June 9, 2021
CD25: the reality of ransomware with @evankaloudis
EPISODE: 0.2.5
BLOCK: 686852
PRICE: 2965 sats per dollar
TOPICS: the reality of ransomware
@evankaloudis: https://twitter.com/evankaloudis
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00:00 - Introduction and background of the speaker
01:06 - Bitcoin as an idea for the future
04:18 - Discussion about the podcast and its guests
11:45 - Bitcoin price discussion and market sentiment
25:00 - Highlights and experiences from the Miami Bitcoin conference
31:11 - Overview of the Colonial Pipeline ransomware attack
39:07 - Discussion on the seizure of Bitcoin by the FBI
42:51 - Bitcoin and payments on the Internet
43:32 - Cybersecurity industry boom
45:07 - Ransomware attacks and cybersecurity
01:26:46 - Apple's encryption and access to messages
01:27:26 - Brainstorming live on air
01:28:07 - Creating a VPN app with Bitcoin payments
01:29:26 - Automatically routing through VPN providers
01:30:14 - Apple's privacy features and market demand
01:31:19 - Wrap up and appreciation
WEBVTT
NOTE
Transcription provided by Podhome.fm
Created: 3/17/2024 4:32:07 PM
Duration: 5810.051
Channels: 1
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So with all that being said, I'd like to invite
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now someone I've spent some time with to
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share a message.
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My name is Rajiv Bekele, and I'm president of El Salvador.
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Great ideas are beautiful and have great power. But like most beautiful things, they can also be more fragile than we think.
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When I was a kid, we thought about the future and we were delighted by its possibilities.
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We couldn't wait for it to happen and be part of its creation.
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But now ask almost anyone what they think about the future, and they will say something along the lines of nuclear war, climate catastrophe, hunger, pestilence, the death of life.
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We didn't took care of the beautiful idea that we create our own future,
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that we, as humanity, can do almost anything that we imagine,
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our ingenuity,
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what separates us from other species.
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In El Salvador, we are trying to rescue this idea and start the design of a country for the future
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using the best ingredients that makes us who we are while using sensibility to find the best examples of ideas from history and around the world.
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I believe Bitcoin could be one of these ideas.
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That is why next week, I will send to congress a bill that will make Bitcoin a legal tender in El Salvador. In the short term, this will generate jobs and help provide financial inclusion to thousands outside the formal economy.
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And in the medium long term, we hope it is a long decision that can help the people and his family
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He got me a gift.
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He got me a gift, a soccer jersey. It's pretty sick.
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I wanna read, my favorite part from the proposed bill.
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Central banks are increasingly taking actions that may cause harm to the economic stability of El Salvador.
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That in order to mitigate the negative impact from central banks, it becomes necessary
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to authorize the circulation of a digital currency with a supply
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that cannot be controlled by any central bank, and is only altered in accord with the objective and calculative criteria.
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Happy Bitcoin Tuesday, freaks.
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It's your boy, Matt Odell, here for another Citadel dispatch.
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That intro
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was our fucking boy, an absolute legend, Jack Mahler's,
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this weekend with the president of El Salvador,
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announcing that El Salvador will be the 1st country
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to be making Bitcoin legal tender.
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This is Citadel dispatch number 25. It's actually been 6 months straight of Bitcoin Tuesdays that we've all shared together,
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which is really fucking impressive.
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So cheers to all the ride or die who have been here in the live chat for the whole thing.
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Live show about Bitcoin distributed systems privacy and open source software.
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I'm grateful to be joined here by
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our boy, Evan Kaludes,
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for his
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7th diss Citadel dispatch. What's up, Evan?
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What is up, Matt, and what is up, freaks?
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It's fucking up. It's been 7 episodes.
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Man, just shouts to you for doing such a good job and having such great guests on facilitating
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facilitating such great dialogue.
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Just happy to be a part of it, man.
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Yeah, dude. Thank you. I mean, you you joined us for the first episode, and here you are for,
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the 25th, so that's,
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pretty fucking badass. I mean, I just spent the I thought I had enough of you already. I just spent the last week with you in Miami,
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and and then here we are. We could've missed a Bitcoin Tuesday freak, so, we made it happen. We're keeping the streak going like rock star on GitHub. You know, you gotta keep those, those green squares going.
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So, I mean, the main topic of,
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today's discussion is going to be,
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all this ransomware bullshit that's going on. But before we get there, I mean, obviously, I started it off with this El Salvador news.
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I think it's a pretty big deal.
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What's your take here, Evan?
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Well, I think we're entering into a new era of Bitcoin where we're seeing the game theory
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about to play out amongst the nation states.
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And, you know, all the salty people may make, you know, all these offhand remarks about, I don't know,
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you know, El Salvador
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and how much money they have down there, like, what they produce. Like,
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this is this is just the beginning
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of what's gonna be get become, like, a crazy chain reaction.
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And,
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you know, it's it's gonna start with countries in Latin America.
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From there, we could see countries in Africa
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and then Europe and Asia,
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all going down this path.
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This is this is unprecedented,
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and this is really where the fun begins.
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Yeah. I think, people are kinda underestimating,
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you know, what happens next here. I mean, the the FOMO can just
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it kinda just works into itself. And,
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first, we had this kind of corporate FOMO start, and now we have this nation state FOMO,
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and it it's it's kind of beautiful watching it happen in Latin America first. I mean,
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there's so many countries down there that were once powerhouses that have just completely been destroyed and gutted, and their people completely fucked,
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partially because of US hegemony, but also, you know, for internal political reasons. So to see them have access to this money
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that should be able to uplift the people and give them more sovereignty,
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is really powerful, and I'm I'm just excited. I'm excited to kinda see this all unfold. I mean, we've we've theorized for a while here that,
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it was gonna start with challenger countries. It was gonna start with smaller economies. Like, obviously, it's not gonna start with the big dogs. They have
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a lot more to lose and a lot less to gain.
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So
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watching it happen in our backdoor
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with you know, I've traveled around South America a lot, Central America a lot, and
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and I love the culture. The culture is fantastic. So to see this all unfold is is kinda beautiful. And it's amazing how quick,
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it went from, you know, just El Salvador to, like, all these different
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politicians in all these different countries. I mean, in a lot of you know, I don't think there's been any other presidents that have stepped forward yet,
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but, like, ran you know, bunch of different legislatures,
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ledge
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legislators, and other things like that have started to step up, and they want to,
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you know, they wanna get on the train. So, it's it's it's kind of cool how quick it can unfold here. Yeah. Absolutely. And, you know, it always was gonna be out of necessity. The the countries who needed it the most and who had the the least to lose. And if you think about it, El Salvador has, like, nothing to lose here. They're they're not in They've not been in charge of their own destiny for a long
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time. You know, they've been a dollarized country. Like, they use the US dollars. It's not like they have another currency
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that they had control of that they could, you know, inflate to help
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their own spending. Right? They're they're just at the mercy
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of the US empire and our spending and and what we do.
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And, you know, when those stimmy checks
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get distributed,
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you know, the El Salvadorians, they're they're not getting one. So Yeah. They don't send that to them.
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No. No. They do not. So I I think if anything, this is
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a sign of El Salvador,
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taking control of their own destiny again.
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I mean, it's it's empowered.
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I mean, sorry to cut you off. I didn't mean to do that. I apologize.
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I mean, it's more than just I mean, they're dollarized, so it's it's very obvious with them. Right? But just in general, because we're the reserve currency,
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when we inflate our supply, we're really taxing the rest of the world,
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more than we're taxing ourselves. I mean, obviously, we're also taxing
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individual citizens in terms of inflation, but inflation first hits the non reserve currencies that are using us as a reserve even if they're not dollarized.
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It seems like Marty's owl is just you know, we have him in the comments. It seems like he's just got really
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it seems like he wasn't humble, and he's just upset with me about my 200 k by conference day, And now he's just he's just going at me. Ever since last week, he's just been going at me. So he wants he wants you to lead the show here, Evan.
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Marty, I'm so sorry. I'm so sorry this happened to you.
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But, you know, just just don't overextend yourself on Matt's bullishness. That's there's a lesson here. You know what I mean?
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I personally am stoked at these low prices. Like, there's so many bullish events going on right now as the prices suppress
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with all this FUD that we've been seeing between Yuan and China and the ransomware and the ESG. It's like,
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this is Sats stackers paradise, freaks.
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Like, this is the time to extend some capital.
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I like that term, stacker's paradise.
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Stacker's paradise. Yes. I just want you to know, Marty's owl. Like, unless you change your name to Evans owl,
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you're officially a LARPer and a Virtue signaler. So you you have to actually go the you got to go the full 9 yards.
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Okay. I don't think I'm ready for meme accounts.
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I got I got sidetracked. Oh oh, the other thing is so I've changed the display to mempool.space
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if you're watching the video feed.
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This is not because we dumped even though I'm sure I'm gonna get the accusations. It's because,
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I think 2 episodes, 6102,
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who's always been a major influence on the show and a good friend
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was just going at me about having the price as the ticker.
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So I'm trying to build, like, an actual
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dispatch specific dashboard,
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but until then,
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I think this is what we'll go with. It seems it seems clean enough to me. It's a site I use every day.
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What do you think, Evan? Do you think this is a good a good choice for for episode 25? I feel like episode 25 is, like, a nice influential number too. You know? It's a significant number.
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Well,
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I am a huge mempools.space
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fanboy. So
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it was really great to meet Simon and Wiz this past week.
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You know, it's it's a great project, so I love seeing this up. However, I I do wish we could have a way to be the sweet spot. So we'll see what we can whip up for future episodes.
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That'd be the sweet spot. So we'll see what we could whip up for future episodes.
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Yeah. But for now, you know,
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this this will have to do. I think we're at about
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what,
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my my block clock is telling me we're at 2,971
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sats per US dollar.
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Kraken is telling me the US dollar price is about 33,693.
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I I think I think this thing is, a bit undervalued now, and I think fear is really high. If you go talk to your normie friends who are just trading, getting to shit coins, whatever,
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they are terrified. They do not wanna be holding the bag
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on a leg down. So they're they're because if they're sold already or they're thinking about offloading the bags, I think this is a great time to buy.
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And,
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you know, I I don't think a 6 figure BTC is out of the cards right now
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Yeah. For this year. Not out of the fucking cards. Of course not.
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But probably it's much higher than that. Yeah.
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It's fucking crazy. It's crazy how quick people just switch. Like, people are so fucking embarrassed on Twitter right now. They're just so
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and it's just, like, a couple weeks. All it takes is, like, a couple weeks of down days, and then now everyone's
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It's it's it's nonsensical. Like, the first of all, the fundamentals haven't changed at all. Right? Bitcoin's still cranking out blocks. Right?
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You know, we're we're about to activate Taproot.
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That's gonna be huge.
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And then all this Latin America
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bullishness, like, how how did this not change people's tunes? Like, it it's really crazy to me.
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Over So Yeah. It's fine by me. If you're a Fiat miner if you're a Fiat miner, you're just stacking yeah. If you're just stacking every week, you're just staying humble and stacking,
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You know, this this could turn into this could easily turn into, like, last March where it's, like, a generational
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opportunity to buy Bitcoin where everybody's gonna look back, and they're gonna be like, what the fuck, man? Yeah. Yeah. I think it's gonna be like, oh, you got lucky. Everyone else was getting shaken out, and you were buying
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at 28, 29 to 35 k or whatever. I think this is definitely sweet rank.
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And, I mean, it wasn't
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as it wasn't as violent
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down in 2017, but we still had a drawdown of, like, 35%
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or so. Right?
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So Right. Things are still playing out. It's just a little more violent with all the
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focus on it from,
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you know, mostly state actors. So
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Well, we we almost had I mean, if I if I remember back I'm not gonna pull up the chart, but if if I remember back in 2017, there was, like, many,
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like, 30 plus percent drawdowns.
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This time around, we didn't, like, get any 30% plus draw downs, and then we just got this huge big one,
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which kinda reminds me more of 2013, but also in my mind, you know, it's like maybe we just got a little bit ahead of ourselves. You know, Tesla
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bought in, and they kind of, like, jumped the gun there, and it it created all this additional buy pressure.
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And then, you know, maybe, like, personalities, like like that Odell guy, or, like, saying 200 k by conference day and stuff, and people just got a little bit ahead of themselves.
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Marty's out came back as Evan's out. Oh, I see.
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And and so, like, we got what we deserved. Right? We got hit back, we got kicked in the balls, and it needed to clean out all the leverage
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and set up the stack base. Right? Set up the stackers base. The stackers set the floor in my mind, and then the traders are the ones who are are doing the liquidity in in between. Right? But but if people are just constantly stacking, we just have millions of people just stacking every time they get paid.
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The price is just that floor is just, like, slowly rising. Right?
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Yeah.
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It's it's simple as that. You know? The people with conviction, the staff stackers, they set the floor.
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And,
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you know,
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there's there's, there's the other side of it, the people who are liquidating.
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You know, the though that group of people has to be exhausted, but
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from what I'm hearing from my normie friends trading, I think we're getting there. I think we're really close to reaching this bottom. So
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fingers crossed, freaks. It's not financial advice, but,
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you know, if you're in this for the long haul,
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4 years plus, this is an excellent time to buy.
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Before we go further here, I'm just gonna be a little bit shameless.
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I you know, the stream did,
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fuck up in the beginning. So if you retweeted or, you know, liked on on YouTube or on Twitch. I don't even know how it works on Twitch.
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There's a new stream now, so consider going and doing that. It is appreciated. It is the single biggest thing you could do for the show. Obviously, huge shout out to all everyone who's donated to the show. I wanna keep this ad free. I think that's, you know,
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it's fucking fantastic that it can just be supported by Bitcoiners for Bitcoiners.
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So I appreciate all of you on that.
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You wanna talk about Miami a little bit before we get into this ransomware thing?
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Yeah. Absolutely. Before we go to the weeds,
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Yeah, man. It was an incredible week with some incredible people.
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You know, it was very overwhelming at times. I think the scale of it, there's definitely
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people that
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we didn't get around to even seeing or talking to. There was countless cases of freaks saying, oh, I didn't know this person was there. Oh, I can't believe I didn't see you. Like, it was just, like, a little too big, you know, but at the same time, it sort of makes sense for being the world's biggest ever Bitcoin conference.
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But, yeah, there were some incredible talks.
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I particularly
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liked
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seeing Ron Paul,
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speak.
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You know, it's hard not to get bullish on Bitcoin after
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hearing doctor No talk so positively about it for so long.
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You know, there were also shenanigans too,
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you know, from,
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Dogecoiners
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interrupting Steve Lee's talk and stripping on stage.
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I feel so bad for Steve Lee. He's such a sweet guy.
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Brilliant guy. Okay. Ryan Calder was in the backstage and just fucking ran up and air hugged him off the stage.
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Shouts to Ryan.
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That's a true Bitcoiner right there. I I gotta I gotta go live with the guy,
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learn how
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to learn how to pick up shitcoiners like that with so swiftly.
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But, yeah, man, there was a lot of things,
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you know, to to be bullish on. I think it was it was great all in all despite being overwhelmed and being in this whirlwind. I, I I honestly think the best part of the conference was the free and open source dome you helped put together, Matt. So shout out to you for that. Yeah. It was me and Rudolf. Shout out to Rudolf for his help. Incredible
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Bitcoiner to meet. I love RaspiBlitz.
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I was so happy to have spent time with him. Wish we could chat have chatted a little more. Well, that reminds me,
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neck next week, Rudolf is gonna be on dispatch,
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along with members of the teams of Noddle, Ronan Dojo,
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Start 9, and MyNode,
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to discuss the different node packages and their their licensing schemes,
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and what makes an open source license. So the only node,
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package that is not a part of it yet is Umbrel.
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They haven't responded to me. So,
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if you freaks are using Umbrel and you would like to see them be a part of the discussion along with all the other major node teams,
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consider chirping at them,
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reaching out to them, and asking them to be on
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what is hopefully one of your favorite shows.
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Umbra, please join.
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We love your product. We want you to get your word in. If you want me to come join and moderate, I will. But, it would be incomplete without y'all. But that being said, Matt, you know it's gonna be a complete bloodbath.
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Dude, this show is designed to be an organized bloodbath every week. That is literally,
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that that is literally the plan.
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Most of the people who are joining I mean, I have jokes on Twitter right now. The 3rd best Ben in Bitcoin, Ben the Carmen,
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said that you should be a permanent host. I mean, when I designed the show, I said to you from the beginning, like, the idea was
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that basically there's multiple recurring hosts.
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Right? You being one of them. And but some of these guys that are gonna be on the show next week are also,
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I would say would fall in that category, including Zelco,
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Kita Miner, and Open Arms who will be joining us.
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So, hopefully, some of these other guys will also
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end up being more reoccurring as well. So,
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I I I I think I think look. We're gonna have the live chat as we always do. I'm sure they won't, pull any punches,
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and
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and it's a very important conversation to have. You know, people are are looking at these node projects.
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They all have different pros and cons, and and it's it's one of the first decisions that a ride or die freak is kinda making. Right? It's like they're making, like, what kind of wallets am I gonna use, and and what kind of a node am I gonna run. Right?
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Yeah. Absolutely.
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I think there's a lot of options in the space, which is great. We got a lot of competition,
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but it could be a little overwhelming
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for the average user to sort of figure out what they want.
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But that being said, there there's a little something for everyone depending how technical you are or not, depending if you want more of a focus on coin joining or
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you want lightning or or, you know, the ability to install a whole bunch of apps.
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I think there's a solution for everyone, and, you know, this is a very important thing that
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people
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take control of their own destinies, run their own nodes, and become first class citizens in Bitcoin. So the more people we onboard to setups like this, the merrier, and, you know, the more we're all gonna build benefit.
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We have,
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rider die freak, who's on the show last week.
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Anthony,
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saying he wouldn't go with the node package that doesn't join the chat next week considering
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So go out and tell your favorite node packages that you feel the same way, and and let's hope that we get them all on the show.
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And then we have FTB asking why I said no market buy during our HR. I said, consider stacking, but instead instead of just telling people to do it, because I learned my lesson, and in hindsight, it actually,
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you know, they got a better price if they waited till now. But, I mean, look, guys. It's it's all it's all fun and games. I hope I, you know,
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I I kind of feel bad after the fact about the whole 200 k by conference day thing.
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I got caught up in a little bit. A lot of it was like a meme, it was like meant to be a meme and then I just dug into it, you know, because everyone was doing like the sale or 100 k parties and like Scott Miner from Googonen was like 400 k,
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And I was just, you know, I wanted to jump into it, and it's
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it was just fun. It was like a troll on, like, the engagement accounts on Twitter, and I had just gone all caps.
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It was, like, early February. I looked back. It was, like, early February. So it was, like, at we were, like, we were, like, at 28:30,
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and, we went up to, like, 65 k, and then, you know, you guys know the rest.
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I have Cantillon John or Cantillon Cantillon
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John saying I wasn't humble.
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That is correct.
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To be clear, I am rarely humble.
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That is why I repeat it so often that that not only should you guys stay humble, but I should stay humble. But to be absolutely clear, I have more Bitcoin than I had when I made the 200 k by conference day prediction.
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So so it might sound like cope, but,
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when I say humble, the first and foremost thing I mean is, you know, hold your own keys, care about your privacy, don't use leverage.
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That's, like, the humility that matters arguably the most in Bitcoin land. Because if you're not humble in that regard, then you lose all your Bitcoin on March 12th. If you're not humble in that regard,
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you lose all your Bitcoin on whenever the most recent dump happened. I I know that day, like, all the shit coins went down, like, 95% or something.
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In Bitcoin land, that's the most important humility. And I actually get shit on the other side when people say, Matt, I don't wanna be humble. When when
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when Bitcoin's pumping, I wanna dunk on the shit corners. Yeah.
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That doesn't preclude that. You're allowed to dunk on the shit corners. Just don't take out leverage,
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you know, like,
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whatever.
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Exactly. And we have Evans owl in here saying, Matt is so humble, so I appreciate the hard critique, Evan. Thank Evans owl. Thank you for that.
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Yep. And believe me, freaks, we gave him so much flack this past week. He's he's heard it enough.
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Yeah. It's like every day in the Airbnb at, like, 2 in the morning, I was just
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just 200 k by conference days. I mean, that's why we got such a nice play to begin with. We're, like, rationalizing. It's, like, oh, yeah. It will be 200 k, so whatever.
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I went to Marty's hotel I went to Marty's hotel on Sunday, and I was, like, I was like, oh, dude. You believed it too. Didn't you?
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So
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nice.
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Oh, sweet.
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Well, anyway, guys, I guess that was a lesson for us all. You know, this is Bitcoin tends to teach you a lesson if you,
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if you get a little bit too cocky. So,
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okay, well, that was great. I mean, the best part about Miami
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was,
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Ross's interview, the first interview he's ever done,
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since he's been put in his cage.
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It was an extremely moving interview. I'd be lying if I said that I didn't have tears in my eyes.
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Everyone should go, listen to that. I do have it on,
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my Twitter page if you can't find it, but it's on Bitcoin Magazine's YouTube.
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Literally, every single Bitcoiner needs to go listen to that.
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And then second of all, like, it was just so fantastic meeting so many
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freaks and fellow big corners and people I've interacted with only online.
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You really start to realize how powerful this movement is
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when you when you meet with so many like minded folks.
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And I really do. Like, it just furthers your conviction. You know? It just furthers your conviction that
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for better or worse, like, we're, you know, we're gonna win this thing, and and we're gonna make the world a better place. And,
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ultimately,
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that mission is bigger than any of us individuals. It's it's bigger than ourselves.
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Who's the favorite person you met this past week?
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I don't know. Big corners are just so fantastic that it's too hard to choose. Who's the favorite person you've met this week, Evan?
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Oh, man. There are a lot, man.
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Hanging With Wiz at the Airbnb was great. He's an incredible Bitcoiner.
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Of course. You know,
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helped kick off Zeus essentially, so it was amazing seeing him.
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Oh, man. Adam Curry, when he came to the Fosse dome, I got to talk to him,
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and he pulled out his phone, and he showed me he was using juice. Oh, that's cool.
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That that was like, oh, man. Okay. Now now I understand. This this is what I'm doing it for, you know. Like, people actually using your software feels amazing.
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Yeah, man. There was countless ones, and it's hard to even say it's a loaded question to even ask one like, Russ Okun, that was really cool talking to him at Beefsteak.
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Will Reeves at Beefsteak too. I feel so bad. I was giving him such a hard time about the FoldSpin rewards.
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Did you do it in person too? Sweetheart, that guy.
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What'd you say? Did you do it in person too?
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Oh, yeah. No. No. No. We're at the bar in the back at Beefsteak,
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which freaks. Okay.
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Beefsteak
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was probably the best event all week. Like, no. No. It was It's
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always the best event. Always the best event. Well, first of all, Russell Coon is a fucking legend. We are so lucky to have him on the athlete side. Like, he's gonna fucking orange pill so many fucking athletes. I I like He gets it that guy. Ask for a better ambassador. He's a fucking real one, man. He gets it that guy. Yeah. But beefsteak was fucking legendary. Every every beefsteak
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is is the is the best, you know, one of the best events of of wherever you are,
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whether that's Austin BitDevs or
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a a different conference,
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BitBlock Boom or something like that, but
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this was this one was absolutely insane. It was the largest one he's ever thrown.
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You know, we had NFL players there. We had senator senator Loomis was
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eating steak with her hands at a Bitcoin beef steak, like Didn't even get to talk to her. This one was it was the biggest one by far is, like, so many people I didn't even get around to say hi to. It was crazy.
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But the venue was incredible too. Like, it was some converted strip club. It was out of control.
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There was like
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a like a cockpit from a plane that was up this, like, staircase that you could stick your head out of. We'll post some pictures of that too.
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And, yeah, the food was incredible as always.
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Yeah. Nothing We had our fave we had our fave one of our favorite core devs and, friend of the podcast, James O'Byrne DJing.
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Oh, James was killing it. We were dancing. We got so drunk. We were dancing on the dance floor. It was amazing.
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I we got kicked out of closing. I think they kicked us out at, like, 2 in the morning. Oh, yeah. Yeah. We went to, like, 1:30,
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and then we load up. We're so drunk. We're going into the Uber. Right? I get into the back seat,
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and, I don't even realize who we're with. We're with we're with Gigi, and I start Oh, I fucking love Gigi, man. But I already I met him already, but it was and he's already a good friend, but it was so good to see him again.
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Fucking hell. Oh, man. He's great.
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Love him and his work.
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So, yeah. It was it was just so overwhelming. It was literally a whirlwind.
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Gigi slept on our couch that night. Right?
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Yeah. I brought him some water to try to revive him in the morning.
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But you know it's a good night when you wake up the next morning, Gigi's on your couch. Yeah. You scream.
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Yeah. No. That was just,
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that was it was yeah. There were so many good people that, like, you couldn't walk.
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You'd walk, like, 3 feet, and then you get stuck in another amazing conversation.
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Like, you literally literally Get pulled out of 1 convo, pulled into the next. Like, you were never really at least for me, I felt like I was never really in control of what I was gonna be doing there.
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But,
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it it worked out nicely, and we had a blast.
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So so, Freaks, next time there's a beef stick,
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you definitely need to sign up and come and say hi.
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It's it's
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it was legendary, Braj. Like, that that's the word I would use. It was legendary. You always always when you have a chance to go to a beef steak, just always go to the beef steak. Like, that's
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don't hesitate. It'll get sold out before you oh, me and everyone were talking about
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how we're such dicks when the tweet goes out, we don't retweet right away, and, like, it gets no engagement because everyone who sees the tweet's, like, oh, we need to get our tickets. Everyone needs to get their tickets. Gotta send it to your friends and stuff. Yeah. Yeah. Exactly.
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You you retweet it after you secure your ticket. Yeah. You secure the tickets, and then you retweet it. It's like on the plane where you put the mask on your face before you put it on the file next to you.
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Yeah. Exactly.
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Okay. Well, that's
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that's great. Yeah. That was fucking awesome.
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So let's jump into this ransomware thing. It's on the news.
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Everyone's saying that,
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Bitcoin's broken. The FBI can
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can break into Bitcoin.
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FUD FUD everywhere, FUD abounds, feels like Bitcoin is
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being FUD attacked.
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That's not a great place to start with. Let's start with the fact that the Colonial Pipeline
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got ransomware attacked.
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What was it, like, 4 weeks ago or something like that? We got a picture of the Colonial Pipeline on if you're on the video feed freaks.
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We've talked about it a bunch on on both podcasts, both on dispatch and RHR, so I don't wanna go too much into the details of this particular attack. But,
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you know, the the basics is is that this
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popular ransomware
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as a service software,
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DarkSide,
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was used,
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to put
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to to lock up,
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I guess, like, the account management services of Colonial Pipeline, which runs up the East Coast and services most of the East Coast's
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supply needs,
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energy supply needs. And as a result, there was gas shortages, there was all this concern,
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major infrastructure of the United States.
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The Biden administration,
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I think, declared, like, ransomware
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equivalent to terrorism.
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They said it was an act of war. They said all these things about,
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that they thought Russia was about behind it or, like, a Russian gang.
389
00:32:36.899 --> 00:32:39.080
Then there was, like, all this weirdness that happened
390
00:32:39.620 --> 00:32:47.175
immediately following it where, like, Darkseid said that they were closing up shop, and and they didn't vet their clients well enough. I mean, Darkseid is
391
00:32:47.555 --> 00:32:49.175
is this new idea, this
392
00:32:50.190 --> 00:32:55.170
ransomware as a service. So the idea is that the dev team behind Darkseid doesn't actually attack,
393
00:32:56.910 --> 00:32:59.170
they don't actually attack the different clients.
394
00:32:59.565 --> 00:33:04.784
They give you access to the software, and if you use the software on a client, they just take a 15%
395
00:33:05.085 --> 00:33:06.544
fee off the top, and
396
00:33:07.340 --> 00:33:15.375
and I I I guess they take also a flat fee. They probably take a flat fee as payment to get this the software to begin with, and then they take,
397
00:33:15.835 --> 00:33:18.414
a percentage off the top of any ransomware
398
00:33:18.715 --> 00:33:24.760
you get paid. So so Darkseid came out and said, you know, we didn't mean to do any kind of geopolitical
399
00:33:25.300 --> 00:33:25.800
warfare.
400
00:33:27.380 --> 00:33:28.760
You we usually just attack
401
00:33:29.395 --> 00:33:33.655
soft targets like hospitals, and small businesses, and banks, and police stations,
402
00:33:34.675 --> 00:33:39.660
not large infrastructure projects, and that will vet our our clients better going forward,
403
00:33:40.440 --> 00:33:42.940
which is just kind of a hilarious statement from a
404
00:33:43.400 --> 00:33:46.060
hacking group in, Russia to be releasing.
405
00:33:46.395 --> 00:33:52.575
And then, like, a day or 2 after that sorry for fixing my timelines a little bit off, but this is, you know, for the most part,
406
00:33:52.955 --> 00:33:53.855
should be correct.
407
00:33:54.330 --> 00:33:59.950
Couple days after that, they said all of their servers had been seized, and that they were just going out of business,
408
00:34:00.410 --> 00:34:04.125
which a lot of us believed, and I still kinda believe was like a boating accident,
409
00:34:04.905 --> 00:34:12.360
claim. Right? You know, we're going out of business, and then they just come out. It was, like, all of a sudden, like, in 2 months, there's a light sided malware or something.
410
00:34:13.220 --> 00:34:16.600
You know, it's just to, like, take some of the geopolitical pressure off of themselves.
411
00:34:17.035 --> 00:34:17.934
And then yesterday,
412
00:34:18.635 --> 00:34:20.174
the Department of Justice announced
413
00:34:20.474 --> 00:34:21.775
that they seized 63.7
414
00:34:22.395 --> 00:34:22.895
Bitcoin.
415
00:34:24.474 --> 00:34:34.299
That was the ransom was it was the affiliate portion of the ransom that was paid the opposite affiliate. The the client's portion of the ransom that was paid.
416
00:34:34.865 --> 00:34:37.765
So not that 15% that goes to the dark side devs.
417
00:34:38.464 --> 00:34:39.525
It was the 85%
418
00:34:39.825 --> 00:34:40.885
that goes to whoever,
419
00:34:41.720 --> 00:34:43.100
was the one who
420
00:34:44.440 --> 00:34:51.635
executed the ransom, and and they said they they I guess they didn't give us that many details, but they said they tracked it down, and
421
00:34:52.095 --> 00:34:54.035
then they secured the private key.
422
00:34:54.655 --> 00:34:54.975
And,
423
00:34:55.535 --> 00:34:58.115
yeah. So so where do you wanna start here, Evan?
424
00:34:58.730 --> 00:35:03.230
It's it's just a tragedy that ECDSA has broken now. You know?
425
00:35:03.530 --> 00:35:05.470
We we gotta abandon Bitcoin.
426
00:35:05.770 --> 00:35:07.069
Whatever spread.
427
00:35:10.735 --> 00:35:11.475
With sarcasm.
428
00:35:12.975 --> 00:35:23.089
We have a lot of new users. We have a lot of new users. I assume some of them were scared by the FUD that that Bitcoin addresses could be attacked. I would just say just straight up to the new users,
429
00:35:25.015 --> 00:35:32.420
no one can crack a a Bitcoin private key, and if they could, they're not going to test it out with fucking $2,000,000.
430
00:35:34.240 --> 00:35:43.325
There's a lot more Bitcoin that they could take than 63 Bitcoin. Yeah. That that's a that's an excellent point, Matt. There's much bigger fish to fry and,
431
00:35:45.085 --> 00:35:46.065
bigger bounties,
432
00:35:46.845 --> 00:35:48.785
to plunder than that. So,
433
00:35:51.010 --> 00:35:53.029
yeah. I mean, it's it's just hysteria.
434
00:35:53.490 --> 00:35:54.529
It's it's just,
435
00:35:54.849 --> 00:35:57.349
you know, the FBI also trying to
436
00:35:58.245 --> 00:36:03.945
do some PR and overstate their abilities. Like, it's a mix of all these different things. It's people not understanding
437
00:36:04.645 --> 00:36:05.865
what actually transpired.
438
00:36:08.230 --> 00:36:08.730
It's,
439
00:36:09.190 --> 00:36:11.369
you know, minimal facts being presented,
440
00:36:12.309 --> 00:36:19.265
by the DOJ and FBI and and people, you know, conflating things and trying to piece together things in their heads.
441
00:36:20.605 --> 00:36:23.105
But, realistically, this is just sounds like
442
00:36:23.760 --> 00:36:25.140
there's one piece of
443
00:36:25.520 --> 00:36:26.020
infrastructure
444
00:36:26.640 --> 00:36:27.460
upon maybe
445
00:36:28.319 --> 00:36:28.819
AWS's
446
00:36:29.280 --> 00:36:30.500
cloud or or someone
447
00:36:31.119 --> 00:36:32.740
hosting infrastructure in North,
448
00:36:33.464 --> 00:36:34.525
Northern California.
449
00:36:35.945 --> 00:36:36.445
And,
450
00:36:37.545 --> 00:36:39.244
they were able to track this
451
00:36:40.380 --> 00:36:43.599
infrastructure back, and they were just holding the key hot on the server.
452
00:36:44.299 --> 00:36:49.279
It's sort of mind boggling. You know? If if anything, the takeaway is, like, these guys are not listening
453
00:36:51.845 --> 00:36:52.424
to RHR and,
454
00:36:53.204 --> 00:36:54.244
TFTC and,
455
00:36:55.125 --> 00:36:58.025
taking control of their own keys and and putting it into cold storage.
456
00:36:58.810 --> 00:37:01.950
So we know we know the dark side gang. They're not plebs.
457
00:37:03.369 --> 00:37:09.185
They're definitely not plebs. So so let's just pull it back for a second. So when it comes to seizing Bitcoin,
458
00:37:09.965 --> 00:37:15.265
you're not gonna be able to crack the private key. So the the MO is you first try and trace the Bitcoin.
459
00:37:15.790 --> 00:37:19.250
If it's a KYC payment, obviously, it's attached to your identity,
460
00:37:20.750 --> 00:37:32.675
so you're you're you're forced to try and and break a link there. With ransomware, it's actually, you know, kind of similar to a KYC type of situation, because in this situation, you know, Colonial Pipeline paid the ransom. They immediately told the FBI,
461
00:37:33.069 --> 00:37:42.450
you know, we paid this ransom to this address. Right? And I have up on the screen, I have Ergo's tracking of of the funds going through. So you you track the funds first.
462
00:37:42.885 --> 00:37:54.700
Right? And once you track the funds, you try and figure out where the addresses are located. Right? So you wanna figure out the owner. If you can figure out the owner, then you can pressure the owner. Whether that's if you're a gang member or something, you're trying to,
463
00:37:55.240 --> 00:37:59.500
hold a gun to someone's head or break their kneecaps or or threaten their their
464
00:37:59.895 --> 00:38:00.395
their
465
00:38:00.855 --> 00:38:02.075
kids, their loved ones.
466
00:38:02.775 --> 00:38:06.075
But with the US government, you know, we have the largest prison system in the world.
467
00:38:06.455 --> 00:38:07.755
We could take your assets,
468
00:38:08.150 --> 00:38:14.730
you know, we could cruise missile your ass. There's a there's a bunch of things the US government can do to pressure an owner to try and get access. Mhmm.
469
00:38:15.190 --> 00:38:18.675
If if if they don't know the owner and they can't pressure the owner,
470
00:38:19.375 --> 00:38:24.035
they can try and attempt to to get the private keys because they're on an Internet connected device,
471
00:38:24.390 --> 00:38:26.410
whether that's a home computer
472
00:38:26.710 --> 00:38:35.995
or a server. Obviously, it's easier if it's a cloud server, especially if it's in something like AWS, like we think it was, where it's in like a corporate cloud, and you can just give Amazon a subpoena and take it. Right?
473
00:38:36.775 --> 00:38:53.655
And then last but not least, if it's on an exchange or a custodial wallet, then the service provider actually holds a private key, the user doesn't. Right? So if the user doesn't hold the private key, then you go and you pressure the exchange or service, and you take it from them. That that's the general premise of how you would go about seizing Bitcoin. You're not actually breaking the protocol.
474
00:38:54.755 --> 00:38:57.095
You're attacking essentially the human element
475
00:38:57.395 --> 00:38:59.095
behind holding the private keys.
476
00:38:59.660 --> 00:39:07.475
And first, you know, it's a trace, and then it's an attack. Would you say that's, like, a a general premise that I that we're at that we're dealing with here?
477
00:39:07.875 --> 00:39:08.695
Yeah. Absolutely.
478
00:39:10.355 --> 00:39:12.855
You know, the the crux of the issue is
479
00:39:14.115 --> 00:39:15.015
these ransomware
480
00:39:17.109 --> 00:39:17.609
actors
481
00:39:18.230 --> 00:39:20.250
were trusting third party infrastructure
482
00:39:21.589 --> 00:39:22.890
for even holding their keys,
483
00:39:23.430 --> 00:39:25.690
which should be a big no no. I mean,
484
00:39:26.775 --> 00:39:32.955
they may have had access to the keys through the Bitcoin client on there, but they were hosting it on someone else's box
485
00:39:33.255 --> 00:39:35.835
who just went in there, shelled in for the FBI,
486
00:39:36.310 --> 00:39:38.330
ripped that key off, and took all the funds,
487
00:39:39.670 --> 00:39:41.690
at least from what my understanding is.
488
00:39:42.070 --> 00:39:43.109
So there's,
489
00:39:43.510 --> 00:39:45.690
so I have this ergo thing up.
490
00:39:46.425 --> 00:39:48.285
He also has a thread,
491
00:39:48.905 --> 00:39:54.285
and the thread makes an interesting point. So there's a consolidation that happened, which you can see
492
00:39:56.200 --> 00:40:01.180
which you can see on the the right side, this right this right or most circle cluster,
493
00:40:01.480 --> 00:40:03.660
and that's what creates the cluster. So
494
00:40:04.195 --> 00:40:08.375
they they broke a privacy best practice, and they took a bunch of inputs.
495
00:40:08.755 --> 00:40:09.415
The attackers
496
00:40:09.875 --> 00:40:15.160
the the hackers took a bunch of inputs, and they combined them all into a single, I think, a 69 Bitcoin,
497
00:40:16.260 --> 00:40:16.760
UTXO.
498
00:40:17.300 --> 00:40:19.319
And by doing that, they link common ownership.
499
00:40:20.099 --> 00:40:21.079
And what Ergo,
500
00:40:22.165 --> 00:40:24.665
speculates is that by linking that common ownership,
501
00:40:25.765 --> 00:40:28.345
the FBI or the chain analysis partners,
502
00:40:29.605 --> 00:40:30.665
were able to
503
00:40:31.730 --> 00:40:32.950
then figure out
504
00:40:33.810 --> 00:40:38.870
the the ultimate address the funds were in because the user was using an Electrum Lite client.
505
00:40:39.675 --> 00:40:56.990
This is just the this is his speculation, was using an Electrum Lite client and was connected to, like, a chain analysis node. If, you know, we there's lot lot lot of times there's been speculation that these surveillance companies are running Electrum nodes. So if you're not using your own Electrum node, you're using someone else's Electrum node. Mhmm. And as a result,
506
00:40:57.395 --> 00:41:01.735
those addresses that are not linked on chain are still linked via that way,
507
00:41:02.275 --> 00:41:10.050
and they have an IP address linked to it. And when they had the IP address linked to it, they had the server linked to it. And when they had the server linked to it,
508
00:41:10.670 --> 00:41:19.525
they were able to then hit the server. Right? So so they they have the address information, then they combine it with something like Electrum, and they're able to, like, figure out where the server is and then hit the server.
509
00:41:23.809 --> 00:41:30.630
So there's 2 elements at play here. Right? It's on chain privacy and network level privacy, which are the 2 things that we talk about a ton on this show. Mhmm.
510
00:41:31.395 --> 00:41:37.555
And then last but not least, there's so, I mean, like, this is coming back to actionable discussion. Right? Last but not least, like,
511
00:41:38.275 --> 00:41:44.540
the keys were hot. So you had the keys hot, you had poor on chain privacy, and you had poor network level privacy.
512
00:41:45.480 --> 00:41:50.825
And it seems like it was multisig. It was multisig, but both multisig keys were hot, so that didn't help.
513
00:41:54.905 --> 00:42:00.525
Yeah. I mean, as bad as it gets. I mean, if you're well, I guess it could be worse. But if you're gonna
514
00:42:00.830 --> 00:42:05.090
be using multisig, like, what's the point of having it on hot devices to begin with? So
515
00:42:05.630 --> 00:42:09.330
But, I mean, you use multisig on hot devices when you use lightning, Evan.
516
00:42:10.615 --> 00:42:15.595
That's true. But, no one's should be accepting ransomware payments on lightning.
517
00:42:15.895 --> 00:42:18.395
Although, I expect someone might try one day.
518
00:42:19.150 --> 00:42:19.810
It's definitely
519
00:42:20.110 --> 00:42:21.890
not the way to go, at least today.
520
00:42:23.870 --> 00:42:33.785
Do you think I mean, I'm just gonna come out and say this. Oh, no. Before we do, I the number one thing about ransomware, and a lot of people are gonna try and pigeonhole Bitcoin on this, this is not Bitcoin's fault.
521
00:42:35.045 --> 00:42:39.420
These are insecure systems that are gonna be attacked anyway. If anything, ransom
522
00:42:39.740 --> 00:42:45.520
ransomware allows an incentive for for an attacker to publicize that they've attacked you by encrypting all your shit,
523
00:42:46.345 --> 00:42:52.125
rather than just selling your information to the highest bidder or selling that access to the higher highest bidder. Ultimately,
524
00:42:53.200 --> 00:42:54.580
the cats out of the bag,
525
00:42:55.040 --> 00:42:56.900
whether it's Bitcoin or something else,
526
00:42:57.440 --> 00:43:00.820
payments will be made on the Internet in the censorship resistant fashion,
527
00:43:01.545 --> 00:43:07.965
and what you need to do is improve your infrastructure. There should be a major play in America to realize it's a national security issue
528
00:43:09.120 --> 00:43:13.920
to to improve our infrastructure, and to make sure our companies are protected, and to make sure our public infrastructure is,
529
00:43:14.880 --> 00:43:15.380
protected.
530
00:43:15.924 --> 00:43:23.385
And if it's not protected, these attacks are just gonna keep on happening until people protect them. And I'll I'll I'll tell you one thing. Every single time
531
00:43:23.860 --> 00:43:29.000
one of these providers gets attacked and, you know, ends up having to pay money and loses a ton of business,
532
00:43:29.540 --> 00:43:30.440
they will never
533
00:43:31.015 --> 00:43:39.810
they will never let it happen again. They will spend a ton of fucking money and time to make sure that their systems are secure going forward. They just need to touch the stove and and get hurt.
534
00:43:40.930 --> 00:43:42.070
Yeah. Absolutely.
535
00:43:43.490 --> 00:43:51.665
And and one of yeah. One of the reasons I brought Evan on is by the way. Yeah. One of the reasons I brought Evan on is because you were like this was your industry. Right?
536
00:43:52.365 --> 00:43:55.425
Yeah. Absolutely. I worked in cyber for 6 years, and,
537
00:43:56.900 --> 00:43:57.400
frankly,
538
00:43:58.099 --> 00:44:00.760
I see this as being a boom for cybersecurity.
539
00:44:01.780 --> 00:44:04.839
The fact that you're able to monetize a hack so easily
540
00:44:05.395 --> 00:44:11.175
is gonna light a fire under the entire industry's ass. And that's what we're seeing. We're we're gonna see people,
541
00:44:11.795 --> 00:44:17.980
you know, not only build tools to try to help counter these things and and have more, you know, rig
542
00:44:18.280 --> 00:44:19.740
rigorous backups mechanisms,
543
00:44:21.000 --> 00:44:22.700
but it's also just gonna incentivize
544
00:44:23.535 --> 00:44:30.515
people that just have better security in general to build up systems that will detect these things, to, you know, alert on them.
545
00:44:32.030 --> 00:44:42.385
You know, if if things are happening more more frequently and your expected costs of what you're gonna endure from cyber hacks is going up year after year because this thing becomes more rampant,
546
00:44:43.005 --> 00:44:44.225
then the whole cybersecurity
547
00:44:45.325 --> 00:44:52.599
industry is gonna about to experience a whole boom. I think this is gonna be ultimately great for the industry and ultimately great for people's security.
548
00:44:53.460 --> 00:44:54.839
People need to be rigorous
549
00:44:55.220 --> 00:44:59.400
now just because of how easy it is and and how where the incentives are aligned.
550
00:44:59.905 --> 00:45:06.565
So, yeah, that that's one of the definitely one of the bigger points I wanted to bring home from this thing. Like, this is gonna be a boom for the cyber industry.
551
00:45:07.320 --> 00:45:14.600
And what's really interesting, it goes across, like, the whole the whole economy, because it goes from, like, you know, these larger ransomware payments of of,
552
00:45:15.080 --> 00:45:15.580
fucking
553
00:45:16.055 --> 00:45:19.515
full nation pipeline, and then there's small businesses all over the place.
554
00:45:19.815 --> 00:45:27.630
Like, these like, you don't hear about the majority of ransomware attacks. And I had a family friend who, like, their small accounting business got hit with a $3,000
555
00:45:28.010 --> 00:45:28.510
ransom.
556
00:45:29.050 --> 00:45:37.065
Because these criminals are savvy, they realize, like, if they hit the smaller low hanging fruit, they need to pick an amount that they'll actually pay. Otherwise, they'll just
557
00:45:38.165 --> 00:45:39.305
start from scratch.
558
00:45:39.685 --> 00:45:41.625
They they just won't pay the ransom.
559
00:45:43.150 --> 00:45:45.090
So it's just really interesting that it's like
560
00:45:45.710 --> 00:45:46.770
like, what? Like,
561
00:45:47.150 --> 00:45:51.650
cyber cyber professionals have been cybersecurity professionals have been talking about,
562
00:45:51.965 --> 00:45:55.345
you know, securing your systems for the last 30 years or whatever,
563
00:45:56.205 --> 00:45:59.825
and everyone just kinda gave it lip service. No one was really doing anything until
564
00:46:00.390 --> 00:46:03.850
until all of a sudden there's this direct incentive to to make it happen.
565
00:46:04.150 --> 00:46:09.935
Yeah. Absolutely. You just gotta when you're doing your threat calculation, right, and you're thinking, like, okay. How much
566
00:46:10.895 --> 00:46:13.155
damage this could potentially do to my
567
00:46:13.935 --> 00:46:15.155
my, enterprise,
568
00:46:15.695 --> 00:46:21.540
and you multiply by the the likeliness of it happening. Well, if it's becoming more and more likely, like,
569
00:46:22.560 --> 00:46:27.460
everyone needs to take this into their their calculation. More and more people are gonna have to spend more money
570
00:46:28.125 --> 00:46:28.704
on cybersecurity
571
00:46:29.005 --> 00:46:30.065
protection. So
572
00:46:30.925 --> 00:46:35.185
it's definitely gonna be a boom for the industry. It's, it's a shame that this is what it took
573
00:46:35.720 --> 00:46:39.500
for things to start changing and people to start taking things more seriously.
574
00:46:39.800 --> 00:46:42.860
But, you know, like many other instances in this industry,
575
00:46:44.115 --> 00:46:46.455
lessons are often learned the hard way.
576
00:46:47.235 --> 00:46:48.355
And and then
577
00:46:52.150 --> 00:46:52.650
yeah.
578
00:46:53.109 --> 00:46:53.930
Yeah. Exactly.
579
00:46:54.630 --> 00:46:59.130
Lessons lessons are heard the hard way. And, oh, that that's what that's what I was saying. So the the site,
580
00:46:59.535 --> 00:47:02.675
the other thing that it kind of is is funny is, like, these companies
581
00:47:03.055 --> 00:47:07.715
historically have paid bounties. A lot of these big companies have paid bounties out for security researchers.
582
00:47:08.310 --> 00:47:10.410
You find a bug, you know, we'll give you $10,000
583
00:47:11.030 --> 00:47:11.690
or something.
584
00:47:14.310 --> 00:47:18.455
We have Vanilla in the chat trying to figure out how to rewind. I'm pretty sure you can rewind on,
585
00:47:19.015 --> 00:47:19.675
on YouTube.
586
00:47:20.135 --> 00:47:24.555
I I don't know if you can rewind live on Twitch. You definitely can't do it live
587
00:47:25.260 --> 00:47:34.424
via Twitter, but anyway, this is all gonna get posted to podcast feed. It's gonna get posted onto bitcoin tv.com. There's full archives. You can download it. You can torrent it. This is an open project,
588
00:47:35.204 --> 00:47:36.585
in the spirit of FOSS,
589
00:47:37.045 --> 00:47:45.150
and I want you guys to seed it. I want you to rip it up. I want you to share it. I want you to do whatever the hell you wanna do with it, and all those links are available at citadel dispatch.com,
590
00:47:45.450 --> 00:47:47.470
and that's where you can also contribute to the show.
591
00:47:47.850 --> 00:47:51.869
But anyway, my point was that they had these bounties, and it just goes to show,
592
00:47:52.435 --> 00:47:53.175
you know, how
593
00:47:53.555 --> 00:47:56.535
shitty their bounties were. You know? Like, there's such low numbers.
594
00:47:56.835 --> 00:47:57.895
And in this case,
595
00:47:58.435 --> 00:47:58.935
basically,
596
00:47:59.589 --> 00:48:06.329
the the security researchers, like, the the kind way of of calling a ransomware gang is is they're basically distributed security researchers.
597
00:48:07.705 --> 00:48:12.525
They get to set the price of their bounty, and there's, like, a negotiation if it's paid or not.
598
00:48:14.090 --> 00:48:16.270
What an incredible price discovery tool.
599
00:48:19.210 --> 00:48:31.505
So with all that said, I mean, I'm just gonna jump right in here. Do you think this is a was a real ransomware attack, or do you think it was a false flag, perpetrated by the US government? Oh, wow. Really get it into it, Matt. Alright. So
600
00:48:32.100 --> 00:48:33.640
so okay. First of all,
601
00:48:34.660 --> 00:48:37.080
you know, we really don't know for sure. Right?
602
00:48:37.700 --> 00:48:39.480
So the motto is
603
00:48:40.135 --> 00:48:43.595
don't trust, verify, and, unfortunately, it's really hard to verify
604
00:48:44.375 --> 00:48:46.395
any claims from anyone right now.
605
00:48:47.255 --> 00:48:54.670
We know that there's some crazy things that have come out from journalists reporting on this. I think Kim Zetter said that,
606
00:48:55.530 --> 00:49:00.645
this attack didn't actually affect the distribution systems, systems, the the technical systems, but actually,
607
00:49:02.305 --> 00:49:09.480
came down to infecting the billing systems and that the company, the pipeline shut everything down because they weren't sure how they would bill their customers,
608
00:49:09.860 --> 00:49:12.200
which if so is is absolutely disgusting
609
00:49:12.660 --> 00:49:14.840
and goes to show you you can't trust corporations.
610
00:49:16.115 --> 00:49:17.974
Is the government telling the rights?
611
00:49:18.355 --> 00:49:22.295
The the truth here in this story, we don't really know. I mean, the FBI has a long
612
00:49:22.660 --> 00:49:32.345
track record of creating its own terrorist plots than coming in as the good fit guy and stopping them. So could they be involved? I don't know. Shit. Who knows for sure?
613
00:49:33.684 --> 00:49:36.585
But what I do know is that the end of the day,
614
00:49:37.180 --> 00:49:39.840
this whole thing is actually great for Bitcoin
615
00:49:40.140 --> 00:49:41.840
because everything is good for Bitcoin.
616
00:49:42.140 --> 00:49:43.040
But, specifically,
617
00:49:44.625 --> 00:49:46.005
when you have the FBI
618
00:49:46.385 --> 00:49:47.204
coming out
619
00:49:47.505 --> 00:49:48.165
and saying,
620
00:49:48.704 --> 00:49:49.525
okay, guys,
621
00:49:49.984 --> 00:49:51.204
you should pay this
622
00:49:51.760 --> 00:49:58.339
these ransoms, like, just just pay them, like and using this as an example of, like, okay, this is how we can get your money back or whatever.
623
00:49:58.640 --> 00:50:00.579
I think we're gonna see more companies
624
00:50:01.065 --> 00:50:08.365
just paying these things straight up. And I don't know what the FBI's angle is behind that is that they just don't want, you know, critical infrastructure
625
00:50:08.665 --> 00:50:09.325
to be
626
00:50:10.060 --> 00:50:13.120
down because the companies are trying to be cheap asses.
627
00:50:13.420 --> 00:50:15.680
That's that's probably what it comes down to.
628
00:50:16.460 --> 00:50:18.555
But, ultimately, I think, you know,
629
00:50:20.235 --> 00:50:22.335
boards across the country of these major
630
00:50:22.875 --> 00:50:24.575
corporations are seeing what happened.
631
00:50:25.770 --> 00:50:29.550
They're coming up with plans to how to mitigate this. I'm I'm sure many
632
00:50:29.850 --> 00:50:33.630
are thinking about having Bitcoin in the reserves just in case this does happen
633
00:50:33.934 --> 00:50:36.115
to get back on their feet as soon as possible.
634
00:50:37.214 --> 00:50:38.835
It's it's just
635
00:50:39.295 --> 00:50:43.069
coming into the minds of all these people that may have not have been thinking about cryptocurrency
636
00:50:43.530 --> 00:50:47.710
at all before. And even if the connotation is bad in the light of hacking,
637
00:50:49.050 --> 00:50:50.270
you know, exposure
638
00:50:51.355 --> 00:50:52.555
no matter what your
639
00:50:53.995 --> 00:50:57.535
for no matter what the purpose is always a good thing for Bitcoin. So,
640
00:50:58.155 --> 00:51:00.415
I think this is in itself is bullish news.
641
00:51:01.520 --> 00:51:04.460
I think that's a very insightful answer. It's nice and nuanced,
642
00:51:05.000 --> 00:51:06.220
with 0 concrete,
643
00:51:06.840 --> 00:51:07.340
apply,
644
00:51:07.880 --> 00:51:09.740
which is a very professional answer.
645
00:51:11.464 --> 00:51:15.325
We have we have ride or die free, Randy McMillan, in the live chat,
646
00:51:15.944 --> 00:51:27.000
mentioning insurance scam. I mean, I don't think this was necessarily insurance scam, but as this ransomware attack start becoming more and more common and and these operators, the CEOs of the companies, and the treasuries of companies
647
00:51:27.605 --> 00:51:28.665
become more savvy,
648
00:51:29.285 --> 00:51:39.330
it could definitely be a vector. I mean, I know there is already ransomware insurance. So, I mean, that's up to the insurance companies to try and figure out how they're gonna deal with that kind of fraud.
649
00:51:39.950 --> 00:51:41.570
That's fraud like any other.
650
00:51:42.430 --> 00:51:44.690
I would just say that insurance companies
651
00:51:46.285 --> 00:51:50.305
tend to fuck over their clients as much as possible, so I'm not gonna shed a tear there.
652
00:51:50.605 --> 00:51:59.010
I don't think this is an insurance scam. I think this company cap, you know, Colonial Pipeline just had a horrible infrastructure. They're probably running, like, Windows 95 or some shit.
653
00:52:00.589 --> 00:52:04.130
They wanted sympathy from the government and from their clients,
654
00:52:04.655 --> 00:52:08.675
because they couldn't accept payments, so they just shut down everything because they were fucking greedy,
655
00:52:09.695 --> 00:52:10.195
which,
656
00:52:10.495 --> 00:52:12.170
you know, runs logically.
657
00:52:14.230 --> 00:52:17.210
The US government was able to actually catch these guys
658
00:52:17.589 --> 00:52:19.050
probably partially because
659
00:52:19.725 --> 00:52:24.705
they they used, you know, executive privilege by saying that was a terrorist attack.
660
00:52:25.325 --> 00:52:29.185
So they were able to, you know, get more power than than they could otherwise.
661
00:52:30.589 --> 00:52:32.049
And then they, obviously,
662
00:52:32.750 --> 00:52:34.690
in in proper DOJ fashion,
663
00:52:35.549 --> 00:52:37.650
they used it to attack Bitcoin afterwards,
664
00:52:39.555 --> 00:52:45.494
You know, taking advantage prices go to waste, as they say. Right. Yeah. Taking advantage of a real attack,
665
00:52:46.830 --> 00:52:49.890
makes complete sense. To me, if it was gonna be a false flag,
666
00:52:50.990 --> 00:52:54.530
they wouldn't have recovered the Bitcoin, and the pipeline would still be shut down.
667
00:52:55.835 --> 00:52:56.335
So,
668
00:52:56.635 --> 00:53:00.175
you know, if it was a false flag, it was a very weak false flag.
669
00:53:01.515 --> 00:53:04.175
And if you believe that our infrastructure is secure,
670
00:53:05.730 --> 00:53:07.510
I got a shitcoin to sell you.
671
00:53:10.450 --> 00:53:19.185
Yeah. I mean, too many things are just connected out of convenience and laziness and cost cutting. You know? Like, these things don't have to be online at all, but it's just
672
00:53:19.645 --> 00:53:23.980
they become complacent. It's it's easy. It's it's, you know, cheaper than
673
00:53:24.520 --> 00:53:25.740
having more operators,
674
00:53:27.240 --> 00:53:29.100
more employees operate things manually.
675
00:53:29.925 --> 00:53:33.305
And, yes, it's sort of hard to unwind all that stuff.
676
00:53:35.285 --> 00:53:41.309
But, I mean, I expect there to be more ransomware attacks. I expect the majority of the funds not to get recovered.
677
00:53:42.329 --> 00:53:43.069
I expect
678
00:53:43.369 --> 00:53:47.630
future ransomware attackers to learn from the mistakes of these attackers,
679
00:53:48.535 --> 00:53:51.275
and and practice better privacy, best practices,
680
00:53:51.895 --> 00:53:55.835
and better OPSEC in general, right, in terms of how they store their keys.
681
00:53:57.980 --> 00:54:04.560
And I don't think this is stopping anytime soon. And what one other interesting aspect of here, by the way, is that this ransomware
682
00:54:04.954 --> 00:54:07.855
specifically, I have it up on the screen, not this is not the
683
00:54:08.234 --> 00:54:13.535
the one of the colonial attack. The thing is when when Darkseid attacks an organization,
684
00:54:14.250 --> 00:54:29.345
most of the time the organization just pays and just doesn't say anything to the public because it just looks bad. Mhmm. So they never admit it. But every once in a while, you get information out of it. So the majority, it's it's almost like a rape victim, like the majority of times it happens, you just don't even hear about it because they're ashamed about it.
685
00:54:31.085 --> 00:54:37.930
But sometimes it happens, and we're able to glean certain knowledge from it. And Krebs on security has a whole post about Darkseid based on
686
00:54:38.230 --> 00:54:46.045
one of the large attacks that happened, and the the company actually coming out and publicly releasing all the information, because they wanted it to be out there.
687
00:54:46.425 --> 00:54:52.160
And and as you can see in the screen, they actually offer 20% discount if you pay with Monero. So
688
00:54:53.740 --> 00:54:55.280
for for better or worse,
689
00:54:57.065 --> 00:54:58.845
you know, the operators understand
690
00:54:59.225 --> 00:55:01.565
that one of their weak points is actually,
691
00:55:03.305 --> 00:55:05.325
trying to prevent the tracing of the Bitcoin.
692
00:55:09.869 --> 00:55:12.369
Yeah. That was definitely something interesting to observe.
693
00:55:13.325 --> 00:55:15.585
You know, they were willing to pay the premium
694
00:55:16.445 --> 00:55:19.745
to have some assurance that they could track this thing on chain.
695
00:55:20.500 --> 00:55:27.800
And, you know, from the side of things, I mean, we don't know exactly what led the servers to be discovered, but
696
00:55:28.465 --> 00:55:31.285
you one would think that, the on chain
697
00:55:32.065 --> 00:55:33.045
lack of privacy
698
00:55:33.345 --> 00:55:41.080
was helpful in the Well, so There's another theory I saw. So we're just all speculating at this point, Freaks, because the FBI is intentionally not telling us everything.
699
00:55:41.700 --> 00:55:44.680
There's a theory I saw, and we just recently it came out today,
700
00:55:45.515 --> 00:55:49.455
that the FBI for 2 years was running an encrypted phone network,
701
00:55:50.875 --> 00:55:51.855
called Anam,
702
00:55:52.700 --> 00:55:57.599
and they were they were they went into gangs, like, organized crimes distribution networks,
703
00:55:57.900 --> 00:56:02.515
and they were able to get the phones into the hands of distributors, and the distributors are giving them to mobsters.
704
00:56:02.975 --> 00:56:04.035
And every single,
705
00:56:05.055 --> 00:56:22.885
message was automatically getting cc'd to the FBI, and they had a backdoor key to it. So they saw every single message that went to this network for 2 years, and they literally operated the whole thing. It wasn't like they compelled the company or something. They were just literally operating an encrypted chat network. They sold it to organized criminals, and they got them on everything.
706
00:56:23.230 --> 00:56:25.970
And so one theory is is, you know, in the
707
00:56:26.270 --> 00:56:30.850
in the affidavit or whatever, it says, you know, the Bitcoin was sent to this address,
708
00:56:31.550 --> 00:56:32.050
and
709
00:56:32.415 --> 00:56:35.234
and we had the private key to that address, so we seized it.
710
00:56:37.135 --> 00:56:42.115
They might have sent it to a custodial mixer, and that custodial mixer could have been operated by the FBI.
711
00:56:42.480 --> 00:56:49.940
I mean, the freaks on Twitter don't realize, like, the majority of private Bitcoin usage even today, I mean, it's hard to calculate for sure Mhmm. Isn't really the CoinJoin,
712
00:56:50.755 --> 00:56:53.175
tools, the non custodial CoinJoin tools. The majority
713
00:56:53.555 --> 00:56:57.815
has historically, and I believe still to this day, have been these custodial mixers,
714
00:56:58.400 --> 00:57:01.940
where you're just trusting the operator. You send them you send them Bitcoin,
715
00:57:02.800 --> 00:57:06.740
and they send you someone else's Bitcoin after a certain amount of time. So maybe,
716
00:57:07.305 --> 00:57:11.805
you know, these guys just sent it into a custodial mix, and the custodial mixers, like, thank you very much.
717
00:57:13.545 --> 00:57:14.365
Could definitely
718
00:57:14.720 --> 00:57:17.700
definitely be the case. I mean, I think the takeaway here is,
719
00:57:18.160 --> 00:57:20.019
you know, trusted third parties
720
00:57:20.400 --> 00:57:26.095
are security holes, of course. Right? And if you can't verify the software that's running on your device
721
00:57:26.474 --> 00:57:28.335
and all the software you're running,
722
00:57:28.714 --> 00:57:29.694
you know, it's
723
00:57:30.380 --> 00:57:32.720
it's prime territory for a honeypot.
724
00:57:33.339 --> 00:57:34.880
And, you know, that's what
725
00:57:35.740 --> 00:57:38.160
this FBI Global Sting was. And,
726
00:57:38.700 --> 00:57:39.519
you know, it's
727
00:57:40.605 --> 00:57:45.745
bore a lot of fruit for them. It was it was brilliant, you know, like, this is gonna be something they're gonna tell their bosses,
728
00:57:46.845 --> 00:57:51.150
you will they they're gonna think it's a grand slam, and it was. They We were able to arrest so many people,
729
00:57:51.930 --> 00:57:56.829
and we were able to run this thing for years without anyone knowing. But, you know,
730
00:57:57.525 --> 00:58:04.665
when you're just running software, you can't verify on servers run by someone else. What else do you expect? Well, to be clear here, they're
731
00:58:05.319 --> 00:58:08.940
it appears they're still operating, that they haven't caught the actual guys.
732
00:58:09.559 --> 00:58:12.380
This is first of all, the funds they took is of the affiliate,
733
00:58:13.315 --> 00:58:18.695
and it doesn't we're not even sure if they caught the affiliate either, if they actually caught the people. It seems like they just got the funds.
734
00:58:20.680 --> 00:58:30.365
So I I wouldn't say that they're, you know, done operating. I I expect this specific group to keep operating, but obviously still ransomware groups in general are gonna be operating. We have some person
735
00:58:30.745 --> 00:58:39.869
I by the way, dude, your your name some person on YouTube makes me sound like an asshole every time I call you out on the show because it looks like I'm just ignoring your name. But his real name on
736
00:58:40.490 --> 00:58:46.670
his his his name on YouTube is some person. He's asking why are custodial mixers still the thing, and it's twofold.
737
00:58:47.275 --> 00:58:48.175
Actually, it's threefold.
738
00:58:49.035 --> 00:58:52.335
A lot of times they're cheaper than using the CoinJoin tools.
739
00:58:52.715 --> 00:58:55.455
Mhmm. They're they're way easier to use,
740
00:58:56.079 --> 00:58:57.220
with less gotchas,
741
00:58:58.960 --> 00:59:00.740
and well, number 23,
742
00:59:01.040 --> 00:59:07.515
it has a has a asterisk next to it with less gotchas, easier to use, and on chain privacy is better. But with 23,
743
00:59:08.855 --> 00:59:14.839
that's if you trust the provider. It's custodial privacy. Right? So if you trust the provider and the provider is keeping logs
744
00:59:15.300 --> 00:59:18.839
and isn't actually the FBI waiting for you to send in your money,
745
00:59:20.099 --> 00:59:31.195
they're way easier to use, and on chain, it's perfect. It's, like, not perfect privacy, but it completely breaks the link on chain. It's not visible on chain. Like, you send you send your Bitcoin and they send you some other Bitcoin.
746
00:59:31.940 --> 00:59:37.560
There's no link because the link is them sending you someone else's Bitcoin, and that happens off chain. Yeah. Absolutely.
747
00:59:38.180 --> 00:59:42.085
So I'll just on the outside of the server, but the inside server has everything.
748
00:59:42.865 --> 00:59:50.484
Yeah. So he just apologized. You don't have to apologize. You you could keep your you could keep your name if you want. I appreciate you I appreciate you coming into live chat all the time.
749
00:59:51.039 --> 00:59:54.019
The he just apologized because his name is some person.
750
00:59:54.480 --> 00:59:55.380
Quit apologizing,
751
00:59:55.680 --> 01:00:01.365
freaks. Come on. So yep. And so what a lot of people do, or historically, what a lot of people did is
752
01:00:01.745 --> 01:00:08.645
if you don't and so you have custodial risk. So not only do are you trusting them with your privacy, obviously, you're trusting them with your money.
753
01:00:09.950 --> 01:00:10.450
Yeah.
754
01:00:12.670 --> 01:00:20.664
They could steal your money. So what a lot of people do for on the trusting with them on the privacy side is they'll chain them together. Right? So they'll go from 1
755
01:00:21.045 --> 01:00:26.730
custodial mixer to the next custodial mixer. So then all of a sudden, you're mostly just trusting them with,
756
01:00:29.350 --> 01:00:32.410
you're mostly just trusting them with actually stealing your funds.
757
01:00:32.875 --> 01:00:36.655
You're you're less so trusting them with the privacy side because if you go from
758
01:00:37.595 --> 01:00:41.190
mixer to mixer, they they don't have all the information. Right?
759
01:00:43.109 --> 01:00:46.569
Yeah. Yeah. I mean, when you're using, like, a traditional coin joint, like,
760
01:00:46.950 --> 01:00:50.490
you don't have as much opacity. So someone could guess, like, okay.
761
01:00:50.845 --> 01:00:52.465
Matt is 1 in these
762
01:00:53.165 --> 01:00:55.585
5, 10, 100 people. Right?
763
01:00:55.885 --> 01:00:56.385
Whereas,
764
01:00:58.160 --> 01:01:01.299
unchained for this custodial mixer is just completely opaque.
765
01:01:01.920 --> 01:01:04.260
But, however, if that person is a honeypot
766
01:01:04.720 --> 01:01:06.740
or the FBI, they have the entire
767
01:01:07.040 --> 01:01:07.455
recipe
768
01:01:07.855 --> 01:01:09.315
for what input came in,
769
01:01:09.695 --> 01:01:13.875
who did we send it out to, etcetera. It's like they have the exact answer sheet.
770
01:01:14.415 --> 01:01:15.875
Whereas, you know, a noncustodial
771
01:01:16.175 --> 01:01:18.080
mix as long as the,
772
01:01:18.720 --> 01:01:19.380
the mixing
773
01:01:19.840 --> 01:01:27.855
is sound, the strategy for it, like, they don't know anything really. And if you if you didn't use Tor or VPN, they'll have your IP address too.
774
01:01:28.235 --> 01:01:29.375
Yep. Of course.
775
01:01:29.675 --> 01:01:34.570
It's kind of a similar risk to a VPN in general. So I got custodial privacy risk.
776
01:01:35.190 --> 01:01:38.170
Yeah. Of course. You know, you're trusting that VPN provider
777
01:01:38.710 --> 01:01:41.450
with all the sites you went to, what IP you're coming from.
778
01:01:43.935 --> 01:01:51.475
Yeah. Yeah. That that's a great analogy. Yeah. Like, you guys you freaks give me shit about 200 k by conference day, but what'll really kick me in the balls if it moleved.net
779
01:01:51.920 --> 01:01:52.819
turns into a honeypot.
780
01:01:53.280 --> 01:01:56.020
So I've been recommending it to you freaks for years now.
781
01:01:58.640 --> 01:02:00.735
But yeah. So I think that was a pretty good
782
01:02:01.215 --> 01:02:05.795
overall view of the custodial mixers we went into there. Oh, so I I have another
783
01:02:06.575 --> 01:02:07.715
question for you.
784
01:02:08.870 --> 01:02:10.650
Do you expect that
785
01:02:11.830 --> 01:02:19.015
either these ransomware providers switch to a Monero only model or change their premium structure? So right now, it seems like they're pricing it at 20%,
786
01:02:21.875 --> 01:02:23.015
20% additional
787
01:02:23.315 --> 01:02:30.930
cost or risk if you if you use Bitcoin. Do you think that number goes up, or do you think they just switch over to Monero completely, or is this just a dumb question?
788
01:02:32.829 --> 01:02:42.935
I think that, you know, operationally, it would probably be better to just switch to Monero. But at the same time, it's a little harder to procure, especially if it's like a large corporation getting
789
01:02:43.430 --> 01:02:44.170
as much.
790
01:02:44.790 --> 01:02:48.569
They might not have exposure to the exchanges that have Monero.
791
01:02:49.670 --> 01:02:51.609
So I I see that premium
792
01:02:52.785 --> 01:02:53.525
sticking around,
793
01:02:54.224 --> 01:02:55.045
maybe increasing,
794
01:02:56.224 --> 01:03:00.885
but, you know, if anything, I think people are gonna change their security postures as
795
01:03:01.880 --> 01:03:09.020
to what they do with the private keys more than anything. I mean, that's what makes the most sense to me at least. Right? Like, why cut off
796
01:03:09.665 --> 01:03:13.445
the potential of it being paid if a corporation only wanted in BTC,
797
01:03:13.985 --> 01:03:19.900
especially if the FBI is going and saying, oh, hey. Look. We could sort of recover it in BTC. You know, like, why
798
01:03:20.440 --> 01:03:22.859
remove that and the premium? Right?
799
01:03:24.415 --> 01:03:27.635
Why not just fix the way you're storing your keys? Like, it's ridiculous.
800
01:03:29.055 --> 01:03:33.200
Right. So so let's jump into that. That was my the next place I was going with this.
801
01:03:34.880 --> 01:03:36.420
Evan, is there not
802
01:03:36.880 --> 01:03:38.660
a use case for hot wallets?
803
01:03:40.295 --> 01:03:44.235
Is there not a use case for hot wallets? Of course, there's a use case for hot wallets. Right?
804
01:03:44.775 --> 01:03:47.675
What are you talking about, bro? Is is Zeus a cold wallet?
805
01:03:49.300 --> 01:03:58.095
No. Zeus hacked your node on the at home, that's a hot wallet. Lightning's a hot wallet right now. I mean, it always will be. Right? Because their state has to be maintained
806
01:03:58.395 --> 01:04:05.270
and passed around on the gossip network. Right? When I tweeted that out, I had 2 different types of people. I had the people that were saying that I was flooding Lightning,
807
01:04:05.970 --> 01:04:17.545
and I had the people that were saying, wait, Lightning's a hot wallet. So I was very happy that I tweeted it out. Well, you know, anytime you could educate someone, that's always good, but come on, Matt. You know that was bait, that tweet.
808
01:04:18.805 --> 01:04:25.210
You know, it was it was half bait, half, you know, trying to provoke a conversation here. Right? Because
809
01:04:25.750 --> 01:04:30.090
it it seems that there's been a large argument on a large contingent of Bitcoin Twitter
810
01:04:30.405 --> 01:04:31.785
that say the most unrealistic
811
01:04:32.245 --> 01:04:33.625
part of this whole exercise
812
01:04:34.645 --> 01:04:44.720
is that this group was using a a corporate server. It it appears they were using a corporate server. That's if the custodial mixer theory is incorrect, which I still think is a really cool theory.
813
01:04:46.525 --> 01:04:47.325
And just like,
814
01:04:49.005 --> 01:04:53.850
like, they must have had such an awe fuck moment when they sent it in, but that's, that's besides the point
815
01:04:54.810 --> 01:04:58.830
that that there's this that there's this idea that because they were using a hot wallet,
816
01:05:00.250 --> 01:05:01.070
that's unrealistic.
817
01:05:01.545 --> 01:05:06.345
Like, a shit ton of people in this space use hot wallets. I mean, we had a guy we had
818
01:05:06.985 --> 01:05:11.325
every centralized exchange has a hot wallet. The whole Lightning Network's hot wallet.
819
01:05:11.770 --> 01:05:13.150
Any any any,
820
01:05:13.770 --> 01:05:30.530
freak who has used CoinJoin is is inherently using a hot wallet because it needs to coordinate with each other. If you're running Whirlpool or join market 247, you're using a hot wallet. The easiest way to do that with high performance on whether that's Lightning or CoinJoin or whatnot is to is to use a a well connected server.
821
01:05:32.430 --> 01:05:48.190
You know, we had the guy who lost a 1,000 coins on Electrum. He was using, obviously, he was using a hot wallet, and he clicked the phishing link. That's right. This this idea that people aren't using hot wallets, well, you know, should be educated that that people should try and use cold storage when possible,
822
01:05:48.570 --> 01:06:00.275
but it's a calculated risk. Right? The we have Anthony in the comments saying he's a hot wallet. Yeah. We we we saw him in Miami. He was very hot all the time. In Miami, you have to take 3 showers a day. You have you have no choice.
823
01:06:01.619 --> 01:06:04.280
It's a calculated risk. Like, if these hackers are,
824
01:06:05.380 --> 01:06:12.495
you know, bringing in 6000 Bitcoin every 2 years, who the fuck cares if 60 Bitcoin gets seized because it's on a hot wallet?
825
01:06:14.795 --> 01:06:16.815
Yeah. That's true. But at the same time,
826
01:06:17.700 --> 01:06:24.599
you know, it's not really a high cost to get it into a cold setup. I I think it's like more of an education issue. Right? It's gotta be.
827
01:06:25.275 --> 01:06:25.855
You know,
828
01:06:26.635 --> 01:06:32.975
as great as the show is, for example, right, we only got, like, 200 people listening on average, at least on the restream over here. Right?
829
01:06:33.410 --> 01:06:34.710
So I think
830
01:06:35.250 --> 01:06:36.230
despite people,
831
01:06:36.690 --> 01:06:37.350
you know,
832
01:06:38.210 --> 01:06:43.915
having technical ability and being good at cyber and even being able to facilitate great things like this,
833
01:06:44.215 --> 01:06:49.994
you know, people's general knowledge about Bitcoin is lacking. The freaks are like the the point o 1%.
834
01:06:51.480 --> 01:06:55.640
Just to be clear, the the significant majority of the freaks coming through the podcast feeds.
835
01:06:56.520 --> 01:06:57.580
Over over 20,000
836
01:06:57.880 --> 01:06:59.740
will listen to this episode most likely.
837
01:07:00.955 --> 01:07:03.035
But, yeah, I agree. It's it's it's it's,
838
01:07:04.315 --> 01:07:10.230
we're definitely still early days. We're absolutely early days. Oh, we're A lot of times, it's it's a convenience thing. Right? You just
839
01:07:11.170 --> 01:07:15.910
the the real question about using a server to me is not necessarily the hot wall, it is.
840
01:07:16.685 --> 01:07:23.665
And I guess if you're an organized crime, it's probably not that hard, but most of these servers require some kind of k y c to to use
841
01:07:24.445 --> 01:07:25.425
a corporate server.
842
01:07:25.760 --> 01:07:30.579
But I guess I guess if you're an organized crime, you can get fake identities, stolen identities relatively easily.
843
01:07:33.275 --> 01:07:33.775
Yep.
844
01:07:34.555 --> 01:07:35.055
Definitely.
845
01:07:36.715 --> 01:07:38.495
My point wasn't to flood lightning.
846
01:07:40.559 --> 01:07:50.605
My point is that everyone just no one talk no one talks about the fact that Lightning uses a hot wallet, that Lightning uses hot wallets. Like, very I mean, not nobody is hyperbolic.
847
01:07:51.225 --> 01:07:55.645
Few people talk about it. Yeah. Absolutely. And we're fine with that. And and
848
01:07:56.180 --> 01:07:57.080
if we're correct
849
01:07:57.540 --> 01:07:58.360
about Lightning,
850
01:07:59.140 --> 01:08:01.800
there's gonna be, like, 1,000,000,000 of dollars on hot wallets.
851
01:08:02.820 --> 01:08:03.320
Mhmm.
852
01:08:03.620 --> 01:08:04.120
Right?
853
01:08:04.515 --> 01:08:09.095
Definitely. And the routing nodes are gonna have 1,000,000 of dollars on each routing node.
854
01:08:09.475 --> 01:08:15.870
Yeah. They're gonna be TARIUS, man. Like it's they need to be secured. There needs to be measures to mitigate all this sort of risk.
855
01:08:16.810 --> 01:08:18.110
Keys need to be held
856
01:08:18.784 --> 01:08:19.445
on infrastructure
857
01:08:19.905 --> 01:08:24.485
that the the the routers own. You know, there's a lot of challenges in,
858
01:08:25.264 --> 01:08:29.989
doing this stuff, especially as the big corporations and enterprise operations,
859
01:08:31.090 --> 01:08:33.750
come into the game. Like, it's it's not just, like,
860
01:08:34.210 --> 01:08:35.030
setting up.
861
01:08:36.645 --> 01:08:45.304
It's not as easy as setting up a BTC pay and just plugging in an expo. You know what I mean? Like, this is something that you actively have to maintain. You gotta maintain the state
862
01:08:45.640 --> 01:08:47.100
and make sure you don't get hacked.
863
01:08:50.199 --> 01:08:53.179
Yeah. It's even it's even worse than just a regular hot wallet.
864
01:08:53.635 --> 01:08:54.755
Yeah. Absolutely. And
865
01:08:56.835 --> 01:08:58.375
absolutely. And the challenge
866
01:08:59.235 --> 01:09:01.335
that this requires is the reason why
867
01:09:01.670 --> 01:09:03.050
we don't see exchanges,
868
01:09:04.630 --> 01:09:07.610
have Lightning yet. It is the reason, like, you don't see Lightning
869
01:09:07.989 --> 01:09:10.409
integrated on Cash App yet. You know what I mean?
870
01:09:10.815 --> 01:09:16.355
Like, there's a lot of boxes to tick to make sure that your setup is secured generally, especially when you're serving,
871
01:09:16.655 --> 01:09:18.595
you know, potentially millions of customers.
872
01:09:19.170 --> 01:09:19.989
So it's not
873
01:09:21.370 --> 01:09:21.870
easy.
874
01:09:23.250 --> 01:09:24.309
Agreed. Agreed.
875
01:09:26.130 --> 01:09:27.510
I mean, do do you see
876
01:09:29.515 --> 01:09:30.015
Whirlpool,
877
01:09:30.395 --> 01:09:32.335
unspent capacity is ticking on up?
878
01:09:33.515 --> 01:09:36.415
Hell, yeah. You love to see it. Smelting sets.
879
01:09:36.929 --> 01:09:41.110
But that's, like, that's a perfect example. Right? Like, if you wanna sit in that remixing pool,
880
01:09:41.730 --> 01:09:43.190
you want it running 247,
881
01:09:44.050 --> 01:09:45.909
that's a calculated risk you're taking.
882
01:09:46.364 --> 01:09:50.145
I think it can be worth it, but it's a risk that you should calculate in your head
883
01:09:50.685 --> 01:10:02.369
and do accordingly. Right? Like, it shouldn't be all your funds at once. Absolutely. I mean, definitely, it's a different situation when you're doing something like Whirlpool or or setting up lightning at home, especially if you're just
884
01:10:02.995 --> 01:10:05.895
not exposed to the plane that web and it's just over tour services.
885
01:10:06.275 --> 01:10:12.650
You know, providing your machines, getting the updates, like, your chance your odds are really low of something catastrophic happened.
886
01:10:13.210 --> 01:10:22.110
But still, something could happen. You could have a loss that you can't recover from. And that's why anytime you use any of these services and use a hot wallet,
887
01:10:22.995 --> 01:10:40.050
you need to measure the amount that you're putting in appropriately. You do not want the vast majority of your funds, like your savings, your life savings on one of these hot wallets. Right? That's why I think the the analogy of checking account versus savings account is is so perfect. It's like you don't want everything in your checking account.
888
01:10:42.605 --> 01:10:47.985
So my lady wants some person to know that that you're her favorite NIM, and that you shouldn't change your NIM.
889
01:10:50.320 --> 01:10:52.260
It's good. You know what it reminds me of?
890
01:10:53.920 --> 01:10:56.260
It it reminds me of, like, on Ipods when
891
01:10:56.640 --> 01:10:57.540
you had, like,
892
01:10:58.225 --> 01:11:02.005
unknown artists or various artists, you know, everything would just get
893
01:11:02.625 --> 01:11:10.110
put there. You know, you can't search for that Google phrase. You know what I mean? Some person is not going to turn up any results or will it turn up like billions of results.
894
01:11:10.970 --> 01:11:11.470
So,
895
01:11:11.850 --> 01:11:12.350
yeah,
896
01:11:12.650 --> 01:11:14.670
some person great way to not get found.
897
01:11:15.005 --> 01:11:17.185
Oh, like, I'd someone I've one of the
898
01:11:17.965 --> 01:11:20.705
one of the OGs, he changed his legal name to Nobody.
899
01:11:22.125 --> 01:11:22.285
So
900
01:11:23.245 --> 01:11:27.370
and then I think there was, like, a someone's name was null, and it, like, broke a bunch of systems,
901
01:11:28.390 --> 01:11:31.130
which was pretty good. Have you ever seen that xkcd
902
01:11:31.590 --> 01:11:32.570
comic where
903
01:11:33.025 --> 01:11:34.704
the guy names his kid,
904
01:11:35.585 --> 01:11:37.125
drop tables? Anyway,
905
01:11:37.985 --> 01:11:39.125
preschool database.
906
01:11:39.905 --> 01:11:41.525
That's it. Little Tommy Tables.
907
01:11:42.340 --> 01:11:43.160
There we go.
908
01:11:44.580 --> 01:11:45.960
That's good upside, Freaks.
909
01:11:46.980 --> 01:11:52.165
Smelting sats, you mentioned, and some person called it out. I mean, the reason we say smelting sats
910
01:11:54.725 --> 01:11:55.465
is because
911
01:11:55.925 --> 01:11:57.145
when you smelt gold,
912
01:11:58.005 --> 01:11:58.885
you're really creating
913
01:11:59.840 --> 01:12:01.620
if you take 5 gold bars and
914
01:12:02.080 --> 01:12:02.580
you
915
01:12:03.600 --> 01:12:04.580
put it all together,
916
01:12:05.680 --> 01:12:07.860
and then you pour 5 new gold bars,
917
01:12:09.415 --> 01:12:13.514
you basically have 5 new UTXOs. I think it's a way better analogy than
918
01:12:14.135 --> 01:12:17.034
than mixing. I I I really don't think CoinJoin is mixing,
919
01:12:18.050 --> 01:12:22.790
and I don't think it's just semantics even though the semantics do help us because mixing is
920
01:12:23.489 --> 01:12:26.710
has a negative connotation, and custodial mixers have,
921
01:12:27.795 --> 01:12:30.054
there's some precedence of them being deemed illegal.
922
01:12:30.994 --> 01:12:36.215
But it's a batch Bitcoin send transaction, and really, at the end of the day, if if you're using a proper implementation,
923
01:12:37.520 --> 01:12:40.980
you're getting 5 new UTXO's with no discernible history.
924
01:12:41.600 --> 01:12:42.980
So it's way more similar,
925
01:12:44.240 --> 01:12:47.685
it's way more similar to melting 5 gold coins together
926
01:12:48.385 --> 01:12:50.245
and creating 5 new gold coins
927
01:12:50.625 --> 01:12:51.365
than it is
928
01:12:51.745 --> 01:12:54.405
just shuffling the 5 coins between each other. Right?
929
01:12:54.870 --> 01:13:02.970
Absolutely. It's definitely better than just a shuffle mix where, you know, maybe you're taking private keys and moving them around to someone else. Like, now those
930
01:13:03.825 --> 01:13:09.365
5 coins could have come from each of those 5 coins could have come from any one of the incoming
931
01:13:09.745 --> 01:13:10.485
5 coins.
932
01:13:11.860 --> 01:13:13.800
So, yeah, it's definitely not a shuffle.
933
01:13:15.700 --> 01:13:20.645
So, Evan, did you did you intentionally remove your name? You think it's, like, good OPSEC for you?
934
01:13:21.605 --> 01:13:23.785
Did I remove my name from what?
935
01:13:24.165 --> 01:13:35.600
From the bottom of the of your thing. It doesn't show your name anymore. Just says my name. Man. Matt, there's definitely a difference between the guest software and the host software because I'm still seeing my name, man.
936
01:13:35.935 --> 01:13:37.315
Okay. Well, someone asked,
937
01:13:37.855 --> 01:13:47.040
who is the guest? So maybe I'm just listen. My OPSEC is already caked as far as who I am. Yeah, dude. Especially after this fucking week, We met so many Bitcoiners.
938
01:13:47.660 --> 01:13:50.880
Oh, man. Yeah. For sure. I I bet my phone is compromised,
939
01:13:51.340 --> 01:13:52.080
my computer.
940
01:13:52.775 --> 01:14:02.155
But it's all good, Matt, because we already operate under the assumption that all our devices are potent. So okay. Exactly. As you should. And that's, you know, probably what the ransomware guy should have done as well
941
01:14:03.790 --> 01:14:04.370
in hindsight.
942
01:14:07.550 --> 01:14:11.570
Yeah. So, I mean, we wanted to keep this on the the shorter end,
943
01:14:12.705 --> 01:14:14.285
because we're both,
944
01:14:16.005 --> 01:14:19.465
we're kinda both in Bitcoin detox. You know? It's just been just a marathon.
945
01:14:20.270 --> 01:14:25.489
So I expect this to be one of the shorter dispatches, but I hope it was high signal. But before we do,
946
01:14:26.190 --> 01:14:28.690
there was 2 topics that I really wanted to hit.
947
01:14:29.245 --> 01:14:29.905
We already
948
01:14:30.605 --> 01:14:33.345
we already hit the encrypted phone network,
949
01:14:34.765 --> 01:14:37.025
ANOM that they were running. I mean,
950
01:14:38.340 --> 01:14:47.560
it kind of feels like if they're running that, like, they could be running a shit they're probably running a ton of things. Right? Like, they must they're they gotta have their hands in some Bitcoin things.
951
01:14:50.185 --> 01:14:53.805
That's that that's that should be a wake up call for people. You have any thoughts there?
952
01:14:58.860 --> 01:15:00.000
Say that again? Sorry.
953
01:15:00.699 --> 01:15:05.094
They have this, you know we found out the FBI. They finally admitted that they
954
01:15:05.474 --> 01:15:07.335
were running this encrypted phone network,
955
01:15:09.610 --> 01:15:13.150
ANOM, right, where they were just intercepting every message that the
956
01:15:13.690 --> 01:15:19.795
the organized crime was sending was just going to them. Oh, you're saying you gotta have some Bitcoin operation going on.
957
01:15:20.175 --> 01:15:22.035
Yeah. I mean, look, I if
958
01:15:22.415 --> 01:15:26.630
yeah. I I don't know. I I feel like they could be running some wallets.
959
01:15:27.570 --> 01:15:28.469
I mean, definitely
960
01:15:28.929 --> 01:15:31.030
some custodial wallets, some
961
01:15:32.025 --> 01:15:37.805
software that connects to servers they own. You know what I mean? Like, software that doesn't let you hit
962
01:15:38.344 --> 01:15:39.645
or connect your own node.
963
01:15:40.710 --> 01:15:45.770
You know, custodial mixing services would be a clear one as they could piece together the entire history.
964
01:15:48.045 --> 01:15:53.745
Yeah. Freaks, I mean, you gotta be vigilant out there. You know, if something sounds too good to be true, it probably is.
965
01:15:54.285 --> 01:15:55.105
You know, decentralized
966
01:15:55.485 --> 01:15:56.785
services are definitely
967
01:15:58.000 --> 01:15:59.540
prime suspects to be honeypots.
968
01:16:00.400 --> 01:16:08.315
And, you know, any software that's closed source, right, that you can't verify, you can't build yourself, you can't connect your own nodes, someone else is seeing your transactions,
969
01:16:08.855 --> 01:16:11.915
these are all prime suspects to be operated by the FBO.
970
01:16:12.320 --> 01:16:14.980
I'm not saying that they are for sure, but
971
01:16:15.280 --> 01:16:19.275
counter chances are there's gotta be a couple that the FBI are running for sure.
972
01:16:19.755 --> 01:16:22.815
Like, that that applies to, like, every iPhone app.
973
01:16:23.435 --> 01:16:24.574
Closed source things.
974
01:16:24.875 --> 01:16:32.050
Yeah. Absolutely. You know And because you're gonna have an open source iPhone app, you just can't verify you can't verify that it's the same code that's running.
975
01:16:32.670 --> 01:16:38.345
Absolutely. Who knows? Like, I I provide Juice open source. Right? And you could build it yourself and put it onto your own phone.
976
01:16:38.805 --> 01:16:44.730
But who's to say that Apple is not piecing it together behind the scenes and putting out a version that,
977
01:16:45.770 --> 01:16:47.870
can you build it yourself and run it on iPhone?
978
01:16:48.970 --> 01:16:53.790
Well, yeah, of course. I mean, when if I'm using it on the iPhone, I'm using a version I built. But,
979
01:16:54.225 --> 01:17:01.525
you know, I recommend the freaks. They go out and use Android and use the verified bills that either F droid builds
980
01:17:01.850 --> 01:17:08.510
or build it themselves or or use the binary I have and sign if but only if you trust me. Otherwise, just build it yourself.
981
01:17:08.865 --> 01:17:15.205
IOS, you know, it's sort of hard to get around that. You're sort of screwed one way or the other. I mean, unless you're going line by line,
982
01:17:16.510 --> 01:17:21.090
building building it yourself. I guess I guess it it does increase it improves the trust profile.
983
01:17:21.469 --> 01:17:26.265
It it improves the trust profile regardless. Do that either through going line by line, so it's tricky.
984
01:17:26.725 --> 01:17:27.225
Yeah.
985
01:17:27.685 --> 01:17:30.505
So the ultimately, you're trusting the maintainer to a degree,
986
01:17:31.045 --> 01:17:31.545
obviously.
987
01:17:32.220 --> 01:17:34.239
Yeah. Ultimately, you could have some It's
988
01:17:36.140 --> 01:17:40.320
better if you have a signed builder, you build it yourself, but but it is what it is.
989
01:17:42.085 --> 01:17:43.704
But these are, like, auto updatable
990
01:17:44.005 --> 01:17:45.145
apps that are, like,
991
01:17:45.764 --> 01:17:48.025
you can't you can't verify it all on iPhone,
992
01:17:49.830 --> 01:17:52.390
Like, they could easily probably just serve someone
993
01:17:52.790 --> 01:17:56.570
they don't that doesn't have to be the whole app either. Right? They could just serve you
994
01:17:57.765 --> 01:18:05.465
they could serve you a malicious update just a single person, if you're on iPhone or Android or even on Google Play. Right? If you have auto updates enabled.
995
01:18:06.085 --> 01:18:06.824
For sure.
996
01:18:08.330 --> 01:18:11.790
Yeah, man. I mean, end of the day, these platforms, they have a lot of,
997
01:18:12.250 --> 01:18:15.335
rooms for black back doors, you know, like, something like Imessage. Right?
998
01:18:16.455 --> 01:18:18.235
It's not like signal where,
999
01:18:19.094 --> 01:18:23.995
you know, you create a new key and everyone gets notified you changed it. Like, this is a system
1000
01:18:24.619 --> 01:18:32.559
built to add new devices to it and share the keys. Like, Apple controls the whole thing. They could just add a device to the f that belongs to the FBI
1001
01:18:32.860 --> 01:18:33.760
to your profile,
1002
01:18:34.365 --> 01:18:37.985
have it coded so that it doesn't send you a notification that you added it,
1003
01:18:38.365 --> 01:18:41.745
and, all of a sudden, they have a copy of all your messages
1004
01:18:42.380 --> 01:18:43.600
just like the FBI,
1005
01:18:44.300 --> 01:18:45.440
global ANOM
1006
01:18:45.820 --> 01:18:52.865
sting. You know what I mean? I I would just point out to the freaks that, like, when you're talking about threat models, you know, the FBI, the NSA,
1007
01:18:53.245 --> 01:18:58.545
Chinese special service, the Russian special service, like, these are the most sophisticated actors in the world.
1008
01:18:58.870 --> 01:19:00.330
Okay? So I don't want you
1009
01:19:01.030 --> 01:19:01.929
to get overwhelmed
1010
01:19:02.230 --> 01:19:11.485
because you can't secure yourself from them. You know? 99% of the world can't secure themselves from them. Yeah. Absolutely. So you have to plan your threat model appropriately, and,
1011
01:19:12.445 --> 01:19:15.185
and that's why that's why we like cold storage, because
1012
01:19:15.760 --> 01:19:17.540
if you just don't have your keys online,
1013
01:19:18.800 --> 01:19:29.525
you reduce the overwhelming majority of risk that they it had it has to be local. And if you use when we're talking about actionable discussion here, if you use, you know, cold storage multisig
1014
01:19:30.304 --> 01:19:31.925
located in different geographies,
1015
01:19:32.545 --> 01:19:33.605
different areas,
1016
01:19:34.430 --> 01:19:39.730
then they've an attacker physically has to go to those locations, those multiple different locations
1017
01:19:40.590 --> 01:19:41.475
to access it.
1018
01:19:42.595 --> 01:19:44.855
If you're using things on your keys like
1019
01:19:45.795 --> 01:19:48.055
the timer feature on on Coldcard,
1020
01:19:48.675 --> 01:19:49.175
where
1021
01:19:49.640 --> 01:19:58.140
once you enter the PIN, you have to wait a week before you're able to access the key. Things like that can reduce your attack surface very, very easily
1022
01:19:59.425 --> 01:20:00.325
without overcomplicating
1023
01:20:00.785 --> 01:20:06.725
things. And because once you start overcomplicating things, you end up presumably shooting yourself in the fruit. Most Bitcoin is lost
1024
01:20:07.340 --> 01:20:17.245
because of user error, because you get too complicated, because you start fucking things up. But the single biggest thing you can do is just never connect your keys to the Internet. Your keys are never on the Internet,
1025
01:20:18.905 --> 01:20:24.925
then, you know, 9 times out of 10, the only way they're able to access them, the only way an attacker is able to access them
1026
01:20:26.010 --> 01:20:29.550
is to come in and actually take your keys from from the device.
1027
01:20:29.929 --> 01:20:36.605
You know, they have to they have to come into the physical location to take them. We had Craig Raw on the show. I really wanna get him back on,
1028
01:20:37.385 --> 01:20:39.645
and he said the single biggest thing for Multisig
1029
01:20:40.025 --> 01:20:50.190
to him, because he's from South Africa, there's tons of crime down there. There's tons of burglaries. The single biggest thing is that someone can't come into his home with a gun and and and take his keys,
1030
01:20:50.865 --> 01:20:53.925
because they're they're located in geographically distributed areas.
1031
01:20:54.305 --> 01:21:07.980
Now, unfortunately, if if someone's a deranged criminal and they come in and they don't believe that you have multisig, they might do a lot of damage to you. So, really, where I wanna see this go is I wanna see the assumption be made that so many Bitcoiners are using
1032
01:21:08.335 --> 01:21:11.635
geographically distributed multisig that attackers just assume
1033
01:21:12.255 --> 01:21:16.275
they just assume before they come in that the majority of your funds are in that kind of setup,
1034
01:21:16.800 --> 01:21:22.260
similar to, like, an ADT sign or some kind of alarm system sign that we see on the on people's lawns. Right?
1035
01:21:24.185 --> 01:21:25.005
Yeah. Absolutely.
1036
01:21:25.305 --> 01:21:28.605
It would be funny if Rodolfo started producing some songs like that.
1037
01:21:29.864 --> 01:21:30.925
You know what I mean?
1038
01:21:31.545 --> 01:21:32.045
Yeah.
1039
01:21:32.370 --> 01:21:36.710
Geographically distributed multisig lives here. But actually, right now, it'd be bad because
1040
01:21:37.010 --> 01:21:40.150
just so few Bitcoiners that it will literally be a sign. It's like, I'm a Bitcoiner.
1041
01:21:41.255 --> 01:21:44.475
But that's so that's a maybe that's a thought for after hyper Bitcoinization.
1042
01:21:46.295 --> 01:21:51.980
And then last but not least, the one topic I wanted the last topic I wanted to get you with before you leave us,
1043
01:21:53.559 --> 01:21:55.340
is did you see this new,
1044
01:21:57.079 --> 01:22:01.395
trust minimized VPN that Apple released? I think they're calling it Private Relay.
1045
01:22:02.735 --> 01:22:03.955
Yeah. So I saw
1046
01:22:04.495 --> 01:22:08.210
the headline, but I did not dive into the specifics of it.
1047
01:22:08.690 --> 01:22:12.630
It's intriguing to say the least, but just like any VPN,
1048
01:22:13.250 --> 01:22:14.710
I worry about Apple
1049
01:22:15.545 --> 01:22:20.285
having this network visibility into what all their Safari users are doing. So,
1050
01:22:21.305 --> 01:22:22.765
I really need to
1051
01:22:23.290 --> 01:22:27.230
be swayed to to trust it for anything serious. You know what I mean?
1052
01:22:27.770 --> 01:22:29.630
Yeah. So, I mean, with Apple,
1053
01:22:32.114 --> 01:22:34.375
a lot of times it just feels like they're virtue signaling.
1054
01:22:34.915 --> 01:22:35.415
Mhmm.
1055
01:22:36.275 --> 01:22:40.695
But also sometimes it feels like I mean, look, the threat model they have for their
1056
01:22:41.210 --> 01:22:43.630
customers is, like, not to protect them from themselves,
1057
01:22:44.410 --> 01:22:50.455
not to protect them from Apple, you know, themselves being from Apple's perspective or the US government, but to protect them from everyone else.
1058
01:22:51.175 --> 01:22:52.715
The exception, of course, being
1059
01:22:53.095 --> 01:22:58.235
that they, like, co own Chinese Icloud servers with the Chinese government, so China doesn't have to give them
1060
01:22:58.820 --> 01:23:01.400
a warrant or anything to access it. They can just,
1061
01:23:03.139 --> 01:23:07.365
they can just go in themselves. So they're like, oh, the the Chinese government hasn't given us,
1062
01:23:08.005 --> 01:23:12.985
information requests. Yeah. Because the Chinese government just has straight access to it, so they didn't have to ask Apple for it.
1063
01:23:13.845 --> 01:23:19.240
So that's like, you know, one hand says one thing, the other hand is like scratching the CCP's back. But,
1064
01:23:20.100 --> 01:23:23.480
in the case of this, I mean, obviously, it's not open source.
1065
01:23:23.855 --> 01:23:28.035
There's no way for us to really trust Apple's claims, but the idea is basically,
1066
01:23:30.175 --> 01:23:31.155
every connection,
1067
01:23:32.050 --> 01:23:34.870
that goes out goes to 2 independent servers.
1068
01:23:35.810 --> 01:23:38.630
So Apple, I guess, controls 1.
1069
01:23:39.325 --> 01:23:42.465
I guess Apple controls both, but the second server doesn't know,
1070
01:23:43.085 --> 01:23:45.105
what the first server is saying to itself.
1071
01:23:46.700 --> 01:23:50.560
What what what the the first server is doing some kind of,
1072
01:23:53.340 --> 01:23:53.840
obfuscation,
1073
01:23:54.140 --> 01:23:56.055
so that the second server doesn't know.
1074
01:23:56.695 --> 01:24:00.795
Ideally, to me, it would seem like it should be run by 2 independent companies,
1075
01:24:01.175 --> 01:24:09.740
so both companies would have to collude, and that's something we see with Unchained Capital with their multisig setup for their their their loan product. We're, like, you hold one key, they hold one key, and
1076
01:24:10.120 --> 01:24:17.945
a authorized third party holds the 3rd key, so those 2 parties have to include against you to basically attack you, which also kinda like what we're talking about with the custodial mixers,
1077
01:24:18.725 --> 01:24:22.275
chaining them together. Right? If you chain them together, then they have to collude.
1078
01:24:23.240 --> 01:24:25.420
Yeah. Similar to, like, if we use VPNs
1079
01:24:25.800 --> 01:24:34.285
chained together from different different countries, you'd get an effect like that. Right. So the so the Apple fanboy response to this is, is, this is amazing.
1080
01:24:34.985 --> 01:24:42.925
I'm not an Apple fanboy, but this is what an Apple fanboy would say. This is amazing. Just more proof that Apple really cares about their customers' privacy, and it's the best for privacy.
1081
01:24:43.790 --> 01:24:46.849
And then, like, the Cypherpunk or hardcore BitCorner look
1082
01:24:47.230 --> 01:24:47.889
would be,
1083
01:24:48.190 --> 01:24:49.329
you know, this is
1084
01:24:49.790 --> 01:24:59.815
closed source. There's no way for us to verify their claims. Apple probably full of shit. Icloud isn't end to end encrypted, and most users think it's end to end encrypted, and they back up their whole phones to it, and Apple's malicious,
1085
01:25:00.675 --> 01:25:02.215
and users should use Tor.
1086
01:25:02.739 --> 01:25:04.199
But there's a middle ground here,
1087
01:25:04.739 --> 01:25:09.719
and that is that, you know, when you use a VPN like a mole vad or a bolae
1088
01:25:10.595 --> 01:25:14.135
or one of the horrible ones, all the other horrible ones that exist
1089
01:25:14.595 --> 01:25:19.815
Mhmm. You're completely trusting that provider. Right? And it'd be kinda cool if,
1090
01:25:21.340 --> 01:25:22.400
this seems like
1091
01:25:23.180 --> 01:25:30.585
I mean, if it's actually what's happening in the background because I there's no way for me to verify it. It seems like a strictly it's it's
1092
01:25:31.125 --> 01:25:33.704
it's inferior to Tor from a privacy perspective,
1093
01:25:35.764 --> 01:25:36.665
but it seems,
1094
01:25:38.150 --> 01:25:44.650
strictly superior to a traditional hosted VPN, where you're just completely trusting them with all your all your traffic.
1095
01:25:46.875 --> 01:25:48.895
I would it would be kinda cool to see
1096
01:25:49.435 --> 01:25:54.255
some of the, you know, more reputable VPNs, like, kind of team up together
1097
01:25:54.555 --> 01:25:55.775
to make it the default
1098
01:25:56.960 --> 01:26:07.295
setup on on their for their customers, you know. Like, if if Molvad and Bolle, you know, they're both accept Bitcoin, they both have good reputations if they set it up. So the default
1099
01:26:07.915 --> 01:26:14.735
is every time you do a connection, it goes through, you know, Mullvad first, and then it goes through Bolle, and you need to basically have them collude
1100
01:26:15.770 --> 01:26:16.090
to,
1101
01:26:16.570 --> 01:26:17.790
deanonymize you,
1102
01:26:18.250 --> 01:26:22.910
that could be a massive trust improvement for people while still having the bandwidth improvements
1103
01:26:23.575 --> 01:26:26.875
of using a VPN over something like Tor. Right? Like, the main benefit,
1104
01:26:28.455 --> 01:26:32.075
of using a VPN over Tor is, like, you just get significantly better speeds.
1105
01:26:33.380 --> 01:26:35.239
Yeah. Absolutely. That's a great point.
1106
01:26:35.860 --> 01:26:41.159
While that setup would be interesting to see, it would be also really hard to verify.
1107
01:26:42.724 --> 01:26:43.224
And,
1108
01:26:44.005 --> 01:26:51.989
you know, ultimately, end of the day, you're still trusting Apple. Right? Like, this is a company who's gone so far as to disable the encryption on on their Icloud
1109
01:26:52.369 --> 01:26:54.070
backups to have a way,
1110
01:26:55.010 --> 01:26:59.670
to access those messages for the FBI to access those messages in, you know,
1111
01:27:00.395 --> 01:27:01.934
different domestic situations.
1112
01:27:02.715 --> 01:27:14.480
So it's even with this intricate setup, it's we can't verify it. We can't know for sure. And if privacy on this level is important to you while still maintaining speed, you might wanna try
1113
01:27:14.860 --> 01:27:17.360
to link together VPNs yourself manually
1114
01:27:17.885 --> 01:27:20.145
across different countries, across different jurisdictions,
1115
01:27:21.805 --> 01:27:25.905
and create your own threat profile for these VPN providers.
1116
01:27:26.660 --> 01:27:27.560
Because, ultimately,
1117
01:27:28.980 --> 01:27:31.640
this sort of thing on paper sounds great, but
1118
01:27:32.180 --> 01:27:34.440
at the end of the day, it can just be like window
1119
01:27:35.945 --> 01:27:45.485
dressing, you know, like What about that? What about this? So I like, one of my favorite parts of dispatch is just brainstorming live on air. So what if, like, you got
1120
01:27:46.940 --> 01:27:51.579
if if if if you made an app, you, Evan Kaludis, you made an open source app
1121
01:27:53.185 --> 01:27:56.325
That's an idea. And then you reached out you reached out to
1122
01:27:57.105 --> 01:27:58.085
5 or 6
1123
01:27:58.465 --> 01:28:04.990
of of the largest VPN providers or the best VPN providers that you curate. You decide those are 6 best. Right?
1124
01:28:05.370 --> 01:28:09.230
Mhmm. And and you tell them, look. I want you to accept Bitcoin payments.
1125
01:28:09.575 --> 01:28:19.679
Maybe a couple of them already do. Right? So you obviously pick those. I want you to accept Bitcoin payments, and I need you to give me an open API that I can hook into. And then your app,
1126
01:28:20.460 --> 01:28:20.960
randomly,
1127
01:28:21.580 --> 01:28:24.719
every time you wanna use it, you pay it with lightning,
1128
01:28:25.179 --> 01:28:26.960
and it picks 2 random ones,
1129
01:28:27.365 --> 01:28:31.305
and, like, change change you through them automatically, something like that.
1130
01:28:32.805 --> 01:28:33.705
That's intriguing.
1131
01:28:34.485 --> 01:28:35.465
Would I even
1132
01:28:36.080 --> 01:28:42.580
necessarily need to get those providers on board? I could just do it myself and be a proxy, but then you're trusting me. Right?
1133
01:28:43.095 --> 01:28:47.275
Right. Right. But and then you're like, there's a custodial money relationship there. But if it's Lightning,
1134
01:28:47.815 --> 01:28:54.300
you can just automatically just split it between where you go, and then you could take a cut as the as the software provider.
1135
01:28:54.600 --> 01:28:55.900
Mhmm. So literally every
1136
01:28:56.280 --> 01:28:57.660
every member of that
1137
01:28:58.840 --> 01:29:01.340
group is, like basically has a profit incentive
1138
01:29:01.640 --> 01:29:07.304
to have it, you know, work work well, and then no no individual provider knows
1139
01:29:08.165 --> 01:29:15.510
who is who, you know, who they're peered with. Like, they're maybe you even do 3. You almost do like a you almost do like a Tor Onion,
1140
01:29:16.290 --> 01:29:18.710
but the software is just automatically
1141
01:29:19.170 --> 01:29:20.310
routing you through
1142
01:29:20.755 --> 01:29:22.135
the different VPN providers
1143
01:29:24.035 --> 01:29:25.095
while paying everyone.
1144
01:29:26.915 --> 01:29:27.975
That is an intriguing
1145
01:29:28.355 --> 01:29:28.855
idea.
1146
01:29:30.570 --> 01:29:33.230
And, of course, we're gonna tie in lightning.
1147
01:29:33.930 --> 01:29:38.990
That's it. Obviously, we gotta we gotta stay on topic here. Yeah. Or or half hour or whatever
1148
01:29:39.415 --> 01:29:40.875
makes the most sense. But,
1149
01:29:41.815 --> 01:29:46.235
yeah, I mean, as as far as things go on that front, yeah, there there's tons of room for innovation,
1150
01:29:46.960 --> 01:29:50.180
and I think, it would definitely be an intriguing
1151
01:29:51.120 --> 01:29:53.060
product on today's market.
1152
01:29:53.440 --> 01:29:55.140
I mean, a lot of people say
1153
01:29:55.655 --> 01:29:56.155
that
1154
01:29:56.534 --> 01:29:58.395
users don't care about privacy. Right?
1155
01:29:58.855 --> 01:30:03.755
But I don't think that's exactly the case as as shown by your audience and
1156
01:30:04.489 --> 01:30:09.309
by even corporations by Apple trying to pander and and provide these privacy features.
1157
01:30:10.090 --> 01:30:13.630
It's just that these guys shouldn't be the ones doing it given their track record.
1158
01:30:14.075 --> 01:30:24.940
Yeah. I I would say, like, it is the coolest part about I don't trust Apple for shit, but the coolest part about them selling this privacy as a premium thing is that it is kind of creating
1159
01:30:25.500 --> 01:30:30.720
it it is, first of all, showing that there's a market there for people who care about easy to use privacy, and it's almost
1160
01:30:31.505 --> 01:30:38.005
it's almost signaling to the rest of the industry that there's a market there even if there's not as big of a market as people think there is,
1161
01:30:38.760 --> 01:30:40.780
which kinda becomes a self fulfilling prophecy.
1162
01:30:41.480 --> 01:30:45.740
Right? So it'd be nice it'd be nice to see more and more companies kind of
1163
01:30:46.865 --> 01:30:50.405
realizing that this is a value add. This is a way they can attract customers. Right?
1164
01:30:52.465 --> 01:30:56.410
Yeah. Absolutely. And, you know, as time goes on and there are more incidents
1165
01:30:56.790 --> 01:31:00.230
relating to privacy, the demand is just gonna go up and up. So,
1166
01:31:01.225 --> 01:31:05.645
I think the important thing is that people make products that make it easy and accessible.
1167
01:31:06.185 --> 01:31:07.705
And, you know, while it's it's
1168
01:31:09.030 --> 01:31:14.710
you know, I wouldn't trust them. It is cool to see Apple trying to build products or at least market them,
1169
01:31:16.310 --> 01:31:18.985
in the field of privacy. So just wanna see.
1170
01:31:19.764 --> 01:31:25.520
So, Evan, I think we're gonna wrap this up. Do you have any, things you wanna cover before we we do? Oh,
1171
01:31:26.220 --> 01:31:35.435
man. I'm just beat from this week. I just wanna say shout outs to all the freaks listening today. Shouts to all the amazing Bitcoiners I got to hang out with and meet this past
1172
01:31:36.335 --> 01:31:36.835
week.
1173
01:31:37.815 --> 01:31:39.995
You know, I I don't think I've ever been
1174
01:31:40.614 --> 01:31:41.435
more bullish.
1175
01:31:41.950 --> 01:31:47.570
And it's crazy to see that everyone else that I'm talking to is is so incredibly bearish.
1176
01:31:47.950 --> 01:31:51.170
I can't help but think that this is an incredible time to accumulate.
1177
01:31:51.915 --> 01:31:56.155
100%. Cosign everything Evan said. Evan, thank you for coming on the show. I know we're both,
1178
01:31:57.275 --> 01:32:00.735
extremely drained, so I do appreciate you helping me continue this streak.
1179
01:32:01.250 --> 01:32:10.470
I appreciate all the freaks that are here. I appreciate all the freaks I met. I wanna remind the freaks that next week on Bitcoin Tuesday 1900 UTC, we're gonna have battle of the nodes.
1180
01:32:10.995 --> 01:32:13.175
We're gonna have the teams from Noddle, Ronin,
1181
01:32:13.475 --> 01:32:16.135
Grass by Blitz, Start9, and MyNode there.
1182
01:32:16.915 --> 01:32:20.535
Umbrel has not confirmed yet. So if you want to see them in the show,
1183
01:32:20.840 --> 01:32:24.460
please reach out to them and tell them as a customer you would love to see that.
1184
01:32:25.639 --> 01:32:29.179
To the rest of you, we'll see you at RHR on Thursday.
1185
01:32:30.555 --> 01:32:38.815
I love you all. Like, stop being pussies. Bitcoin is doing great, and, we're gonna fucking win. We're gonna win, freaks. Let's go.
1186
01:32:43.860 --> 01:32:44.360
Regulators.
1187
01:32:44.900 --> 01:32:45.400
Regulators.
1188
01:32:46.020 --> 01:32:52.304
We regulate any stealing of his property. We're damn good too. But you can't be any geek off the street.
1189
01:32:52.925 --> 01:32:55.570
Gotta be handy with the steal, if you know what I mean, earn you key.
1190
01:32:59.489 --> 01:33:02.855
Regular Mound up. It was a clear black night, a clear
1191
01:34:05.785 --> 01:34:13.430
time. Wings, I would fly. Let me contemplate. I glance in the clunk, and I see my homie Nate. 16 in the and 1 in the
1192
01:35:41.890 --> 01:35:49.495
I'm tweaking into a whole new era. G funk, step to this, I dare you. Funk on a whole new level.
1193
01:35:52.355 --> 01:35:52.855
Chords,
1194
01:35:53.475 --> 01:35:53.975
strings,
1195
01:35:54.610 --> 01:35:55.270
we brings
1196
01:35:55.970 --> 01:35:56.470
melody.
1197
01:35:57.250 --> 01:35:59.430
G Funk, we're rhythm as light
1198
01:35:59.810 --> 01:36:01.110
and light is rhythm.
1199
01:36:02.530 --> 01:36:04.150
If you know like I know,
1200
01:36:14.520 --> 01:36:16.460
then you like every day.
1201
01:36:17.400 --> 01:36:19.980
And if your ass is a buzz, the 213
1202
01:36:20.360 --> 01:36:21.340
will wake you
1203
01:36:40.670 --> 01:36:43.330
Love you, freaks. I'll see you Thursday for RHR,
1204
01:36:43.995 --> 01:36:47.935
and next Tuesday for the battle of the nodes. Stay humble and stack sets.
NOTE
Transcription provided by Podhome.fm
Created: 3/17/2024 4:32:07 PM
Duration: 5810.051
Channels: 1
1
00:00:00.240 --> 00:00:03.220
2
00:00:04.480 --> 00:00:06.660
now someone I've spent some time with to
3
00:00:07.600 --> 00:00:08.500
share a message.
4
00:00:12.805 --> 00:00:15.705
5
00:00:16.645 --> 00:00:23.040
Great ideas are beautiful and have great power. But like most beautiful things, they can also be more fragile than we think.
6
00:00:23.580 --> 00:00:27.440
When I was a kid, we thought about the future and we were delighted by its possibilities.
7
00:00:27.885 --> 00:00:30.785
We couldn't wait for it to happen and be part of its creation.
8
00:00:31.485 --> 00:00:40.739
But now ask almost anyone what they think about the future, and they will say something along the lines of nuclear war, climate catastrophe, hunger, pestilence, the death of life.
9
00:00:41.280 --> 00:00:44.820
We didn't took care of the beautiful idea that we create our own future,
10
00:00:45.175 --> 00:00:48.315
that we, as humanity, can do almost anything that we imagine,
11
00:00:49.095 --> 00:00:49.835
our ingenuity,
12
00:00:50.215 --> 00:00:52.395
what separates us from other species.
13
00:00:53.090 --> 00:00:58.070
In El Salvador, we are trying to rescue this idea and start the design of a country for the future
14
00:00:58.449 --> 00:01:06.165
using the best ingredients that makes us who we are while using sensibility to find the best examples of ideas from history and around the world.
15
00:01:06.865 --> 00:01:09.125
I believe Bitcoin could be one of these ideas.
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That is why next week, I will send to congress a bill that will make Bitcoin a legal tender in El Salvador. In the short term, this will generate jobs and help provide financial inclusion to thousands outside the formal economy.
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And in the medium long term, we hope it is a long decision that can help the people and his family
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He got me a gift, a soccer jersey. It's pretty sick.
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I wanna read, my favorite part from the proposed bill.
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Central banks are increasingly taking actions that may cause harm to the economic stability of El Salvador.
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That in order to mitigate the negative impact from central banks, it becomes necessary
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to authorize the circulation of a digital currency with a supply
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that cannot be controlled by any central bank, and is only altered in accord with the objective and calculative criteria.
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It's your boy, Matt Odell, here for another Citadel dispatch.
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That intro
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was our fucking boy, an absolute legend, Jack Mahler's,
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this weekend with the president of El Salvador,
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announcing that El Salvador will be the 1st country
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to be making Bitcoin legal tender.
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This is Citadel dispatch number 25. It's actually been 6 months straight of Bitcoin Tuesdays that we've all shared together,
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which is really fucking impressive.
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So cheers to all the ride or die who have been here in the live chat for the whole thing.
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Live show about Bitcoin distributed systems privacy and open source software.
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I'm grateful to be joined here by
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our boy, Evan Kaludes,
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for his
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7th diss Citadel dispatch. What's up, Evan?
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It's fucking up. It's been 7 episodes.
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Man, just shouts to you for doing such a good job and having such great guests on facilitating
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facilitating such great dialogue.
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Just happy to be a part of it, man.
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the 25th, so that's,
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pretty fucking badass. I mean, I just spent the I thought I had enough of you already. I just spent the last week with you in Miami,
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today's discussion is going to be,
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all this ransomware bullshit that's going on. But before we get there, I mean, obviously, I started it off with this El Salvador news.
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I think it's a pretty big deal.
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What's your take here, Evan?
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about to play out amongst the nation states.
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And, you know, all the salty people may make, you know, all these offhand remarks about, I don't know,
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you know, El Salvador
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and how much money they have down there, like, what they produce. Like,
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this is this is just the beginning
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of what's gonna be get become, like, a crazy chain reaction.
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And,
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you know, it's it's gonna start with countries in Latin America.
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From there, we could see countries in Africa
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and then Europe and Asia,
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all going down this path.
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This is this is unprecedented,
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and this is really where the fun begins.
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you know, what happens next here. I mean, the the FOMO can just
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it kinda just works into itself. And,
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first, we had this kind of corporate FOMO start, and now we have this nation state FOMO,
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and it it's it's kind of beautiful watching it happen in Latin America first. I mean,
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there's so many countries down there that were once powerhouses that have just completely been destroyed and gutted, and their people completely fucked,
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partially because of US hegemony, but also, you know, for internal political reasons. So to see them have access to this money
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that should be able to uplift the people and give them more sovereignty,
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is really powerful, and I'm I'm just excited. I'm excited to kinda see this all unfold. I mean, we've we've theorized for a while here that,
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it was gonna start with challenger countries. It was gonna start with smaller economies. Like, obviously, it's not gonna start with the big dogs. They have
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a lot more to lose and a lot less to gain.
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So
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watching it happen in our backdoor
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with you know, I've traveled around South America a lot, Central America a lot, and
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and I love the culture. The culture is fantastic. So to see this all unfold is is kinda beautiful. And it's amazing how quick,
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it went from, you know, just El Salvador to, like, all these different
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politicians in all these different countries. I mean, in a lot of you know, I don't think there's been any other presidents that have stepped forward yet,
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but, like, ran you know, bunch of different legislatures,
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ledge
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legislators, and other things like that have started to step up, and they want to,
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time. You know, they've been a dollarized country. Like, they use the US dollars. It's not like they have another currency
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that they had control of that they could, you know, inflate to help
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their own spending. Right? They're they're just at the mercy
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of the US empire and our spending and and what we do.
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And, you know, when those stimmy checks
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get distributed,
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you know, the El Salvadorians, they're they're not getting one. So Yeah. They don't send that to them.
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No. No. They do not. So I I think if anything, this is
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a sign of El Salvador,
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taking control of their own destiny again.
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I mean, sorry to cut you off. I didn't mean to do that. I apologize.
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I mean, it's more than just I mean, they're dollarized, so it's it's very obvious with them. Right? But just in general, because we're the reserve currency,
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when we inflate our supply, we're really taxing the rest of the world,
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more than we're taxing ourselves. I mean, obviously, we're also taxing
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individual citizens in terms of inflation, but inflation first hits the non reserve currencies that are using us as a reserve even if they're not dollarized.
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It seems like Marty's owl is just you know, we have him in the comments. It seems like he's just got really
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it seems like he wasn't humble, and he's just upset with me about my 200 k by conference day, And now he's just he's just going at me. Ever since last week, he's just been going at me. So he wants he wants you to lead the show here, Evan.
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But, you know, just just don't overextend yourself on Matt's bullishness. That's there's a lesson here. You know what I mean?
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I personally am stoked at these low prices. Like, there's so many bullish events going on right now as the prices suppress
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with all this FUD that we've been seeing between Yuan and China and the ransomware and the ESG. It's like,
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this is Sats stackers paradise, freaks.
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Like, this is the time to extend some capital.
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Stacker's paradise. Yes. I just want you to know, Marty's owl. Like, unless you change your name to Evans owl,
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you're officially a LARPer and a Virtue signaler. So you you have to actually go the you got to go the full 9 yards.
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if you're watching the video feed.
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This is not because we dumped even though I'm sure I'm gonna get the accusations. It's because,
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I think 2 episodes, 6102,
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who's always been a major influence on the show and a good friend
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was just going at me about having the price as the ticker.
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So I'm trying to build, like, an actual
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dispatch specific dashboard,
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but until then,
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I think this is what we'll go with. It seems it seems clean enough to me. It's a site I use every day.
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What do you think, Evan? Do you think this is a good a good choice for for episode 25? I feel like episode 25 is, like, a nice influential number too. You know? It's a significant number.
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I am a huge mempools.space
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fanboy. So
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it was really great to meet Simon and Wiz this past week.
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You know, it's it's a great project, so I love seeing this up. However, I I do wish we could have a way to be the sweet spot. So we'll see what we can whip up for future episodes.
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That'd be the sweet spot. So we'll see what we could whip up for future episodes.
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Yeah. But for now, you know,
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this this will have to do. I think we're at about
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what,
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my my block clock is telling me we're at 2,971
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sats per US dollar.
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Kraken is telling me the US dollar price is about 33,693.
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I I think I think this thing is, a bit undervalued now, and I think fear is really high. If you go talk to your normie friends who are just trading, getting to shit coins, whatever,
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they are terrified. They do not wanna be holding the bag
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on a leg down. So they're they're because if they're sold already or they're thinking about offloading the bags, I think this is a great time to buy.
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And,
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you know, I I don't think a 6 figure BTC is out of the cards right now
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and it's just, like, a couple weeks. All it takes is, like, a couple weeks of down days, and then now everyone's
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You know, we're we're about to activate Taproot.
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That's gonna be huge.
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And then all this Latin America
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bullishness, like, how how did this not change people's tunes? Like, it it's really crazy to me.
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You know, this this could turn into this could easily turn into, like, last March where it's, like, a generational
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at 28, 29 to 35 k or whatever. I think this is definitely sweet rank.
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And, I mean, it wasn't
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as it wasn't as violent
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down in 2017, but we still had a drawdown of, like, 35%
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or so. Right?
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So Right. Things are still playing out. It's just a little more violent with all the
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focus on it from,
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you know, mostly state actors. So
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like, 30 plus percent drawdowns.
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This time around, we didn't, like, get any 30% plus draw downs, and then we just got this huge big one,
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which kinda reminds me more of 2013, but also in my mind, you know, it's like maybe we just got a little bit ahead of ourselves. You know, Tesla
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bought in, and they kind of, like, jumped the gun there, and it it created all this additional buy pressure.
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And then, you know, maybe, like, personalities, like like that Odell guy, or, like, saying 200 k by conference day and stuff, and people just got a little bit ahead of themselves.
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Marty's out came back as Evan's out. Oh, I see.
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And and so, like, we got what we deserved. Right? We got hit back, we got kicked in the balls, and it needed to clean out all the leverage
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and set up the stack base. Right? Set up the stackers base. The stackers set the floor in my mind, and then the traders are the ones who are are doing the liquidity in in between. Right? But but if people are just constantly stacking, we just have millions of people just stacking every time they get paid.
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The price is just that floor is just, like, slowly rising. Right?
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Yeah.
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And,
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you know,
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there's there's, there's the other side of it, the people who are liquidating.
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You know, the though that group of people has to be exhausted, but
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from what I'm hearing from my normie friends trading, I think we're getting there. I think we're really close to reaching this bottom. So
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fingers crossed, freaks. It's not financial advice, but,
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you know, if you're in this for the long haul,
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4 years plus, this is an excellent time to buy.
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I you know, the stream did,
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fuck up in the beginning. So if you retweeted or, you know, liked on on YouTube or on Twitch. I don't even know how it works on Twitch.
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There's a new stream now, so consider going and doing that. It is appreciated. It is the single biggest thing you could do for the show. Obviously, huge shout out to all everyone who's donated to the show. I wanna keep this ad free. I think that's, you know,
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it's fucking fantastic that it can just be supported by Bitcoiners for Bitcoiners.
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So I appreciate all of you on that.
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You wanna talk about Miami a little bit before we get into this ransomware thing?
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Yeah, man. It was an incredible week with some incredible people.
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You know, it was very overwhelming at times. I think the scale of it, there's definitely
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people that
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we didn't get around to even seeing or talking to. There was countless cases of freaks saying, oh, I didn't know this person was there. Oh, I can't believe I didn't see you. Like, it was just, like, a little too big, you know, but at the same time, it sort of makes sense for being the world's biggest ever Bitcoin conference.
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But, yeah, there were some incredible talks.
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I particularly
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liked
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seeing Ron Paul,
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speak.
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You know, it's hard not to get bullish on Bitcoin after
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hearing doctor No talk so positively about it for so long.
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You know, there were also shenanigans too,
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you know, from,
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Dogecoiners
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interrupting Steve Lee's talk and stripping on stage.
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I feel so bad for Steve Lee. He's such a sweet guy.
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That's a true Bitcoiner right there. I I gotta I gotta go live with the guy,
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learn how
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to learn how to pick up shitcoiners like that with so swiftly.
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But, yeah, man, there was a lot of things,
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you know, to to be bullish on. I think it was it was great all in all despite being overwhelmed and being in this whirlwind. I, I I honestly think the best part of the conference was the free and open source dome you helped put together, Matt. So shout out to you for that. Yeah. It was me and Rudolf. Shout out to Rudolf for his help. Incredible
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Bitcoiner to meet. I love RaspiBlitz.
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I was so happy to have spent time with him. Wish we could chat have chatted a little more. Well, that reminds me,
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along with members of the teams of Noddle, Ronan Dojo,
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Start 9, and MyNode,
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to discuss the different node packages and their their licensing schemes,
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and what makes an open source license. So the only node,
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package that is not a part of it yet is Umbrel.
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They haven't responded to me. So,
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if you freaks are using Umbrel and you would like to see them be a part of the discussion along with all the other major node teams,
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consider chirping at them,
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reaching out to them, and asking them to be on
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what is hopefully one of your favorite shows.
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We love your product. We want you to get your word in. If you want me to come join and moderate, I will. But, it would be incomplete without y'all. But that being said, Matt, you know it's gonna be a complete bloodbath.
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that that is literally the plan.
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Most of the people who are joining I mean, I have jokes on Twitter right now. The 3rd best Ben in Bitcoin, Ben the Carmen,
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said that you should be a permanent host. I mean, when I designed the show, I said to you from the beginning, like, the idea was
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that basically there's multiple recurring hosts.
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Right? You being one of them. And but some of these guys that are gonna be on the show next week are also,
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I would say would fall in that category, including Zelco,
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Kita Miner, and Open Arms who will be joining us.
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So, hopefully, some of these other guys will also
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end up being more reoccurring as well. So,
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I I I I think I think look. We're gonna have the live chat as we always do. I'm sure they won't, pull any punches,
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and
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and it's a very important conversation to have. You know, people are are looking at these node projects.
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They all have different pros and cons, and and it's it's one of the first decisions that a ride or die freak is kinda making. Right? It's like they're making, like, what kind of wallets am I gonna use, and and what kind of a node am I gonna run. Right?
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I think there's a lot of options in the space, which is great. We got a lot of competition,
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but it could be a little overwhelming
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for the average user to sort of figure out what they want.
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But that being said, there there's a little something for everyone depending how technical you are or not, depending if you want more of a focus on coin joining or
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you want lightning or or, you know, the ability to install a whole bunch of apps.
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I think there's a solution for everyone, and, you know, this is a very important thing that
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people
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take control of their own destinies, run their own nodes, and become first class citizens in Bitcoin. So the more people we onboard to setups like this, the merrier, and, you know, the more we're all gonna build benefit.
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rider die freak, who's on the show last week.
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Anthony,
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saying he wouldn't go with the node package that doesn't join the chat next week considering
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So go out and tell your favorite node packages that you feel the same way, and and let's hope that we get them all on the show.
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And then we have FTB asking why I said no market buy during our HR. I said, consider stacking, but instead instead of just telling people to do it, because I learned my lesson, and in hindsight, it actually,
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you know, they got a better price if they waited till now. But, I mean, look, guys. It's it's all it's all fun and games. I hope I, you know,
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I I kind of feel bad after the fact about the whole 200 k by conference day thing.
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I got caught up in a little bit. A lot of it was like a meme, it was like meant to be a meme and then I just dug into it, you know, because everyone was doing like the sale or 100 k parties and like Scott Miner from Googonen was like 400 k,
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And I was just, you know, I wanted to jump into it, and it's
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it was just fun. It was like a troll on, like, the engagement accounts on Twitter, and I had just gone all caps.
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It was, like, early February. I looked back. It was, like, early February. So it was, like, at we were, like, we were, like, at 28:30,
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and, we went up to, like, 65 k, and then, you know, you guys know the rest.
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I have Cantillon John or Cantillon Cantillon
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John saying I wasn't humble.
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That is correct.
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To be clear, I am rarely humble.
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That is why I repeat it so often that that not only should you guys stay humble, but I should stay humble. But to be absolutely clear, I have more Bitcoin than I had when I made the 200 k by conference day prediction.
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So so it might sound like cope, but,
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when I say humble, the first and foremost thing I mean is, you know, hold your own keys, care about your privacy, don't use leverage.
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That's, like, the humility that matters arguably the most in Bitcoin land. Because if you're not humble in that regard, then you lose all your Bitcoin on March 12th. If you're not humble in that regard,
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you lose all your Bitcoin on whenever the most recent dump happened. I I know that day, like, all the shit coins went down, like, 95% or something.
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In Bitcoin land, that's the most important humility. And I actually get shit on the other side when people say, Matt, I don't wanna be humble. When when
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when Bitcoin's pumping, I wanna dunk on the shit corners. Yeah.
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That doesn't preclude that. You're allowed to dunk on the shit corners. Just don't take out leverage,
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you know, like,
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whatever.
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Exactly. And we have Evans owl in here saying, Matt is so humble, so I appreciate the hard critique, Evan. Thank Evans owl. Thank you for that.
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So
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nice.
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if you get a little bit too cocky. So,
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okay, well, that was great. I mean, the best part about Miami
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was,
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Ross's interview, the first interview he's ever done,
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since he's been put in his cage.
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It was an extremely moving interview. I'd be lying if I said that I didn't have tears in my eyes.
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Everyone should go, listen to that. I do have it on,
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my Twitter page if you can't find it, but it's on Bitcoin Magazine's YouTube.
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Literally, every single Bitcoiner needs to go listen to that.
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And then second of all, like, it was just so fantastic meeting so many
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freaks and fellow big corners and people I've interacted with only online.
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You really start to realize how powerful this movement is
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when you when you meet with so many like minded folks.
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And I really do. Like, it just furthers your conviction. You know? It just furthers your conviction that
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for better or worse, like, we're, you know, we're gonna win this thing, and and we're gonna make the world a better place. And,
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ultimately,
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that mission is bigger than any of us individuals. It's it's bigger than ourselves.
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Hanging With Wiz at the Airbnb was great. He's an incredible Bitcoiner.
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Of course. You know,
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helped kick off Zeus essentially, so it was amazing seeing him.
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Oh, man. Adam Curry, when he came to the Fosse dome, I got to talk to him,
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and he pulled out his phone, and he showed me he was using juice. Oh, that's cool.
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That that was like, oh, man. Okay. Now now I understand. This this is what I'm doing it for, you know. Like, people actually using your software feels amazing.
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Yeah, man. There was countless ones, and it's hard to even say it's a loaded question to even ask one like, Russ Okun, that was really cool talking to him at Beefsteak.
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Will Reeves at Beefsteak too. I feel so bad. I was giving him such a hard time about the FoldSpin rewards.
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What'd you say? Did you do it in person too?
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which freaks. Okay.
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Beefsteak
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was probably the best event all week. Like, no. No. It was It's
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325
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is is the is the best, you know, one of the best events of of wherever you are,
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whether that's Austin BitDevs or
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a a different conference,
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BitBlock Boom or something like that, but
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this was this one was absolutely insane. It was the largest one he's ever thrown.
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You know, we had NFL players there. We had senator senator Loomis was
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But the venue was incredible too. Like, it was some converted strip club. It was out of control.
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There was like
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a like a cockpit from a plane that was up this, like, staircase that you could stick your head out of. We'll post some pictures of that too.
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And, yeah, the food was incredible as always.
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342
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Love him and his work.
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So, yeah. It was it was just so overwhelming. It was literally a whirlwind.
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Yeah. No. That was just,
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that was it was yeah. There were so many good people that, like, you couldn't walk.
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You'd walk, like, 3 feet, and then you get stuck in another amazing conversation.
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But,
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it it worked out nicely, and we had a blast.
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So so, Freaks, next time there's a beef stick,
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you definitely need to sign up and come and say hi.
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It's it's
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357
00:30:34.320 --> 00:30:37.940
don't hesitate. It'll get sold out before you oh, me and everyone were talking about
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how we're such dicks when the tweet goes out, we don't retweet right away, and, like, it gets no engagement because everyone who sees the tweet's, like, oh, we need to get our tickets. Everyone needs to get their tickets. Gotta send it to your friends and stuff. Yeah. Yeah. Exactly.
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You you retweet it after you secure your ticket. Yeah. You secure the tickets, and then you retweet it. It's like on the plane where you put the mask on your face before you put it on the file next to you.
360
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361
00:31:03.794 --> 00:31:04.855
362
00:31:05.475 --> 00:31:08.054
that's great. Yeah. That was fucking awesome.
363
00:31:09.340 --> 00:31:12.000
So let's jump into this ransomware thing. It's on the news.
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Everyone's saying that,
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Bitcoin's broken. The FBI can
366
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can break into Bitcoin.
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FUD FUD everywhere, FUD abounds, feels like Bitcoin is
368
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being FUD attacked.
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00:31:27.480 --> 00:31:32.380
That's not a great place to start with. Let's start with the fact that the Colonial Pipeline
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got ransomware attacked.
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What was it, like, 4 weeks ago or something like that? We got a picture of the Colonial Pipeline on if you're on the video feed freaks.
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We've talked about it a bunch on on both podcasts, both on dispatch and RHR, so I don't wanna go too much into the details of this particular attack. But,
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you know, the the basics is is that this
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popular ransomware
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as a service software,
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DarkSide,
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was used,
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to put
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to to lock up,
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I guess, like, the account management services of Colonial Pipeline, which runs up the East Coast and services most of the East Coast's
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supply needs,
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energy supply needs. And as a result, there was gas shortages, there was all this concern,
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major infrastructure of the United States.
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The Biden administration,
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I think, declared, like, ransomware
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equivalent to terrorism.
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They said it was an act of war. They said all these things about,
388
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that they thought Russia was about behind it or, like, a Russian gang.
389
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Then there was, like, all this weirdness that happened
390
00:32:39.620 --> 00:32:47.175
immediately following it where, like, Darkseid said that they were closing up shop, and and they didn't vet their clients well enough. I mean, Darkseid is
391
00:32:47.555 --> 00:32:49.175
is this new idea, this
392
00:32:50.190 --> 00:32:55.170
ransomware as a service. So the idea is that the dev team behind Darkseid doesn't actually attack,
393
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they don't actually attack the different clients.
394
00:32:59.565 --> 00:33:04.784
They give you access to the software, and if you use the software on a client, they just take a 15%
395
00:33:05.085 --> 00:33:06.544
fee off the top, and
396
00:33:07.340 --> 00:33:15.375
and I I I guess they take also a flat fee. They probably take a flat fee as payment to get this the software to begin with, and then they take,
397
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a percentage off the top of any ransomware
398
00:33:18.715 --> 00:33:24.760
you get paid. So so Darkseid came out and said, you know, we didn't mean to do any kind of geopolitical
399
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warfare.
400
00:33:27.380 --> 00:33:28.760
You we usually just attack
401
00:33:29.395 --> 00:33:33.655
soft targets like hospitals, and small businesses, and banks, and police stations,
402
00:33:34.675 --> 00:33:39.660
not large infrastructure projects, and that will vet our our clients better going forward,
403
00:33:40.440 --> 00:33:42.940
which is just kind of a hilarious statement from a
404
00:33:43.400 --> 00:33:46.060
hacking group in, Russia to be releasing.
405
00:33:46.395 --> 00:33:52.575
And then, like, a day or 2 after that sorry for fixing my timelines a little bit off, but this is, you know, for the most part,
406
00:33:52.955 --> 00:33:53.855
should be correct.
407
00:33:54.330 --> 00:33:59.950
Couple days after that, they said all of their servers had been seized, and that they were just going out of business,
408
00:34:00.410 --> 00:34:04.125
which a lot of us believed, and I still kinda believe was like a boating accident,
409
00:34:04.905 --> 00:34:12.360
claim. Right? You know, we're going out of business, and then they just come out. It was, like, all of a sudden, like, in 2 months, there's a light sided malware or something.
410
00:34:13.220 --> 00:34:16.600
You know, it's just to, like, take some of the geopolitical pressure off of themselves.
411
00:34:17.035 --> 00:34:17.934
And then yesterday,
412
00:34:18.635 --> 00:34:20.174
the Department of Justice announced
413
00:34:20.474 --> 00:34:21.775
that they seized 63.7
414
00:34:22.395 --> 00:34:22.895
Bitcoin.
415
00:34:24.474 --> 00:34:34.299
That was the ransom was it was the affiliate portion of the ransom that was paid the opposite affiliate. The the client's portion of the ransom that was paid.
416
00:34:34.865 --> 00:34:37.765
So not that 15% that goes to the dark side devs.
417
00:34:38.464 --> 00:34:39.525
It was the 85%
418
00:34:39.825 --> 00:34:40.885
that goes to whoever,
419
00:34:41.720 --> 00:34:43.100
was the one who
420
00:34:44.440 --> 00:34:51.635
executed the ransom, and and they said they they I guess they didn't give us that many details, but they said they tracked it down, and
421
00:34:52.095 --> 00:34:54.035
then they secured the private key.
422
00:34:54.655 --> 00:34:54.975
And,
423
00:34:55.535 --> 00:34:58.115
yeah. So so where do you wanna start here, Evan?
424
00:34:58.730 --> 00:35:03.230
425
00:35:03.530 --> 00:35:05.470
We we gotta abandon Bitcoin.
426
00:35:05.770 --> 00:35:07.069
427
00:35:10.735 --> 00:35:11.475
With sarcasm.
428
00:35:12.975 --> 00:35:23.089
We have a lot of new users. We have a lot of new users. I assume some of them were scared by the FUD that that Bitcoin addresses could be attacked. I would just say just straight up to the new users,
429
00:35:25.015 --> 00:35:32.420
no one can crack a a Bitcoin private key, and if they could, they're not going to test it out with fucking $2,000,000.
430
00:35:34.240 --> 00:35:43.325
431
00:35:45.085 --> 00:35:46.065
bigger bounties,
432
00:35:46.845 --> 00:35:48.785
to plunder than that. So,
433
00:35:51.010 --> 00:35:53.029
yeah. I mean, it's it's just hysteria.
434
00:35:53.490 --> 00:35:54.529
It's it's just,
435
00:35:54.849 --> 00:35:57.349
you know, the FBI also trying to
436
00:35:58.245 --> 00:36:03.945
do some PR and overstate their abilities. Like, it's a mix of all these different things. It's people not understanding
437
00:36:04.645 --> 00:36:05.865
what actually transpired.
438
00:36:08.230 --> 00:36:08.730
It's,
439
00:36:09.190 --> 00:36:11.369
you know, minimal facts being presented,
440
00:36:12.309 --> 00:36:19.265
by the DOJ and FBI and and people, you know, conflating things and trying to piece together things in their heads.
441
00:36:20.605 --> 00:36:23.105
But, realistically, this is just sounds like
442
00:36:23.760 --> 00:36:25.140
there's one piece of
443
00:36:25.520 --> 00:36:26.020
infrastructure
444
00:36:26.640 --> 00:36:27.460
upon maybe
445
00:36:28.319 --> 00:36:28.819
AWS's
446
00:36:29.280 --> 00:36:30.500
cloud or or someone
447
00:36:31.119 --> 00:36:32.740
hosting infrastructure in North,
448
00:36:33.464 --> 00:36:34.525
Northern California.
449
00:36:35.945 --> 00:36:36.445
And,
450
00:36:37.545 --> 00:36:39.244
they were able to track this
451
00:36:40.380 --> 00:36:43.599
infrastructure back, and they were just holding the key hot on the server.
452
00:36:44.299 --> 00:36:49.279
It's sort of mind boggling. You know? If if anything, the takeaway is, like, these guys are not listening
453
00:36:51.845 --> 00:36:52.424
to RHR and,
454
00:36:53.204 --> 00:36:54.244
TFTC and,
455
00:36:55.125 --> 00:36:58.025
taking control of their own keys and and putting it into cold storage.
456
00:36:58.810 --> 00:37:01.950
457
00:37:03.369 --> 00:37:09.185
They're definitely not plebs. So so let's just pull it back for a second. So when it comes to seizing Bitcoin,
458
00:37:09.965 --> 00:37:15.265
you're not gonna be able to crack the private key. So the the MO is you first try and trace the Bitcoin.
459
00:37:15.790 --> 00:37:19.250
If it's a KYC payment, obviously, it's attached to your identity,
460
00:37:20.750 --> 00:37:32.675
so you're you're you're forced to try and and break a link there. With ransomware, it's actually, you know, kind of similar to a KYC type of situation, because in this situation, you know, Colonial Pipeline paid the ransom. They immediately told the FBI,
461
00:37:33.069 --> 00:37:42.450
you know, we paid this ransom to this address. Right? And I have up on the screen, I have Ergo's tracking of of the funds going through. So you you track the funds first.
462
00:37:42.885 --> 00:37:54.700
Right? And once you track the funds, you try and figure out where the addresses are located. Right? So you wanna figure out the owner. If you can figure out the owner, then you can pressure the owner. Whether that's if you're a gang member or something, you're trying to,
463
00:37:55.240 --> 00:37:59.500
hold a gun to someone's head or break their kneecaps or or threaten their their
464
00:37:59.895 --> 00:38:00.395
their
465
00:38:00.855 --> 00:38:02.075
kids, their loved ones.
466
00:38:02.775 --> 00:38:06.075
But with the US government, you know, we have the largest prison system in the world.
467
00:38:06.455 --> 00:38:07.755
We could take your assets,
468
00:38:08.150 --> 00:38:14.730
you know, we could cruise missile your ass. There's a there's a bunch of things the US government can do to pressure an owner to try and get access. Mhmm.
469
00:38:15.190 --> 00:38:18.675
If if if they don't know the owner and they can't pressure the owner,
470
00:38:19.375 --> 00:38:24.035
they can try and attempt to to get the private keys because they're on an Internet connected device,
471
00:38:24.390 --> 00:38:26.410
whether that's a home computer
472
00:38:26.710 --> 00:38:35.995
or a server. Obviously, it's easier if it's a cloud server, especially if it's in something like AWS, like we think it was, where it's in like a corporate cloud, and you can just give Amazon a subpoena and take it. Right?
473
00:38:36.775 --> 00:38:53.655
And then last but not least, if it's on an exchange or a custodial wallet, then the service provider actually holds a private key, the user doesn't. Right? So if the user doesn't hold the private key, then you go and you pressure the exchange or service, and you take it from them. That that's the general premise of how you would go about seizing Bitcoin. You're not actually breaking the protocol.
474
00:38:54.755 --> 00:38:57.095
You're attacking essentially the human element
475
00:38:57.395 --> 00:38:59.095
behind holding the private keys.
476
00:38:59.660 --> 00:39:07.475
And first, you know, it's a trace, and then it's an attack. Would you say that's, like, a a general premise that I that we're at that we're dealing with here?
477
00:39:07.875 --> 00:39:08.695
478
00:39:10.355 --> 00:39:12.855
You know, the the crux of the issue is
479
00:39:14.115 --> 00:39:15.015
these ransomware
480
00:39:17.109 --> 00:39:17.609
actors
481
00:39:18.230 --> 00:39:20.250
were trusting third party infrastructure
482
00:39:21.589 --> 00:39:22.890
for even holding their keys,
483
00:39:23.430 --> 00:39:25.690
which should be a big no no. I mean,
484
00:39:26.775 --> 00:39:32.955
they may have had access to the keys through the Bitcoin client on there, but they were hosting it on someone else's box
485
00:39:33.255 --> 00:39:35.835
who just went in there, shelled in for the FBI,
486
00:39:36.310 --> 00:39:38.330
ripped that key off, and took all the funds,
487
00:39:39.670 --> 00:39:41.690
at least from what my understanding is.
488
00:39:42.070 --> 00:39:43.109
489
00:39:43.510 --> 00:39:45.690
so I have this ergo thing up.
490
00:39:46.425 --> 00:39:48.285
He also has a thread,
491
00:39:48.905 --> 00:39:54.285
and the thread makes an interesting point. So there's a consolidation that happened, which you can see
492
00:39:56.200 --> 00:40:01.180
which you can see on the the right side, this right this right or most circle cluster,
493
00:40:01.480 --> 00:40:03.660
and that's what creates the cluster. So
494
00:40:04.195 --> 00:40:08.375
they they broke a privacy best practice, and they took a bunch of inputs.
495
00:40:08.755 --> 00:40:09.415
The attackers
496
00:40:09.875 --> 00:40:15.160
the the hackers took a bunch of inputs, and they combined them all into a single, I think, a 69 Bitcoin,
497
00:40:16.260 --> 00:40:16.760
UTXO.
498
00:40:17.300 --> 00:40:19.319
And by doing that, they link common ownership.
499
00:40:20.099 --> 00:40:21.079
And what Ergo,
500
00:40:22.165 --> 00:40:24.665
speculates is that by linking that common ownership,
501
00:40:25.765 --> 00:40:28.345
the FBI or the chain analysis partners,
502
00:40:29.605 --> 00:40:30.665
were able to
503
00:40:31.730 --> 00:40:32.950
then figure out
504
00:40:33.810 --> 00:40:38.870
the the ultimate address the funds were in because the user was using an Electrum Lite client.
505
00:40:39.675 --> 00:40:56.990
This is just the this is his speculation, was using an Electrum Lite client and was connected to, like, a chain analysis node. If, you know, we there's lot lot lot of times there's been speculation that these surveillance companies are running Electrum nodes. So if you're not using your own Electrum node, you're using someone else's Electrum node. Mhmm. And as a result,
506
00:40:57.395 --> 00:41:01.735
those addresses that are not linked on chain are still linked via that way,
507
00:41:02.275 --> 00:41:10.050
and they have an IP address linked to it. And when they had the IP address linked to it, they had the server linked to it. And when they had the server linked to it,
508
00:41:10.670 --> 00:41:19.525
they were able to then hit the server. Right? So so they they have the address information, then they combine it with something like Electrum, and they're able to, like, figure out where the server is and then hit the server.
509
00:41:23.809 --> 00:41:30.630
So there's 2 elements at play here. Right? It's on chain privacy and network level privacy, which are the 2 things that we talk about a ton on this show. Mhmm.
510
00:41:31.395 --> 00:41:37.555
And then last but not least, there's so, I mean, like, this is coming back to actionable discussion. Right? Last but not least, like,
511
00:41:38.275 --> 00:41:44.540
the keys were hot. So you had the keys hot, you had poor on chain privacy, and you had poor network level privacy.
512
00:41:45.480 --> 00:41:50.825
And it seems like it was multisig. It was multisig, but both multisig keys were hot, so that didn't help.
513
00:41:54.905 --> 00:42:00.525
514
00:42:00.830 --> 00:42:05.090
be using multisig, like, what's the point of having it on hot devices to begin with? So
515
00:42:05.630 --> 00:42:09.330
516
00:42:10.615 --> 00:42:15.595
517
00:42:15.895 --> 00:42:18.395
Although, I expect someone might try one day.
518
00:42:19.150 --> 00:42:19.810
It's definitely
519
00:42:20.110 --> 00:42:21.890
not the way to go, at least today.
520
00:42:23.870 --> 00:42:33.785
521
00:42:35.045 --> 00:42:39.420
These are insecure systems that are gonna be attacked anyway. If anything, ransom
522
00:42:39.740 --> 00:42:45.520
ransomware allows an incentive for for an attacker to publicize that they've attacked you by encrypting all your shit,
523
00:42:46.345 --> 00:42:52.125
rather than just selling your information to the highest bidder or selling that access to the higher highest bidder. Ultimately,
524
00:42:53.200 --> 00:42:54.580
the cats out of the bag,
525
00:42:55.040 --> 00:42:56.900
whether it's Bitcoin or something else,
526
00:42:57.440 --> 00:43:00.820
payments will be made on the Internet in the censorship resistant fashion,
527
00:43:01.545 --> 00:43:07.965
and what you need to do is improve your infrastructure. There should be a major play in America to realize it's a national security issue
528
00:43:09.120 --> 00:43:13.920
to to improve our infrastructure, and to make sure our companies are protected, and to make sure our public infrastructure is,
529
00:43:14.880 --> 00:43:15.380
protected.
530
00:43:15.924 --> 00:43:23.385
And if it's not protected, these attacks are just gonna keep on happening until people protect them. And I'll I'll I'll tell you one thing. Every single time
531
00:43:23.860 --> 00:43:29.000
one of these providers gets attacked and, you know, ends up having to pay money and loses a ton of business,
532
00:43:29.540 --> 00:43:30.440
they will never
533
00:43:31.015 --> 00:43:39.810
they will never let it happen again. They will spend a ton of fucking money and time to make sure that their systems are secure going forward. They just need to touch the stove and and get hurt.
534
00:43:40.930 --> 00:43:42.070
535
00:43:43.490 --> 00:43:51.665
536
00:43:52.365 --> 00:43:55.425
537
00:43:56.900 --> 00:43:57.400
frankly,
538
00:43:58.099 --> 00:44:00.760
I see this as being a boom for cybersecurity.
539
00:44:01.780 --> 00:44:04.839
The fact that you're able to monetize a hack so easily
540
00:44:05.395 --> 00:44:11.175
is gonna light a fire under the entire industry's ass. And that's what we're seeing. We're we're gonna see people,
541
00:44:11.795 --> 00:44:17.980
you know, not only build tools to try to help counter these things and and have more, you know, rig
542
00:44:18.280 --> 00:44:19.740
rigorous backups mechanisms,
543
00:44:21.000 --> 00:44:22.700
but it's also just gonna incentivize
544
00:44:23.535 --> 00:44:30.515
people that just have better security in general to build up systems that will detect these things, to, you know, alert on them.
545
00:44:32.030 --> 00:44:42.385
You know, if if things are happening more more frequently and your expected costs of what you're gonna endure from cyber hacks is going up year after year because this thing becomes more rampant,
546
00:44:43.005 --> 00:44:44.225
then the whole cybersecurity
547
00:44:45.325 --> 00:44:52.599
industry is gonna about to experience a whole boom. I think this is gonna be ultimately great for the industry and ultimately great for people's security.
548
00:44:53.460 --> 00:44:54.839
People need to be rigorous
549
00:44:55.220 --> 00:44:59.400
now just because of how easy it is and and how where the incentives are aligned.
550
00:44:59.905 --> 00:45:06.565
So, yeah, that that's one of the definitely one of the bigger points I wanted to bring home from this thing. Like, this is gonna be a boom for the cyber industry.
551
00:45:07.320 --> 00:45:14.600
552
00:45:15.080 --> 00:45:15.580
fucking
553
00:45:16.055 --> 00:45:19.515
full nation pipeline, and then there's small businesses all over the place.
554
00:45:19.815 --> 00:45:27.630
Like, these like, you don't hear about the majority of ransomware attacks. And I had a family friend who, like, their small accounting business got hit with a $3,000
555
00:45:28.010 --> 00:45:28.510
ransom.
556
00:45:29.050 --> 00:45:37.065
Because these criminals are savvy, they realize, like, if they hit the smaller low hanging fruit, they need to pick an amount that they'll actually pay. Otherwise, they'll just
557
00:45:38.165 --> 00:45:39.305
start from scratch.
558
00:45:39.685 --> 00:45:41.625
They they just won't pay the ransom.
559
00:45:43.150 --> 00:45:45.090
So it's just really interesting that it's like
560
00:45:45.710 --> 00:45:46.770
like, what? Like,
561
00:45:47.150 --> 00:45:51.650
cyber cyber professionals have been cybersecurity professionals have been talking about,
562
00:45:51.965 --> 00:45:55.345
you know, securing your systems for the last 30 years or whatever,
563
00:45:56.205 --> 00:45:59.825
and everyone just kinda gave it lip service. No one was really doing anything until
564
00:46:00.390 --> 00:46:03.850
until all of a sudden there's this direct incentive to to make it happen.
565
00:46:04.150 --> 00:46:09.935
566
00:46:10.895 --> 00:46:13.155
damage this could potentially do to my
567
00:46:13.935 --> 00:46:15.155
my, enterprise,
568
00:46:15.695 --> 00:46:21.540
and you multiply by the the likeliness of it happening. Well, if it's becoming more and more likely, like,
569
00:46:22.560 --> 00:46:27.460
everyone needs to take this into their their calculation. More and more people are gonna have to spend more money
570
00:46:28.125 --> 00:46:28.704
on cybersecurity
571
00:46:29.005 --> 00:46:30.065
protection. So
572
00:46:30.925 --> 00:46:35.185
it's definitely gonna be a boom for the industry. It's, it's a shame that this is what it took
573
00:46:35.720 --> 00:46:39.500
for things to start changing and people to start taking things more seriously.
574
00:46:39.800 --> 00:46:42.860
But, you know, like many other instances in this industry,
575
00:46:44.115 --> 00:46:46.455
lessons are often learned the hard way.
576
00:46:47.235 --> 00:46:48.355
And and then
577
00:46:52.150 --> 00:46:52.650
578
00:46:53.109 --> 00:46:53.930
Yeah. Exactly.
579
00:46:54.630 --> 00:46:59.130
Lessons lessons are heard the hard way. And, oh, that that's what that's what I was saying. So the the site,
580
00:46:59.535 --> 00:47:02.675
the other thing that it kind of is is funny is, like, these companies
581
00:47:03.055 --> 00:47:07.715
historically have paid bounties. A lot of these big companies have paid bounties out for security researchers.
582
00:47:08.310 --> 00:47:10.410
You find a bug, you know, we'll give you $10,000
583
00:47:11.030 --> 00:47:11.690
or something.
584
00:47:14.310 --> 00:47:18.455
We have Vanilla in the chat trying to figure out how to rewind. I'm pretty sure you can rewind on,
585
00:47:19.015 --> 00:47:19.675
on YouTube.
586
00:47:20.135 --> 00:47:24.555
I I don't know if you can rewind live on Twitch. You definitely can't do it live
587
00:47:25.260 --> 00:47:34.424
via Twitter, but anyway, this is all gonna get posted to podcast feed. It's gonna get posted onto bitcoin tv.com. There's full archives. You can download it. You can torrent it. This is an open project,
588
00:47:35.204 --> 00:47:36.585
in the spirit of FOSS,
589
00:47:37.045 --> 00:47:45.150
and I want you guys to seed it. I want you to rip it up. I want you to share it. I want you to do whatever the hell you wanna do with it, and all those links are available at citadel dispatch.com,
590
00:47:45.450 --> 00:47:47.470
and that's where you can also contribute to the show.
591
00:47:47.850 --> 00:47:51.869
But anyway, my point was that they had these bounties, and it just goes to show,
592
00:47:52.435 --> 00:47:53.175
you know, how
593
00:47:53.555 --> 00:47:56.535
shitty their bounties were. You know? Like, there's such low numbers.
594
00:47:56.835 --> 00:47:57.895
And in this case,
595
00:47:58.435 --> 00:47:58.935
basically,
596
00:47:59.589 --> 00:48:06.329
the the security researchers, like, the the kind way of of calling a ransomware gang is is they're basically distributed security researchers.
597
00:48:07.705 --> 00:48:12.525
They get to set the price of their bounty, and there's, like, a negotiation if it's paid or not.
598
00:48:14.090 --> 00:48:16.270
599
00:48:19.210 --> 00:48:31.505
600
00:48:32.100 --> 00:48:33.640
601
00:48:34.660 --> 00:48:37.080
you know, we really don't know for sure. Right?
602
00:48:37.700 --> 00:48:39.480
So the motto is
603
00:48:40.135 --> 00:48:43.595
don't trust, verify, and, unfortunately, it's really hard to verify
604
00:48:44.375 --> 00:48:46.395
any claims from anyone right now.
605
00:48:47.255 --> 00:48:54.670
We know that there's some crazy things that have come out from journalists reporting on this. I think Kim Zetter said that,
606
00:48:55.530 --> 00:49:00.645
this attack didn't actually affect the distribution systems, systems, the the technical systems, but actually,
607
00:49:02.305 --> 00:49:09.480
came down to infecting the billing systems and that the company, the pipeline shut everything down because they weren't sure how they would bill their customers,
608
00:49:09.860 --> 00:49:12.200
which if so is is absolutely disgusting
609
00:49:12.660 --> 00:49:14.840
and goes to show you you can't trust corporations.
610
00:49:16.115 --> 00:49:17.974
Is the government telling the rights?
611
00:49:18.355 --> 00:49:22.295
The the truth here in this story, we don't really know. I mean, the FBI has a long
612
00:49:22.660 --> 00:49:32.345
track record of creating its own terrorist plots than coming in as the good fit guy and stopping them. So could they be involved? I don't know. Shit. Who knows for sure?
613
00:49:33.684 --> 00:49:36.585
But what I do know is that the end of the day,
614
00:49:37.180 --> 00:49:39.840
this whole thing is actually great for Bitcoin
615
00:49:40.140 --> 00:49:41.840
because everything is good for Bitcoin.
616
00:49:42.140 --> 00:49:43.040
But, specifically,
617
00:49:44.625 --> 00:49:46.005
when you have the FBI
618
00:49:46.385 --> 00:49:47.204
coming out
619
00:49:47.505 --> 00:49:48.165
and saying,
620
00:49:48.704 --> 00:49:49.525
okay, guys,
621
00:49:49.984 --> 00:49:51.204
you should pay this
622
00:49:51.760 --> 00:49:58.339
these ransoms, like, just just pay them, like and using this as an example of, like, okay, this is how we can get your money back or whatever.
623
00:49:58.640 --> 00:50:00.579
I think we're gonna see more companies
624
00:50:01.065 --> 00:50:08.365
just paying these things straight up. And I don't know what the FBI's angle is behind that is that they just don't want, you know, critical infrastructure
625
00:50:08.665 --> 00:50:09.325
to be
626
00:50:10.060 --> 00:50:13.120
down because the companies are trying to be cheap asses.
627
00:50:13.420 --> 00:50:15.680
That's that's probably what it comes down to.
628
00:50:16.460 --> 00:50:18.555
But, ultimately, I think, you know,
629
00:50:20.235 --> 00:50:22.335
boards across the country of these major
630
00:50:22.875 --> 00:50:24.575
corporations are seeing what happened.
631
00:50:25.770 --> 00:50:29.550
They're coming up with plans to how to mitigate this. I'm I'm sure many
632
00:50:29.850 --> 00:50:33.630
are thinking about having Bitcoin in the reserves just in case this does happen
633
00:50:33.934 --> 00:50:36.115
to get back on their feet as soon as possible.
634
00:50:37.214 --> 00:50:38.835
It's it's just
635
00:50:39.295 --> 00:50:43.069
coming into the minds of all these people that may have not have been thinking about cryptocurrency
636
00:50:43.530 --> 00:50:47.710
at all before. And even if the connotation is bad in the light of hacking,
637
00:50:49.050 --> 00:50:50.270
you know, exposure
638
00:50:51.355 --> 00:50:52.555
no matter what your
639
00:50:53.995 --> 00:50:57.535
for no matter what the purpose is always a good thing for Bitcoin. So,
640
00:50:58.155 --> 00:51:00.415
I think this is in itself is bullish news.
641
00:51:01.520 --> 00:51:04.460
642
00:51:05.000 --> 00:51:06.220
with 0 concrete,
643
00:51:06.840 --> 00:51:07.340
apply,
644
00:51:07.880 --> 00:51:09.740
which is a very professional answer.
645
00:51:11.464 --> 00:51:15.325
We have we have ride or die free, Randy McMillan, in the live chat,
646
00:51:15.944 --> 00:51:27.000
mentioning insurance scam. I mean, I don't think this was necessarily insurance scam, but as this ransomware attack start becoming more and more common and and these operators, the CEOs of the companies, and the treasuries of companies
647
00:51:27.605 --> 00:51:28.665
become more savvy,
648
00:51:29.285 --> 00:51:39.330
it could definitely be a vector. I mean, I know there is already ransomware insurance. So, I mean, that's up to the insurance companies to try and figure out how they're gonna deal with that kind of fraud.
649
00:51:39.950 --> 00:51:41.570
That's fraud like any other.
650
00:51:42.430 --> 00:51:44.690
I would just say that insurance companies
651
00:51:46.285 --> 00:51:50.305
tend to fuck over their clients as much as possible, so I'm not gonna shed a tear there.
652
00:51:50.605 --> 00:51:59.010
I don't think this is an insurance scam. I think this company cap, you know, Colonial Pipeline just had a horrible infrastructure. They're probably running, like, Windows 95 or some shit.
653
00:52:00.589 --> 00:52:04.130
They wanted sympathy from the government and from their clients,
654
00:52:04.655 --> 00:52:08.675
because they couldn't accept payments, so they just shut down everything because they were fucking greedy,
655
00:52:09.695 --> 00:52:10.195
which,
656
00:52:10.495 --> 00:52:12.170
you know, runs logically.
657
00:52:14.230 --> 00:52:17.210
The US government was able to actually catch these guys
658
00:52:17.589 --> 00:52:19.050
probably partially because
659
00:52:19.725 --> 00:52:24.705
they they used, you know, executive privilege by saying that was a terrorist attack.
660
00:52:25.325 --> 00:52:29.185
So they were able to, you know, get more power than than they could otherwise.
661
00:52:30.589 --> 00:52:32.049
And then they, obviously,
662
00:52:32.750 --> 00:52:34.690
in in proper DOJ fashion,
663
00:52:35.549 --> 00:52:37.650
they used it to attack Bitcoin afterwards,
664
00:52:39.555 --> 00:52:45.494
665
00:52:46.830 --> 00:52:49.890
666
00:52:50.990 --> 00:52:54.530
they wouldn't have recovered the Bitcoin, and the pipeline would still be shut down.
667
00:52:55.835 --> 00:52:56.335
So,
668
00:52:56.635 --> 00:53:00.175
you know, if it was a false flag, it was a very weak false flag.
669
00:53:01.515 --> 00:53:04.175
And if you believe that our infrastructure is secure,
670
00:53:05.730 --> 00:53:07.510
I got a shitcoin to sell you.
671
00:53:10.450 --> 00:53:19.185
672
00:53:19.645 --> 00:53:23.980
they become complacent. It's it's easy. It's it's, you know, cheaper than
673
00:53:24.520 --> 00:53:25.740
having more operators,
674
00:53:27.240 --> 00:53:29.100
more employees operate things manually.
675
00:53:29.925 --> 00:53:33.305
And, yes, it's sort of hard to unwind all that stuff.
676
00:53:35.285 --> 00:53:41.309
677
00:53:42.329 --> 00:53:43.069
I expect
678
00:53:43.369 --> 00:53:47.630
future ransomware attackers to learn from the mistakes of these attackers,
679
00:53:48.535 --> 00:53:51.275
and and practice better privacy, best practices,
680
00:53:51.895 --> 00:53:55.835
and better OPSEC in general, right, in terms of how they store their keys.
681
00:53:57.980 --> 00:54:04.560
And I don't think this is stopping anytime soon. And what one other interesting aspect of here, by the way, is that this ransomware
682
00:54:04.954 --> 00:54:07.855
specifically, I have it up on the screen, not this is not the
683
00:54:08.234 --> 00:54:13.535
the one of the colonial attack. The thing is when when Darkseid attacks an organization,
684
00:54:14.250 --> 00:54:29.345
most of the time the organization just pays and just doesn't say anything to the public because it just looks bad. Mhmm. So they never admit it. But every once in a while, you get information out of it. So the majority, it's it's almost like a rape victim, like the majority of times it happens, you just don't even hear about it because they're ashamed about it.
685
00:54:31.085 --> 00:54:37.930
But sometimes it happens, and we're able to glean certain knowledge from it. And Krebs on security has a whole post about Darkseid based on
686
00:54:38.230 --> 00:54:46.045
one of the large attacks that happened, and the the company actually coming out and publicly releasing all the information, because they wanted it to be out there.
687
00:54:46.425 --> 00:54:52.160
And and as you can see in the screen, they actually offer 20% discount if you pay with Monero. So
688
00:54:53.740 --> 00:54:55.280
for for better or worse,
689
00:54:57.065 --> 00:54:58.845
you know, the operators understand
690
00:54:59.225 --> 00:55:01.565
that one of their weak points is actually,
691
00:55:03.305 --> 00:55:05.325
trying to prevent the tracing of the Bitcoin.
692
00:55:09.869 --> 00:55:12.369
693
00:55:13.325 --> 00:55:15.585
You know, they were willing to pay the premium
694
00:55:16.445 --> 00:55:19.745
to have some assurance that they could track this thing on chain.
695
00:55:20.500 --> 00:55:27.800
And, you know, from the side of things, I mean, we don't know exactly what led the servers to be discovered, but
696
00:55:28.465 --> 00:55:31.285
you one would think that, the on chain
697
00:55:32.065 --> 00:55:33.045
lack of privacy
698
00:55:33.345 --> 00:55:41.080
699
00:55:41.700 --> 00:55:44.680
There's a theory I saw, and we just recently it came out today,
700
00:55:45.515 --> 00:55:49.455
that the FBI for 2 years was running an encrypted phone network,
701
00:55:50.875 --> 00:55:51.855
called Anam,
702
00:55:52.700 --> 00:55:57.599
and they were they were they went into gangs, like, organized crimes distribution networks,
703
00:55:57.900 --> 00:56:02.515
and they were able to get the phones into the hands of distributors, and the distributors are giving them to mobsters.
704
00:56:02.975 --> 00:56:04.035
And every single,
705
00:56:05.055 --> 00:56:22.885
message was automatically getting cc'd to the FBI, and they had a backdoor key to it. So they saw every single message that went to this network for 2 years, and they literally operated the whole thing. It wasn't like they compelled the company or something. They were just literally operating an encrypted chat network. They sold it to organized criminals, and they got them on everything.
706
00:56:23.230 --> 00:56:25.970
And so one theory is is, you know, in the
707
00:56:26.270 --> 00:56:30.850
in the affidavit or whatever, it says, you know, the Bitcoin was sent to this address,
708
00:56:31.550 --> 00:56:32.050
and
709
00:56:32.415 --> 00:56:35.234
and we had the private key to that address, so we seized it.
710
00:56:37.135 --> 00:56:42.115
They might have sent it to a custodial mixer, and that custodial mixer could have been operated by the FBI.
711
00:56:42.480 --> 00:56:49.940
I mean, the freaks on Twitter don't realize, like, the majority of private Bitcoin usage even today, I mean, it's hard to calculate for sure Mhmm. Isn't really the CoinJoin,
712
00:56:50.755 --> 00:56:53.175
tools, the non custodial CoinJoin tools. The majority
713
00:56:53.555 --> 00:56:57.815
has historically, and I believe still to this day, have been these custodial mixers,
714
00:56:58.400 --> 00:57:01.940
where you're just trusting the operator. You send them you send them Bitcoin,
715
00:57:02.800 --> 00:57:06.740
and they send you someone else's Bitcoin after a certain amount of time. So maybe,
716
00:57:07.305 --> 00:57:11.805
you know, these guys just sent it into a custodial mix, and the custodial mixers, like, thank you very much.
717
00:57:13.545 --> 00:57:14.365
718
00:57:14.720 --> 00:57:17.700
definitely be the case. I mean, I think the takeaway here is,
719
00:57:18.160 --> 00:57:20.019
you know, trusted third parties
720
00:57:20.400 --> 00:57:26.095
are security holes, of course. Right? And if you can't verify the software that's running on your device
721
00:57:26.474 --> 00:57:28.335
and all the software you're running,
722
00:57:28.714 --> 00:57:29.694
you know, it's
723
00:57:30.380 --> 00:57:32.720
it's prime territory for a honeypot.
724
00:57:33.339 --> 00:57:34.880
And, you know, that's what
725
00:57:35.740 --> 00:57:38.160
this FBI Global Sting was. And,
726
00:57:38.700 --> 00:57:39.519
you know, it's
727
00:57:40.605 --> 00:57:45.745
bore a lot of fruit for them. It was it was brilliant, you know, like, this is gonna be something they're gonna tell their bosses,
728
00:57:46.845 --> 00:57:51.150
you will they they're gonna think it's a grand slam, and it was. They We were able to arrest so many people,
729
00:57:51.930 --> 00:57:56.829
and we were able to run this thing for years without anyone knowing. But, you know,
730
00:57:57.525 --> 00:58:04.665
when you're just running software, you can't verify on servers run by someone else. What else do you expect? Well, to be clear here, they're
731
00:58:05.319 --> 00:58:08.940
732
00:58:09.559 --> 00:58:12.380
This is first of all, the funds they took is of the affiliate,
733
00:58:13.315 --> 00:58:18.695
and it doesn't we're not even sure if they caught the affiliate either, if they actually caught the people. It seems like they just got the funds.
734
00:58:20.680 --> 00:58:30.365
So I I wouldn't say that they're, you know, done operating. I I expect this specific group to keep operating, but obviously still ransomware groups in general are gonna be operating. We have some person
735
00:58:30.745 --> 00:58:39.869
I by the way, dude, your your name some person on YouTube makes me sound like an asshole every time I call you out on the show because it looks like I'm just ignoring your name. But his real name on
736
00:58:40.490 --> 00:58:46.670
his his his name on YouTube is some person. He's asking why are custodial mixers still the thing, and it's twofold.
737
00:58:47.275 --> 00:58:48.175
Actually, it's threefold.
738
00:58:49.035 --> 00:58:52.335
A lot of times they're cheaper than using the CoinJoin tools.
739
00:58:52.715 --> 00:58:55.455
Mhmm. They're they're way easier to use,
740
00:58:56.079 --> 00:58:57.220
with less gotchas,
741
00:58:58.960 --> 00:59:00.740
and well, number 23,
742
00:59:01.040 --> 00:59:07.515
it has a has a asterisk next to it with less gotchas, easier to use, and on chain privacy is better. But with 23,
743
00:59:08.855 --> 00:59:14.839
that's if you trust the provider. It's custodial privacy. Right? So if you trust the provider and the provider is keeping logs
744
00:59:15.300 --> 00:59:18.839
and isn't actually the FBI waiting for you to send in your money,
745
00:59:20.099 --> 00:59:31.195
they're way easier to use, and on chain, it's perfect. It's, like, not perfect privacy, but it completely breaks the link on chain. It's not visible on chain. Like, you send you send your Bitcoin and they send you some other Bitcoin.
746
00:59:31.940 --> 00:59:37.560
There's no link because the link is them sending you someone else's Bitcoin, and that happens off chain. Yeah. Absolutely.
747
00:59:38.180 --> 00:59:42.085
So I'll just on the outside of the server, but the inside server has everything.
748
00:59:42.865 --> 00:59:50.484
Yeah. So he just apologized. You don't have to apologize. You you could keep your you could keep your name if you want. I appreciate you I appreciate you coming into live chat all the time.
749
00:59:51.039 --> 00:59:54.019
The he just apologized because his name is some person.
750
00:59:54.480 --> 00:59:55.380
751
00:59:55.680 --> 01:00:01.365
752
01:00:01.745 --> 01:00:08.645
if you don't and so you have custodial risk. So not only do are you trusting them with your privacy, obviously, you're trusting them with your money.
753
01:00:09.950 --> 01:00:10.450
754
01:00:12.670 --> 01:00:20.664
755
01:00:21.045 --> 01:00:26.730
custodial mixer to the next custodial mixer. So then all of a sudden, you're mostly just trusting them with,
756
01:00:29.350 --> 01:00:32.410
you're mostly just trusting them with actually stealing your funds.
757
01:00:32.875 --> 01:00:36.655
You're you're less so trusting them with the privacy side because if you go from
758
01:00:37.595 --> 01:00:41.190
mixer to mixer, they they don't have all the information. Right?
759
01:00:43.109 --> 01:00:46.569
760
01:00:46.950 --> 01:00:50.490
you don't have as much opacity. So someone could guess, like, okay.
761
01:00:50.845 --> 01:00:52.465
Matt is 1 in these
762
01:00:53.165 --> 01:00:55.585
5, 10, 100 people. Right?
763
01:00:55.885 --> 01:00:56.385
Whereas,
764
01:00:58.160 --> 01:01:01.299
unchained for this custodial mixer is just completely opaque.
765
01:01:01.920 --> 01:01:04.260
But, however, if that person is a honeypot
766
01:01:04.720 --> 01:01:06.740
or the FBI, they have the entire
767
01:01:07.040 --> 01:01:07.455
recipe
768
01:01:07.855 --> 01:01:09.315
for what input came in,
769
01:01:09.695 --> 01:01:13.875
who did we send it out to, etcetera. It's like they have the exact answer sheet.
770
01:01:14.415 --> 01:01:15.875
Whereas, you know, a noncustodial
771
01:01:16.175 --> 01:01:18.080
mix as long as the,
772
01:01:18.720 --> 01:01:19.380
the mixing
773
01:01:19.840 --> 01:01:27.855
774
01:01:28.235 --> 01:01:29.375
775
01:01:29.675 --> 01:01:34.570
776
01:01:35.190 --> 01:01:38.170
777
01:01:38.710 --> 01:01:41.450
with all the sites you went to, what IP you're coming from.
778
01:01:43.935 --> 01:01:51.475
779
01:01:51.920 --> 01:01:52.819
turns into a honeypot.
780
01:01:53.280 --> 01:01:56.020
So I've been recommending it to you freaks for years now.
781
01:01:58.640 --> 01:02:00.735
But yeah. So I think that was a pretty good
782
01:02:01.215 --> 01:02:05.795
overall view of the custodial mixers we went into there. Oh, so I I have another
783
01:02:06.575 --> 01:02:07.715
question for you.
784
01:02:08.870 --> 01:02:10.650
Do you expect that
785
01:02:11.830 --> 01:02:19.015
either these ransomware providers switch to a Monero only model or change their premium structure? So right now, it seems like they're pricing it at 20%,
786
01:02:21.875 --> 01:02:23.015
20% additional
787
01:02:23.315 --> 01:02:30.930
cost or risk if you if you use Bitcoin. Do you think that number goes up, or do you think they just switch over to Monero completely, or is this just a dumb question?
788
01:02:32.829 --> 01:02:42.935
789
01:02:43.430 --> 01:02:44.170
as much.
790
01:02:44.790 --> 01:02:48.569
They might not have exposure to the exchanges that have Monero.
791
01:02:49.670 --> 01:02:51.609
So I I see that premium
792
01:02:52.785 --> 01:02:53.525
sticking around,
793
01:02:54.224 --> 01:02:55.045
maybe increasing,
794
01:02:56.224 --> 01:03:00.885
but, you know, if anything, I think people are gonna change their security postures as
795
01:03:01.880 --> 01:03:09.020
to what they do with the private keys more than anything. I mean, that's what makes the most sense to me at least. Right? Like, why cut off
796
01:03:09.665 --> 01:03:13.445
the potential of it being paid if a corporation only wanted in BTC,
797
01:03:13.985 --> 01:03:19.900
especially if the FBI is going and saying, oh, hey. Look. We could sort of recover it in BTC. You know, like, why
798
01:03:20.440 --> 01:03:22.859
remove that and the premium? Right?
799
01:03:24.415 --> 01:03:27.635
Why not just fix the way you're storing your keys? Like, it's ridiculous.
800
01:03:29.055 --> 01:03:33.200
801
01:03:34.880 --> 01:03:36.420
Evan, is there not
802
01:03:36.880 --> 01:03:38.660
a use case for hot wallets?
803
01:03:40.295 --> 01:03:44.235
804
01:03:44.775 --> 01:03:47.675
What are you talking about, bro? Is is Zeus a cold wallet?
805
01:03:49.300 --> 01:03:58.095
No. Zeus hacked your node on the at home, that's a hot wallet. Lightning's a hot wallet right now. I mean, it always will be. Right? Because their state has to be maintained
806
01:03:58.395 --> 01:04:05.270
807
01:04:05.970 --> 01:04:17.545
and I had the people that were saying, wait, Lightning's a hot wallet. So I was very happy that I tweeted it out. Well, you know, anytime you could educate someone, that's always good, but come on, Matt. You know that was bait, that tweet.
808
01:04:18.805 --> 01:04:25.210
You know, it was it was half bait, half, you know, trying to provoke a conversation here. Right? Because
809
01:04:25.750 --> 01:04:30.090
it it seems that there's been a large argument on a large contingent of Bitcoin Twitter
810
01:04:30.405 --> 01:04:31.785
that say the most unrealistic
811
01:04:32.245 --> 01:04:33.625
part of this whole exercise
812
01:04:34.645 --> 01:04:44.720
is that this group was using a a corporate server. It it appears they were using a corporate server. That's if the custodial mixer theory is incorrect, which I still think is a really cool theory.
813
01:04:46.525 --> 01:04:47.325
And just like,
814
01:04:49.005 --> 01:04:53.850
like, they must have had such an awe fuck moment when they sent it in, but that's, that's besides the point
815
01:04:54.810 --> 01:04:58.830
that that there's this that there's this idea that because they were using a hot wallet,
816
01:05:00.250 --> 01:05:01.070
that's unrealistic.
817
01:05:01.545 --> 01:05:06.345
Like, a shit ton of people in this space use hot wallets. I mean, we had a guy we had
818
01:05:06.985 --> 01:05:11.325
every centralized exchange has a hot wallet. The whole Lightning Network's hot wallet.
819
01:05:11.770 --> 01:05:13.150
Any any any,
820
01:05:13.770 --> 01:05:30.530
freak who has used CoinJoin is is inherently using a hot wallet because it needs to coordinate with each other. If you're running Whirlpool or join market 247, you're using a hot wallet. The easiest way to do that with high performance on whether that's Lightning or CoinJoin or whatnot is to is to use a a well connected server.
821
01:05:32.430 --> 01:05:48.190
You know, we had the guy who lost a 1,000 coins on Electrum. He was using, obviously, he was using a hot wallet, and he clicked the phishing link. That's right. This this idea that people aren't using hot wallets, well, you know, should be educated that that people should try and use cold storage when possible,
822
01:05:48.570 --> 01:06:00.275
but it's a calculated risk. Right? The we have Anthony in the comments saying he's a hot wallet. Yeah. We we we saw him in Miami. He was very hot all the time. In Miami, you have to take 3 showers a day. You have you have no choice.
823
01:06:01.619 --> 01:06:04.280
It's a calculated risk. Like, if these hackers are,
824
01:06:05.380 --> 01:06:12.495
you know, bringing in 6000 Bitcoin every 2 years, who the fuck cares if 60 Bitcoin gets seized because it's on a hot wallet?
825
01:06:14.795 --> 01:06:16.815
826
01:06:17.700 --> 01:06:24.599
you know, it's not really a high cost to get it into a cold setup. I I think it's like more of an education issue. Right? It's gotta be.
827
01:06:25.275 --> 01:06:25.855
You know,
828
01:06:26.635 --> 01:06:32.975
as great as the show is, for example, right, we only got, like, 200 people listening on average, at least on the restream over here. Right?
829
01:06:33.410 --> 01:06:34.710
So I think
830
01:06:35.250 --> 01:06:36.230
despite people,
831
01:06:36.690 --> 01:06:37.350
you know,
832
01:06:38.210 --> 01:06:43.915
having technical ability and being good at cyber and even being able to facilitate great things like this,
833
01:06:44.215 --> 01:06:49.994
you know, people's general knowledge about Bitcoin is lacking. The freaks are like the the point o 1%.
834
01:06:51.480 --> 01:06:55.640
835
01:06:56.520 --> 01:06:57.580
Over over 20,000
836
01:06:57.880 --> 01:06:59.740
will listen to this episode most likely.
837
01:07:00.955 --> 01:07:03.035
But, yeah, I agree. It's it's it's it's,
838
01:07:04.315 --> 01:07:10.230
we're definitely still early days. We're absolutely early days. Oh, we're A lot of times, it's it's a convenience thing. Right? You just
839
01:07:11.170 --> 01:07:15.910
the the real question about using a server to me is not necessarily the hot wall, it is.
840
01:07:16.685 --> 01:07:23.665
And I guess if you're an organized crime, it's probably not that hard, but most of these servers require some kind of k y c to to use
841
01:07:24.445 --> 01:07:25.425
842
01:07:25.760 --> 01:07:30.579
843
01:07:33.275 --> 01:07:33.775
844
01:07:34.555 --> 01:07:35.055
Definitely.
845
01:07:36.715 --> 01:07:38.495
846
01:07:40.559 --> 01:07:50.605
My point is that everyone just no one talk no one talks about the fact that Lightning uses a hot wallet, that Lightning uses hot wallets. Like, very I mean, not nobody is hyperbolic.
847
01:07:51.225 --> 01:07:55.645
Few people talk about it. Yeah. Absolutely. And we're fine with that. And and
848
01:07:56.180 --> 01:07:57.080
if we're correct
849
01:07:57.540 --> 01:07:58.360
about Lightning,
850
01:07:59.140 --> 01:08:01.800
there's gonna be, like, 1,000,000,000 of dollars on hot wallets.
851
01:08:02.820 --> 01:08:03.320
852
01:08:03.620 --> 01:08:04.120
Right?
853
01:08:04.515 --> 01:08:09.095
854
01:08:09.475 --> 01:08:15.870
855
01:08:16.810 --> 01:08:18.110
Keys need to be held
856
01:08:18.784 --> 01:08:19.445
on infrastructure
857
01:08:19.905 --> 01:08:24.485
that the the the routers own. You know, there's a lot of challenges in,
858
01:08:25.264 --> 01:08:29.989
doing this stuff, especially as the big corporations and enterprise operations,
859
01:08:31.090 --> 01:08:33.750
come into the game. Like, it's it's not just, like,
860
01:08:34.210 --> 01:08:35.030
setting up.
861
01:08:36.645 --> 01:08:45.304
It's not as easy as setting up a BTC pay and just plugging in an expo. You know what I mean? Like, this is something that you actively have to maintain. You gotta maintain the state
862
01:08:45.640 --> 01:08:47.100
and make sure you don't get hacked.
863
01:08:50.199 --> 01:08:53.179
864
01:08:53.635 --> 01:08:54.755
Yeah. Absolutely. And
865
01:08:56.835 --> 01:08:58.375
866
01:08:59.235 --> 01:09:01.335
that this requires is the reason why
867
01:09:01.670 --> 01:09:03.050
we don't see exchanges,
868
01:09:04.630 --> 01:09:07.610
have Lightning yet. It is the reason, like, you don't see Lightning
869
01:09:07.989 --> 01:09:10.409
integrated on Cash App yet. You know what I mean?
870
01:09:10.815 --> 01:09:16.355
Like, there's a lot of boxes to tick to make sure that your setup is secured generally, especially when you're serving,
871
01:09:16.655 --> 01:09:18.595
you know, potentially millions of customers.
872
01:09:19.170 --> 01:09:19.989
So it's not
873
01:09:21.370 --> 01:09:21.870
easy.
874
01:09:23.250 --> 01:09:24.309
Agreed. Agreed.
875
01:09:26.130 --> 01:09:27.510
876
01:09:29.515 --> 01:09:30.015
Whirlpool,
877
01:09:30.395 --> 01:09:32.335
unspent capacity is ticking on up?
878
01:09:33.515 --> 01:09:36.415
879
01:09:36.929 --> 01:09:41.110
880
01:09:41.730 --> 01:09:43.190
you want it running 247,
881
01:09:44.050 --> 01:09:45.909
that's a calculated risk you're taking.
882
01:09:46.364 --> 01:09:50.145
I think it can be worth it, but it's a risk that you should calculate in your head
883
01:09:50.685 --> 01:10:02.369
884
01:10:02.995 --> 01:10:05.895
not exposed to the plane that web and it's just over tour services.
885
01:10:06.275 --> 01:10:12.650
You know, providing your machines, getting the updates, like, your chance your odds are really low of something catastrophic happened.
886
01:10:13.210 --> 01:10:22.110
But still, something could happen. You could have a loss that you can't recover from. And that's why anytime you use any of these services and use a hot wallet,
887
01:10:22.995 --> 01:10:40.050
you need to measure the amount that you're putting in appropriately. You do not want the vast majority of your funds, like your savings, your life savings on one of these hot wallets. Right? That's why I think the the analogy of checking account versus savings account is is so perfect. It's like you don't want everything in your checking account.
888
01:10:42.605 --> 01:10:47.985
889
01:10:50.320 --> 01:10:52.260
890
01:10:53.920 --> 01:10:56.260
It it reminds me of, like, on Ipods when
891
01:10:56.640 --> 01:10:57.540
you had, like,
892
01:10:58.225 --> 01:11:02.005
unknown artists or various artists, you know, everything would just get
893
01:11:02.625 --> 01:11:10.110
put there. You know, you can't search for that Google phrase. You know what I mean? Some person is not going to turn up any results or will it turn up like billions of results.
894
01:11:10.970 --> 01:11:11.470
So,
895
01:11:11.850 --> 01:11:12.350
yeah,
896
01:11:12.650 --> 01:11:14.670
some person great way to not get found.
897
01:11:15.005 --> 01:11:17.185
898
01:11:17.965 --> 01:11:20.705
one of the OGs, he changed his legal name to Nobody.
899
01:11:22.125 --> 01:11:22.285
So
900
01:11:23.245 --> 01:11:27.370
and then I think there was, like, a someone's name was null, and it, like, broke a bunch of systems,
901
01:11:28.390 --> 01:11:31.130
902
01:11:31.590 --> 01:11:32.570
comic where
903
01:11:33.025 --> 01:11:34.704
the guy names his kid,
904
01:11:35.585 --> 01:11:37.125
drop tables? Anyway,
905
01:11:37.985 --> 01:11:39.125
preschool database.
906
01:11:39.905 --> 01:11:41.525
That's it. Little Tommy Tables.
907
01:11:42.340 --> 01:11:43.160
908
01:11:44.580 --> 01:11:45.960
That's good upside, Freaks.
909
01:11:46.980 --> 01:11:52.165
Smelting sats, you mentioned, and some person called it out. I mean, the reason we say smelting sats
910
01:11:54.725 --> 01:11:55.465
is because
911
01:11:55.925 --> 01:11:57.145
when you smelt gold,
912
01:11:58.005 --> 01:11:58.885
you're really creating
913
01:11:59.840 --> 01:12:01.620
if you take 5 gold bars and
914
01:12:02.080 --> 01:12:02.580
you
915
01:12:03.600 --> 01:12:04.580
put it all together,
916
01:12:05.680 --> 01:12:07.860
and then you pour 5 new gold bars,
917
01:12:09.415 --> 01:12:13.514
you basically have 5 new UTXOs. I think it's a way better analogy than
918
01:12:14.135 --> 01:12:17.034
than mixing. I I I really don't think CoinJoin is mixing,
919
01:12:18.050 --> 01:12:22.790
and I don't think it's just semantics even though the semantics do help us because mixing is
920
01:12:23.489 --> 01:12:26.710
has a negative connotation, and custodial mixers have,
921
01:12:27.795 --> 01:12:30.054
there's some precedence of them being deemed illegal.
922
01:12:30.994 --> 01:12:36.215
But it's a batch Bitcoin send transaction, and really, at the end of the day, if if you're using a proper implementation,
923
01:12:37.520 --> 01:12:40.980
you're getting 5 new UTXO's with no discernible history.
924
01:12:41.600 --> 01:12:42.980
So it's way more similar,
925
01:12:44.240 --> 01:12:47.685
it's way more similar to melting 5 gold coins together
926
01:12:48.385 --> 01:12:50.245
and creating 5 new gold coins
927
01:12:50.625 --> 01:12:51.365
than it is
928
01:12:51.745 --> 01:12:54.405
just shuffling the 5 coins between each other. Right?
929
01:12:54.870 --> 01:13:02.970
930
01:13:03.825 --> 01:13:09.365
5 coins could have come from each of those 5 coins could have come from any one of the incoming
931
01:13:09.745 --> 01:13:10.485
5 coins.
932
01:13:11.860 --> 01:13:13.800
So, yeah, it's definitely not a shuffle.
933
01:13:15.700 --> 01:13:20.645
934
01:13:21.605 --> 01:13:23.785
935
01:13:24.165 --> 01:13:35.600
From the bottom of the of your thing. It doesn't show your name anymore. Just says my name. Man. Matt, there's definitely a difference between the guest software and the host software because I'm still seeing my name, man.
936
01:13:35.935 --> 01:13:37.315
937
01:13:37.855 --> 01:13:47.040
who is the guest? So maybe I'm just listen. My OPSEC is already caked as far as who I am. Yeah, dude. Especially after this fucking week, We met so many Bitcoiners.
938
01:13:47.660 --> 01:13:50.880
939
01:13:51.340 --> 01:13:52.080
my computer.
940
01:13:52.775 --> 01:14:02.155
But it's all good, Matt, because we already operate under the assumption that all our devices are potent. So okay. Exactly. As you should. And that's, you know, probably what the ransomware guy should have done as well
941
01:14:03.790 --> 01:14:04.370
942
01:14:07.550 --> 01:14:11.570
Yeah. So, I mean, we wanted to keep this on the the shorter end,
943
01:14:12.705 --> 01:14:14.285
because we're both,
944
01:14:16.005 --> 01:14:19.465
we're kinda both in Bitcoin detox. You know? It's just been just a marathon.
945
01:14:20.270 --> 01:14:25.489
So I expect this to be one of the shorter dispatches, but I hope it was high signal. But before we do,
946
01:14:26.190 --> 01:14:28.690
there was 2 topics that I really wanted to hit.
947
01:14:29.245 --> 01:14:29.905
We already
948
01:14:30.605 --> 01:14:33.345
we already hit the encrypted phone network,
949
01:14:34.765 --> 01:14:37.025
ANOM that they were running. I mean,
950
01:14:38.340 --> 01:14:47.560
it kind of feels like if they're running that, like, they could be running a shit they're probably running a ton of things. Right? Like, they must they're they gotta have their hands in some Bitcoin things.
951
01:14:50.185 --> 01:14:53.805
That's that that's that should be a wake up call for people. You have any thoughts there?
952
01:14:58.860 --> 01:15:00.000
953
01:15:00.699 --> 01:15:05.094
954
01:15:05.474 --> 01:15:07.335
were running this encrypted phone network,
955
01:15:09.610 --> 01:15:13.150
ANOM, right, where they were just intercepting every message that the
956
01:15:13.690 --> 01:15:19.795
the organized crime was sending was just going to them. Oh, you're saying you gotta have some Bitcoin operation going on.
957
01:15:20.175 --> 01:15:22.035
Yeah. I mean, look, I if
958
01:15:22.415 --> 01:15:26.630
yeah. I I don't know. I I feel like they could be running some wallets.
959
01:15:27.570 --> 01:15:28.469
960
01:15:28.929 --> 01:15:31.030
some custodial wallets, some
961
01:15:32.025 --> 01:15:37.805
software that connects to servers they own. You know what I mean? Like, software that doesn't let you hit
962
01:15:38.344 --> 01:15:39.645
or connect your own node.
963
01:15:40.710 --> 01:15:45.770
You know, custodial mixing services would be a clear one as they could piece together the entire history.
964
01:15:48.045 --> 01:15:53.745
Yeah. Freaks, I mean, you gotta be vigilant out there. You know, if something sounds too good to be true, it probably is.
965
01:15:54.285 --> 01:15:55.105
You know, decentralized
966
01:15:55.485 --> 01:15:56.785
services are definitely
967
01:15:58.000 --> 01:15:59.540
prime suspects to be honeypots.
968
01:16:00.400 --> 01:16:08.315
And, you know, any software that's closed source, right, that you can't verify, you can't build yourself, you can't connect your own nodes, someone else is seeing your transactions,
969
01:16:08.855 --> 01:16:11.915
these are all prime suspects to be operated by the FBO.
970
01:16:12.320 --> 01:16:14.980
I'm not saying that they are for sure, but
971
01:16:15.280 --> 01:16:19.275
counter chances are there's gotta be a couple that the FBI are running for sure.
972
01:16:19.755 --> 01:16:22.815
973
01:16:23.435 --> 01:16:24.574
Closed source things.
974
01:16:24.875 --> 01:16:32.050
Yeah. Absolutely. You know And because you're gonna have an open source iPhone app, you just can't verify you can't verify that it's the same code that's running.
975
01:16:32.670 --> 01:16:38.345
976
01:16:38.805 --> 01:16:44.730
But who's to say that Apple is not piecing it together behind the scenes and putting out a version that,
977
01:16:45.770 --> 01:16:47.870
978
01:16:48.970 --> 01:16:53.790
979
01:16:54.225 --> 01:17:01.525
you know, I recommend the freaks. They go out and use Android and use the verified bills that either F droid builds
980
01:17:01.850 --> 01:17:08.510
or build it themselves or or use the binary I have and sign if but only if you trust me. Otherwise, just build it yourself.
981
01:17:08.865 --> 01:17:15.205
IOS, you know, it's sort of hard to get around that. You're sort of screwed one way or the other. I mean, unless you're going line by line,
982
01:17:16.510 --> 01:17:21.090
983
01:17:21.469 --> 01:17:26.265
984
01:17:26.725 --> 01:17:27.225
Yeah.
985
01:17:27.685 --> 01:17:30.505
986
01:17:31.045 --> 01:17:31.545
obviously.
987
01:17:32.220 --> 01:17:34.239
988
01:17:36.140 --> 01:17:40.320
989
01:17:42.085 --> 01:17:43.704
But these are, like, auto updatable
990
01:17:44.005 --> 01:17:45.145
apps that are, like,
991
01:17:45.764 --> 01:17:48.025
you can't you can't verify it all on iPhone,
992
01:17:49.830 --> 01:17:52.390
Like, they could easily probably just serve someone
993
01:17:52.790 --> 01:17:56.570
they don't that doesn't have to be the whole app either. Right? They could just serve you
994
01:17:57.765 --> 01:18:05.465
they could serve you a malicious update just a single person, if you're on iPhone or Android or even on Google Play. Right? If you have auto updates enabled.
995
01:18:06.085 --> 01:18:06.824
For sure.
996
01:18:08.330 --> 01:18:11.790
997
01:18:12.250 --> 01:18:15.335
rooms for black back doors, you know, like, something like Imessage. Right?
998
01:18:16.455 --> 01:18:18.235
It's not like signal where,
999
01:18:19.094 --> 01:18:23.995
you know, you create a new key and everyone gets notified you changed it. Like, this is a system
1000
01:18:24.619 --> 01:18:32.559
built to add new devices to it and share the keys. Like, Apple controls the whole thing. They could just add a device to the f that belongs to the FBI
1001
01:18:32.860 --> 01:18:33.760
to your profile,
1002
01:18:34.365 --> 01:18:37.985
have it coded so that it doesn't send you a notification that you added it,
1003
01:18:38.365 --> 01:18:41.745
and, all of a sudden, they have a copy of all your messages
1004
01:18:42.380 --> 01:18:43.600
just like the FBI,
1005
01:18:44.300 --> 01:18:45.440
global ANOM
1006
01:18:45.820 --> 01:18:52.865
1007
01:18:53.245 --> 01:18:58.545
Chinese special service, the Russian special service, like, these are the most sophisticated actors in the world.
1008
01:18:58.870 --> 01:19:00.330
Okay? So I don't want you
1009
01:19:01.030 --> 01:19:01.929
to get overwhelmed
1010
01:19:02.230 --> 01:19:11.485
because you can't secure yourself from them. You know? 99% of the world can't secure themselves from them. Yeah. Absolutely. So you have to plan your threat model appropriately, and,
1011
01:19:12.445 --> 01:19:15.185
and that's why that's why we like cold storage, because
1012
01:19:15.760 --> 01:19:17.540
if you just don't have your keys online,
1013
01:19:18.800 --> 01:19:29.525
you reduce the overwhelming majority of risk that they it had it has to be local. And if you use when we're talking about actionable discussion here, if you use, you know, cold storage multisig
1014
01:19:30.304 --> 01:19:31.925
located in different geographies,
1015
01:19:32.545 --> 01:19:33.605
different areas,
1016
01:19:34.430 --> 01:19:39.730
then they've an attacker physically has to go to those locations, those multiple different locations
1017
01:19:40.590 --> 01:19:41.475
to access it.
1018
01:19:42.595 --> 01:19:44.855
If you're using things on your keys like
1019
01:19:45.795 --> 01:19:48.055
the timer feature on on Coldcard,
1020
01:19:48.675 --> 01:19:49.175
where
1021
01:19:49.640 --> 01:19:58.140
once you enter the PIN, you have to wait a week before you're able to access the key. Things like that can reduce your attack surface very, very easily
1022
01:19:59.425 --> 01:20:00.325
without overcomplicating
1023
01:20:00.785 --> 01:20:06.725
things. And because once you start overcomplicating things, you end up presumably shooting yourself in the fruit. Most Bitcoin is lost
1024
01:20:07.340 --> 01:20:17.245
because of user error, because you get too complicated, because you start fucking things up. But the single biggest thing you can do is just never connect your keys to the Internet. Your keys are never on the Internet,
1025
01:20:18.905 --> 01:20:24.925
then, you know, 9 times out of 10, the only way they're able to access them, the only way an attacker is able to access them
1026
01:20:26.010 --> 01:20:29.550
is to come in and actually take your keys from from the device.
1027
01:20:29.929 --> 01:20:36.605
You know, they have to they have to come into the physical location to take them. We had Craig Raw on the show. I really wanna get him back on,
1028
01:20:37.385 --> 01:20:39.645
and he said the single biggest thing for Multisig
1029
01:20:40.025 --> 01:20:50.190
to him, because he's from South Africa, there's tons of crime down there. There's tons of burglaries. The single biggest thing is that someone can't come into his home with a gun and and and take his keys,
1030
01:20:50.865 --> 01:20:53.925
because they're they're located in geographically distributed areas.
1031
01:20:54.305 --> 01:21:07.980
Now, unfortunately, if if someone's a deranged criminal and they come in and they don't believe that you have multisig, they might do a lot of damage to you. So, really, where I wanna see this go is I wanna see the assumption be made that so many Bitcoiners are using
1032
01:21:08.335 --> 01:21:11.635
geographically distributed multisig that attackers just assume
1033
01:21:12.255 --> 01:21:16.275
they just assume before they come in that the majority of your funds are in that kind of setup,
1034
01:21:16.800 --> 01:21:22.260
similar to, like, an ADT sign or some kind of alarm system sign that we see on the on people's lawns. Right?
1035
01:21:24.185 --> 01:21:25.005
1036
01:21:25.305 --> 01:21:28.605
It would be funny if Rodolfo started producing some songs like that.
1037
01:21:29.864 --> 01:21:30.925
You know what I mean?
1038
01:21:31.545 --> 01:21:32.045
1039
01:21:32.370 --> 01:21:36.710
Geographically distributed multisig lives here. But actually, right now, it'd be bad because
1040
01:21:37.010 --> 01:21:40.150
just so few Bitcoiners that it will literally be a sign. It's like, I'm a Bitcoiner.
1041
01:21:41.255 --> 01:21:44.475
But that's so that's a maybe that's a thought for after hyper Bitcoinization.
1042
01:21:46.295 --> 01:21:51.980
And then last but not least, the one topic I wanted the last topic I wanted to get you with before you leave us,
1043
01:21:53.559 --> 01:21:55.340
is did you see this new,
1044
01:21:57.079 --> 01:22:01.395
trust minimized VPN that Apple released? I think they're calling it Private Relay.
1045
01:22:02.735 --> 01:22:03.955
1046
01:22:04.495 --> 01:22:08.210
the headline, but I did not dive into the specifics of it.
1047
01:22:08.690 --> 01:22:12.630
It's intriguing to say the least, but just like any VPN,
1048
01:22:13.250 --> 01:22:14.710
I worry about Apple
1049
01:22:15.545 --> 01:22:20.285
having this network visibility into what all their Safari users are doing. So,
1050
01:22:21.305 --> 01:22:22.765
I really need to
1051
01:22:23.290 --> 01:22:27.230
be swayed to to trust it for anything serious. You know what I mean?
1052
01:22:27.770 --> 01:22:29.630
1053
01:22:32.114 --> 01:22:34.375
a lot of times it just feels like they're virtue signaling.
1054
01:22:34.915 --> 01:22:35.415
Mhmm.
1055
01:22:36.275 --> 01:22:40.695
But also sometimes it feels like I mean, look, the threat model they have for their
1056
01:22:41.210 --> 01:22:43.630
customers is, like, not to protect them from themselves,
1057
01:22:44.410 --> 01:22:50.455
not to protect them from Apple, you know, themselves being from Apple's perspective or the US government, but to protect them from everyone else.
1058
01:22:51.175 --> 01:22:52.715
The exception, of course, being
1059
01:22:53.095 --> 01:22:58.235
that they, like, co own Chinese Icloud servers with the Chinese government, so China doesn't have to give them
1060
01:22:58.820 --> 01:23:01.400
a warrant or anything to access it. They can just,
1061
01:23:03.139 --> 01:23:07.365
they can just go in themselves. So they're like, oh, the the Chinese government hasn't given us,
1062
01:23:08.005 --> 01:23:12.985
information requests. Yeah. Because the Chinese government just has straight access to it, so they didn't have to ask Apple for it.
1063
01:23:13.845 --> 01:23:19.240
So that's like, you know, one hand says one thing, the other hand is like scratching the CCP's back. But,
1064
01:23:20.100 --> 01:23:23.480
in the case of this, I mean, obviously, it's not open source.
1065
01:23:23.855 --> 01:23:28.035
There's no way for us to really trust Apple's claims, but the idea is basically,
1066
01:23:30.175 --> 01:23:31.155
every connection,
1067
01:23:32.050 --> 01:23:34.870
that goes out goes to 2 independent servers.
1068
01:23:35.810 --> 01:23:38.630
So Apple, I guess, controls 1.
1069
01:23:39.325 --> 01:23:42.465
I guess Apple controls both, but the second server doesn't know,
1070
01:23:43.085 --> 01:23:45.105
what the first server is saying to itself.
1071
01:23:46.700 --> 01:23:50.560
What what what the the first server is doing some kind of,
1072
01:23:53.340 --> 01:23:53.840
obfuscation,
1073
01:23:54.140 --> 01:23:56.055
so that the second server doesn't know.
1074
01:23:56.695 --> 01:24:00.795
Ideally, to me, it would seem like it should be run by 2 independent companies,
1075
01:24:01.175 --> 01:24:09.740
so both companies would have to collude, and that's something we see with Unchained Capital with their multisig setup for their their their loan product. We're, like, you hold one key, they hold one key, and
1076
01:24:10.120 --> 01:24:17.945
a authorized third party holds the 3rd key, so those 2 parties have to include against you to basically attack you, which also kinda like what we're talking about with the custodial mixers,
1077
01:24:18.725 --> 01:24:22.275
chaining them together. Right? If you chain them together, then they have to collude.
1078
01:24:23.240 --> 01:24:25.420
1079
01:24:25.800 --> 01:24:34.285
1080
01:24:34.985 --> 01:24:42.925
I'm not an Apple fanboy, but this is what an Apple fanboy would say. This is amazing. Just more proof that Apple really cares about their customers' privacy, and it's the best for privacy.
1081
01:24:43.790 --> 01:24:46.849
And then, like, the Cypherpunk or hardcore BitCorner look
1082
01:24:47.230 --> 01:24:47.889
would be,
1083
01:24:48.190 --> 01:24:49.329
you know, this is
1084
01:24:49.790 --> 01:24:59.815
closed source. There's no way for us to verify their claims. Apple probably full of shit. Icloud isn't end to end encrypted, and most users think it's end to end encrypted, and they back up their whole phones to it, and Apple's malicious,
1085
01:25:00.675 --> 01:25:02.215
and users should use Tor.
1086
01:25:02.739 --> 01:25:04.199
But there's a middle ground here,
1087
01:25:04.739 --> 01:25:09.719
and that is that, you know, when you use a VPN like a mole vad or a bolae
1088
01:25:10.595 --> 01:25:14.135
or one of the horrible ones, all the other horrible ones that exist
1089
01:25:14.595 --> 01:25:19.815
Mhmm. You're completely trusting that provider. Right? And it'd be kinda cool if,
1090
01:25:21.340 --> 01:25:22.400
this seems like
1091
01:25:23.180 --> 01:25:30.585
I mean, if it's actually what's happening in the background because I there's no way for me to verify it. It seems like a strictly it's it's
1092
01:25:31.125 --> 01:25:33.704
it's inferior to Tor from a privacy perspective,
1093
01:25:35.764 --> 01:25:36.665
but it seems,
1094
01:25:38.150 --> 01:25:44.650
strictly superior to a traditional hosted VPN, where you're just completely trusting them with all your all your traffic.
1095
01:25:46.875 --> 01:25:48.895
I would it would be kinda cool to see
1096
01:25:49.435 --> 01:25:54.255
some of the, you know, more reputable VPNs, like, kind of team up together
1097
01:25:54.555 --> 01:25:55.775
to make it the default
1098
01:25:56.960 --> 01:26:07.295
setup on on their for their customers, you know. Like, if if Molvad and Bolle, you know, they're both accept Bitcoin, they both have good reputations if they set it up. So the default
1099
01:26:07.915 --> 01:26:14.735
is every time you do a connection, it goes through, you know, Mullvad first, and then it goes through Bolle, and you need to basically have them collude
1100
01:26:15.770 --> 01:26:16.090
to,
1101
01:26:16.570 --> 01:26:17.790
deanonymize you,
1102
01:26:18.250 --> 01:26:22.910
that could be a massive trust improvement for people while still having the bandwidth improvements
1103
01:26:23.575 --> 01:26:26.875
of using a VPN over something like Tor. Right? Like, the main benefit,
1104
01:26:28.455 --> 01:26:32.075
of using a VPN over Tor is, like, you just get significantly better speeds.
1105
01:26:33.380 --> 01:26:35.239
1106
01:26:35.860 --> 01:26:41.159
While that setup would be interesting to see, it would be also really hard to verify.
1107
01:26:42.724 --> 01:26:43.224
And,
1108
01:26:44.005 --> 01:26:51.989
you know, ultimately, end of the day, you're still trusting Apple. Right? Like, this is a company who's gone so far as to disable the encryption on on their Icloud
1109
01:26:52.369 --> 01:26:54.070
backups to have a way,
1110
01:26:55.010 --> 01:26:59.670
to access those messages for the FBI to access those messages in, you know,
1111
01:27:00.395 --> 01:27:01.934
different domestic situations.
1112
01:27:02.715 --> 01:27:14.480
So it's even with this intricate setup, it's we can't verify it. We can't know for sure. And if privacy on this level is important to you while still maintaining speed, you might wanna try
1113
01:27:14.860 --> 01:27:17.360
to link together VPNs yourself manually
1114
01:27:17.885 --> 01:27:20.145
across different countries, across different jurisdictions,
1115
01:27:21.805 --> 01:27:25.905
and create your own threat profile for these VPN providers.
1116
01:27:26.660 --> 01:27:27.560
Because, ultimately,
1117
01:27:28.980 --> 01:27:31.640
this sort of thing on paper sounds great, but
1118
01:27:32.180 --> 01:27:34.440
at the end of the day, it can just be like window
1119
01:27:35.945 --> 01:27:45.485
1120
01:27:46.940 --> 01:27:51.579
if if if if you made an app, you, Evan Kaludis, you made an open source app
1121
01:27:53.185 --> 01:27:56.325
That's an idea. And then you reached out you reached out to
1122
01:27:57.105 --> 01:27:58.085
5 or 6
1123
01:27:58.465 --> 01:28:04.990
of of the largest VPN providers or the best VPN providers that you curate. You decide those are 6 best. Right?
1124
01:28:05.370 --> 01:28:09.230
Mhmm. And and you tell them, look. I want you to accept Bitcoin payments.
1125
01:28:09.575 --> 01:28:19.679
Maybe a couple of them already do. Right? So you obviously pick those. I want you to accept Bitcoin payments, and I need you to give me an open API that I can hook into. And then your app,
1126
01:28:20.460 --> 01:28:20.960
randomly,
1127
01:28:21.580 --> 01:28:24.719
every time you wanna use it, you pay it with lightning,
1128
01:28:25.179 --> 01:28:26.960
and it picks 2 random ones,
1129
01:28:27.365 --> 01:28:31.305
and, like, change change you through them automatically, something like that.
1130
01:28:32.805 --> 01:28:33.705
1131
01:28:34.485 --> 01:28:35.465
Would I even
1132
01:28:36.080 --> 01:28:42.580
necessarily need to get those providers on board? I could just do it myself and be a proxy, but then you're trusting me. Right?
1133
01:28:43.095 --> 01:28:47.275
1134
01:28:47.815 --> 01:28:54.300
you can just automatically just split it between where you go, and then you could take a cut as the as the software provider.
1135
01:28:54.600 --> 01:28:55.900
Mhmm. So literally every
1136
01:28:56.280 --> 01:28:57.660
every member of that
1137
01:28:58.840 --> 01:29:01.340
group is, like basically has a profit incentive
1138
01:29:01.640 --> 01:29:07.304
to have it, you know, work work well, and then no no individual provider knows
1139
01:29:08.165 --> 01:29:15.510
who is who, you know, who they're peered with. Like, they're maybe you even do 3. You almost do like a you almost do like a Tor Onion,
1140
01:29:16.290 --> 01:29:18.710
but the software is just automatically
1141
01:29:19.170 --> 01:29:20.310
routing you through
1142
01:29:20.755 --> 01:29:22.135
the different VPN providers
1143
01:29:24.035 --> 01:29:25.095
while paying everyone.
1144
01:29:26.915 --> 01:29:27.975
1145
01:29:28.355 --> 01:29:28.855
idea.
1146
01:29:30.570 --> 01:29:33.230
And, of course, we're gonna tie in lightning.
1147
01:29:33.930 --> 01:29:38.990
1148
01:29:39.415 --> 01:29:40.875
1149
01:29:41.815 --> 01:29:46.235
yeah, I mean, as as far as things go on that front, yeah, there there's tons of room for innovation,
1150
01:29:46.960 --> 01:29:50.180
and I think, it would definitely be an intriguing
1151
01:29:51.120 --> 01:29:53.060
product on today's market.
1152
01:29:53.440 --> 01:29:55.140
I mean, a lot of people say
1153
01:29:55.655 --> 01:29:56.155
that
1154
01:29:56.534 --> 01:29:58.395
users don't care about privacy. Right?
1155
01:29:58.855 --> 01:30:03.755
But I don't think that's exactly the case as as shown by your audience and
1156
01:30:04.489 --> 01:30:09.309
by even corporations by Apple trying to pander and and provide these privacy features.
1157
01:30:10.090 --> 01:30:13.630
It's just that these guys shouldn't be the ones doing it given their track record.
1158
01:30:14.075 --> 01:30:24.940
1159
01:30:25.500 --> 01:30:30.720
it it is, first of all, showing that there's a market there for people who care about easy to use privacy, and it's almost
1160
01:30:31.505 --> 01:30:38.005
it's almost signaling to the rest of the industry that there's a market there even if there's not as big of a market as people think there is,
1161
01:30:38.760 --> 01:30:40.780
which kinda becomes a self fulfilling prophecy.
1162
01:30:41.480 --> 01:30:45.740
Right? So it'd be nice it'd be nice to see more and more companies kind of
1163
01:30:46.865 --> 01:30:50.405
realizing that this is a value add. This is a way they can attract customers. Right?
1164
01:30:52.465 --> 01:30:56.410
1165
01:30:56.790 --> 01:31:00.230
relating to privacy, the demand is just gonna go up and up. So,
1166
01:31:01.225 --> 01:31:05.645
I think the important thing is that people make products that make it easy and accessible.
1167
01:31:06.185 --> 01:31:07.705
And, you know, while it's it's
1168
01:31:09.030 --> 01:31:14.710
you know, I wouldn't trust them. It is cool to see Apple trying to build products or at least market them,
1169
01:31:16.310 --> 01:31:18.985
in the field of privacy. So just wanna see.
1170
01:31:19.764 --> 01:31:25.520
1171
01:31:26.220 --> 01:31:35.435
1172
01:31:36.335 --> 01:31:36.835
week.
1173
01:31:37.815 --> 01:31:39.995
You know, I I don't think I've ever been
1174
01:31:40.614 --> 01:31:41.435
more bullish.
1175
01:31:41.950 --> 01:31:47.570
And it's crazy to see that everyone else that I'm talking to is is so incredibly bearish.
1176
01:31:47.950 --> 01:31:51.170
I can't help but think that this is an incredible time to accumulate.
1177
01:31:51.915 --> 01:31:56.155
1178
01:31:57.275 --> 01:32:00.735
extremely drained, so I do appreciate you helping me continue this streak.
1179
01:32:01.250 --> 01:32:10.470
I appreciate all the freaks that are here. I appreciate all the freaks I met. I wanna remind the freaks that next week on Bitcoin Tuesday 1900 UTC, we're gonna have battle of the nodes.
1180
01:32:10.995 --> 01:32:13.175
We're gonna have the teams from Noddle, Ronin,
1181
01:32:13.475 --> 01:32:16.135
Grass by Blitz, Start9, and MyNode there.
1182
01:32:16.915 --> 01:32:20.535
Umbrel has not confirmed yet. So if you want to see them in the show,
1183
01:32:20.840 --> 01:32:24.460
please reach out to them and tell them as a customer you would love to see that.
1184
01:32:25.639 --> 01:32:29.179
To the rest of you, we'll see you at RHR on Thursday.
1185
01:32:30.555 --> 01:32:38.815
I love you all. Like, stop being pussies. Bitcoin is doing great, and, we're gonna fucking win. We're gonna win, freaks. Let's go.
1186
01:32:43.860 --> 01:32:44.360
1187
01:32:44.900 --> 01:32:45.400
Regulators.
1188
01:32:46.020 --> 01:32:52.304
We regulate any stealing of his property. We're damn good too. But you can't be any geek off the street.
1189
01:32:52.925 --> 01:32:55.570
1190
01:32:59.489 --> 01:33:02.855
1191
01:34:05.785 --> 01:34:13.430
time. Wings, I would fly. Let me contemplate. I glance in the clunk, and I see my homie Nate. 16 in the and 1 in the
1192
01:35:41.890 --> 01:35:49.495
I'm tweaking into a whole new era. G funk, step to this, I dare you. Funk on a whole new level.
1193
01:35:52.355 --> 01:35:52.855
Chords,
1194
01:35:53.475 --> 01:35:53.975
strings,
1195
01:35:54.610 --> 01:35:55.270
we brings
1196
01:35:55.970 --> 01:35:56.470
melody.
1197
01:35:57.250 --> 01:35:59.430
G Funk, we're rhythm as light
1198
01:35:59.810 --> 01:36:01.110
and light is rhythm.
1199
01:36:02.530 --> 01:36:04.150
If you know like I know,
1200
01:36:14.520 --> 01:36:16.460
then you like every day.
1201
01:36:17.400 --> 01:36:19.980
And if your ass is a buzz, the 213
1202
01:36:20.360 --> 01:36:21.340
will wake you
1203
01:36:40.670 --> 01:36:43.330
1204
01:36:43.995 --> 01:36:47.935
and next Tuesday for the battle of the nodes. Stay humble and stack sets.
