June 30, 2021
CD28: el salvador, china, and bitcoin with @gladstein
EPISODE: 0.2.8
BLOCK: 689158
PRICE: 2749 sats per dollar
TOPICS: el salvador, china, CFA franc, 51% attacks and difficulty adjustment
@gladstein: https://twitter.com/gladstein
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03:08 - Introduction of Ricardo Salinas and his support for Bitcoin
06:22 - Geopolitical implications of Bitcoin adoption by nation states
25:23 - Challenges and opportunities of onboarding a large population onto Lightning Network
44:11 - The adoption of Bitcoin as legal tender in El Salvador
46:00 - Custodial Lightning wallets and privacy properties
49:39 - The potential impact of Bitcoin on accepting donations and fundraising
01:08:26 - The impact of China's mining restrictions on Bitcoin
01:19:17 - The decentralization of Bitcoin mining and the potential for attacks
01:27:00 - Bitcoiners should be skeptical and wait for more confirmations before settling transactions
01:27:39 - The decrease in network hash rate and the debate about reaching the all-time high
01:28:12 - The mainstream media's lack of understanding of Bitcoin and its geopolitical implications
01:29:16 - The geopolitical impact of Bitcoin and its potential for the next century
01:30:06 - The difficulty adjustment in Bitcoin mining and its defense mechanism against attacks
01:31:42 - The national security issue of relying on foreign manufacturing for critical infrastructure
01:36:31 - The implications of a successful WeChat-like app in Africa
01:45:28 - Discussion on Worldcoin and its surveillance-based approach
WEBVTT
NOTE
Transcription provided by Podhome.fm
Created: 3/17/2024 8:10:36 PM
Duration: 7048.882
Channels: 1
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Happy Bitcoin Tuesday, freaks.
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It's your boy, Matt Odell, here for another
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diss Citadel Dispatch.
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I missed you guys last week,
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while I was on vacation.
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Shout out to the ride or die freaks who took it upon themselves
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to run a Citadel Dispatch, run a Bitcoin Tuesday unsanctioned,
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through Twitter Spaces.
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I know the audio quality on the podcast feed was a little bit under par.
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Apologies about that.
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I don't think I'll be leaving you guys anytime soon, but if if we do do another episode that way,
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we will try and make sure the audio is better.
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To our freaks who are joining us through the audio streams, that was Ricardo Salinas in the intro. Yes. He was not speaking English. He was speaking Spanish.
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He's a Mexican billionaire, the 3rd richest, including,
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a significant shareholder of Banco Azteca,
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which is
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they're all throughout Latin America. They operate all throughout Latin America, Mexico, Panama, Guatemala, Honduras, Peru, El Salvador,
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and he was just basically talking about how much he loves Bitcoin and how much Fiat sucks.
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Completely orange pilled.
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Kind of unreal to see still to this day. Shout out to at the rational root who got that clip, put it on Twitter, has all the
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subtitles,
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the translations into English. So if you do wanna come in, if you're an audio freak, and you wanna come in and see what the subtitles are, you can look at the the video feed, which you can get at silodispatch.com.
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Shout out to real quick shout out you you can, Freaks have been asking about
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the Citadel dispatch hats. You can get those at citadel dispatch.com/stack.
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You can also get,
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flasks
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and
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magnets
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courtesy of Quinn Solo and BTC pins to ride or die freaks, which is pretty cool of them stepping up and offering merch through their
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respective stores.
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If you buy that merch through them,
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a third of it will go to OpenSats, a third goes to me, and a third goes to them, which is a pretty cool breakdown,
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so I really appreciate them.
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This is Citadel Dispatch, the interactive show about Bitcoin distributed systems privacy and open source software.
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I'm your host, Matt O'Dell, and I'm joined here today by the chief strategy officer of Human Rights Foundation and a good friend, Alex Gladstein. How's it going, Alex?
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Great to be here. Great to be back in the Citadel.
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Yeah. I've been, after
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26 weeks in a row, I took my 1st week off last week. But here we're back with Citadel dispatch 28, so it is good to be back as well.
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Before we get started, I just want the freaks to know
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that my vacation has not quite ended yet. So I am in a small inn
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in rural America,
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and there was a power outage yesterday that cut the Internet for about 10 minutes.
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So if this stream just fucking dies at some point or ripping it live,
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that's probably why it happened,
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and we'll be back up within 10 minutes. That's that's the plan in effect, and we'll see what happens. Because I I don't have any cell reception here, so I can't even switch to,
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I have 2 hotspots that I travel with. 1 is my cell phone, and one is a separate dedicated hotspot. And they're both at different networks, and neither have reception here. That's a feature, not a bug. So today, we're gonna be talking about,
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I just feel like all of a sudden this is becoming the year of nation states in Bitcoin.
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We have the big news that people have been hearing about as El Salvador, but then recently, we have this this Chinese Bitcoin mining ban.
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And then on top of all of that, Alex wrote a really fantastic piece. He's been working with Bitcoin Magazine, releasing pieces every 2 weeks on the French colonial franc,
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which is something that I just was not on my radar at all.
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So I figured we'll we'll just start with that,
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because, you know, I it's it's just a crazy I can't believe this is still happening right now, Alex.
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Yeah. I think the setup here is that
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the geopolitical
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era of Bitcoin is really beginning.
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You know, this open source code experiment
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that started growing through different kinds of communities on the Internet and eventually made its way into the mainstream,
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you know, we've really taken a turn for for the geopolitical
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level here, which is which is really amazing to see. And and I think even before El Salvador, we we started hearing all these news cycles about, like, the Nigerian government and the Indian government, and
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now this is, like, an issue at the government level. So it's really exciting to be around for the
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nation state adoption of a new,
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new new base base currency. At least that's what I think is gonna happen.
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And in that context, I've been trying to use my time at Bitcoin Magazine to explore,
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basically, areas where the fiat system is totally broken for people and and in ways that many don't really think about it. Like like, I, for example, had
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interviewed many activists from this region of Western and Central Africa,
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like, let's call it Francophone Africa,
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through my work at HRF. And we'd been working with them on, like, pro democracy stuff.
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But, like, the monetary piece was never really at the forefront,
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which is weird because when I then went back to ask them about money,
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they have these incredible stories.
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And in fact, this woman, Farida Naburaima, who I profiled in in the the essay at Bitcoin Magazine,
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fighting monetary colonialism with open source Code. I mean, I get on the phone with her and I'm asking her about it and she's like, no, no, no. Like, that's the reason we are fighting the government in our country is because of monetary colonialism.
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It's the primary reason.
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In 1960 or so, when Togo gained its independence from France, their first leader
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was assassinated by the French government because he wanted to create his own, you know, a Togolese currency with the Togolese central bank. And that's, like, one example out of many that I cover in the essay. There's
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crazy shit happened in Niger,
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in Mali, in Senegal.
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Guinea is probably the craziest. You had you had the typical kind of, like, cold war style assassinations of leaders that didn't wanna comply with this French colonial system,
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which we can get into. But
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the
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this event that happened in Guinea, the small country in West Africa was so crazy in the early
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19
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sixties, around 1960, I believe. There was this thing called Operation Parcel, where basically the Ghanaians were like, get out of here. You know, we wanna run our own thing now. And the French were like, no. And then they they kinda went back and forth and the French were like, fine, we're leaving. But then they, like, burned everything in their wake. They just, like, destroyed everything on the way out.
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Just, like, totally,
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you know, just total sort of retribution.
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And then
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they, like
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once the Ghanaians had made their own currency,
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the the French set up these counterfeit
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operations and printed an enormous amount of this currency and then just dumped it into the country, and they wrecked the economy. I just thought that was insane. I mean, that that that's not the truth is stranger than fiction sometimes. Like, that is wild.
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So just digging into that history and just seeing how this,
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these 15 countries which constitute a 183,000,000
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people around a territory
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80% the size of India are still controlled by the French, and they basically subsidize the French way of life. One of these activists told me that they don't think France would be any bigger of a power than Austria if it didn't have the colonies. So, basically, the colonies give them
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a place to sell their exports at higher than market prices and a place to import raw goods at lower than market prices. Within, the French would then make the goods into
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cars, furniture, whatever, and then sell them back to these colonies at a higher price. So if you unless you have this mechanism,
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which also relied on having, like, a control over the central banking of these countries, where these countries would have, like, the CFA franc
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and then, you know, the French would have the franc or now the euro. So, like, whenever these countries export and earn, right, whenever, like, an Ivorian coffee producer would sell a $1,000,000 of coffee to China or America. Those dollars or yuan go through a French currency exchange,
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and the French freaking pocket the hard money, the harder money. They they pocketed the francs or now they pocket the euros, and they credit these poor countries with CFA francs in their account, which are not convertible really elsewhere.
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So the whole system is is is very, devious, but it's also very effective.
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And it's just an incredible thing, and I I learned about it recently. Wanted to share with the Bitcoin community because
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of relevance to you all.
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These people in these countries, they don't have another way forward. Like, what are their options to get rid of this French colonialism? Well, okay. We could start our own currency. Yeah. That hasn't been a very good strategy, generally. Like, most of these countries with an independent currency in Africa tend to have, like, hyperinflation Right. Etcetera. Okay. Well, they could have a regional currency.
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Well, you know, the French kinda hijacked one of the plans,
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and there really isn't anything else on the table. So as Foday Diap, the other guy I interviewed from Senegal said, what are we gonna do? Wait around? No. We're gonna, like, seize our freedoms. So you're gonna start to see
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an increasing amount of Francophone kinda activists
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start to use Bitcoin, and I'm gonna be involved in that effort. So,
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Farida Naburema, who's, like, you know, arguably the leader of the Togolese movement at the moment, she's gonna be, hanging out with us at the Oslo Freedom Forum in a few months.
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What I told her to do was, you know, we're gonna have this whole Bitcoin track of programming, and Matt's gonna be there and many others are gonna be there. I told her to basically prepare a little, like, challenge to us. And and I told her to say to get up there and basically tell us what she needs and what she's seen on the ground, and we'll help her.
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Because I think we, as a community, absolutely wanna help these people gain their freedoms.
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There it's not gonna come through politics. It's not gonna come through pieces of paper. It's only gonna come through open source code. So A 100%. That that's, I guess, the way I wanted to start out.
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Yeah. I mean, this is what the fight's all about. I mean, at least it's to me. I think, I think a lot of freaks would agree.
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It's it's just it's pretty crazy that I mean, what did you say? A 183,000,000
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people. That's half of America.
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Yeah. And get and get this. When the French
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originally set up the colonial system,
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there were about 40,000,000 French and 30,000,000 people in these countries. So it wasn't, like, quite apartheid. But today, there's 67,000,000
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French and a 183,000,000.
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So it's like total apartheid.
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And in the future, by 21100
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apparently, if you look at demographies,
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it's gonna be 800,000,000
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and like 70,000,000 French. You have like a negative birth rate or whatever.
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So it's gonna become totally unsustainable,
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but there's not like
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a lot of activity. Like, essentially,
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this year, you're gonna see, like, a reform for some of the countries of the what's called the reserve requirement. So, basically, when these again, when these countries earn through whether it's remittances or exports, etcetera,
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they have to put 50%
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of that into Paris, into a French bank, where they don't have discretion over how that money is spent.
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So that requirement is gonna be eased for some countries. And I think in, like, 2027,
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there's gonna be an e a new they're gonna rebrand one of the currencies to, like, call it call it the eco,
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which is named after, like, the group of countries in West Africa. But it looks like the French are gonna remain in control pretty much from here. And Macron has been, like, going to Africa.
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And he's been going to Burkina Faso in these countries. And he's been talking up how,
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like, France needs Africa. And you think about it, 85% of French speakers live in Africa. So, like, the French nation really relies on Africa now. It's really interesting. So,
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what people don't understand though, it's it's not just the language. Right? It's it's the money beneath it. That that's what he's really, trying to to support.
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And again,
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we're not it's not even like we're on the back nine of this system. Like, they're trying to aggressively expand it. So
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and and, again, the way that this system works is that each of these countries is ruled by a dictator who has a deal with France, and France basically provides them weapons and support and diplomatic cover
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in exchange for keeping the currency system going. So it's like they have their own private reserve in this area of Africa, basically, for for raw goods like, you may the uranium that powers the French
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electricity, by the way, which is 75% nuclear in French. It all comes from, like, Niger and Chad and stuff, and they all get it for below market prices.
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And they do that believe dictator
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there to to keep it, you know, to keep it cheap. And if they walked away,
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you know, not only do they have to worry about
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action from the French. Right? They have they have their reserves that are stuck over in France. Right? That they're being held hostage, basically.
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Yeah. And and, you know, that's been part of the deal is that the French,
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make it so that there's a huge in a number of disincentives to leaving the system.
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And, ultimately, they would they would bust out the military ones,
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or or the violent ones,
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and people really went too far. But, again, just to underline, like, there's no real real reform on the table for these people, 183,000,000
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people.
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And as Foday Diap says, like,
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these most of these people never have stepped foot in a bank. They don't have a credit card. 70% of these people in these countries,
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by and large, are are unbanked and but they have cell phones, man. And he's like, we're gonna we're gonna skip freaking we're gonna leapfrog. Just like we leapfrog landlines to go to mobile phones, we're gonna leapfrog banks and go right to Bitcoin. It's, like, kind of amazing. And I I think his focus on
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like, this is really where lightning is so important. Right? Because he's like, we're not gonna be able to afford on chain fees.
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We need to make payments that are like $5, $10.
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And if that's our only currency like, it's one thing if you're an American and you're like spending your fiat and saving in your Bitcoin, But if you're in Senegal and like you're in this closed economy, circular economy of Bitcoin,
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like, yeah, you you you you really need lightning. There's no real way around it, or something else that would scale, in a similar way with lower fees. But, hey. This is what we have. So that's why he's dedicated his his life to that. I thought that was super eye opening,
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to learn about.
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The other thing that's important to know is that there's so many obstacles in the form of scams,
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whether it's Cardano or whatever. Like, these people are being, like, always whispered in their ear about this other currency. Right? So it is gonna be a little bit of a struggle. But, you know, as long as we take the approach of, you know, Bitcoin first, this is a Bitcoin first advocacy approach,
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and Bitcoin becomes the currency of decolonization,
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then we're then we're looking good. Then we're looking good.
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Yeah. I mean, I think it's gonna be messy. Right? Like, there's gonna be
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their shit corners tend to really flock into these environments when they when they see a situation that's advantageous to them.
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Well, I I somebody I know shared, you know, there's the Cardano guys are going nuts for it. Right? Because they they have all these deals with these African governments,
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to to promote their
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their their their shitcoin. Right? And it's like,
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you gotta point out to these people that to be to be careful, you know. And you just gotta
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you gotta just gently remind them. And you you don't have to be mean about it, but you just have to basically be like, look. You gotta be careful. Like,
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at the end of the day, the way I try to explain it is all these other cryptocurrencies are fiat currencies. Like, there's a small group of people who make the decisions, and you don't have control over them. Bitcoin is the only one where,
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you know, nobody's got control. We know exactly what the issuance and the monetary policy is gonna be. The French can't control it. The local dictator can't control it, and Silicon Valley can't control it.
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It's not the case for any of these other systems, whether they be Fiat controlled by a currency board, the French colonial system, some dictator's currency,
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or Cardano with Charles Hoskinson.
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Everybody's got a small group of people who's gonna control the rules. This is our one way ticket out. Right? And and it's actually happening. It's pretty exciting.
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Yeah. I mean, when you
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when you when you we talk about this Colonial Frank, I mean, it'll it it to me, it sounds like a shitcoin scheme,
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but that's because I just approach it with a Bitcoin lens. Right? Like, you have to hold it with the Papa French. You know? You see that with the premines and all their utility token schemes and whatnot.
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But, one thing I I I tried to
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really highlight,
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on this show and on on Rabbit Hole Recap and just on Twitter in general,
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is that you really have to follow the incentives. Right? Like, no one's really better than the incentives. And one of the cool things about Bitcoin is that the incentives align where people are greedy, but it works out for a more robust system.
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But when you look at something, you know, after reading your article, which, by the way, like, once again, like, I had no fucking idea that this was going on until I read your article, until I read your piece,
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is is you have to look at the incentives. Right? And the French have absolutely no reason to have real reform. They're gonna they're gonna, you know, they're gonna give lip service, and that's about it. And the the the powers that be in the individual countries have good deals set up for them, and there's a lot of corruption there, and they're not gonna really reform from the top. And I feel like there's this
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impulse with big corners because we've had this El Salvador moment, which we'll get to in a second, but I don't wanna jump there yet,
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where they think, like, there could be a top down thing. And, you know, our boy, Russell Okun,
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he wrote a piece, I think to the Nigerian president imploring him to adopt Bitcoin.
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And I know that was a just a it it was it was a it was a strategic tactic by him, and I know he understands the reality of the situation. But I think,
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ultimately, what we're looking at here is is the only way this move continues
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is from a grassroots approach. It's from the people first,
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and then the governments are gonna begrudgingly follow. Like, you we can't expect these governments to to do it themselves. Right?
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Yeah. I think that's really important.
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You know, without going to El Salvador,
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the the two models are either that the government forces it, you have, like, this, like, top down adoption,
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or you have this grassroots,
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kind of, like, what's called popular dollarization,
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which is what happened in Latin America. Right? So Ecuador is a good example. So it you know, the dollar just became, like, so well so used there that, like, eventually the government sort of adopted it. And that's, I think, what you're gonna look at here in these in these, what we call SIFA countries, these CFA countries.
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There isn't gonna be a Bukele type reformer who can, like, kind of independently
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decide to just add Bitcoin. That seems highly unlikely given the
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control the French have, and the IMF and the World Bank, by the way, which which are very involved in this colonial operation. They're, like, you know, part and parcel of the whole deal.
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They they're kind of, like, they work they're kind of controlled by the French in a way,
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and and they work with the French to enforce the system.
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They're not gonna want it. And as you said, the local dictators, like, aren't gonna want it either. So it's gonna have to come from the bottom up. And
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eventually, if enough people use it, you know, the governments kinda have to react. So I would say that in this scenario,
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yes. It's not gonna be a, you know, a a top down thing. It's gonna have to come from the people. Which I mean, in a and to a degree,
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that kind of was what happened in El Salvador. It just seems like their president was opportunistic as well. Like, I mean, I remember Mahler's was saying that he was onboarding, like, 20,000 El Salvadorians,
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a day,
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or maybe a week. That's completely different if if it's one of the other. But he was he was onboarding a a ton of El Salvadorians
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before the president reached out. Right? And he saw this was kind of happening on a grassroots level,
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and then he made his move. But I I imagine a lot more will will decide to dig in,
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rather than embrace. Right?
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Yeah. And and, clearly, that started
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the seed grew out of Bitcoin Beach and expanded and eventually caught the the president's attention. And,
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you know,
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maybe we can we'll start maybe talking about El Salvador in a second, but
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I think what's important is that, as we head into this nation state era of Bitcoin here,
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Bitcoin's gonna use certain governments as vessels for it. Like, it it doesn't it's like almost like this organism that just grows, and it it it kind of sense the vulnerability.
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It pops through to the next layer here,
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in El Salvador. But it it doesn't really care
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who adopts it or how it gets adopted. But we're gonna see different different ways that's gonna break down. And again, yeah, like in West Africa, I think the only hope is
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is bottom up from the people. And in other places, it it, it may be different. But it's worth mentioning that the remittance factor here,
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which is I believe one of the reasons why the Salvadorans ended up going for it is the amount of money they could actually save. So I just wanted to run the numbers for the freaks here because they're crazy.
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So the average,
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so first of all, some of these countries have 5, 10, 15% of their GDP is in remittances.
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So money that family, friends, etcetera are sending back home.
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So in the case of Nigeria, which is not Francophone, but it's in the West African area,
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they they have about, 7% of their GDP. It's a massive country. 7% of their GDP is remittances. So you're talking 25, $30,000,000,000
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per year. Right? Okay. So the average $200
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remittance to sent to sub Saharan Africa, according to the World Bank, has a fee of 8%.
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The average $500 remittance has a fee of 9%.
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So you can start to see why these governments, when they're sitting there and they're looking at maybe, like, increasing their GDP
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by, like, a half percent or a percent
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just by upgrading the software that they use for people to to move money around. That is very appealing. Right?
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And, you know, we're currently using this dinosaur technology for remittances. That's absurd.
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And now we have, you know, proper good money to to do remittances with.
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And that's again one of the reasons why I think Bukele,
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did what he did and it's it's what,
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lord Fusitwa has been very
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eloquent about describing. This politician,
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from from Tonga who's great, and he's his nation has 40% Reliance GDP on remittances. Right? So so they can save numerous percent of their GDP
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just by upgrading to the better money system. And I I think that you're gonna see more and more of that start to just be discussed in the international aid community.
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But, you know, as I mentioned in the article, still today, the human rights space, the international aid space, clueless about Bitcoin? Clueless.
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So, I mean, first of all, shout out to the rider die freaks who,
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join us every week in the live chat,
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either through Twitch, Twitter, or YouTube.
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You guys make this show extra special,
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shouting out your questions
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and your feedback.
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We have BTC pins,
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in the comments mentioning that I call them El Salvadorians. It's Salvadorians.
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Apologies there. But we also have 6102 Bitcoin in, the live chat.
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You know, with El Salvador, there's there's about 6,000,000
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Salvadorians.
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Right?
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With with these
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CFA countries,
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in Africa, where you've said, what'd you say, a 180,000,000
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people. Yeah.
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What does have you given any thought of what the path looks like of trying to onboard a 180,000,000
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people onto Lightning? Like, how many people do we think are currently using Lightning? Probably less than a1000000. Right? Yeah. Well, let's look at the adoption of the cell phone. I think it's useful. So
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only a couple years ago,
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even in, let's say, 2010,
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and I know that seems like a while ago. And, yeah, the iPhone came out in 2007, so that was fairly early. But back then, there was only, like, 5% penetration in in in these countries with with cell phones,
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especially ones that had data smartphones. Okay.
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Now you have,
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even in some of the poorer, more rural countries like Ethiopia and Sudan, etcetera,
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you have 25%,
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30%,
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Internet and phone penetration.
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And by 2025, it's gonna be 50%.
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So when we look at this population of a 183 people in CFA countries, again, because of the French exploitation,
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not only are they very anti democratic, you know, ruled by dictators, but they're also, like, hugely underdeveloped. They're they're basically the poorest countries in the world. If you look at any list of the world's poorest countries, you know, Chad, Niger, Guinea, Bissau, they're always at the bottom because they've been basically, like, strip mined, by the French, basically. It's like the capital strip mine. The Alan Farrington thing. By the way, great freaking article. Freaks should read it.
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But but this is that at, like, a a large scale. So
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we we don't have a 183,000,000
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people who can use Bitcoin right now, in these countries. We we probably have a I'm you know, my guess would be 20 to 30,000,000 at most. That's gonna change over the next decade. You know, we're gonna get there. So I think Bitcoin needs to grow alongside of that.
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But what Foday was telling me was that
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what's interesting is that as far as technology and, like,
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the Bitcoin economy goes, it's been very active in the anglophone countries. So for example, Nigeria,
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Ghana, Kenya, and South Africa
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have, a ton of Bitcoin activity. In fact, some of them lead the world, in Bitcoin activity per capita.
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The francophone countries
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have have basically
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they've been ignored. They take a back seat. A lot of it's because of the language barrier. A lot of it's because when tech companies or investors or entrepreneurs go to Africa, they tend to go to the the anglophone countries.
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So we you know, there's not gonna be this massive influx people right away. It's gotta start in communities with education,
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and it'll grow organically. But I I have every confidence that by 2030,
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a huge percentage of these people are gonna be using Bitcoin in one way or another.
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As for the the question 6102 raised, it's a good one.
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You know, I tend to think that it's gonna grow organically.
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You you're not gonna have I think El Salvador is, like, somewhat unique, like, it's the first one and they're, like, gonna do they're gonna try do it in 3 months. And if you listen to McCormick's interview with Bukele, like, he's like, I think we could do it. Yeah. It's like, dude, that's like 11 weeks or whatever. He's like, alright. We're gonna get it done. But I'm not sure that's gonna be the the the standard moving forward.
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Like, this sort of forced integration. I think it'll be a little slower.
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So we'll see. I don't know. Matt, are you are you worried about, like, the lightning network buckling under the pressure here?
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Yeah. I mean, I think
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I think we're not ready right now.
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I think that's fine.
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I I, you know, I I think we're kind of in the age of the briefcase cell phones,
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and I think people couldn't even fathom
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the little Nokia brick cell phones at that point,
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let alone where we are at today. Right.
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I know that's a little bit of a faith argument, but I think, you know, you have to build a a very strong foundation, and then you can build on top of that strong foundation. If you have a weak foundation, then we're gonna end up with real problems,
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in 20 years.
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I guess now is a good time to jump to El Salvador because,
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this is basically a working test case with 6,000,000 people, which I think is already,
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is is gonna, you know, put some stress,
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on our current infrastructure.
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You know, I've been expecting high fees, on chain fees.
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Been wrong about that. So, you know, maybe we'll have more time where on chain fees will be low.
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But every time you, you know, you hit the chain, you're you're talking a a relatively high fee.
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You know, and and in these cases, if we're talking 5, $10, that could be a very big deal for them.
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So what I see happening is kind of
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custodial solutions popping up,
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and we have 22
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different
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types of of custodial situations. Right? We have,
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in El Salvador, we have this Galloy money, this Bitcoin Beach wallet,
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which is,
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no KYC
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controlled by the community. I think they have a 2 or 3 multisig that holds the funds by known community members.
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And it's open source, so people can fork that. So you could end up in a situation where you have bunch of little communities
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that all have their own custodial lightning
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wallet infrastructure,
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that interact with each other on this open monetary network, which doesn't seem like that bad of a situation at least in the in the near term. And there's no, like, scaling issue there because they're all they're on instance, right, in a way?
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Yeah. And it's, you know, it's it's it's batch transactions. Right? So you can have 20 1,000, 40000 transactions
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per time it hits the chain,
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because it's a custodial Lightning Wallet.
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But with
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the actual
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wallet that the president is
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releasing,
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I guess that they're calling it the Chivo wallet Mhmm.
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I have a lot of concerns with
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because
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we talked about incentives earlier. Right? And one of the phenomenons I've been watching is the death of cash.
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And in the Western world, really, the death of cash has happened because of a UX situation. It's like the younger generation
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doesn't like dealing with cash. They think it's easier to use their digital payment apps.
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But
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the the issue there is as and and then we've also seen in these countries,
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in certain countries, we've seen restrictions in cash start getting instituted for the the stragglers that are still using it. So it's twofold. You have cash is is being chosen not to be used by a large group of the populace, and then of the remaining people,
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you have
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you you you have a
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ostracization
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of them using it, whether that's
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explicit and you can't make a transaction over $5,000
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without getting reported, or if that's just you go into a store and you try and spend a $100 bill and they look at you like you're a criminal because they're just not used to people spending cash.
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It's be that's becoming more and more of an issue, and I expect that phenomenon to increase. So when you look at the incentives,
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for digitizing
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a populace in terms of financial transactions,
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the real incentive
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I see for for most leaders in the world
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is greater surveillance and greater control.
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And
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if you look at this
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this Chivo wallet,
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I mean, it's gonna be a custodial wallet,
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you know, that it's going to be,
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you know, fully KYC ed as much as they're capable of KYC ing there. I I know they have trouble with ID ing people and, you know, tagging their populace, but as you move more digitized, it's gonna be easier.
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So they're gonna have full surveillance capabilities on this on any transaction that happens on on this wallet,
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and they're gonna have the ability to seize funds and block transactions, right, which is issues we've seen with the PayPal's of the world and the Venmo's of the world.
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The advantage here is
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it still can work with, you know, the open monetary network that is Bitcoin. You could theoretically
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send to an outside wallet that is self custody or something like the Bitcoin Beach Wallet that is a better custodial model than than than the countries. But I wonder how long that lasts. I also wonder,
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you know, you see him announcing,
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the president announced
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there's gonna be no fees. It's gonna be fast transactions. Right? And that's a great way to incentivize peep and you'll get your free $30 with Bitcoin. Right. It's a great way to incentivize people to use your wallet over, like, a free open source sovereign wallet.
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And I I think we're gonna see these soft pushes to try and get people into these more closed ecosystems. Right?
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Yeah. I mean, we can talk about the downsides, but we also need to talk about the upsides here. 100%.
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So I've just to stay on the downsides for a second,
366
00:33:50.289 --> 00:34:01.415
The question is right. So if it's ever if the if the ability of this wallet, which I think you and I would agree would be very popular because it's gonna offer, like, services that open source wallets will be kind of harder to,
367
00:34:02.195 --> 00:34:04.775
replicate with regard to integration with the banking system,
368
00:34:06.130 --> 00:34:09.349
and basically, like, cheap cheap cheap exchanges back and forth.
369
00:34:10.369 --> 00:34:25.830
Are they gonna close those bridges? Right? So would there ever be a day when you can't just, like, pay a lightning invoice, like, from your Chivo wallet? So that's, you know, that's to be that's a trust situation. You're trusting this guy and his team or whoever comes after him, you know, once he's no longer there.
370
00:34:27.490 --> 00:34:32.665
But at the end of the day, like, there's some interesting big picture things here. First of all, it's just nuts that they're gonna buy
371
00:34:32.965 --> 00:34:39.460
essentially $30 of Bitcoin for for probably 3,000,000 people. I mean, probably half the population will claim it, maybe more. Right.
372
00:34:39.859 --> 00:34:53.615
If you look at, like, Internet and mobile phone rates, it's 50, 60 percent of the country and, I don't know, say most of them take it. You're talking like, 3,000 Bitcoin that that they're just about to just air drop into the population. So it's kinda funny because
373
00:34:54.240 --> 00:35:11.485
we're watching this happen with Bitcoin. I think what we were afraid of really was that this would happen with like some random altcoin. Right? That some government would be convinced. And it almost happened in, like, what like, Cardano was, like, in Ethiopia. So I think we're still might happen. It still might happen. Will happen. Yeah. Yeah. I mean, I think, like, what our
374
00:35:11.880 --> 00:35:15.900
our model here has to account for the fact that it could have happened with an Altcoin.
375
00:35:16.760 --> 00:35:23.485
It it it could have been a Bitcoin ban. It could have been a stable coin that's like entirely, like, like, focused on surveillance and control.
376
00:35:23.865 --> 00:35:26.365
I still think it's remarkable that they're doing it with Bitcoin
377
00:35:26.665 --> 00:35:31.950
and that they're working with Strike and and Rockstar and Jack and stuff and I I see upside.
378
00:35:32.250 --> 00:35:35.310
I also see just general upside in terms of just geopolitically,
379
00:35:36.650 --> 00:35:37.550
this derisking
380
00:35:37.955 --> 00:35:47.175
the asset for the other countries that are thinking about it in Latin America. You've got Paraguay, a bunch of other countries thinking about doing something similar. Like, once they actually see this thing live and active,
381
00:35:47.500 --> 00:35:59.935
and we all know Bitcoin's incentive structure, everybody listening. Once you start using Bitcoin, you don't go back. You you don't, like, not use it anymore. So Right. We all know what direction this is heading in. So I think there are these big picture geopolitical
382
00:36:00.235 --> 00:36:02.655
kind of, like, implications that are super positive
383
00:36:03.115 --> 00:36:09.240
and also just hilarious that he's gonna drop 3,000 Bitcoin on people. I mean, in 10 years, that's gonna be so crazy to think about.
384
00:36:09.940 --> 00:36:10.440
Yeah.
385
00:36:11.060 --> 00:36:11.720
You know?
386
00:36:12.705 --> 00:36:22.325
Right? Yeah. I missed you. You, I saw you made an interesting comment on Twitter that, you know, 3,000 Bitcoin is also the unspent capacity, the liquidity pool of Whirlpool.
387
00:36:23.730 --> 00:36:26.630
So it would be great to see some of that Bitcoin go into Whirlpool.
388
00:36:27.410 --> 00:36:28.050
I would,
389
00:36:29.410 --> 00:36:32.605
I yeah. I wanna be clear that, I mean, this is strictly superior
390
00:36:33.065 --> 00:36:43.910
to basically any other digitization scheme. Right. Anything else we've ever seen in the history of the world. I mean, let's be clear. Like, the argument the argument I was making against the Chivo Wallet
391
00:36:44.370 --> 00:36:48.710
is the is basically the argument that you make against WePay.
392
00:36:49.085 --> 00:36:55.745
Right? Like, WePay in China. Or what is it? WeChat? But you as you you pay through WeChat, it controls your whole life.
393
00:36:56.045 --> 00:37:06.690
They're they're moving everyone onto that system. It's not connected to an open monetary network. They have complete control and complete surveillance, and you have to use, you know, the yuan. Right?
394
00:37:07.309 --> 00:37:07.809
Mhmm.
395
00:37:08.744 --> 00:37:11.885
Bitcoin is strictly this this Chivo wallet is is strictly
396
00:37:12.505 --> 00:37:27.015
is is strictly an improvement over something like that, which is what we are gonna probably see in most of the world before they move over to a Bitcoin thing, or at least we're gonna see leaders try and push into that kind of system. Right? Yeah. And, look, we're gonna be educating as many people as we can about,
397
00:37:27.555 --> 00:37:28.775
using, you know, noncustodial
398
00:37:29.075 --> 00:37:33.950
wallets, and we're gonna be doing that anyway. And a lot of people who end up using Bitcoin in El Salvador,
399
00:37:34.490 --> 00:37:49.515
in their 1st year of experience I mean, look, they're gonna go through the same learning experience that we all went through. And in that 1st year, a lot of them are gonna be like, screw it. I wanna be my own bank. And they're gonna move their funds into not custodial wallet. Like, there's gonna be, a significant portion of people who who do that over time.
400
00:37:50.279 --> 00:37:52.619
And it may develop into a situation where
401
00:37:53.160 --> 00:37:59.494
where it's sort of like what you're gonna see with Paxful once once they integrate lightning, which should be shortly from what I understand.
402
00:38:00.115 --> 00:38:03.894
Where, you know, your Paxful account, if you're in Argentina or Nigeria or wherever,
403
00:38:04.275 --> 00:38:08.214
it's a KYC bank account, but but you can then withdraw it,
404
00:38:08.900 --> 00:38:27.440
you know, into lightning. And then, you know, that's where you get into the the the issues of privacy and lightning. But generally speaking, a lot of those can be solved at the wallet level and and people will have almost this functionality to be able to have, like, an ATM essentially. And I think that's that's what we can hope and push for in El Salvador is, like, yes, there's gonna be this, like, advantaged KYC government wallet that's basically unavoidable.
405
00:38:28.619 --> 00:38:34.000
But, you know, as long as citizens can withdraw to their own bank and they can be their own, you know,
406
00:38:34.505 --> 00:38:36.285
decision maker of their financial destiny.
407
00:38:36.585 --> 00:38:50.349
Massive upside. So just, yeah, just again zooming out how ridiculous this is that this country is actually, like, trying to figure out how to roll out Bitcoin to their population. Whereas, like, our governments are trying to figure out how to steal our rights from us by implementing CBDCs.
408
00:38:50.650 --> 00:38:51.150
So,
409
00:38:51.925 --> 00:38:55.745
you know, that's kind of the that's the big picture we need to keep in the back of our mind. Right?
410
00:38:56.205 --> 00:39:00.465
Yeah. No. Absolutely. I mean, I like I said, I think this is a a massive net benefit.
411
00:39:01.270 --> 00:39:02.970
I think it's important to
412
00:39:03.430 --> 00:39:09.130
to stay vigilant and and and to really threat model this stuff out though and and threat model the incentives.
413
00:39:10.025 --> 00:39:15.565
But but, yeah, I mean, this is something that I did not expect at all. It completely caught me off guard, and it's really great to see.
414
00:39:17.550 --> 00:39:33.845
We have yeah. Go on. Just 2 other things I wanted to mention. First of all, there were a lot of ridiculous takes on the webs about, like, how this was somehow bad for Bitcoin or whatever. Terrible takes. Obviously, this is like the best thing you could imagine for Bitcoin, so I'm not sure what those people were thinking. Do you know what the argument was?
415
00:39:34.385 --> 00:39:36.065
Well, the argument was essentially that,
416
00:39:37.460 --> 00:39:39.400
there's an article in the law,
417
00:39:39.780 --> 00:39:44.200
article 7, that essentially, you know, and a lot of libertarians were pushing this argument
418
00:39:44.500 --> 00:39:46.244
that, like, it's coercive
419
00:39:46.705 --> 00:39:49.285
because it would force merchants to accept Bitcoin.
420
00:39:49.825 --> 00:39:50.724
And, you know,
421
00:39:51.345 --> 00:39:59.750
if you're not a strict so first of all okay. Fine. But, like, a lot of those people never said a damn word when Bolivia banned Bitcoin in 2014.
422
00:40:00.050 --> 00:40:01.350
Legal ban of Bitcoin.
423
00:40:01.650 --> 00:40:09.225
None of these people said anything. Only when they when a government adopts Bitcoin do they say something. So that's a little weird. You have to think about the signal there.
424
00:40:09.685 --> 00:40:18.180
And second of all, there are, like, a whole bunch of other reasons to to to believe that, like, the merchants using this thing are not gonna be forced to hold Bitcoin. Like, in fact,
425
00:40:18.555 --> 00:40:19.455
from what I understand,
426
00:40:19.835 --> 00:40:25.055
that's a second step. Like, basically, if you receive a Bitcoin payment from America or wherever,
427
00:40:25.650 --> 00:40:29.110
or from someone in your store, from what I understand, into this new system,
428
00:40:29.490 --> 00:40:31.830
it will actually automatically convert into,
429
00:40:32.369 --> 00:40:38.095
into the the the sort of the the doll the, you know, the sort of dollar denominated account in the in the app.
430
00:40:38.395 --> 00:40:42.815
To withdraw into Bitcoin into your own custody requires a second step.
431
00:40:43.180 --> 00:40:46.319
So I I thought the whole thing was a very wrong headed critique,
432
00:40:47.020 --> 00:40:48.800
but we'll see we'll see how it goes.
433
00:40:49.420 --> 00:40:52.480
The second thing is that the mining piece is really interesting because,
434
00:40:53.825 --> 00:40:56.485
yeah, like, the the the they're obviously gonna do,
435
00:40:58.545 --> 00:41:11.865
geothermal mining with the volcanic energy. There's 2 interesting parts to this. Number 1, almost okay. So all Central American countries, which are relatively poor compared to the the region around them, have volcanoes, and they have stranded energy that they can't can't access.
436
00:41:13.045 --> 00:41:22.750
And the cool part is now what they can do is sell and then I know Max Kieser and a bunch of other people have said this, but they're actually gonna do it. Like, these countries, Guatemala,
437
00:41:23.050 --> 00:41:24.109
Honduras, Panama,
438
00:41:24.785 --> 00:41:41.440
Colombia, they they can sell bonds based on the future earnings of the renewable energy, and that's not possible today, like, before Bitcoin. That would be, like, you can't monetize stranded renewable energy like that very well. You're gonna be able to do it. That's very interesting. So it gives these countries
439
00:41:42.060 --> 00:41:42.800
an alternative
440
00:41:43.365 --> 00:41:48.025
to borrowing from the fucking IMF or the World Bank. Right? It allows them to to borrow
441
00:41:48.405 --> 00:41:57.830
against what they already own. Right? Really interesting from a development and kinda, like, you know, geopolitical into independence point of view. So I thought that was worth mentioning too.
442
00:41:58.265 --> 00:42:00.765
Yeah. I mean, if you wanna know if it's a good thing or not,
443
00:42:01.545 --> 00:42:05.244
the proof is in the IMF and the World Bank being pretty pissed off about the world.
444
00:42:05.865 --> 00:42:24.370
Yeah. Being really, you know, we're not we're not helping. Which I thought was funny like, who at the World Bank? The World Bank trust me, I've dealt with these people. They don't really understand what how Bitcoin works. Like, it was funny to me to see the government ask for technical implementation help. Like, what but, like, is Matt O'Dell gonna hire the World Bank to help set up his code or whatever? It's like a total joke.
445
00:42:24.770 --> 00:42:44.560
So but I'm glad they said no. I'm glad they said no. I mean, that's what really what really pissed me off is all the shit corners just, like, flying in there, like, immediately and just, like, trying to take advantage of situation, but, you know, I've come to expect it. Inevitable. We we have to know that that's gonna happen through the next decade, and we just have to be prepared for it. I just wanna go back to the 2 critiques that you mentioned,
446
00:42:45.260 --> 00:42:50.480
the first one being that, you know, that's a legal tender law and it requires them to accept Bitcoin.
447
00:42:51.065 --> 00:42:52.125
Mhmm. I mean,
448
00:42:53.065 --> 00:42:56.765
like like, people can't expect like, we live in a certain world,
449
00:42:57.225 --> 00:43:03.750
you know, and it's a world of legal tender laws. All these people were forced to accept US dollars for however many years already,
450
00:43:05.090 --> 00:43:12.694
and now they're they're basically, we would have seen a law that said they're forced to accept US dollars through a shitty US dollar
451
00:43:12.994 --> 00:43:13.815
government app,
452
00:43:14.194 --> 00:43:19.920
and instead, it's a lightning compatible Bitcoin app, and they can choose which one it is. Like, it's strictly a benefit.
453
00:43:20.540 --> 00:43:28.880
And you, like, live in little fairy land if you think otherwise. Well, the funny thing is these economists were basically arguing for the last 5 years against us that
454
00:43:29.215 --> 00:43:31.715
Bitcoin isn't money because it's not legal tender.
455
00:43:32.175 --> 00:43:41.230
And you're like, wait a second. Now it's legal tender and now you're finding some other way to complain about it. You have to realize they're never gonna, like, give up and and
456
00:43:41.690 --> 00:43:56.430
and they're just gonna dig in however they can. I just thought it was funny how, you know, now we have its legal tender and they find some excuse. Oh, it's it's enforced to legal tender. Like, what? As if, like, the dollar isn't, like, forced, like, in a, you know, de facto way?
457
00:43:57.050 --> 00:44:09.345
So we'll see. I mean, I think it's worthy to we all should be paying attention to this. I think Bitcoiners should go there. I'm planning to go this summer for sure and and just see how it's, like, working and see how we can all contribute.
458
00:44:09.990 --> 00:44:11.609
Obviously, trying to
459
00:44:11.910 --> 00:44:12.789
They can have a,
460
00:44:13.430 --> 00:44:22.835
they have a a carve out in the actual bill that is very obvious carve out. It was like, you have to accept Bitcoin if you're technically able to accept it, which is like
461
00:44:23.695 --> 00:44:40.105
it's just, you know, what more can you ask for on that? It's just funny that if we went back in time to, like, 2015 and you told somebody that a nation state was gonna adopt Bitcoin and and this person was a libertarian and and I don't think they would have problem over article 7 in this bill. They'd be like, are you fucking kidding me? And they should state it's adopting Bitcoin as legal tender.
462
00:44:40.565 --> 00:44:45.490
So I think a bunch of people just really got they just they kinda, you know look, classic missing,
463
00:44:46.350 --> 00:44:51.490
missing the forest for the trees. Stay focused on the signal. Signal is that a nation state adopted Bitcoin.
464
00:44:51.835 --> 00:44:58.575
The rest is largely noise. We can we can help improve it though, for sure. And what was the second criticism? It's something about mining?
465
00:44:59.170 --> 00:45:03.190
No. No. No. I just was it was a point I wanted to make about the fact that,
466
00:45:03.569 --> 00:45:06.869
it's gonna unlock the ability of many nations that are poorer,
467
00:45:07.964 --> 00:45:08.865
to capitalize
468
00:45:09.244 --> 00:45:16.865
on stranded renewables that haven't even been mined yet A 100%. Through through bonds as opposed to borrowing from the IMF or World Bank. That's really cool idea,
469
00:45:17.380 --> 00:45:29.315
and I think you've seen it. You've seen the beginning of it. It's happening now. So that's that's more on that level. If you're a resource rich country in general and you don't have the infrastructure to sell into a global marketplace, it's
470
00:45:29.935 --> 00:45:33.235
extremely powerful that you can just monetize your resources
471
00:45:33.660 --> 00:45:37.200
directly into a free market with just Internet access. Like, that's pretty
472
00:45:37.820 --> 00:45:40.880
like, I I it's completely understated how
473
00:45:42.035 --> 00:45:45.015
massive that free market is in terms of Bitcoin mining.
474
00:45:46.355 --> 00:45:51.095
Yeah. No. A 100%. And there'll be countries that are rich that don't have, for whatever reason, renewable,
475
00:45:51.740 --> 00:45:59.855
you know, or whatever resources they want. The they're gonna go ahead and, like, finance it in other countries. So it's gonna be really interesting to see moving forward on that note.
476
00:46:00.734 --> 00:46:04.515
We have some freaks in the comments mentioning a recent write up,
477
00:46:05.455 --> 00:46:10.580
by another freak actually at rod armor, kc rod armor, who wrote up,
478
00:46:11.520 --> 00:46:16.180
a proposal for something that another freak, Eric Eric Sirion on Twitter,
479
00:46:17.175 --> 00:46:21.435
that's s I r I o n, has been working on, which is chamion mints,
480
00:46:21.975 --> 00:46:22.535
which is a
481
00:46:23.255 --> 00:46:24.529
an already existing
482
00:46:24.829 --> 00:46:27.490
concept that dates back to, I believe, the nineties,
483
00:46:28.670 --> 00:46:31.009
to a more trust minimized custodial
484
00:46:31.309 --> 00:46:33.985
option. The issue they always had in the past
485
00:46:34.525 --> 00:46:35.025
was,
486
00:46:36.845 --> 00:46:44.530
it relied on fiat, so it relied on on, you know, major third parties that you had to rely on to actually custody the Fiat, but they're
487
00:46:45.230 --> 00:46:46.370
mixing it together
488
00:46:46.830 --> 00:46:47.570
with Lightning
489
00:46:48.155 --> 00:46:50.975
and a federated model. So it's custodial Lightning
490
00:46:51.515 --> 00:46:58.140
that gives you very good privacy properties. So right now, custodial Lightning options, whether you're using Gloy Money or a wallet of
491
00:46:58.600 --> 00:47:00.220
Satoshi or Chivo Wallet,
492
00:47:01.240 --> 00:47:05.100
is is is not private at all to the custodian. The custodian can see everything.
493
00:47:05.455 --> 00:47:08.995
You're also you usually have to trust the custodian a 100%.
494
00:47:09.695 --> 00:47:21.190
The Galloy money, while they they have this multisig to hold the the custody, so that's strictly better. But in this, it's a larger federation, so something like Liquid. So you'd have, like, a 16 member federation
495
00:47:21.809 --> 00:47:29.255
that custodies the funds, so you'd have to they'd all have to screw you over to take your money. And then on the privacy side, it'd be,
496
00:47:30.995 --> 00:47:31.975
extremely private.
497
00:47:32.610 --> 00:47:46.195
So that is a very promising thing, I think, especially if if we had many of them. But I I I think that is, it is a long time off, but it's it's it's one of those things just like we said earlier, I think. You know? We're we're we're looking at the suitcase cell phone.
498
00:47:47.375 --> 00:47:52.390
Yeah. Yeah. And 6102 is mentioning Scriptcash, which I think was Frank Braun's, proposal,
499
00:47:53.570 --> 00:47:55.990
which was also Chalmun based, I think, 6102.
500
00:47:57.650 --> 00:47:59.510
But I don't know what's happening with that.
501
00:47:59.895 --> 00:48:03.195
But there's all these different things that are just way above our pay grade.
502
00:48:03.815 --> 00:48:10.210
And I know it kinda sounds like a blind faith type of thing, but I think the important thing is you build the you have to build a strong foundation.
503
00:48:10.990 --> 00:48:12.610
And then as this other stuff,
504
00:48:14.510 --> 00:48:24.715
you know, gets built out, like, at least it gets built out on this top foundation, and there's gonna be, you know, there's gonna be mishaps along the way, and there's gonna be different paths we take that might not work out well.
505
00:48:25.339 --> 00:48:28.880
And we hopefully, we'll learn from those mistakes and we'll improve. Right?
506
00:48:29.500 --> 00:48:33.200
Yeah. And just, again, the ability to use the open source noncustodial
507
00:48:33.579 --> 00:48:36.195
stuff. I was with someone the other day.
508
00:48:36.495 --> 00:48:55.225
She was in El Salvador and I was, like, helping helping her understand this and set her up real quick with the Moonwallet, which by the way, of course, has this, like, killer Spanish version in El Salvador. So it's she is super easy for her to download and just love the way that the flow, is set up where it you know, I used to be. I remember a couple years ago,
509
00:48:55.685 --> 00:49:13.180
I'm trying to onboard people, and some of these wallets would, like, immediately ask, you know, for you to write down these 24 words, and that's, like, the worst possible flow for onboarding someone who doesn't know what Bitcoin is. So I just I love the way that the Moon Wallet has it as, like, the emergency kit. It's very that's a smart way of branding it. Like, that's the emergency kit is your is your seed, and you wanna write it down.
510
00:49:13.805 --> 00:49:20.945
But basically, this she's able to set it up and, like, I just immediately send her Bitcoin and, like, you know, she's sending lightning back to me and it's, like,
511
00:49:21.420 --> 00:49:29.760
her mind is completely blown because she's like, I don't I never put in an ID. Like, what how does this even work? And I'm like, yeah. That's the magic of it. It literally is magic. So
512
00:49:31.265 --> 00:49:34.964
you're gonna drag a certain percentage of actual noncustodial
513
00:49:35.265 --> 00:49:42.330
use up. Right? It's inevitable. So so that's another upside to mention. That's, just to be clear, that's Moon with 2 u's. Yes.
514
00:49:43.830 --> 00:49:45.050
I Yes.
515
00:49:45.510 --> 00:49:49.495
The freaks are well aware. I I love Moon Wallet. I talk about it a lot. I use Moon Wallet.
516
00:49:50.295 --> 00:49:51.115
I think,
517
00:49:52.055 --> 00:49:53.675
Moonwallet is a perfect example
518
00:49:54.135 --> 00:49:55.755
of this, like, bleeding edge
519
00:49:57.440 --> 00:50:02.099
that, you know, even 6 months ago, I couldn't really fathom that we'd have that kind of UX
520
00:50:02.720 --> 00:50:03.460
in a
521
00:50:03.920 --> 00:50:07.744
a relatively new way. There's still trust certain trust elements there,
522
00:50:08.204 --> 00:50:14.305
but, you know, I I think I think these are just growing pains. And I I I think even like, if you go back 2 years,
523
00:50:16.089 --> 00:50:17.069
you know, I was
524
00:50:18.410 --> 00:50:20.910
just digesting constant constant Bitcoin
525
00:50:21.450 --> 00:50:34.150
all the time, and I couldn't even fathom where we are today. You know? Like, I I I was completely caught off guard by a lot of lightning stuff, a lot of the the coin joint tools. Samura Wallet completely caught me off guard. It's way farther ahead
526
00:50:35.410 --> 00:51:00.015
than I expect. Moon Wallet just, to me, came out of came out of fucking nowhere, like, 6 months ago. Dude, and they're like, it's really amazing how carefully they think about things. Like, they have a ton of stuff they're rolling out later this year. Like, this thing that you and I have talked about a lot that, you know, you've helped bring to life a little bit with the Hexa Wallet folks, but this idea of, like, essentially, like, you know, lightning tip jar that you could have. The the from what I understand,
527
00:51:00.315 --> 00:51:12.000
they're gonna try and do that attack that with key send. So they're gonna basically have an option in the app, hopefully, in the next year. But you go into your Moon Wallet and you just you just create, like, a, like, a string or a QR,
528
00:51:12.375 --> 00:51:19.995
and then you could just plug that into your Twitter bio or whatever. And then it just it's like a rotating it rotates the public key and, like, just could receive
529
00:51:20.330 --> 00:51:21.470
lightning, which would
530
00:51:21.850 --> 00:51:26.270
be crazy and, like, really amazing. Because I noticed most important use case
531
00:51:27.184 --> 00:51:31.684
the single most important use case for an activist today is is to be able to easily
532
00:51:31.984 --> 00:51:32.484
accept
533
00:51:32.785 --> 00:51:37.910
Bitcoin that's from around the world without, like, hosting a BTC pay server on some platform.
534
00:51:38.610 --> 00:51:40.690
Especially lightning as we discussed with the fees and stuff.
535
00:51:41.625 --> 00:51:47.565
There's also stuff to look at with Bolt 12. What Rusty is doing with offers is really cool, so you could have a similar functionality.
536
00:51:47.945 --> 00:51:57.300
At the end of the day, it's just gonna come down to the wallet manufacturer and what they want, how they wanna approach it. But from what I'm seeing, I think by this time next year, there'll be 2 or 3 different ways to do it.
537
00:51:57.600 --> 00:51:59.700
And you'll bay basically be able to
538
00:52:00.975 --> 00:52:08.195
offer that as part of your wallet. Like, your wallet will just generate, like, a static lightning address that that will that you could put up on wherever,
539
00:52:08.930 --> 00:52:10.710
will having pretty minimal privacy,
540
00:52:11.090 --> 00:52:11.590
vulnerabilities,
541
00:52:11.890 --> 00:52:17.345
which is crazy. And and it forces Twitter's hand. That's the the main idea here. Because as we all know, you know,
542
00:52:18.065 --> 00:52:24.325
Jack has a lot of control over Square, but very little at Twitter. I think he has, like, very small percentage of the power there.
543
00:52:24.950 --> 00:52:34.570
So I don't know how much he can actually push Lightning integration into their tip system. It seems like that's where it's going, but let's just imagine that if all of a sudden Right. A lot of popular accounts
544
00:52:35.335 --> 00:52:45.550
are have figured out this way to, like, just insert their lightning tip jar, that's gonna in the same way that Clubhouse forced Twitter to do spaces, that's gonna force Twitter to integrate Lightning. Right? So,
545
00:52:45.850 --> 00:52:50.270
but you can see where you're going with the product road map. Yeah. I mean, I think if Jack had,
546
00:52:50.855 --> 00:52:56.475
you know, dictatorship control over Twitter, had actual control over Twitter, we'd already have Lightning in Twitter. Totally.
547
00:52:56.855 --> 00:52:59.575
I I I think, ultimately, you know, I don't even
548
00:53:00.760 --> 00:53:05.020
a a a direct lightning integration to Twitter isn't as appealing to me as having,
549
00:53:05.320 --> 00:53:13.234
you know, a bunch of open source, tools that allow you to take these donations because, ultimately, when Twitter does bend the knee and add,
550
00:53:14.815 --> 00:53:17.394
you know, lightning, it's gonna be in a centralized
551
00:53:17.940 --> 00:53:27.160
custodial kind of surveillance type relationship anyway, and we're gonna have a lot of the same pain points that we have with something like Cash App, right, where where people's accounts get frozen and
552
00:53:27.485 --> 00:53:34.545
and and funds are blocked for whatever reason or they fail KYC checks. It's gonna be inundated with all this different ID information.
553
00:53:35.460 --> 00:53:37.640
So, ultimately, what we wanna see regardless,
554
00:53:38.420 --> 00:53:41.640
I think it's even bigger than forcing their hand. Right? Like, I wanna see,
555
00:53:42.260 --> 00:53:42.920
you know,
556
00:53:43.505 --> 00:53:49.444
this time next year or maybe 2 years, you know, maybe I'm being a little bit too high time preference, like, 4 or 5 different ways
557
00:53:49.744 --> 00:53:55.690
that you can basically just paste the static text string somewhere, whether that's a Twitter bio or Reddit bio or,
558
00:53:56.790 --> 00:54:03.904
you know, a Telegram chat or something and accept donations from around the world in a semi private way. Like, because right now, you can do it
559
00:54:04.444 --> 00:54:11.420
with a fixed on chain address, and you're paying on chain fees, and everyone can just track everything that's happening there. Right? And that's obviously not ideal.
560
00:54:12.040 --> 00:54:16.840
Yeah. There is lnurl as well. Obviously, we we we've been looking at it. It's a little buggy,
561
00:54:17.320 --> 00:54:27.505
but I Yeah. We have a problem left in coin. Let's just put it this way. There's there's there's several options coming out. It's very exciting. And here's the thing, like, just think about the way that lightning
562
00:54:27.990 --> 00:54:31.450
wallets and apps I mean, you talk to let you talk to some of the wallet developers.
563
00:54:31.910 --> 00:54:32.569
I mean,
564
00:54:33.270 --> 00:54:38.255
some sort of coin join probably more like a a pay join, but that's gonna be like native,
565
00:54:38.875 --> 00:54:44.815
in these apps in the next year or 2. Like like, when you when you open and close and stuff like that, it's gonna be amazing. And,
566
00:54:45.515 --> 00:54:46.015
the
567
00:54:46.760 --> 00:55:14.335
the point here is that when you had, the signal people put the altcoin in their their thing, their their main argument was that was don't wanna don't wanna revisit it too much, but their main argument was like, oh, it's lightning's not ready. Well, guess what? It's gonna be ready in, like, a year for sure. I mean, there's already a nation state rolling out with it. It. So I just think that excuse is a bad one, and I think that rather than saying it's not ready, you should actually just work on helping make it ready. Yeah. And mobile coin isn't fucking ready either. They're fucking full of shit. You just have to follow the incentives once again. Right? Like, they they
568
00:55:15.035 --> 00:55:22.940
Moxie was in involved with MobileCoin, and he had a very big incentive to get integrated with signal that he was is his project as well,
569
00:55:23.400 --> 00:55:35.675
that he even though it's OpenStreet, he rules with a relatively iron fist, and it's not a coincidence that MobileCoin got put in there. I I mean, I I think it kinda just stalled. Right? Like, I don't think Yeah. I haven't seen it integrated into signal on my end,
570
00:55:36.055 --> 00:55:41.980
so I don't know what's going on there. I mean, I I remember it was, like, pumped and dumped on them, so, like, that was probably
571
00:55:42.360 --> 00:55:52.994
a big wake up call. Went down, like, 10 x on there. I think so. It would behoove me since we are having this topic. You know, samurai has led the way in terms of pay nims, which is also a static,
572
00:55:53.720 --> 00:55:56.860
text string that you can use to pay people. Unfortunately,
573
00:55:57.880 --> 00:56:03.894
they're the only wallet that supports it, which is a major negative when it comes to accepting donations. I I think,
574
00:56:04.375 --> 00:56:06.635
Jimmy Wales of Wikipedia mentioned this,
575
00:56:07.095 --> 00:56:27.255
and I've seen this as a pain point because Seal Dispatch you know, Rabbit Hole Recap has sponsors, including KYC sponsors, and that really kills me. I don't like that. I I think it I it's it's just it's follow the incentives. Right? And as much as I make sure to not let it corrupt me, I want the show to be completely supported audience,
576
00:56:28.275 --> 00:56:29.415
and I've been struggling
577
00:56:29.760 --> 00:56:45.375
to basically streamline the donation methods. Right? Because Jimmy Wales mentioned this on Wikipedia. The more times and he kind of used this as a cop out for not accepting Bitcoin, but I'll just forget that for a second because they're donation based service. And the more options you have for people donating,
578
00:56:45.835 --> 00:56:53.890
the less likely they are to donate. But if you stick with a single option, like PayNIMS or something, and the only people that can donate are samurai users,
579
00:56:54.190 --> 00:57:04.335
you're also screwed from that point. So we're kinda stuck in a situation here where you're you're offering many different options to support, and as a result, you probably get less donations than you would otherwise.
580
00:57:05.050 --> 00:57:06.270
And these are little nuances
581
00:57:06.650 --> 00:57:07.150
around,
582
00:57:08.650 --> 00:57:11.630
you know, audience supported work, community funded work,
583
00:57:12.570 --> 00:57:13.055
that
584
00:57:13.535 --> 00:57:17.694
that people on the receiving end don't really like to talk about. It's kind of like,
585
00:57:18.655 --> 00:57:22.675
it's a little bit of a dirty topic that no one really wants to discuss out in the open,
586
00:57:23.150 --> 00:57:29.730
but it's something that's a major major pain point in Bitcoin right now. Yeah. I mean, payments are really cool. We set we have one for HRF.
587
00:57:30.385 --> 00:57:36.645
But, I mean, I'll just say it's, like, it's not super fast to set up. It takes a little bit of time and there's, like, a fee you have to pay. And
588
00:57:36.945 --> 00:57:45.250
at the end of the day, it's it's a short term thing anyway because at least for the purposes of what we're looking at, like, it's gotta be a lightning solution. Like, it it these
589
00:57:45.650 --> 00:57:51.195
you know, we just you have to know that fees are gonna get like, the dollar is gonna get weaker. Bitcoin's gonna get stronger.
590
00:57:52.375 --> 00:57:59.660
Fees are gonna get 15, 20, 30, 40, $50, and the people that I'm working with need to be able to send 5 to 10. So it's just it is what it is. You know?
591
00:58:01.240 --> 00:58:03.880
Yeah. Yeah. I mean, I I've I have I have major
592
00:58:04.680 --> 00:58:07.420
this is a sore topic for me, Gladstein, because
593
00:58:08.425 --> 00:58:12.605
because I we we have right now, we're sitting on an apparent Chinese,
594
00:58:13.705 --> 00:58:14.205
mining,
595
00:58:14.665 --> 00:58:22.590
you know, restrictions or ban or whatever you wanna call it, the largest difficulty adjustment downward in history, and the mempools keep clearing.
596
00:58:23.290 --> 00:58:27.150
And people keep paying 1 separate bite, and I expected the high fees already.
597
00:58:28.375 --> 00:58:35.950
So so I I do have a lot of fruits keeping me in my purse in total. We do. We sell $20 fees, like, 2 months ago. Like, this is the same.
598
00:58:36.410 --> 00:58:50.924
So I look. I I just look. For now, it's awesome. Take the cheap fees while they're here, but you cannot possibly expect I mean, again, remember, forget Bitcoin. The dollar is collapsing, like, over time. Like, it's it's not immediately collapsing. But Well, you should measure fees in, like,
599
00:58:51.450 --> 00:58:59.390
some kind of good or something. I don't know. But, yeah, like, purchasing power. But, yeah, it'll it'll the the the purchasing power requirement for getting block space
600
00:58:59.795 --> 00:59:02.694
should go up with adoption unless block space increases.
601
00:59:03.395 --> 00:59:10.290
Right? Like, that's a it's a it's a very simple logical thing, and and Yeah. But but, it might take a little bit longer,
602
00:59:10.910 --> 00:59:28.069
than I expected, but it is We'll have Panem's, and we'll have on chain solutions, and people will use that. But the Lightning solution will be, like, hugely helpful for for the community that I'm working with for sure. Yeah. We have ride or die freaks, Trinity, in the comments saying that we should measure fees and tomatoes. Like, that's what I'm saying. Like, you gotta measure it in,
603
00:59:28.869 --> 00:59:31.210
in some kind of good that people need to survive.
604
00:59:31.829 --> 00:59:35.460
I don't know if they need tomatoes, but but it it is what it is.
605
00:59:36.045 --> 00:59:36.785
Okay. So
606
00:59:37.565 --> 00:59:38.305
El Salvador,
607
00:59:38.845 --> 00:59:39.984
I I mean, I think
608
00:59:41.405 --> 00:59:46.820
very fucking cool. I look forward to visiting there. I fucking love what the guys at Bitcoin Beach are doing. Doing.
609
00:59:48.800 --> 00:59:51.060
I I I I do you know,
610
00:59:51.760 --> 00:59:54.660
to me, the way the way I look at these things as
611
00:59:56.005 --> 00:59:59.225
as, you know, a public Bitcoiner that has a platform,
612
01:00:01.205 --> 01:00:03.305
is that it tends to be
613
01:00:03.650 --> 01:00:11.750
in Bitcoin land that you get better engagement if just everything is super rosy and bullish and has no trade offs or no issues.
614
01:00:12.975 --> 01:00:14.115
So I figure
615
01:00:14.655 --> 01:00:16.835
if I'm losing a bunch of my privacy,
616
01:00:17.855 --> 01:00:22.230
you know, chilling with the freaks twice a week, then my role should be
617
01:00:23.010 --> 01:00:31.285
to be a necessary contrarian or just someone that, you know, is constantly just on the lookout and just wants the freaks to be constantly on the lookout.
618
01:00:31.585 --> 01:00:37.204
And the way I do see it playing out, and maybe I'm just being because I I listened to his his McCormick,
619
01:00:37.869 --> 01:00:38.369
show,
620
01:00:38.829 --> 01:00:43.329
and he just he seems like, what can you expect from a president besides that? Like, that was, like,
621
01:00:43.630 --> 01:00:49.865
as like, absolutely amazing, his grasp of Bitcoin. I mean, he was talking about sats like he was thinking in sats. Like,
622
01:00:50.165 --> 01:00:52.744
I'm still trying to get some of the freaks to think in sats,
623
01:00:53.420 --> 01:00:57.200
and this guy is just throwing sats left and right. Like, it's his standard already.
624
01:00:59.020 --> 01:01:11.375
But I do think that there's gonna be, like, a pain point period where people start getting their funds blocked or seized with Chivo Wallet. And, hopefully, at that point, that will be the the real that's the real incentive to go out and seek,
625
01:01:11.690 --> 01:01:16.349
you know, a different open source wallet that is more sovereign that gives you more control every month. Right?
626
01:01:16.650 --> 01:01:19.095
Yeah. Absolutely. And then, you know, as
627
01:01:19.974 --> 01:01:28.680
the large percentage of folks using this wallet are gonna be, you know, in the remittance market, it's easy. They just have their family just start sending to the address that they control. So I mean,
628
01:01:28.980 --> 01:01:31.960
you'll start seeing that. And just a note on him, on Bukele,
629
01:01:32.420 --> 01:01:37.000
yeah, of course, he's very polished. He's like an Obama Clinton level politician. He's incredible.
630
01:01:37.355 --> 01:01:41.215
But you you know, again, and, you know, we've already gone through this before, but,
631
01:01:42.155 --> 01:01:43.695
let's be careful about him.
632
01:01:44.075 --> 01:01:50.100
What's interesting is he does have an opportunity here. Basically, in Salvador, you know, in in El Salvador, the
633
01:01:50.720 --> 01:01:53.220
constitution is such that he cannot run for president again.
634
01:01:54.445 --> 01:01:56.445
And he is probably gonna try and,
635
01:01:56.925 --> 01:02:11.450
you know, what what we would call, you know, extra legally, you know, change the constitution to to run again. This has happened in many countries. Obviously, it happened in Bolivia, Venezuela, etcetera. Yeah. New York City. Yeah. New York City. But at the national level,
636
01:02:12.665 --> 01:02:52.855
it is something that people obviously are worried about. But he could choose a different path, which is what I'm rooting for. Like, what if he, like, actually agrees to, like, go when he's done and whatever? He's the he he his career, you know, he moves on. He becomes like what if he become becomes like the international, like, kind of ambassador for Bitcoin and, like, just goes around to different countries kinda like doing what, like, Jimmy Carter did or whatever for, like, humanitarian I could a 100% see that. Like, that would be great. And and he could be he he has a statue. If he plays his cards right, he's got a statue right there next to Satoshi. He just can't fuck it up, so let's see what happens. You know? Well, I mean yeah. I mean, a lot of people had statues that maybe were were lower down than Satoshi but have been toppled because of their ego. But, I,
637
01:02:54.569 --> 01:02:59.470
Yeah. I mean, look. I we were talking about incentives once again. I guess incentives is just the word of the day.
638
01:03:00.650 --> 01:03:00.890
The
639
01:03:01.565 --> 01:03:04.705
there is this additional incentive for the first couple of
640
01:03:05.405 --> 01:03:07.585
rulers or presidents or leaders,
641
01:03:08.365 --> 01:03:10.385
that move to a Bitcoin world,
642
01:03:11.260 --> 01:03:24.255
that they become, like, international celebrities. Right? Like, no one knew who this guy was. No one was talking about El Salvador. Now all of a sudden, it's on CNBC and all over the place, and people are listening to his speeches and seeing the polls get passed and stuff. Yeah. He's an international
643
01:03:24.555 --> 01:03:27.454
celebrity now. So so that incentive is a strong,
644
01:03:28.610 --> 01:03:32.470
that's definitely a strong incentive on the positive side at least for,
645
01:03:32.930 --> 01:03:37.750
you know, maybe the first 20 countries or something like that. Right? Like, the first movers, especially if they
646
01:03:38.404 --> 01:03:39.464
also personally
647
01:03:40.325 --> 01:03:47.750
are, you know, accumulating Bitcoin and their country is accumulating Bitcoin because, you know, they're gonna put their country on the map for a long time, and they're gonna, you know,
648
01:03:48.390 --> 01:03:50.970
really squirrel away some generational wealth. Right?
649
01:03:51.590 --> 01:03:53.370
Yeah. And then the last thing on that
650
01:03:54.390 --> 01:03:58.474
El Salvador piece is that, again, geo going up to the geopolitical level,
651
01:03:59.335 --> 01:04:00.875
we are kind of at this crossroads.
652
01:04:01.655 --> 01:04:11.420
Let's put Bitcoin to the side for a second where we have, like, the Washington consensus, which is like, you know, the way that the United States and the World Bank, the IMF, and to the to it to some extent, the EU,
653
01:04:11.880 --> 01:04:18.765
kinda control the world's flow of money and all the rules and how nations develop and which ones get access to nukes, etcetera, etcetera.
654
01:04:19.705 --> 01:04:41.615
You know, which ones were gonna be held down, which ones were gonna be forced to have structural reforms or austerity, etcetera. Now you have the rise of China. So you have, like, the kind of China kind of belt and road thing. And now you have, like, a third thing. So in the cold war, you had the Americans and Soviets and you had the non aligned movement. Right? So what if we have like the Nakamoto consensus, which is like all the Bitcoin parties. Like, you could conceivably start seeing
655
01:04:41.970 --> 01:05:04.650
parties in many countries where the the only platform really is that they're a Bitcoin party. And then, like, people will vote for their wallet just like they do in some countries. They'll vote for the party that has the lowest taxes. Like, they'll vote for the party that's gonna be most pro Bitcoin. Like, that's a possibility here that we have, know, the Washington consensus and we have the Nakamoto consensus. So I thought that would be kind of, kinda interesting to see pop up.
656
01:05:05.430 --> 01:05:08.825
Yeah. I mean, in a lot of ways, I'm a kind of a single issue voter in that regard.
657
01:05:11.545 --> 01:05:16.204
So Yeah. Exactly. Okay. So, yeah, I that would not surprise me at all, especially if,
658
01:05:17.390 --> 01:05:21.410
you know, especially if we're correct with the Bitcoin price. You know? Bitcoiners will have more money,
659
01:05:21.870 --> 01:05:24.770
and, corruption runs a lot of this world. So
660
01:05:26.105 --> 01:05:31.005
that naturally that naturally follows that, it'll it'll go towards political power as well.
661
01:05:33.145 --> 01:05:33.645
So
662
01:05:33.950 --> 01:05:40.589
El Salvador, positive news. I think Latin America is just gonna be, like, this really great testing ground for Bitcoin, and I look forward to,
663
01:05:41.925 --> 01:05:44.025
hopefully, seeing it blossom in the whole region.
664
01:05:44.485 --> 01:05:46.825
I love the culture down there. It's, you know,
665
01:05:47.285 --> 01:05:52.420
same time zone as us. It's very easy for me to travel down there. I know the language better than any other foreign language.
666
01:05:53.700 --> 01:05:54.600
So, selfishly,
667
01:05:55.220 --> 01:05:56.280
very happy about
668
01:05:56.740 --> 01:06:00.040
Latin America taking the helm here, and I I look forward to seeing it expand.
669
01:06:00.785 --> 01:06:05.204
Obviously, I would love to see it expand in Africa. In Africa, you have this other app aspect,
670
01:06:05.984 --> 01:06:14.230
where maybe the French have had a lot of control and been holding their grip for a while, but you also have this creeping control coming in from China. Right? Mhmm. Mhmm.
671
01:06:14.530 --> 01:06:15.510
And I feel like
672
01:06:16.130 --> 01:06:19.350
the US has kinda just completely dropped the ball in that regard,
673
01:06:20.194 --> 01:06:29.175
in terms of trying to stop that Chinese expansion there. It's almost like a it's been a vacuum of European and and American influence, and the Chinese have kinda come in.
674
01:06:29.500 --> 01:06:30.380
Bitcoin could be
675
01:06:32.059 --> 01:06:34.160
I mean, Bitcoin is the best tool
676
01:06:34.540 --> 01:06:36.000
to to fight that Chinese
677
01:06:36.700 --> 01:06:39.040
that Chinese in that region. Right?
678
01:06:40.125 --> 01:06:48.865
Yeah. No. I mean, there wouldn't be any other options if we lived in a world without Bitcoin, but we do and and you're gonna see people able to access this, like, collaborative,
679
01:06:49.390 --> 01:06:49.890
peaceful
680
01:06:50.270 --> 01:06:56.609
parallel monetary network, which is which is kind of amazing. So, yeah, high level view on El Salvador, like, historic
681
01:06:56.915 --> 01:06:58.995
historic kind of moment. Very kind of under
682
01:06:59.395 --> 01:07:01.815
it's even even even watching it live,
683
01:07:02.595 --> 01:07:03.735
we're it's being underestimated.
684
01:07:04.115 --> 01:07:06.599
Like, you have to remember that very few newspapers
685
01:07:07.220 --> 01:07:08.040
covered it.
686
01:07:08.820 --> 01:07:15.480
You know, it's not like it was on the front page of the New York Times. So when we in, like, 20, 30 years, when we go back and look at, like, Bitcoin history,
687
01:07:16.165 --> 01:07:26.060
we're gonna have to pick some of these, we have to dig for some of these events because the the the world media was not exactly excited about it. Let's put it that way. You'll just you'll go listen to the Bitcoin podcasts.
688
01:07:26.680 --> 01:07:33.964
Yeah. You have to mean I mean, credit to Peter for getting the first interview, you know, and not CNN. I mean, I thought that was pretty interesting.
689
01:07:34.265 --> 01:07:39.789
Well, I mean, if if I could have bet on that ahead of time, I give a lot of the Bitcoin builders shit about this that I'm not
690
01:07:40.089 --> 01:07:43.930
there's no easy way for me to bet with Bitcoin on these things yet. Mhmm.
691
01:07:44.650 --> 01:07:45.150
Hopefully,
692
01:07:46.365 --> 01:07:49.265
hopefully, the boys working on discrete log contracts,
693
01:07:49.805 --> 01:07:52.465
will have a nice pretty UX for us,
694
01:07:52.845 --> 01:07:53.245
for the
695
01:07:54.359 --> 01:07:55.579
in the near future.
696
01:07:55.960 --> 01:08:02.185
But I would have bet on Peter getting that interview. Like, he's a fucking hustler. I'm not really that surprised that he got it, but props to him for sure.
697
01:08:04.425 --> 01:08:11.530
Did you see he even he took a picture he took a picture with him with this little dispatch hat. You tried to get him to wear it, and the guy was like, I'm not wearing that hat. I
698
01:08:12.070 --> 01:08:13.530
don't know what that stands for.
699
01:08:15.190 --> 01:08:19.610
That's so so, I mean, I we're so we're talking about Africa, Chinese influence,
700
01:08:22.885 --> 01:08:28.985
China, you know, so Chinese the supposedly, China is kicking out miners right now. They're restricting mining,
701
01:08:29.980 --> 01:08:33.119
and the miners are moving their hash rate,
702
01:08:33.980 --> 01:08:34.480
and
703
01:08:35.179 --> 01:08:41.675
I I guess they're they're moving their miners. They're moving their actual hardware out of the country, allegedly. This is what we're being told.
704
01:08:42.135 --> 01:08:44.395
Mhmm. We have the largest difficulty adjustment,
705
01:08:45.680 --> 01:08:49.380
downward in the history of Bitcoin, it appears. That's that's what we're on,
706
01:08:50.160 --> 01:08:51.380
track for right now,
707
01:08:53.735 --> 01:08:56.395
and that would be indicative of that kind of situation.
708
01:08:56.855 --> 01:08:58.875
It would also be indicative of a
709
01:08:59.495 --> 01:09:01.995
state sponsored 51% attack. But,
710
01:09:02.850 --> 01:09:05.190
where do you stand here in terms
711
01:09:07.010 --> 01:09:11.245
of China and Bitcoin and the next 5 years or something like that?
712
01:09:11.785 --> 01:09:13.725
Yeah. Well, I'll give 2,
713
01:09:14.585 --> 01:09:15.085
interpretations.
714
01:09:15.545 --> 01:09:21.870
So one is based on, some conversations I've had with, like, some American miners who are obviously as you've as you've pointed out very
715
01:09:22.330 --> 01:09:22.810
they're very,
716
01:09:24.090 --> 01:09:32.075
you know, biased towards their own, opinions. But let you know, just looking at the numbers. Okay. So the hash rate peaked at a 180
717
01:09:32.615 --> 01:09:34.075
x a hash per second,
718
01:09:36.250 --> 01:09:40.990
in early May, now it's now it's at like 90. So we've lost half. Okay. So,
719
01:09:41.450 --> 01:09:50.205
you know, we can speculate, but generally speaking, you know, we we're seeing that the network lost about half of its hash rate from its peak just about 5 weeks ago.
720
01:09:51.500 --> 01:09:54.240
And that from what we can understand,
721
01:09:54.780 --> 01:09:59.280
most of these minors are not getting arrested. A few of them actually did from what we can see.
722
01:09:59.995 --> 01:10:07.455
But a lot of them are just like openly communicated on social media and they're just like, shit, we're going elsewhere. They were holding conferences to figure out where to go next.
723
01:10:09.100 --> 01:10:14.159
And it's gonna take them a long time to plug in because there's just not that much, Isn't that weird to you?
724
01:10:14.860 --> 01:10:17.679
Which part? Oh, it's all weird to me, but which which part?
725
01:10:18.505 --> 01:10:20.844
I mean, I so I I think I think
726
01:10:21.625 --> 01:10:50.060
we gotta go back to Oh oh oh, that they're not getting arrested, like, in a major crackdown or what? Yeah. It seems it does not doesn't that seem weird? Like, if you banned weed, you wouldn't just, like, let the weed dealers take their weed out of the country and tweet about it. The guys I was talking to were saying that it they were amazed that it looks so peaceful, like and maybe that's the weird thing to dive into, but it looks like that most of them are moving out peacefully. And they're actually getting their equipment out and they're shipping it. You know, there's been a lot of photos. I mean, those can be doctored, but
727
01:10:50.440 --> 01:10:52.125
a lot of photo video evidence of, like,
728
01:10:52.605 --> 01:10:59.500
you know, empty mining, you know, husks at at at farms and and, you know, footage of of
729
01:10:59.980 --> 01:11:01.500
machines being moved. And,
730
01:11:02.700 --> 01:11:04.480
that seems to probably go
731
01:11:05.180 --> 01:11:07.120
to Malaysia, Kazakhstan, Russia,
732
01:11:07.660 --> 01:11:08.800
the US, Canada.
733
01:11:09.825 --> 01:11:12.245
And I guess this this this particular narrative
734
01:11:12.625 --> 01:11:13.285
is that,
735
01:11:14.305 --> 01:11:21.989
the chai it wasn't the CCP, but the Chinese miners were this huge asset for Bitcoin. They protected it in its infancy. And then those those individuals are gonna go elsewhere.
736
01:11:22.290 --> 01:11:39.690
And and and the argument that that some of these miners make is that this is so great because the those Chinese miners who were such a great resource for Bitcoin, they're just gonna go elsewhere and it'll be better because they won't be under the CCP's rule anymore. So that's their this is the one argument. Argument a is that this is a fantastic thing for Bitcoin.
737
01:11:40.470 --> 01:11:44.570
That it's less about the drop off in in hash rate and more about the decentralization
738
01:11:44.950 --> 01:11:50.735
now. Where it was maybe even easier before for maybe a state to to to get some sort of influence.
739
01:11:51.275 --> 01:11:52.175
Harder now.
740
01:11:53.490 --> 01:11:56.150
Well, let me put it this way. If Yeah. If
741
01:11:57.970 --> 01:12:00.870
if if we success if this difficulty adjustment
742
01:12:01.170 --> 01:12:01.890
goes down
743
01:12:02.415 --> 01:12:08.755
you know, largest difficulty ever, and then the hardware is actually moving out of China, and it moves to all these different other jurisdictions, I you know, and
744
01:12:17.845 --> 01:12:23.385
a smaller operation is harder to detect and regulate and control than these large corporate operations.
745
01:12:24.645 --> 01:12:27.590
And then the difficulty goes back up, and we
746
01:12:28.389 --> 01:12:29.849
come back up to near ovals,
747
01:12:31.190 --> 01:12:31.929
I think
748
01:12:32.710 --> 01:12:35.210
we will be in the most bullish situation
749
01:12:35.905 --> 01:12:38.245
in Bitcoin's history in terms of,
750
01:12:39.425 --> 01:12:44.165
the robustness of our of our mining infrastructure and then not being in a single location.
751
01:12:45.630 --> 01:12:50.130
I don't think we passed that threshold yet. We have to see what happens here Totally.
752
01:12:50.829 --> 01:12:51.329
Because
753
01:12:51.869 --> 01:12:57.015
there is a significant level of hash in China, or there was 5 5 weeks ago.
754
01:12:58.115 --> 01:13:00.375
And if you wanted to do
755
01:13:01.075 --> 01:13:03.015
a state level attack on Bitcoin
756
01:13:03.470 --> 01:13:09.010
as the Chinese. Basically, the shitcoiner FUD that we've heard all these years and all this time
757
01:13:09.550 --> 01:13:10.050
is
758
01:13:10.485 --> 01:13:14.105
you would basically pull a large portion of Hash off the network,
759
01:13:15.204 --> 01:13:19.784
and you would you wouldn't want people to think that was happening, so you would tell them that
760
01:13:20.350 --> 01:13:33.935
that's that's you know, there's Hash is leaving the country, and it's they just need to plug in. And you might even test it out with a couple seasons of, oh, well, it's the rainy season, and don't worry about this hash rug pull, and we've gone down 14% in difficulty. That's completely normal.
761
01:13:34.715 --> 01:13:35.455
And then
762
01:13:35.820 --> 01:13:42.400
what you would do is instead of doing a traditional 51% attack so so a traditional 51% attack is the idea is
763
01:13:42.860 --> 01:13:59.560
I send a payment to you. I own the private keys. You settle up that thing. Maybe you send me tomatoes, you know, and then I have the tomatoes, and then I reverse the transaction. And I keep the Bitcoin, and I have the tomatoes. And, obviously, the tomatoes could be 100 of 1,000,000 of dollars if you're doing it to an exchange or something like that or a merchant.
764
01:14:00.420 --> 01:14:04.585
Also, with lightning, if you have a lightning counter party, you can fuck with the Lightning
765
01:14:05.205 --> 01:14:08.025
counter party. Now a government state attack,
766
01:14:08.565 --> 01:14:26.554
you wouldn't necessarily if you just wanted to kill Bitcoin, there's a lot of reasons the Chinese government would wanna kill Bitcoin. I think everyone agrees on that. You know? They they want their centralized digital yuan, and they want it to be worldwide. They want everyone to use WePay. That would be the fucking best thing in the world. And so in in that situation, what you would do
767
01:14:27.470 --> 01:14:28.930
to me, logically,
768
01:14:29.470 --> 01:14:30.610
is you would do this,
769
01:14:30.990 --> 01:14:33.170
and then after difficulty goes down,
770
01:14:33.630 --> 01:14:35.970
you would then just do a constant reorganization.
771
01:14:37.325 --> 01:14:38.785
So you would just
772
01:14:39.085 --> 01:14:41.265
keep basic growth forking the
773
01:14:41.885 --> 01:14:46.225
the chain. It wouldn't even be a fork because it'd be valid consensus rules,
774
01:14:46.800 --> 01:14:50.659
and you'd basically have a DDOS attack if if you had over 51%
775
01:14:50.960 --> 01:14:51.780
of the hash.
776
01:14:54.455 --> 01:14:57.594
And they they they could you know, they would do they would do this
777
01:14:58.375 --> 01:15:03.250
if if they wanted to do a massive reorg and really screw with us, they could do that by
778
01:15:04.110 --> 01:15:13.885
just mining in the background on a different chain that we don't know about and then releasing all the blocks at once. But they could also do an active attack where they're just constantly reorging the tip.
779
01:15:14.505 --> 01:15:20.090
So that's kind of what I'm looking at in I think it's a very unlikely type of attack, But if it was gonna happen,
780
01:15:21.590 --> 01:15:26.889
this would be the time for it to happen. Yeah. And this is what it would look like. It would look like this. Yeah. So so the
781
01:15:27.375 --> 01:15:30.195
scenario b is that it is an attack by the Chinese government
782
01:15:30.974 --> 01:15:37.310
and it it looks perfectly like this. And and we'll see what happens. But, obviously, as you say, I think that's very unlikely.
783
01:15:38.010 --> 01:15:39.790
Look. I think what most people don't
784
01:15:41.130 --> 01:15:47.355
should realize is that all these great powers make huge mistakes in history. They all screw up. They do something terrible.
785
01:15:47.815 --> 01:15:51.514
And, you know, you could look at America's invasion of Iraq, Vietnam,
786
01:15:51.870 --> 01:15:59.170
Soviets and Afghanistan. You could look at Napoleon or Hitler trying to invade Russia. Like, no matter how powerful they are, they always make a fatal mistake,
787
01:15:59.710 --> 01:16:01.010
or several, in fact.
788
01:16:01.935 --> 01:16:03.875
And maybe this is just this blunder.
789
01:16:04.255 --> 01:16:05.715
I mean, you know, we'll see.
790
01:16:06.815 --> 01:16:13.940
But if it is a blunder and they aren't about to attack the network or in the process of doing so, this is tremendously bullish. Right?
791
01:16:14.660 --> 01:16:27.750
Because again, it just removes their ability to sort of fuck with the network. Now the concern starts to be what's the US hash rate. Right? So we were at, like, 8 to 10% before the drop. So now people think we're at, like, maybe 20 to 25%.
792
01:16:28.449 --> 01:16:30.150
So we don't really want the US
793
01:16:30.610 --> 01:16:34.790
to get 50 either. Right? So the question is, is there gonna be some kinda, like, ghash
794
01:16:36.355 --> 01:16:39.335
momentum or initiative among American miners
795
01:16:39.715 --> 01:16:42.215
if we get close where they'll go elsewhere?
796
01:16:42.690 --> 01:16:48.710
And I think some miners would do that and I think others wouldn't, but it would be interesting to see. I think another thing that people,
797
01:16:49.489 --> 01:16:53.965
in this scenario a, where it actually is a blunder and and a a lot of the money is gonna come to the
798
01:16:54.425 --> 01:16:57.725
US, some of the miners I spoke to were basically saying that
799
01:16:58.440 --> 01:17:00.780
they we shouldn't underestimate the Biden administration's,
800
01:17:01.560 --> 01:17:05.135
like, kind of, like, policies on energy stuff. Like,
801
01:17:05.614 --> 01:17:14.034
look at think about it this way. If they put collect Marathon, like, Marathon has I think one of Marathon's biggest mines is, like, old coal plant or whatever.
802
01:17:14.414 --> 01:17:20.820
So if the Biden administration did a carbon tax, a moderate carbon tax of $50 per ton
803
01:17:21.360 --> 01:17:34.060
on some of these, companies, it would increase their energy cost by 5¢ per kilowatt hour. Right? So that would move them from wherever they are now for 5¢ to 9 or 10¢, which would make them completely it would make they they couldn't make any money. So
804
01:17:34.760 --> 01:17:38.700
people are maybe underestimating the Biden administration's sort of green policies
805
01:17:39.080 --> 01:17:40.060
here as well.
806
01:17:40.415 --> 01:17:56.950
And maybe maybe that ends up forcing American miners to go elsewhere. So we'll see what happens here, but there is a concern about American miners getting to 50% now. And we have we have to be realistic about that. I think there's there's 2 things that so so there's short term incentives and long term incentives. So long term,
807
01:17:57.785 --> 01:18:03.085
I think, if we get through the turbulent times, which we have for the most part already, I would say,
808
01:18:04.185 --> 01:18:28.329
is, you know I mean, specifically, like, if if we go back to the Segwit two x days and we and we go back to the b cash days, I mean, not only was there a large portion of Chinese hash, but there was a single company that was controlling a large portion of the manufacturing and the hash, which is Bitmain. Right? And they fell from grace. So it is it is we are strictly in a better situation today. But Totally. The the long term incentive is
809
01:18:28.630 --> 01:18:29.289
is that
810
01:18:29.590 --> 01:18:31.130
governments will inherently,
811
01:18:33.555 --> 01:18:35.255
you know, make it regulatory,
812
01:18:37.155 --> 01:18:39.574
not cost it will be cost effective
813
01:18:40.035 --> 01:18:51.100
to be distributed and be small operations because these large corporate miners, like you said, like Marathon and stuff, are gonna end up having to pay higher costs, and they're gonna have to move around, basically, to try and
814
01:18:51.445 --> 01:18:52.905
keep profitability. Right?
815
01:18:53.445 --> 01:18:55.305
But that's more of a long term thing,
816
01:18:56.405 --> 01:19:01.050
that that will take some time to to play out. And right now, we're in this kind of
817
01:19:02.010 --> 01:19:03.389
short term situation.
818
01:19:04.889 --> 01:19:07.710
So so if if we we we do agree
819
01:19:08.250 --> 01:19:10.590
that if the official story is correct,
820
01:19:11.475 --> 01:19:15.495
and China is basically pushing out a large amount of hash out of their
821
01:19:15.875 --> 01:19:16.375
jurisdiction
822
01:19:16.755 --> 01:19:19.395
Mhmm. With no repercussions to the individual minors
823
01:19:19.970 --> 01:19:24.710
By the way, this is a country that has strict capital controls and very little freedom. Right.
824
01:19:25.330 --> 01:19:33.735
They're making a massive mistake. Right? This is if if if you wanna control Bitcoin or attack Bitcoin, you need you wanna you wanna keep that hash
825
01:19:34.360 --> 01:19:37.100
not only in your your borders, but you wanna keep it regulated
826
01:19:37.960 --> 01:19:38.460
and,
827
01:19:39.080 --> 01:19:47.765
you know, you want all the operators tagged and bagged. You want them all known. You want them to know that you know where they live. You know what their assets are. You know who their family is,
828
01:19:48.465 --> 01:19:50.245
and you wanna keep them under your thumb.
829
01:19:51.025 --> 01:19:51.525
So
830
01:19:52.390 --> 01:19:54.950
strictly speaking from the Chinese perspective
831
01:19:56.230 --> 01:19:57.610
Chinese government perspective,
832
01:19:58.790 --> 01:20:00.490
if the official story is correct,
833
01:20:01.685 --> 01:20:08.505
they are gonna we're gonna be talking about this for decades. Right? Like, this is gonna be a massive, massive mistake. Yeah. They're they're probably gonna
834
01:20:09.320 --> 01:20:14.140
Yeah. Probably be the death of the yeah. They'll probably be the death of the digital yuan. It's like this
835
01:20:14.760 --> 01:20:19.020
is this is, you know, when when when push comes to shove and we talk about
836
01:20:19.915 --> 01:20:23.435
Bitcoin becoming the next reserve currency in 10 years, it's going to be
837
01:20:24.795 --> 01:20:34.980
this was one of the pivotal moments that meant that it wasn't the digital yuan, instead it was Bitcoin. I mean, it sounds crazy, but it it yeah. It could be Xi Jinping's lasting legacy that he fucked this one up.
838
01:20:35.605 --> 01:20:36.105
And,
839
01:20:36.804 --> 01:20:37.784
you know, look,
840
01:20:38.485 --> 01:20:38.985
it's
841
01:20:40.085 --> 01:20:48.150
it it could be something where it look, they end up realizing a mistake in a year or 2 and having to buy back in at a higher price like everybody else. So we'll we'll we'll see. But,
842
01:20:49.030 --> 01:20:54.730
we're all gonna be watching. I mean, that's the crazy part is you can just see this happen. I mean, you could just watch the hash rate drop. So,
843
01:20:55.415 --> 01:20:56.395
unlike other
844
01:20:56.855 --> 01:20:58.475
monetary systems where the,
845
01:20:59.574 --> 01:21:01.275
issues get hidden behind,
846
01:21:02.375 --> 01:21:03.515
bureaucracy and,
847
01:21:04.820 --> 01:21:06.520
semantics and euphemisms.
848
01:21:06.900 --> 01:21:13.725
Like, this one's just pretty transparent. We can kinda see what's going on. Obviously, we can't see whether or not they're perpetrating some kind of
849
01:21:14.605 --> 01:21:15.105
attack.
850
01:21:16.205 --> 01:21:20.385
But leaving aside the the kind of, let's say, fringe 3 d chess thing,
851
01:21:21.165 --> 01:21:28.829
and, again, assuming, yeah, that that they are making this mistake. It's super bullish as you as as you say for the network for network security,
852
01:21:29.369 --> 01:21:30.030
for decentralization.
853
01:21:30.409 --> 01:21:34.255
Again, this the only concern here now is is probably the US.
854
01:21:34.955 --> 01:21:43.409
And, honestly, it's funny because our own politicians may may may also prevent us from achieving that dominance, which is the crazy part.
855
01:21:44.670 --> 01:21:51.625
In the same way that the CCP should have realized, if they haven't, that that they really would benefit them or behoove them to have this control over it.
856
01:21:52.185 --> 01:21:53.085
American politicians
857
01:21:53.465 --> 01:21:58.925
should probably think about that as well. Although, I hope they don't, obviously. But, like, let's just say if you're in their shoes,
858
01:21:59.320 --> 01:22:06.220
but they're gonna shoot themselves in the foot because they're gonna they're gonna go after the mining infrastructure most likely given all the signals we've seen.
859
01:22:06.574 --> 01:22:11.795
So so we'll see. I mean, it might just be a bunch of global powers shooting themselves in the foot here.
860
01:22:12.495 --> 01:22:14.034
Well, I mean, like, if the understanding
861
01:22:16.000 --> 01:22:18.740
if if the understanding of the power of having,
862
01:22:19.120 --> 01:22:22.800
you know, a lot of large minor operations in your borders
863
01:22:23.605 --> 01:22:25.864
But when when that understanding really becomes
864
01:22:27.045 --> 01:22:28.425
prevalent or widespread,
865
01:22:30.780 --> 01:22:47.505
Ideally, most countries will not have a large enough amount of the hash to do anything with it. So it kind of ends up in, like, a a standoff situation where they're all just trying to make sure no other countries have it, which is one of the long term incentives that should keep Bitcoin secure or at least what I'm hoping would keep you know, help keep Bitcoin secure.
866
01:22:47.820 --> 01:22:50.480
Right now, we're kind of in this special situation because
867
01:22:51.340 --> 01:22:56.080
of how Bitcoin mining developed to begin with. China already had a large amount of hash.
868
01:22:56.795 --> 01:23:00.335
Right? So they're in this privileged situation, the Chinese government,
869
01:23:02.715 --> 01:23:03.455
and they
870
01:23:03.900 --> 01:23:11.200
they could really flex it if they wanted to. So so so we have people we have freaks in the in the comments saying so they're asking,
871
01:23:11.805 --> 01:23:15.825
what are we watching for? Right? Like, we try and keep this actionable actionable Bitcoin discussion.
872
01:23:16.365 --> 01:23:17.585
So first of all,
873
01:23:17.965 --> 01:23:25.950
if if they start doing and 61 to 2 made a point in here, and I thought I was clear about this, but, yeah, it's either gonna be it would either be a deep reorg to just completely,
874
01:23:27.530 --> 01:23:29.070
lose faith in the
875
01:23:29.565 --> 01:23:37.265
in in the the chain settlement and just create a lot large amount of FUD, which you you reorg a lot of blocks. You do, like, a shadow
876
01:23:37.790 --> 01:23:40.929
you do a shadow chain, and then you release them all at the same time.
877
01:23:41.230 --> 01:23:51.585
And all of a sudden, like, a bunch of exchanges are lose like, lost a shit ton of money, and you you just fuck around with everything. And you can even make those shadow blocks completely empty blocks. So the transactions never fucking happened. And
878
01:23:51.965 --> 01:24:02.940
and and so all these exchanges are just completely underwater because, you know, people traded Bitcoin for shitcoins and Fiat and all this fucking shit, and there was just, you know, a massive reorganization.
879
01:24:03.695 --> 01:24:08.275
Or you can do this constant fuck around where you're just reorging the tip over and over again.
880
01:24:09.455 --> 01:24:15.570
And that is that would be like a DDoS attack. That would be a denial of service attack. The chain would just became basically unusable,
881
01:24:17.150 --> 01:24:18.370
unless we changed,
882
01:24:19.150 --> 01:24:22.930
unless we changed our algorithm, the shot 256 algorithm,
883
01:24:23.265 --> 01:24:24.165
which is a
884
01:24:25.345 --> 01:24:29.685
basically, it's it's a nuclear weapon. It's a it's a deterrent because if we changed it,
885
01:24:30.625 --> 01:24:35.390
we'd brick all miners. So if there's good miners and bad miners, and I'm doing this in air quotes,
886
01:24:36.170 --> 01:24:41.470
we would make it so the good miners hardware also wouldn't work. So you only wanna do that as, like, a last ditch thing,
887
01:24:42.005 --> 01:24:44.585
and it's kind of just like a threat that we hold out there.
888
01:24:45.205 --> 01:24:45.705
So
889
01:24:46.325 --> 01:24:53.370
but that's what we would have to do in that situation, basically. We would have to do a we would have to brick all ASICs, and we'd have to move to another algorithm.
890
01:24:54.390 --> 01:24:54.890
Ideally
891
01:24:56.630 --> 01:24:57.530
and, you know, I've
892
01:24:58.550 --> 01:25:05.055
spent many days drinking with BitCorners talking about these different scenarios, but you'd you'd want an algorithm that was
893
01:25:05.435 --> 01:25:08.175
easy to make into ASICs and try and get back through the,
894
01:25:09.160 --> 01:25:13.020
you know, try and get back through the bootstrap period as quick as possible.
895
01:25:14.840 --> 01:25:25.165
You know, or I I even theorized, you know, sometimes that you could try you can try and if there's there's a couple other networks that already have basics, and you could basically try and steal their algo.
896
01:25:26.330 --> 01:25:27.790
But the problem is,
897
01:25:28.330 --> 01:25:32.750
you know, a lot of all this manufacturing is happening in Taiwan, which is in Chinese backdoor,
898
01:25:33.690 --> 01:25:34.190
backyard.
899
01:25:34.625 --> 01:25:38.405
And in China is where a lot of the assemblage and the shipping happens.
900
01:25:38.785 --> 01:25:49.829
Mhmm. So, you know, we don't really have if if they they they they have the leg up if they want to start manufacturing on the new whatever the new algo is. So it'll be real it would be really fucking messy.
901
01:25:50.770 --> 01:25:53.909
Let's assume that Matt is just being paranoid uncle,
902
01:25:54.324 --> 01:25:58.344
and none of this is gonna happen, and we're gonna be in the Super Bowl situation.
903
01:25:59.844 --> 01:26:04.410
In that situation, what we would wanna see is we wanna see this difficulty adjustment down,
904
01:26:05.590 --> 01:26:12.715
and then the next period, difficulty adjustment goes back up because how how long does it take to ship these things? Or, like, the next two periods,
905
01:26:13.015 --> 01:26:14.715
difficulty adjustment goes back up,
906
01:26:15.015 --> 01:26:16.155
hash rate recovers.
907
01:26:17.110 --> 01:26:20.809
And then we see self reported hash rate, which, by the way, we can't verify
908
01:26:21.829 --> 01:26:26.655
when these miners say they're mining whatever amount. Self reported hash rate in America and Kazakhstan
909
01:26:27.675 --> 01:26:31.455
and Iceland and El Salvador and all these different places that they're going,
910
01:26:32.920 --> 01:26:42.265
go up, and maybe get pictures and videos and stuff from from those miners saying, look. We actually, in fact, bought all these miners and maybe even plebs. You know? Like, I know,
911
01:26:42.885 --> 01:26:54.530
as far as I'm concerned, if if you're a freak and you're not trying to accumulate cheap miners right now, you're short Bitcoin. So, like, I you know, I'm trying to accumulate miners, and if they actually arrive at my door,
912
01:26:56.110 --> 01:27:00.885
then, like, the 3 minors or whatever I got, like, will actually be there. Right?
913
01:27:01.985 --> 01:27:05.605
So so that's kind of what we're looking for. This is gonna be,
914
01:27:06.060 --> 01:27:10.000
you know, a month long process, a month and a half long process. If we get past that
915
01:27:10.460 --> 01:27:11.679
transitory phase,
916
01:27:12.940 --> 01:27:24.660
then we end up in, like, a super bullish green pastures type of situation. But until then, I think the safe assumption that Bitcoiners should be making I'm not saying to sell your Bitcoin. What's the alternative? You know? Like, I'm I'm not selling shit.
917
01:27:25.680 --> 01:27:30.740
Is the safe assumption to be it should be just be skeptical here and be watching Mhmm. And to not,
918
01:27:31.125 --> 01:27:33.304
you know at least on the bare minimum,
919
01:27:33.925 --> 01:27:43.130
you should be waiting more confirmations before you do any kind of real settlement, when you have these big hash pulls. You should you should be waiting a longer period of time because,
920
01:27:43.590 --> 01:27:45.930
you know, the the network hash is decreasing.
921
01:27:48.245 --> 01:27:52.745
Yeah. And from what I've seen, you know, people are debating whether or not
922
01:27:53.205 --> 01:27:58.320
we'll get back to that all time high of hash rate, even by the end of this year. So I think people are expecting
923
01:27:58.940 --> 01:28:01.360
a longer than just like a month or 2,
924
01:28:01.900 --> 01:28:02.400
process,
925
01:28:02.930 --> 01:28:04.000
you know, but,
926
01:28:04.485 --> 01:28:07.705
yeah, if if, again, if there's not, like, some crazy attack happening
927
01:28:08.325 --> 01:28:25.155
in front of our eyes, then, then this is this is, this is very bullish. Yeah. And it's it's crazy to think about again that, like, the mainstream media is just again, in 20 years when we look back, this will be a massive geopolitical moment, regardless of what's happening, whether it was an attack on Bitcoin or whether they were stupid and they blundered.
928
01:28:25.534 --> 01:28:35.929
It'll be up right up there with any other event of the last 20 years, and, and yet the media of the time were clueless. I can't really think of a of a corollary. It's it's kind of interesting.
929
01:28:36.550 --> 01:28:39.130
Maybe the media were always clueless, and we just weren't,
930
01:28:39.585 --> 01:28:41.284
like, tuned in to that specific
931
01:28:41.824 --> 01:28:43.125
niche to realize.
932
01:28:44.304 --> 01:28:45.685
Yeah. Just but, like,
933
01:28:46.304 --> 01:28:54.659
you know, when big geopolitical events happen, they tend to be reported on. This one just beyond their I mean, it's just it's just beyond their understanding.
934
01:28:54.960 --> 01:29:04.555
Like, they just they haven't really wrapped their mind around it. Like, they don't even know that Bitcoin mining is a thing except that it's they think it's bad for the environment. They don't understand the political aspect of it at all.
935
01:29:05.220 --> 01:29:12.520
It's it's it's kind of crazy, but it's all changing right in front of our eyes. So, yeah, exciting exciting to be here to break down the
936
01:29:12.975 --> 01:29:18.435
the arrival of the geopolitical era in Bitcoin. It's good to know. I mean, I think that's a good way of putting it. No matter what,
937
01:29:20.010 --> 01:29:24.510
I mean, look. This is super exciting shit. Like, to me, this is very exciting. I think,
938
01:29:25.210 --> 01:29:27.390
it is gonna, you know, have massive geopolitical
939
01:29:27.770 --> 01:29:28.270
ramifications
940
01:29:28.730 --> 01:29:29.230
for,
941
01:29:29.555 --> 01:29:31.415
you know, maybe the next century even,
942
01:29:32.675 --> 01:29:34.055
maybe longer. But,
943
01:29:35.475 --> 01:29:38.295
yeah, I just, it's it's just it's just funny.
944
01:29:38.890 --> 01:29:42.430
So so one thing that I did want to mention that I meant to mention earlier,
945
01:29:42.890 --> 01:29:47.710
so I apologize at this point, freaks. Like, we we were we did kinda go deep into the conversation,
946
01:29:48.485 --> 01:29:51.784
is that Bitcoin does have this difficulty adjustment, which is this idea
947
01:29:52.324 --> 01:29:54.344
that when Hash leaves the network,
948
01:29:55.820 --> 01:29:56.320
after
949
01:29:57.180 --> 01:29:59.600
a target of 2 weeks, but it's 2016
950
01:30:00.060 --> 01:30:04.985
blocks. So when Hash leaves, it takes longer than 2 weeks. When Hash gets added, it's shorter than 2 weeks.
951
01:30:06.505 --> 01:30:09.324
The difficulty of how hard it is to mine Bitcoin
952
01:30:09.625 --> 01:30:10.125
changes,
953
01:30:11.065 --> 01:30:23.320
based on, you know, how much hardware was mining it, how powerful the hardware was mining it beforehand. And that's what the this difficulty adjustment we talked about, and that's what makes sure that, you know, Bitcoin remains robust even if,
954
01:30:23.835 --> 01:30:26.655
you know, you have Hash leaving and adding to the network.
955
01:30:27.115 --> 01:30:29.295
So you can't just have, you know, someone just
956
01:30:29.755 --> 01:30:38.480
load up the network with a shit ton of power and just take over the network. Right? Because the difficulty will will adjust and take all the Bitcoin. You know, take all the advanced Bitcoin.
957
01:30:38.955 --> 01:30:41.775
And that's what we call that's what we call the difficulty adjustment.
958
01:30:42.554 --> 01:30:52.240
So there you go for that, freaks. It's a very powerful tool. And, also, one thing to mention is people say, like, why is the difficulty adjustment 2016 blocks instead of, like,
959
01:30:52.780 --> 01:30:56.320
a 100 blocks? A lot of shit coins like to lower their difficulty adjustment,
960
01:30:57.335 --> 01:31:03.915
is because if you have a smaller difficulty adjustment, it allows larger miners to play bigger games. So, like, we're talking about here,
961
01:31:05.580 --> 01:31:19.355
with this scenario, like, if this was a state sponsored attack, really, at this point in Bitcoin's history, only a state can pull off this kind of attack, a state like China that has a massive incentive to do it. Because what you're doing is you're basically forfeiting all this revenue
962
01:31:19.815 --> 01:31:28.340
for this long period of time. And in this case, it's really it's not just this difficulty period. You know, we've had multiple negative difficulty periods over the last,
963
01:31:29.155 --> 01:31:33.895
6 weeks, 7 weeks, so you're forfeiting a shit you're forfeiting 1,000,000 of dollars of revenue,
964
01:31:35.235 --> 01:31:41.690
under probably 100 of 1,000,000 of dollars of revenue if you wanna pull off this kind of attack, and that's a natural defense mechanism.
965
01:31:42.150 --> 01:31:42.890
It's just
966
01:31:43.510 --> 01:31:51.034
it's not a perfect mechanism, especially if you're, you know, one of the most powerful countries in the world and you're trying to institute your global surveillance coin
967
01:31:52.614 --> 01:31:54.235
and global surveillance money.
968
01:31:55.090 --> 01:31:56.070
Yeah. And generally,
969
01:31:56.850 --> 01:32:00.230
you know, assuming, again, this is not some, like, fringe attack,
970
01:32:01.090 --> 01:32:02.230
3 d chess thing.
971
01:32:02.565 --> 01:32:07.945
It's funny because the Chinese government is probably seeing this as a crackdown. They're like, we gotta crackdown on this thing
972
01:32:08.324 --> 01:32:12.370
and, that's gonna hurt them pretty badly in the end. So,
973
01:32:13.230 --> 01:32:14.190
it's kind of like this,
974
01:32:14.830 --> 01:32:23.675
Bitcoin's like this thing that if you fight it, it it will cost you over time, you know. You see that at every level. You know what it is, Alex? The weird thing to me is
975
01:32:25.095 --> 01:32:27.915
is, like, the Chinese government aren't idiots. If anything,
976
01:32:29.090 --> 01:32:35.670
they've proven themselves over the last decade to be very adept at controlling their populace and geopolitical maneuvers.
977
01:32:36.205 --> 01:32:40.145
They're very effective. I think they made the fools of the US in many ways
978
01:32:40.685 --> 01:32:41.185
repeatedly,
979
01:32:43.300 --> 01:32:43.800
and
980
01:32:44.900 --> 01:32:46.980
I I don't they don't even need to do, like,
981
01:32:48.740 --> 01:32:51.800
you know, they don't even need to do this attack that we just discussed.
982
01:32:52.345 --> 01:32:56.525
They could just seize the miners and not, you know, not let the hardware leave the country.
983
01:32:57.305 --> 01:32:59.900
Right? Like, they they're like, this idea that
984
01:33:00.620 --> 01:33:08.719
that it's it's it's not a weird move that they're just like, oh, you can just leave the country with your hardware and sell it and just keep that money for your family
985
01:33:09.525 --> 01:33:15.864
or, you know, move your operation is just really to me, it just rings a bunch of alarm bells. To me, it just seems illogical.
986
01:33:16.300 --> 01:33:19.680
I I I agree. I would say though that just just the
987
01:33:20.380 --> 01:33:22.080
the depth to which the knowledge,
988
01:33:22.940 --> 01:33:23.440
photographs,
989
01:33:24.364 --> 01:33:26.784
data, video footage, whatever has penetrated,
990
01:33:27.965 --> 01:33:31.585
the space. This would have to be so well pulled off. And I I don't know,
991
01:33:32.489 --> 01:33:36.750
like, the Chinese government's good at, like, doing stuff with force, but they're not particularly
992
01:33:37.369 --> 01:33:38.349
good at,
993
01:33:39.929 --> 01:33:42.804
hiding stuff. Like, you know, I mean,
994
01:33:43.425 --> 01:34:06.725
like, we all know about what's happening in Xinjiang and, you know, whatever you however you feel about, like, the legacy of of the coronavirus. Like, obviously, they they tried to hide that and that didn't like, obviously, we figured that out pretty fast. So I don't know. It would be so hard to, like, manufacture all this, like, kind of fake news and manipulate, like, trusted people in the community. I mean, they they just did that with they literally just did that with COVID, though.
995
01:34:07.620 --> 01:34:09.960
No. But the no. But then we found out that
996
01:34:10.340 --> 01:34:15.720
it it existed. What I was pointing to is that when they tried to hide it and then, like, the world found out about it.
997
01:34:16.695 --> 01:34:22.955
So, like, with this, it's different. Right? It's like they would have had to manipulate all these people in the Bitcoin community,
998
01:34:23.495 --> 01:34:28.280
to convince them to say certain things and publish certain media. It it would be a very impressive,
999
01:34:29.380 --> 01:34:34.600
like, con. That's all I'm saying. I mean, but they convinced the western world with multimedia basically
1000
01:34:34.980 --> 01:34:36.265
to completely
1001
01:34:36.885 --> 01:34:44.265
lock down their economies globally, something that we never expected ever, and they started the whole movement and then just kinda made it happen.
1002
01:34:45.750 --> 01:34:46.730
Yeah. That's true.
1003
01:34:47.510 --> 01:34:52.784
I think it's like If you ask me if you ask me in February of last year if if the western governments
1004
01:34:53.565 --> 01:34:55.264
would lock down their whole economies,
1005
01:34:56.605 --> 01:35:05.420
what China was doing in in Wuhan. Right? Well, at less less so than what they were doing in Wuhan. They were, like, welding people in and shit according to the videos we saw.
1006
01:35:06.360 --> 01:35:13.965
I would have said you were fucking crazy. Right? And then meanwhile, you have, like, our boy Stefan is, like, trying to escape Australia right now. This is the aftermath.
1007
01:35:15.705 --> 01:35:18.000
He can't get out. No. No. I mean,
1008
01:35:18.400 --> 01:35:22.180
fair. Fair. I think it's a little a little different in as much as like,
1009
01:35:22.560 --> 01:35:26.574
they got a lot of if this is a con, they got a lot of people to bite. Yeah.
1010
01:35:27.114 --> 01:35:28.014
So we'll see.
1011
01:35:28.395 --> 01:35:31.454
I think it's I agree. We have to be very skeptical both of
1012
01:35:32.235 --> 01:35:50.485
on both ends here. Both of the what's happening in El Salvador. Yeah. Like, let's be skeptical and let's also be skeptical what's happening in China. But regardless, it's a massive geopolitical moment. You know, we don't know which one will be more, have a bigger legacy in 10 years. Both will be huge, and it's crazy that they happen sort of simultaneously, kind of completely unrelated to one another.
1013
01:35:51.025 --> 01:35:54.710
But that's just kinda how Bitcoin works, man. So, hopefully,
1014
01:35:55.330 --> 01:35:59.429
the rosy side, if we're looking looking through the rose tinted glasses, we've got,
1015
01:36:00.050 --> 01:36:03.110
nation state adoption of Bitcoin legal tender on the one hand,
1016
01:36:03.715 --> 01:36:06.775
with a leader who's actually gonna allow citizens to use,
1017
01:36:07.715 --> 01:36:13.880
the official app in a way where they can pay external lightning invoices and receive from anywhere. And on the other hand, you have potentially,
1018
01:36:14.980 --> 01:36:16.840
the sort of effective decentralization
1019
01:36:17.540 --> 01:36:22.645
potentially permanently of the Bitcoin mining infrastructure. So it could be a pretty big week in Bitcoin history
1020
01:36:23.425 --> 01:36:27.765
if if all turns out well. Yeah. I mean, even if even if China attacks Bitcoin,
1021
01:36:28.980 --> 01:36:33.719
they only can do it this one time. Right. So it it'll be messy. It would be chaos,
1022
01:36:34.340 --> 01:36:38.495
but, it'll be nice to kind of put behind us the,
1023
01:36:38.795 --> 01:36:42.735
you know, the specter of China as a as an attack vector.
1024
01:36:43.115 --> 01:36:44.260
We we do have,
1025
01:36:44.659 --> 01:36:52.340
one freak mentioning, like, if they put backdoors in the ASICs before shipping them out. Mhmm. Decent enough theory. You know, I did the Bitmain had,
1026
01:36:54.425 --> 01:36:57.885
Bitmain had both covert ASIC boost where they had a
1027
01:36:58.264 --> 01:37:02.284
special firmware version for themselves or enabling firmware
1028
01:37:02.630 --> 01:37:16.035
for themselves that allow them to mine better than their customers. Mhmm. They also had a kill switch that was discovered at one point. They never used it, but they had a remote kill switch that if you were running, like, an an s I don't think s nine. I think it was earlier than that. Like, if you're running an s 5 or an s 3,
1029
01:37:16.655 --> 01:37:17.715
they could just remotely
1030
01:37:18.015 --> 01:37:21.850
knock it off through the Internet, but they never used it. So, yes, that's possible.
1031
01:37:22.630 --> 01:37:27.610
It's just another thing that you should consider. I mean, this is one of the reasons why why Marty,
1032
01:37:28.150 --> 01:37:34.665
and I a 100% agree with him here, is is saying that it's a it's a it's a national security issue for all all countries
1033
01:37:35.045 --> 01:37:38.985
to have domestic manufacturing across the board, like, everything we use,
1034
01:37:39.449 --> 01:37:43.630
all of our computers, all our phones, you know, they're all fucking built over there.
1035
01:37:44.330 --> 01:37:47.389
We we need to build our own stuff. If if you wanna say that,
1036
01:37:48.025 --> 01:37:50.445
there's backdoors in ASICs, okay, there could be.
1037
01:37:50.985 --> 01:37:54.284
But there could be backdoors in your phones too or your computers or
1038
01:37:54.620 --> 01:37:57.440
the fucking control systems on Boeing's or whatever.
1039
01:37:58.140 --> 01:37:59.920
So that's just a whole another conversation.
1040
01:38:00.540 --> 01:38:05.574
So I wanted to keep this kind of tight. I think we've had a really great conversation so far. But before we leave,
1041
01:38:05.875 --> 01:38:07.335
I kinda wanted to discuss,
1042
01:38:08.755 --> 01:38:14.170
while I have you, I mean, this is kind of your bread and butter, like, the implications of something like
1043
01:38:14.550 --> 01:38:20.305
a a WeChat being very successful in Africa. Right? Because we already see it being extremely successful
1044
01:38:20.685 --> 01:38:21.585
in China.
1045
01:38:22.285 --> 01:38:27.185
And before all these COVID restrictions happened when I was traveling abroad and stuff, I saw it in Europe
1046
01:38:27.520 --> 01:38:46.860
in different like, you'd be in Italy or something, and you'd go into a store, and they'd have the we the WePay QR code there because they knew the Chinese tourists were rich, and they were coming in, and they wanted to pay with it. What are you looking at there in terms of concerns of of the the spread of that and and what that means for the average person that kind of gets forced into using it.
1047
01:38:47.960 --> 01:38:48.860
Yeah. So
1048
01:38:49.320 --> 01:38:51.900
I think there's infrastructure and then there's, like, personal
1049
01:38:52.280 --> 01:38:56.155
electronics. And on the infrastructure piece, the Chinese government is,
1050
01:38:57.655 --> 01:38:59.870
very advanced in terms of both, like,
1051
01:39:00.510 --> 01:39:04.290
resource extraction from Africa and also setting up,
1052
01:39:05.790 --> 01:39:07.810
investments, making cheap loans,
1053
01:39:08.270 --> 01:39:11.905
basically, like shackling these kind of these governments to them.
1054
01:39:12.605 --> 01:39:15.825
They've been very adept at that. There's a recent piece that's really stunning
1055
01:39:16.205 --> 01:39:17.505
that I'd recommend reading,
1056
01:39:18.420 --> 01:39:19.400
in the New Yorker,
1057
01:39:19.860 --> 01:39:20.360
about
1058
01:39:21.460 --> 01:39:23.560
rare earth mineral mining in the Congo.
1059
01:39:24.580 --> 01:39:26.920
I'll just give you guys the the title here.
1060
01:39:27.575 --> 01:39:30.715
It's called the dark side of Congo's cobalt rush.
1061
01:39:31.815 --> 01:39:36.635
And it basically you know, this reporter is there for a while interviewing all kinds of people and
1062
01:39:37.130 --> 01:39:41.630
the Chinese have basically taken over. It's like the the they they come in, they take,
1063
01:39:42.090 --> 01:39:48.525
control over the territory and they have all the mines and that they they they have this, like, dominance over rare earth minerals.
1064
01:39:48.985 --> 01:39:54.045
So at that level, they've been quite effective. But on the sort of, like, personal electronics monetary level,
1065
01:39:54.860 --> 01:39:55.840
not very effective,
1066
01:39:56.220 --> 01:39:56.720
yet.
1067
01:39:57.340 --> 01:40:04.425
I know some even Bitcoiners in Africa are concerned because a lot of the phones are actually made by China, the phones that people use. So, for example,
1068
01:40:04.725 --> 01:40:09.065
Ethiopia is undergoing this massive thing where, like, over the next 5 to 10 years,
1069
01:40:10.245 --> 01:40:13.440
something like 60% of their population is gonna,
1070
01:40:13.740 --> 01:40:19.200
adopt a phone for the first time and they're worried that, like, maybe the majority of those phones will be made by China,
1071
01:40:19.895 --> 01:40:21.435
maybe even the absolute majority,
1072
01:40:22.055 --> 01:40:25.115
or almost all of them. So there is a concern about the hardware,
1073
01:40:25.895 --> 01:40:27.515
but as far as the money piece,
1074
01:40:28.340 --> 01:40:30.920
not not happening yet. Like, the yuan is, like,
1075
01:40:31.539 --> 01:40:32.039
2%.
1076
01:40:32.340 --> 01:40:34.360
It accounts for, like, 2% of,
1077
01:40:35.515 --> 01:40:38.094
kind of reserve you know, national reserves,
1078
01:40:38.795 --> 01:40:41.054
trade, things like that, anywhere from 2 to 3%
1079
01:40:41.435 --> 01:40:44.094
at the moment. Whereas, the euro is at, like,
1080
01:40:46.219 --> 01:40:51.199
10% or somewhere between 10 15%, and the US is at, like, 60%,
1081
01:40:51.900 --> 01:40:54.495
or something like that. So their
1082
01:40:54.795 --> 01:40:55.775
ability to penetrate,
1083
01:40:56.235 --> 01:40:57.695
with the digital yuan,
1084
01:40:58.635 --> 01:41:02.895
forget the, like, DSEP or blockchain part of it or whatever, but just the just the yuan generally,
1085
01:41:04.349 --> 01:41:06.429
it's just not been very effective so far.
1086
01:41:06.750 --> 01:41:09.170
And you just have to just look around. Like, no one's
1087
01:41:09.630 --> 01:41:12.610
it it's it's it's not that dominant in
1088
01:41:13.615 --> 01:41:16.515
in in major African, like, capitals yet.
1089
01:41:17.295 --> 01:41:18.195
So we'll see.
1090
01:41:18.735 --> 01:41:20.355
A lot of it is kind of a mess,
1091
01:41:22.250 --> 01:41:25.150
but, it's certainly something to to keep an eye out on.
1092
01:41:26.250 --> 01:41:31.150
But this makes the Bitcoin project so important, you know, because even if it was being more successful,
1093
01:41:31.455 --> 01:41:33.955
we'd at least have, like, this, like, alternative option.
1094
01:41:34.815 --> 01:41:37.955
The rollout in China has been super effective, though. Right?
1095
01:41:38.655 --> 01:41:43.780
Yeah. Social credit just and stuff? Well, I mean, so some of that's also been a little overblown,
1096
01:41:44.480 --> 01:41:54.615
but let's just put it this way. The Chinese government digitized society in a breathtaking fashion, like, in 10 years basically. Like, people went from, like, very little digital anything to, like, digital everything.
1097
01:41:55.075 --> 01:41:56.375
So that was very effective.
1098
01:41:57.580 --> 01:42:00.960
You know, as far as the social credit system, there is not like one credit score.
1099
01:42:01.580 --> 01:42:06.605
There are many different systems in many different parts of China defined designed by both municipal and
1100
01:42:07.565 --> 01:42:08.864
corporate kind of entities.
1101
01:42:09.645 --> 01:42:15.505
The general goal, I think, by the end of this year is that, like, the Chinese government wants everybody on, like, one kind of system.
1102
01:42:16.210 --> 01:42:22.470
But as as some people have said, it's more like Kafkaesque than Orwellian right now. A lot of it is like broken, doesn't work, isn't it's not interoperable.
1103
01:42:23.215 --> 01:42:30.355
So it's it's, they're having a bear of a time with that. As far as the DCP, like, this kind of, like, central bank digital currency,
1104
01:42:31.430 --> 01:42:34.730
that's being rolled out pretty aggressively in different pockets of China.
1105
01:42:36.230 --> 01:42:48.515
But it kind of remains to be seen how much more control that even gives the government because they're working with the corporate banks because they don't wanna freak the corporate banks out. So they basically cut a deal with the corporate banks so that, like, the corporate banks help distribute the the DCP.
1106
01:42:49.880 --> 01:42:50.380
So
1107
01:42:50.840 --> 01:42:52.060
so so we'll see.
1108
01:42:53.320 --> 01:42:57.100
I mean, again, let's be let's keep keep our eyes open here.
1109
01:42:58.005 --> 01:43:00.985
But I would I would I would be a little careful at at
1110
01:43:02.565 --> 01:43:05.545
assuming that they're gonna be able to pull everything they wanna pull off,
1111
01:43:06.660 --> 01:43:14.905
And maybe that that that aligns more with the scenario here that that this was a huge strategic blunder to to kick out the miners
1112
01:43:15.285 --> 01:43:18.505
in China, assuming, you know, that they're not planning some devious attack.
1113
01:43:19.125 --> 01:43:30.250
That that may be in line with with some of the mistakes they've made recently as well. Yeah. I mean, I would love that. I mean, I I think it's it's execution is way different than try. Right? But I feel like they're definitely gonna try to make it
1114
01:43:31.965 --> 01:43:56.844
that that's their goal. Right? That's the end goal is to try Yeah. Yeah. Yeah. They want they they wanna challenge the dollar the ultimate goal is the money, and they want the the the DCP to be, like, the native currency in all these developing countries. It's just there hasn't been a lot of free market acceptance of that. Like, the free market does not value the yuan very much. Like, again, like, only 2% of all reserves globally are in you know, when a country goes to to make its savings portfolio,
1115
01:43:57.290 --> 01:44:10.825
they're choosing dollars and euros and maybe some Swiss francs and Australian dollars, and they're choosing gold. And they're not choosing digital they're not choosing the yuan. So so we'll see. I mean, look, if that number gets starts creeping up to 8, 10%, okay, then
1116
01:44:11.205 --> 01:44:14.930
then then then we have a discussion here. But, like, it's of my view that it's
1117
01:44:15.410 --> 01:44:39.300
far more likely that Bitcoin starts to actually become a bigger chunk of international reserves and settlements over the next decade. But So we won't have, like, American children spending digital yuan through TikTok in 5 years? Or Yeah. It seems unlikely. I think they're more likely to spend Bitcoin, but but, we could we could we could still fuck it up. We'll see. I feel like TikTok is, like, a good cautionary tale. Right? Like, they that's, like, a major surveillance operation.
1118
01:44:39.715 --> 01:44:45.014
Crazy. I'm sure a lot of freaks are watching the Europe Cup, and if you look at the advertisers, it's, like, all Chinese companies.
1119
01:44:45.875 --> 01:44:46.650
They they, like,
1120
01:44:47.370 --> 01:44:56.110
they're totally culturally dominant. Yeah. I saw multiple TikTok, sponsorships. I mean, I I assume the ones watching aren't here for the livestream because,
1121
01:44:56.534 --> 01:44:57.034
unfortunately,
1122
01:44:57.815 --> 01:45:02.315
the Ukraine game went into, extra time, and we started while it was an extra time.
1123
01:45:03.175 --> 01:45:05.840
But it was good to see, Ukraine pull that off.
1124
01:45:07.040 --> 01:45:11.300
Yeah. I mean, TikTok advertisements are all over that shit. I saw AntChain advertisements.
1125
01:45:11.920 --> 01:45:14.980
You know, China's all over that. Mhmm. Yep.
1126
01:45:15.655 --> 01:45:18.635
Before I leave you, before we leave the freaks,
1127
01:45:20.855 --> 01:45:22.555
and before actually, before I forget,
1128
01:45:22.949 --> 01:45:28.250
looking forward to participating in the B Word event with you and the Oslo Freedom Forum with you.
1129
01:45:28.630 --> 01:45:30.275
I'm very excited about that.
1130
01:45:31.554 --> 01:45:32.034
But,
1131
01:45:32.675 --> 01:45:35.255
the the topic of the day was Worldcoin.
1132
01:45:37.235 --> 01:45:38.614
This almost Orwellian
1133
01:45:40.080 --> 01:45:41.380
concept shitcoin
1134
01:45:41.760 --> 01:45:47.700
that, Sam Altman of Y Combinator came up with that requires everyone to scan their
1135
01:45:48.125 --> 01:45:49.585
irises, their eyes,
1136
01:45:50.285 --> 01:45:53.425
to receive an airdrop, basically, an eye based
1137
01:45:53.885 --> 01:45:55.585
KYC airdrop mechanism,
1138
01:45:56.540 --> 01:46:02.160
to have a global currency that competes with Bitcoin. Do you have any thoughts for the freaks on that?
1139
01:46:02.940 --> 01:46:04.160
Well, yeah. I mean,
1140
01:46:05.180 --> 01:46:13.775
just it's just kind of the just the ego required from this guy to to name his project Worldcoin and to to claim that it's gonna help everybody in the world and
1141
01:46:14.635 --> 01:46:15.135
to
1142
01:46:15.480 --> 01:46:19.020
go so far down the rabbit hole on this to to raise
1143
01:46:19.560 --> 01:46:29.875
$25,000,000 from famous people. I mean, I just would love to be a fly in the wall in his investment pitch to these people. And they've got, like, what, a model of this, like, orb or whatever, like, how fucking ridiculous is this?
1144
01:46:30.895 --> 01:46:48.844
No. But it's, like, it's just a shame because this money should be if this if these people were effective altruists like they claim to be, they would be figuring out how to help educate people and how to improve Bitcoin user to e UX and and and the the network itself. Like, that's what they'd be doing if they really cared about economic independence and,
1145
01:46:49.385 --> 01:46:51.485
increasing, you know, living standards abroad,
1146
01:46:51.960 --> 01:47:06.525
or even in American communities that are that are like under banked, like, and and more vulnerable. Like, they would be just working on Bitcoin. Instead, they let their ego go to them and they make their own stuff. And it's all gonna be a huge freaking waste because no one is gonna use this thing. So it's if anything, it's just sad.
1147
01:47:06.905 --> 01:47:10.445
But it is crazy, yeah, to see like, a quote unquote, like, very prominent
1148
01:47:10.770 --> 01:47:11.670
Silicon Valley icon
1149
01:47:12.370 --> 01:47:14.070
pushing a surveillance
1150
01:47:14.850 --> 01:47:15.350
cryptocurrency.
1151
01:47:17.489 --> 01:47:37.895
You know, that's supposed to be a UBI for the world. Like, this idea that you'd you'd help people by, like, sucking up their personal data is exactly what Satoshi was trying to get away from if you if you read that if you read the white paper carefully on that piece, like like, you know, we're just trying to get away from centralized control and the ability for us to feel to interact financially without
1152
01:47:38.355 --> 01:47:43.735
having to disclose our whole ID stack is the key. And it's just funny that this guy's going in the total opposite direction.
1153
01:47:44.110 --> 01:47:46.929
So just remarkable remarkable to see.
1154
01:47:47.230 --> 01:47:48.989
Yeah. I mean, I I I know,
1155
01:47:50.510 --> 01:47:54.335
I mean, I would I would first start with that. You know, I I do think
1156
01:47:54.715 --> 01:47:58.255
that him and his investors legitimately do not understand Bitcoin.
1157
01:47:58.795 --> 01:48:02.015
I think this is kind of proof of that. So it is bullish in the effect,
1158
01:48:02.930 --> 01:48:05.670
that, we're front running them. They haven't really
1159
01:48:06.130 --> 01:48:10.070
invested the amount of money that they should have into putting it into Bitcoin.
1160
01:48:10.705 --> 01:48:12.965
So it's nice that we're ahead of them on that.
1161
01:48:13.985 --> 01:48:14.805
I am
1162
01:48:15.665 --> 01:48:21.220
unfortunately expecting that we're gonna have more of these Orwellian schemes before people basically learn their lesson.
1163
01:48:22.320 --> 01:48:29.795
I think an important takeaway for the freaks is that this is why proof of work exists in the first place, distributed proof of work with this difficulty adjustment mechanism.
1164
01:48:30.255 --> 01:48:32.115
It's a trust minimized way
1165
01:48:32.655 --> 01:48:36.275
of distributing the supply based on how much work you actually do,
1166
01:48:36.880 --> 01:48:39.460
and all of these airdrop to the world schemes.
1167
01:48:40.079 --> 01:48:46.885
I retweeted a tweet that I did in, like, 2018. Like, people have been talking about this shit forever. They always require a a trusted third party
1168
01:48:47.505 --> 01:48:48.325
who determines
1169
01:48:48.865 --> 01:48:50.645
whether or not you've gotten your
1170
01:48:51.105 --> 01:48:52.805
share of the airdrop yet,
1171
01:48:53.570 --> 01:48:54.070
versus,
1172
01:48:55.570 --> 01:48:59.590
you know, scamming it or or fraudulent. And and and we've seen,
1173
01:49:00.744 --> 01:49:04.764
half assed attempts at this with Stellar, for instance, and Stellar did it through Keybase,
1174
01:49:05.385 --> 01:49:08.460
and they basically didn't have KYC. So what was happening was,
1175
01:49:08.940 --> 01:49:17.920
scammers were just making tons of Keybase accounts and collecting the airdrop and then selling it for hard money. They're selling it for Bitcoin, and then they were probably a lot of them were probably going into US dollars afterwards,
1176
01:49:18.465 --> 01:49:21.445
and Keybase had to put a kibosh on it. They, like, added,
1177
01:49:21.905 --> 01:49:25.525
like, a kind of a KYC element. So all of these elements will always require
1178
01:49:26.130 --> 01:49:27.350
some kind of KYC.
1179
01:49:27.650 --> 01:49:35.510
In this case, you know, whether that's a national ID or DNA or something, in this case, they're relying on eye scans because a lot of these countries don't have,
1180
01:49:37.635 --> 01:49:41.335
you know, they don't have very effective ID mechanisms. So it's it's like the,
1181
01:49:41.795 --> 01:49:45.550
you know, the the advanced KYC. It's like the next level of KYC.
1182
01:49:46.890 --> 01:49:55.775
So yeah. I mean, this this scheme will fail. It is a money grab. They do have a pre mine with investors. That's where the investors expect to make money off of this. That's why they invested.
1183
01:49:57.514 --> 01:50:02.130
And it is just straight Orwellian that you're, like, holding a carrot out
1184
01:50:02.770 --> 01:50:30.315
and you're, like, do your eye scan. Well, I was I was doing an interview earlier today, I think, with, like, Fox or something. They wanted to talk to me about it, and I I almost I basically told them I I wasn't sure if it was real. Like, this could just be a stunt to, like, create some sort of publicity. It's, like, that ridiculous. I mean, it's that absurd. I don't think so, dude. I think You know, I I agree with you. I don't think it's a stunt but it it really sounds like one. Like, if you were to do a stunt, this would be a good stunt. That's how absurd it is and how impossible it is to tell apart,
1185
01:50:31.335 --> 01:50:37.030
yeah, like fiction. It almost reads like an April fools joke. Exactly. Yeah. And that's why in
1186
01:50:37.410 --> 01:50:58.310
the Altcoin space, it's, like, impossible to tell the difference between, like, who's serious and and and who's literally just copy and pasting a joke. Like, it's But there's serious money of so called experts in the in the wider Bitcoin space, the cryptocurrency space that believe that proof of work is a problem that needs to be solved, and they're all in the same camp as this Worldcoin shit. Like, all the proof of stakers and stuff, every
1187
01:50:59.264 --> 01:51:05.205
everyone who thinks proof of stake is the way, anyone who supported the ICO model, stuff like that, like, they're all
1188
01:51:05.585 --> 01:51:11.110
against this idea of this distributed proof of work, this, you know, this trust minimized way of of distributing,
1189
01:51:13.010 --> 01:51:18.230
distributing wealth based on how much work you put in, verifiable work, work that anyone can verify themselves
1190
01:51:18.675 --> 01:51:22.615
that actually work took place without any kind of KYC or anything like that. Right?
1191
01:51:23.315 --> 01:51:24.115
So there's definitely,
1192
01:51:24.515 --> 01:51:25.450
there's definitely a
1193
01:51:26.810 --> 01:51:28.570
a a non understanding, I think, and,
1194
01:51:29.130 --> 01:51:31.210
that's our advantage freaks. That's our,
1195
01:51:32.090 --> 01:51:34.030
this is this is our alpha. We,
1196
01:51:34.864 --> 01:51:37.125
it it might seem clear to us and
1197
01:51:37.744 --> 01:51:40.005
but the majority of the world is just completely
1198
01:51:42.040 --> 01:51:49.500
have they have no idea what's going on. Bitcoin is the real world coin. So just, you know Bitcoin is the real world. Focus on the signal here.
1199
01:51:50.735 --> 01:51:55.475
Alex, this was great. I always enjoy having you on. I always enjoy talking to you.
1200
01:51:56.735 --> 01:51:59.635
I wanna remind the freaks that they can go support,
1201
01:52:00.480 --> 01:52:00.980
hrf@hrf.com?org.
1202
01:52:01.960 --> 01:52:02.460
Do
1203
01:52:03.440 --> 01:52:11.025
you have do you have dotcom too? I don't think we have dotcom. It was pricey back way back when when we got the dotorg. I mean, hrf.org
1204
01:52:11.405 --> 01:52:16.630
is great. Yeah. Hrf.org is good, and we have the Twitter handles. That's good too. And we have hf.org/devfund,
1205
01:52:17.650 --> 01:52:19.030
and that's where you can learn about
1206
01:52:19.330 --> 01:52:20.630
all the dev fund stuff
1207
01:52:21.865 --> 01:52:23.485
we have coming later this year,
1208
01:52:24.185 --> 01:52:28.125
for sure in in the debt fund space. So that'll be good to to track. Awesome.
1209
01:52:29.679 --> 01:52:33.139
Do you have any final thoughts for the Freak's before we, close this up?
1210
01:52:36.055 --> 01:52:45.710
No. Just in general, thank you. We'll be pumping out more content. I have my next piece coming out on 4th July about, Bitcoin and the American idea. So that's gonna be fun.
1211
01:52:46.830 --> 01:52:47.489
And then,
1212
01:52:48.350 --> 01:52:51.170
you know, enjoy that on your 4th July. And,
1213
01:52:52.430 --> 01:52:59.265
yeah. If you are interested in joining us in person to meet some activists and help some people understand Bitcoin, you should go to oslo freedomform.com
1214
01:52:59.725 --> 01:53:01.585
and and and just apply.
1215
01:53:02.290 --> 01:53:10.870
And, if you note that you're in this Bitcoin community, we'll we'll get you in and, you'll get to see what's happening there in Miami. It's gonna be pretty fun.
1216
01:53:11.345 --> 01:53:26.520
So that'll be in October. But thanks for, thanks for tuning in, folks, and we'll see you soon. Awesome. Thank you, Alex. Thank you for joining us. Thank you, Freaks, especially the ride or die that are here in the live chat. Big shout out to all the Freaks that support the show and keep it ad free, whether that's in our Sphinx tribe,
1217
01:53:27.974 --> 01:53:31.355
streaming stats, the Breeze, and other podcast 2 point o apps,
1218
01:53:32.135 --> 01:53:33.755
using the tipping dot me,
1219
01:53:34.370 --> 01:53:37.270
or the ln URL that's here. All those links are at dispatch.com.
1220
01:53:37.810 --> 01:53:43.270
I'm aware that it is down right now. I do not know why. It happened right before we started
1221
01:53:43.575 --> 01:53:46.555
broadcasting, so I will get on top of that as soon as we finish.
1222
01:53:47.495 --> 01:53:50.955
And I'll see you on Thursday for rabbit hole recap. Cheers.
1223
01:53:52.110 --> 01:53:53.010
Thanks, Alex.
1224
01:53:53.550 --> 01:53:54.289
See you.
1225
01:54:08.225 --> 01:54:11.580
Had a man wearing a t shirt said, Virginia's
1226
01:54:12.360 --> 01:54:13.020
for lovers
1227
01:54:13.400 --> 01:54:23.675
had a bible, and his left hand had a bottle in the other. He said all you're really giving is the sunshine in your name.
1228
01:54:24.270 --> 01:54:29.650
We both started laughing when the sky started to rain. Get along
1229
01:54:30.030 --> 01:54:33.015
down the road. We got a long way
1230
01:55:09.575 --> 01:55:10.075
lonely?
1231
01:55:11.015 --> 01:55:12.795
Did she leave her hometown
1232
01:55:13.095 --> 01:55:15.435
thinking she'd end up in LA?
1233
01:55:15.975 --> 01:55:26.989
Did she break down in the desert and get stuck beside the highway? Get along, long down the road. We got a long, long way to go. Scared to live,
1234
01:55:27.290 --> 01:55:28.995
scared to die. We ain't
1235
01:55:46.785 --> 01:55:47.605
get along?
1236
01:56:08.225 --> 01:56:12.485
Find out when you die, the keys to heaven can't be bought.
1237
01:56:13.105 --> 01:56:19.960
We still don't know what love is, but we sure know what it's not. Sometimes you got to get along
1238
01:56:20.340 --> 01:56:23.265
down the road. We got a long, long way
1239
01:57:21.800 --> 01:57:26.300
Love you, freaks. Missed you last week. I'll see you in 2 days. Stay humble and stack.
NOTE
Transcription provided by Podhome.fm
Created: 3/17/2024 8:10:36 PM
Duration: 7048.882
Channels: 1
1
00:02:23.260 --> 00:02:24.960
2
00:02:25.305 --> 00:02:27.805
It's your boy, Matt Odell, here for another
3
00:02:28.345 --> 00:02:29.805
diss Citadel Dispatch.
4
00:02:30.745 --> 00:02:32.365
I missed you guys last week,
5
00:02:32.849 --> 00:02:33.989
while I was on vacation.
6
00:02:34.370 --> 00:02:37.670
Shout out to the ride or die freaks who took it upon themselves
7
00:02:38.610 --> 00:02:41.650
to run a Citadel Dispatch, run a Bitcoin Tuesday unsanctioned,
8
00:02:43.045 --> 00:02:44.185
through Twitter Spaces.
9
00:02:44.805 --> 00:02:49.225
I know the audio quality on the podcast feed was a little bit under par.
10
00:02:49.525 --> 00:02:50.905
Apologies about that.
11
00:02:52.250 --> 00:02:57.710
I don't think I'll be leaving you guys anytime soon, but if if we do do another episode that way,
12
00:02:58.090 --> 00:03:00.350
we will try and make sure the audio is better.
13
00:03:01.365 --> 00:03:09.545
To our freaks who are joining us through the audio streams, that was Ricardo Salinas in the intro. Yes. He was not speaking English. He was speaking Spanish.
14
00:03:09.970 --> 00:03:12.790
He's a Mexican billionaire, the 3rd richest, including,
15
00:03:13.810 --> 00:03:16.150
a significant shareholder of Banco Azteca,
16
00:03:16.769 --> 00:03:17.510
which is
17
00:03:18.694 --> 00:03:24.715
they're all throughout Latin America. They operate all throughout Latin America, Mexico, Panama, Guatemala, Honduras, Peru, El Salvador,
18
00:03:25.015 --> 00:03:29.739
and he was just basically talking about how much he loves Bitcoin and how much Fiat sucks.
19
00:03:30.360 --> 00:03:31.739
Completely orange pilled.
20
00:03:32.200 --> 00:03:39.845
Kind of unreal to see still to this day. Shout out to at the rational root who got that clip, put it on Twitter, has all the
21
00:03:41.585 --> 00:03:42.085
subtitles,
22
00:03:42.385 --> 00:03:51.560
the translations into English. So if you do wanna come in, if you're an audio freak, and you wanna come in and see what the subtitles are, you can look at the the video feed, which you can get at silodispatch.com.
23
00:03:54.835 --> 00:04:00.055
Shout out to real quick shout out you you can, Freaks have been asking about
24
00:04:02.170 --> 00:04:05.230
the Citadel dispatch hats. You can get those at citadel dispatch.com/stack.
25
00:04:06.969 --> 00:04:08.349
You can also get,
26
00:04:08.810 --> 00:04:09.310
flasks
27
00:04:09.769 --> 00:04:10.269
and
28
00:04:10.810 --> 00:04:11.310
magnets
29
00:04:11.795 --> 00:04:19.175
courtesy of Quinn Solo and BTC pins to ride or die freaks, which is pretty cool of them stepping up and offering merch through their
30
00:04:20.850 --> 00:04:21.750
respective stores.
31
00:04:22.290 --> 00:04:24.470
If you buy that merch through them,
32
00:04:26.130 --> 00:04:31.915
a third of it will go to OpenSats, a third goes to me, and a third goes to them, which is a pretty cool breakdown,
33
00:04:32.295 --> 00:04:33.835
so I really appreciate them.
34
00:04:34.295 --> 00:04:39.370
This is Citadel Dispatch, the interactive show about Bitcoin distributed systems privacy and open source software.
35
00:04:40.150 --> 00:04:48.155
I'm your host, Matt O'Dell, and I'm joined here today by the chief strategy officer of Human Rights Foundation and a good friend, Alex Gladstein. How's it going, Alex?
36
00:04:49.014 --> 00:04:51.514
37
00:04:53.415 --> 00:04:55.355
38
00:04:55.730 --> 00:05:02.765
26 weeks in a row, I took my 1st week off last week. But here we're back with Citadel dispatch 28, so it is good to be back as well.
39
00:05:03.405 --> 00:05:06.225
Before we get started, I just want the freaks to know
40
00:05:06.605 --> 00:05:11.505
that my vacation has not quite ended yet. So I am in a small inn
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in rural America,
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and there was a power outage yesterday that cut the Internet for about 10 minutes.
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So if this stream just fucking dies at some point or ripping it live,
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that's probably why it happened,
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and we'll be back up within 10 minutes. That's that's the plan in effect, and we'll see what happens. Because I I don't have any cell reception here, so I can't even switch to,
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I have 2 hotspots that I travel with. 1 is my cell phone, and one is a separate dedicated hotspot. And they're both at different networks, and neither have reception here. That's a feature, not a bug. So today, we're gonna be talking about,
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I just feel like all of a sudden this is becoming the year of nation states in Bitcoin.
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We have the big news that people have been hearing about as El Salvador, but then recently, we have this this Chinese Bitcoin mining ban.
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And then on top of all of that, Alex wrote a really fantastic piece. He's been working with Bitcoin Magazine, releasing pieces every 2 weeks on the French colonial franc,
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which is something that I just was not on my radar at all.
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So I figured we'll we'll just start with that,
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because, you know, I it's it's just a crazy I can't believe this is still happening right now, Alex.
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the geopolitical
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era of Bitcoin is really beginning.
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You know, this open source code experiment
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that started growing through different kinds of communities on the Internet and eventually made its way into the mainstream,
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you know, we've really taken a turn for for the geopolitical
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level here, which is which is really amazing to see. And and I think even before El Salvador, we we started hearing all these news cycles about, like, the Nigerian government and the Indian government, and
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now this is, like, an issue at the government level. So it's really exciting to be around for the
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nation state adoption of a new,
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new new base base currency. At least that's what I think is gonna happen.
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And in that context, I've been trying to use my time at Bitcoin Magazine to explore,
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basically, areas where the fiat system is totally broken for people and and in ways that many don't really think about it. Like like, I, for example, had
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interviewed many activists from this region of Western and Central Africa,
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like, let's call it Francophone Africa,
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through my work at HRF. And we'd been working with them on, like, pro democracy stuff.
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But, like, the monetary piece was never really at the forefront,
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which is weird because when I then went back to ask them about money,
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they have these incredible stories.
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And in fact, this woman, Farida Naburaima, who I profiled in in the the essay at Bitcoin Magazine,
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fighting monetary colonialism with open source Code. I mean, I get on the phone with her and I'm asking her about it and she's like, no, no, no. Like, that's the reason we are fighting the government in our country is because of monetary colonialism.
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It's the primary reason.
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In 1960 or so, when Togo gained its independence from France, their first leader
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was assassinated by the French government because he wanted to create his own, you know, a Togolese currency with the Togolese central bank. And that's, like, one example out of many that I cover in the essay. There's
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crazy shit happened in Niger,
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in Mali, in Senegal.
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Guinea is probably the craziest. You had you had the typical kind of, like, cold war style assassinations of leaders that didn't wanna comply with this French colonial system,
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which we can get into. But
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the
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this event that happened in Guinea, the small country in West Africa was so crazy in the early
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19
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sixties, around 1960, I believe. There was this thing called Operation Parcel, where basically the Ghanaians were like, get out of here. You know, we wanna run our own thing now. And the French were like, no. And then they they kinda went back and forth and the French were like, fine, we're leaving. But then they, like, burned everything in their wake. They just, like, destroyed everything on the way out.
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Just, like, totally,
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you know, just total sort of retribution.
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And then
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they, like
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once the Ghanaians had made their own currency,
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the the French set up these counterfeit
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operations and printed an enormous amount of this currency and then just dumped it into the country, and they wrecked the economy. I just thought that was insane. I mean, that that that's not the truth is stranger than fiction sometimes. Like, that is wild.
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So just digging into that history and just seeing how this,
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these 15 countries which constitute a 183,000,000
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people around a territory
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80% the size of India are still controlled by the French, and they basically subsidize the French way of life. One of these activists told me that they don't think France would be any bigger of a power than Austria if it didn't have the colonies. So, basically, the colonies give them
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a place to sell their exports at higher than market prices and a place to import raw goods at lower than market prices. Within, the French would then make the goods into
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cars, furniture, whatever, and then sell them back to these colonies at a higher price. So if you unless you have this mechanism,
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which also relied on having, like, a control over the central banking of these countries, where these countries would have, like, the CFA franc
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and then, you know, the French would have the franc or now the euro. So, like, whenever these countries export and earn, right, whenever, like, an Ivorian coffee producer would sell a $1,000,000 of coffee to China or America. Those dollars or yuan go through a French currency exchange,
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and the French freaking pocket the hard money, the harder money. They they pocketed the francs or now they pocket the euros, and they credit these poor countries with CFA francs in their account, which are not convertible really elsewhere.
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So the whole system is is is very, devious, but it's also very effective.
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And it's just an incredible thing, and I I learned about it recently. Wanted to share with the Bitcoin community because
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of relevance to you all.
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These people in these countries, they don't have another way forward. Like, what are their options to get rid of this French colonialism? Well, okay. We could start our own currency. Yeah. That hasn't been a very good strategy, generally. Like, most of these countries with an independent currency in Africa tend to have, like, hyperinflation Right. Etcetera. Okay. Well, they could have a regional currency.
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Well, you know, the French kinda hijacked one of the plans,
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and there really isn't anything else on the table. So as Foday Diap, the other guy I interviewed from Senegal said, what are we gonna do? Wait around? No. We're gonna, like, seize our freedoms. So you're gonna start to see
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an increasing amount of Francophone kinda activists
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start to use Bitcoin, and I'm gonna be involved in that effort. So,
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Farida Naburema, who's, like, you know, arguably the leader of the Togolese movement at the moment, she's gonna be, hanging out with us at the Oslo Freedom Forum in a few months.
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What I told her to do was, you know, we're gonna have this whole Bitcoin track of programming, and Matt's gonna be there and many others are gonna be there. I told her to basically prepare a little, like, challenge to us. And and I told her to say to get up there and basically tell us what she needs and what she's seen on the ground, and we'll help her.
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Because I think we, as a community, absolutely wanna help these people gain their freedoms.
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There it's not gonna come through politics. It's not gonna come through pieces of paper. It's only gonna come through open source code. So A 100%. That that's, I guess, the way I wanted to start out.
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It's it's just it's pretty crazy that I mean, what did you say? A 183,000,000
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people. That's half of America.
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originally set up the colonial system,
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there were about 40,000,000 French and 30,000,000 people in these countries. So it wasn't, like, quite apartheid. But today, there's 67,000,000
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French and a 183,000,000.
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So it's like total apartheid.
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And in the future, by 21100
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apparently, if you look at demographies,
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it's gonna be 800,000,000
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and like 70,000,000 French. You have like a negative birth rate or whatever.
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So it's gonna become totally unsustainable,
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but there's not like
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a lot of activity. Like, essentially,
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this year, you're gonna see, like, a reform for some of the countries of the what's called the reserve requirement. So, basically, when these again, when these countries earn through whether it's remittances or exports, etcetera,
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they have to put 50%
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of that into Paris, into a French bank, where they don't have discretion over how that money is spent.
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So that requirement is gonna be eased for some countries. And I think in, like, 2027,
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there's gonna be an e a new they're gonna rebrand one of the currencies to, like, call it call it the eco,
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which is named after, like, the group of countries in West Africa. But it looks like the French are gonna remain in control pretty much from here. And Macron has been, like, going to Africa.
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And he's been going to Burkina Faso in these countries. And he's been talking up how,
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like, France needs Africa. And you think about it, 85% of French speakers live in Africa. So, like, the French nation really relies on Africa now. It's really interesting. So,
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what people don't understand though, it's it's not just the language. Right? It's it's the money beneath it. That that's what he's really, trying to to support.
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And again,
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we're not it's not even like we're on the back nine of this system. Like, they're trying to aggressively expand it. So
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and and, again, the way that this system works is that each of these countries is ruled by a dictator who has a deal with France, and France basically provides them weapons and support and diplomatic cover
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in exchange for keeping the currency system going. So it's like they have their own private reserve in this area of Africa, basically, for for raw goods like, you may the uranium that powers the French
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electricity, by the way, which is 75% nuclear in French. It all comes from, like, Niger and Chad and stuff, and they all get it for below market prices.
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And they do that believe dictator
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there to to keep it, you know, to keep it cheap. And if they walked away,
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action from the French. Right? They have they have their reserves that are stuck over in France. Right? That they're being held hostage, basically.
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make it so that there's a huge in a number of disincentives to leaving the system.
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And, ultimately, they would they would bust out the military ones,
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or or the violent ones,
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and people really went too far. But, again, just to underline, like, there's no real real reform on the table for these people, 183,000,000
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people.
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And as Foday Diap says, like,
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these most of these people never have stepped foot in a bank. They don't have a credit card. 70% of these people in these countries,
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by and large, are are unbanked and but they have cell phones, man. And he's like, we're gonna we're gonna skip freaking we're gonna leapfrog. Just like we leapfrog landlines to go to mobile phones, we're gonna leapfrog banks and go right to Bitcoin. It's, like, kind of amazing. And I I think his focus on
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like, this is really where lightning is so important. Right? Because he's like, we're not gonna be able to afford on chain fees.
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We need to make payments that are like $5, $10.
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And if that's our only currency like, it's one thing if you're an American and you're like spending your fiat and saving in your Bitcoin, But if you're in Senegal and like you're in this closed economy, circular economy of Bitcoin,
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like, yeah, you you you you really need lightning. There's no real way around it, or something else that would scale, in a similar way with lower fees. But, hey. This is what we have. So that's why he's dedicated his his life to that. I thought that was super eye opening,
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to learn about.
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The other thing that's important to know is that there's so many obstacles in the form of scams,
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whether it's Cardano or whatever. Like, these people are being, like, always whispered in their ear about this other currency. Right? So it is gonna be a little bit of a struggle. But, you know, as long as we take the approach of, you know, Bitcoin first, this is a Bitcoin first advocacy approach,
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and Bitcoin becomes the currency of decolonization,
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then we're then we're looking good. Then we're looking good.
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their shit corners tend to really flock into these environments when they when they see a situation that's advantageous to them.
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to to promote their
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their their their shitcoin. Right? And it's like,
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you gotta point out to these people that to be to be careful, you know. And you just gotta
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you gotta just gently remind them. And you you don't have to be mean about it, but you just have to basically be like, look. You gotta be careful. Like,
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at the end of the day, the way I try to explain it is all these other cryptocurrencies are fiat currencies. Like, there's a small group of people who make the decisions, and you don't have control over them. Bitcoin is the only one where,
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you know, nobody's got control. We know exactly what the issuance and the monetary policy is gonna be. The French can't control it. The local dictator can't control it, and Silicon Valley can't control it.
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It's not the case for any of these other systems, whether they be Fiat controlled by a currency board, the French colonial system, some dictator's currency,
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or Cardano with Charles Hoskinson.
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Everybody's got a small group of people who's gonna control the rules. This is our one way ticket out. Right? And and it's actually happening. It's pretty exciting.
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when you when you we talk about this Colonial Frank, I mean, it'll it it to me, it sounds like a shitcoin scheme,
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but that's because I just approach it with a Bitcoin lens. Right? Like, you have to hold it with the Papa French. You know? You see that with the premines and all their utility token schemes and whatnot.
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But, one thing I I I tried to
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really highlight,
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on this show and on on Rabbit Hole Recap and just on Twitter in general,
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is that you really have to follow the incentives. Right? Like, no one's really better than the incentives. And one of the cool things about Bitcoin is that the incentives align where people are greedy, but it works out for a more robust system.
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But when you look at something, you know, after reading your article, which, by the way, like, once again, like, I had no fucking idea that this was going on until I read your article, until I read your piece,
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is is you have to look at the incentives. Right? And the French have absolutely no reason to have real reform. They're gonna they're gonna, you know, they're gonna give lip service, and that's about it. And the the the powers that be in the individual countries have good deals set up for them, and there's a lot of corruption there, and they're not gonna really reform from the top. And I feel like there's this
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impulse with big corners because we've had this El Salvador moment, which we'll get to in a second, but I don't wanna jump there yet,
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where they think, like, there could be a top down thing. And, you know, our boy, Russell Okun,
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he wrote a piece, I think to the Nigerian president imploring him to adopt Bitcoin.
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And I know that was a just a it it was it was a it was a strategic tactic by him, and I know he understands the reality of the situation. But I think,
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ultimately, what we're looking at here is is the only way this move continues
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is from a grassroots approach. It's from the people first,
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and then the governments are gonna begrudgingly follow. Like, you we can't expect these governments to to do it themselves. Right?
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You know, without going to El Salvador,
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the the two models are either that the government forces it, you have, like, this, like, top down adoption,
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or you have this grassroots,
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kind of, like, what's called popular dollarization,
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which is what happened in Latin America. Right? So Ecuador is a good example. So it you know, the dollar just became, like, so well so used there that, like, eventually the government sort of adopted it. And that's, I think, what you're gonna look at here in these in these, what we call SIFA countries, these CFA countries.
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There isn't gonna be a Bukele type reformer who can, like, kind of independently
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decide to just add Bitcoin. That seems highly unlikely given the
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control the French have, and the IMF and the World Bank, by the way, which which are very involved in this colonial operation. They're, like, you know, part and parcel of the whole deal.
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They they're kind of, like, they work they're kind of controlled by the French in a way,
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and and they work with the French to enforce the system.
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They're not gonna want it. And as you said, the local dictators, like, aren't gonna want it either. So it's gonna have to come from the bottom up. And
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eventually, if enough people use it, you know, the governments kinda have to react. So I would say that in this scenario,
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yes. It's not gonna be a, you know, a a top down thing. It's gonna have to come from the people. Which I mean, in a and to a degree,
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a day,
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or maybe a week. That's completely different if if it's one of the other. But he was he was onboarding a a ton of El Salvadorians
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before the president reached out. Right? And he saw this was kind of happening on a grassroots level,
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and then he made his move. But I I imagine a lot more will will decide to dig in,
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rather than embrace. Right?
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the seed grew out of Bitcoin Beach and expanded and eventually caught the the president's attention. And,
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you know,
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maybe we can we'll start maybe talking about El Salvador in a second, but
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I think what's important is that, as we head into this nation state era of Bitcoin here,
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Bitcoin's gonna use certain governments as vessels for it. Like, it it doesn't it's like almost like this organism that just grows, and it it it kind of sense the vulnerability.
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It pops through to the next layer here,
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in El Salvador. But it it doesn't really care
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who adopts it or how it gets adopted. But we're gonna see different different ways that's gonna break down. And again, yeah, like in West Africa, I think the only hope is
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is bottom up from the people. And in other places, it it, it may be different. But it's worth mentioning that the remittance factor here,
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which is I believe one of the reasons why the Salvadorans ended up going for it is the amount of money they could actually save. So I just wanted to run the numbers for the freaks here because they're crazy.
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So the average,
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so first of all, some of these countries have 5, 10, 15% of their GDP is in remittances.
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So money that family, friends, etcetera are sending back home.
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So in the case of Nigeria, which is not Francophone, but it's in the West African area,
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they they have about, 7% of their GDP. It's a massive country. 7% of their GDP is remittances. So you're talking 25, $30,000,000,000
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per year. Right? Okay. So the average $200
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remittance to sent to sub Saharan Africa, according to the World Bank, has a fee of 8%.
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The average $500 remittance has a fee of 9%.
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So you can start to see why these governments, when they're sitting there and they're looking at maybe, like, increasing their GDP
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by, like, a half percent or a percent
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just by upgrading the software that they use for people to to move money around. That is very appealing. Right?
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And, you know, we're currently using this dinosaur technology for remittances. That's absurd.
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And now we have, you know, proper good money to to do remittances with.
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And that's again one of the reasons why I think Bukele,
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did what he did and it's it's what,
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lord Fusitwa has been very
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eloquent about describing. This politician,
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from from Tonga who's great, and he's his nation has 40% Reliance GDP on remittances. Right? So so they can save numerous percent of their GDP
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just by upgrading to the better money system. And I I think that you're gonna see more and more of that start to just be discussed in the international aid community.
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But, you know, as I mentioned in the article, still today, the human rights space, the international aid space, clueless about Bitcoin? Clueless.
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join us every week in the live chat,
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either through Twitch, Twitter, or YouTube.
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You guys make this show extra special,
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shouting out your questions
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and your feedback.
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We have BTC pins,
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in the comments mentioning that I call them El Salvadorians. It's Salvadorians.
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Apologies there. But we also have 6102 Bitcoin in, the live chat.
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You know, with El Salvador, there's there's about 6,000,000
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Salvadorians.
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Right?
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With with these
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CFA countries,
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in Africa, where you've said, what'd you say, a 180,000,000
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people. Yeah.
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What does have you given any thought of what the path looks like of trying to onboard a 180,000,000
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people onto Lightning? Like, how many people do we think are currently using Lightning? Probably less than a1000000. Right? Yeah. Well, let's look at the adoption of the cell phone. I think it's useful. So
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even in, let's say, 2010,
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and I know that seems like a while ago. And, yeah, the iPhone came out in 2007, so that was fairly early. But back then, there was only, like, 5% penetration in in in these countries with with cell phones,
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especially ones that had data smartphones. Okay.
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Now you have,
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even in some of the poorer, more rural countries like Ethiopia and Sudan, etcetera,
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you have 25%,
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30%,
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Internet and phone penetration.
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And by 2025, it's gonna be 50%.
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So when we look at this population of a 183 people in CFA countries, again, because of the French exploitation,
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not only are they very anti democratic, you know, ruled by dictators, but they're also, like, hugely underdeveloped. They're they're basically the poorest countries in the world. If you look at any list of the world's poorest countries, you know, Chad, Niger, Guinea, Bissau, they're always at the bottom because they've been basically, like, strip mined, by the French, basically. It's like the capital strip mine. The Alan Farrington thing. By the way, great freaking article. Freaks should read it.
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But but this is that at, like, a a large scale. So
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we we don't have a 183,000,000
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people who can use Bitcoin right now, in these countries. We we probably have a I'm you know, my guess would be 20 to 30,000,000 at most. That's gonna change over the next decade. You know, we're gonna get there. So I think Bitcoin needs to grow alongside of that.
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But what Foday was telling me was that
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what's interesting is that as far as technology and, like,
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the Bitcoin economy goes, it's been very active in the anglophone countries. So for example, Nigeria,
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Ghana, Kenya, and South Africa
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have, a ton of Bitcoin activity. In fact, some of them lead the world, in Bitcoin activity per capita.
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The francophone countries
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have have basically
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they've been ignored. They take a back seat. A lot of it's because of the language barrier. A lot of it's because when tech companies or investors or entrepreneurs go to Africa, they tend to go to the the anglophone countries.
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So we you know, there's not gonna be this massive influx people right away. It's gotta start in communities with education,
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and it'll grow organically. But I I have every confidence that by 2030,
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a huge percentage of these people are gonna be using Bitcoin in one way or another.
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As for the the question 6102 raised, it's a good one.
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You know, I tend to think that it's gonna grow organically.
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You you're not gonna have I think El Salvador is, like, somewhat unique, like, it's the first one and they're, like, gonna do they're gonna try do it in 3 months. And if you listen to McCormick's interview with Bukele, like, he's like, I think we could do it. Yeah. It's like, dude, that's like 11 weeks or whatever. He's like, alright. We're gonna get it done. But I'm not sure that's gonna be the the the standard moving forward.
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Like, this sort of forced integration. I think it'll be a little slower.
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So we'll see. I don't know. Matt, are you are you worried about, like, the lightning network buckling under the pressure here?
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I think we're not ready right now.
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I think that's fine.
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I I, you know, I I think we're kind of in the age of the briefcase cell phones,
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and I think people couldn't even fathom
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the little Nokia brick cell phones at that point,
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let alone where we are at today. Right.
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I know that's a little bit of a faith argument, but I think, you know, you have to build a a very strong foundation, and then you can build on top of that strong foundation. If you have a weak foundation, then we're gonna end up with real problems,
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in 20 years.
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I guess now is a good time to jump to El Salvador because,
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this is basically a working test case with 6,000,000 people, which I think is already,
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is is gonna, you know, put some stress,
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on our current infrastructure.
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You know, I've been expecting high fees, on chain fees.
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Been wrong about that. So, you know, maybe we'll have more time where on chain fees will be low.
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But every time you, you know, you hit the chain, you're you're talking a a relatively high fee.
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You know, and and in these cases, if we're talking 5, $10, that could be a very big deal for them.
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So what I see happening is kind of
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custodial solutions popping up,
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and we have 22
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different
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types of of custodial situations. Right? We have,
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in El Salvador, we have this Galloy money, this Bitcoin Beach wallet,
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which is,
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no KYC
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controlled by the community. I think they have a 2 or 3 multisig that holds the funds by known community members.
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And it's open source, so people can fork that. So you could end up in a situation where you have bunch of little communities
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that all have their own custodial lightning
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wallet infrastructure,
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that interact with each other on this open monetary network, which doesn't seem like that bad of a situation at least in the in the near term. And there's no, like, scaling issue there because they're all they're on instance, right, in a way?
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Yeah. And it's, you know, it's it's it's batch transactions. Right? So you can have 20 1,000, 40000 transactions
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per time it hits the chain,
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because it's a custodial Lightning Wallet.
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But with
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the actual
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wallet that the president is
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releasing,
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I guess that they're calling it the Chivo wallet Mhmm.
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I have a lot of concerns with
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because
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we talked about incentives earlier. Right? And one of the phenomenons I've been watching is the death of cash.
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And in the Western world, really, the death of cash has happened because of a UX situation. It's like the younger generation
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doesn't like dealing with cash. They think it's easier to use their digital payment apps.
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But
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the the issue there is as and and then we've also seen in these countries,
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in certain countries, we've seen restrictions in cash start getting instituted for the the stragglers that are still using it. So it's twofold. You have cash is is being chosen not to be used by a large group of the populace, and then of the remaining people,
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you have
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you you you have a
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ostracization
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of them using it, whether that's
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explicit and you can't make a transaction over $5,000
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without getting reported, or if that's just you go into a store and you try and spend a $100 bill and they look at you like you're a criminal because they're just not used to people spending cash.
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It's be that's becoming more and more of an issue, and I expect that phenomenon to increase. So when you look at the incentives,
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for digitizing
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a populace in terms of financial transactions,
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the real incentive
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I see for for most leaders in the world
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is greater surveillance and greater control.
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And
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if you look at this
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this Chivo wallet,
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I mean, it's gonna be a custodial wallet,
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you know, that it's going to be,
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you know, fully KYC ed as much as they're capable of KYC ing there. I I know they have trouble with ID ing people and, you know, tagging their populace, but as you move more digitized, it's gonna be easier.
355
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So they're gonna have full surveillance capabilities on this on any transaction that happens on on this wallet,
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and they're gonna have the ability to seize funds and block transactions, right, which is issues we've seen with the PayPal's of the world and the Venmo's of the world.
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The advantage here is
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it still can work with, you know, the open monetary network that is Bitcoin. You could theoretically
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send to an outside wallet that is self custody or something like the Bitcoin Beach Wallet that is a better custodial model than than than the countries. But I wonder how long that lasts. I also wonder,
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you know, you see him announcing,
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the president announced
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there's gonna be no fees. It's gonna be fast transactions. Right? And that's a great way to incentivize peep and you'll get your free $30 with Bitcoin. Right. It's a great way to incentivize people to use your wallet over, like, a free open source sovereign wallet.
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And I I think we're gonna see these soft pushes to try and get people into these more closed ecosystems. Right?
364
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365
00:33:45.985 --> 00:33:49.044
So I've just to stay on the downsides for a second,
366
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The question is right. So if it's ever if the if the ability of this wallet, which I think you and I would agree would be very popular because it's gonna offer, like, services that open source wallets will be kind of harder to,
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replicate with regard to integration with the banking system,
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and basically, like, cheap cheap cheap exchanges back and forth.
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Are they gonna close those bridges? Right? So would there ever be a day when you can't just, like, pay a lightning invoice, like, from your Chivo wallet? So that's, you know, that's to be that's a trust situation. You're trusting this guy and his team or whoever comes after him, you know, once he's no longer there.
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But at the end of the day, like, there's some interesting big picture things here. First of all, it's just nuts that they're gonna buy
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essentially $30 of Bitcoin for for probably 3,000,000 people. I mean, probably half the population will claim it, maybe more. Right.
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If you look at, like, Internet and mobile phone rates, it's 50, 60 percent of the country and, I don't know, say most of them take it. You're talking like, 3,000 Bitcoin that that they're just about to just air drop into the population. So it's kinda funny because
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we're watching this happen with Bitcoin. I think what we were afraid of really was that this would happen with like some random altcoin. Right? That some government would be convinced. And it almost happened in, like, what like, Cardano was, like, in Ethiopia. So I think we're still might happen. It still might happen. Will happen. Yeah. Yeah. I mean, I think, like, what our
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our model here has to account for the fact that it could have happened with an Altcoin.
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It it it could have been a Bitcoin ban. It could have been a stable coin that's like entirely, like, like, focused on surveillance and control.
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I still think it's remarkable that they're doing it with Bitcoin
377
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and that they're working with Strike and and Rockstar and Jack and stuff and I I see upside.
378
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I also see just general upside in terms of just geopolitically,
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this derisking
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the asset for the other countries that are thinking about it in Latin America. You've got Paraguay, a bunch of other countries thinking about doing something similar. Like, once they actually see this thing live and active,
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and we all know Bitcoin's incentive structure, everybody listening. Once you start using Bitcoin, you don't go back. You you don't, like, not use it anymore. So Right. We all know what direction this is heading in. So I think there are these big picture geopolitical
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kind of, like, implications that are super positive
383
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and also just hilarious that he's gonna drop 3,000 Bitcoin on people. I mean, in 10 years, that's gonna be so crazy to think about.
384
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385
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You know?
386
00:36:12.705 --> 00:36:22.325
Right? Yeah. I missed you. You, I saw you made an interesting comment on Twitter that, you know, 3,000 Bitcoin is also the unspent capacity, the liquidity pool of Whirlpool.
387
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So it would be great to see some of that Bitcoin go into Whirlpool.
388
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I would,
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I yeah. I wanna be clear that, I mean, this is strictly superior
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to basically any other digitization scheme. Right. Anything else we've ever seen in the history of the world. I mean, let's be clear. Like, the argument the argument I was making against the Chivo Wallet
391
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is the is basically the argument that you make against WePay.
392
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Right? Like, WePay in China. Or what is it? WeChat? But you as you you pay through WeChat, it controls your whole life.
393
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They're they're moving everyone onto that system. It's not connected to an open monetary network. They have complete control and complete surveillance, and you have to use, you know, the yuan. Right?
394
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Mhmm.
395
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Bitcoin is strictly this this Chivo wallet is is strictly
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is is strictly an improvement over something like that, which is what we are gonna probably see in most of the world before they move over to a Bitcoin thing, or at least we're gonna see leaders try and push into that kind of system. Right? Yeah. And, look, we're gonna be educating as many people as we can about,
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398
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wallets, and we're gonna be doing that anyway. And a lot of people who end up using Bitcoin in El Salvador,
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in their 1st year of experience I mean, look, they're gonna go through the same learning experience that we all went through. And in that 1st year, a lot of them are gonna be like, screw it. I wanna be my own bank. And they're gonna move their funds into not custodial wallet. Like, there's gonna be, a significant portion of people who who do that over time.
400
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And it may develop into a situation where
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where it's sort of like what you're gonna see with Paxful once once they integrate lightning, which should be shortly from what I understand.
402
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Where, you know, your Paxful account, if you're in Argentina or Nigeria or wherever,
403
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it's a KYC bank account, but but you can then withdraw it,
404
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you know, into lightning. And then, you know, that's where you get into the the the issues of privacy and lightning. But generally speaking, a lot of those can be solved at the wallet level and and people will have almost this functionality to be able to have, like, an ATM essentially. And I think that's that's what we can hope and push for in El Salvador is, like, yes, there's gonna be this, like, advantaged KYC government wallet that's basically unavoidable.
405
00:38:28.619 --> 00:38:34.000
But, you know, as long as citizens can withdraw to their own bank and they can be their own, you know,
406
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decision maker of their financial destiny.
407
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Massive upside. So just, yeah, just again zooming out how ridiculous this is that this country is actually, like, trying to figure out how to roll out Bitcoin to their population. Whereas, like, our governments are trying to figure out how to steal our rights from us by implementing CBDCs.
408
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So,
409
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you know, that's kind of the that's the big picture we need to keep in the back of our mind. Right?
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411
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I think it's important to
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to stay vigilant and and and to really threat model this stuff out though and and threat model the incentives.
413
00:39:10.025 --> 00:39:15.565
But but, yeah, I mean, this is something that I did not expect at all. It completely caught me off guard, and it's really great to see.
414
00:39:17.550 --> 00:39:33.845
415
00:39:34.385 --> 00:39:36.065
Well, the argument was essentially that,
416
00:39:37.460 --> 00:39:39.400
there's an article in the law,
417
00:39:39.780 --> 00:39:44.200
article 7, that essentially, you know, and a lot of libertarians were pushing this argument
418
00:39:44.500 --> 00:39:46.244
that, like, it's coercive
419
00:39:46.705 --> 00:39:49.285
because it would force merchants to accept Bitcoin.
420
00:39:49.825 --> 00:39:50.724
And, you know,
421
00:39:51.345 --> 00:39:59.750
if you're not a strict so first of all okay. Fine. But, like, a lot of those people never said a damn word when Bolivia banned Bitcoin in 2014.
422
00:40:00.050 --> 00:40:01.350
Legal ban of Bitcoin.
423
00:40:01.650 --> 00:40:09.225
None of these people said anything. Only when they when a government adopts Bitcoin do they say something. So that's a little weird. You have to think about the signal there.
424
00:40:09.685 --> 00:40:18.180
And second of all, there are, like, a whole bunch of other reasons to to to believe that, like, the merchants using this thing are not gonna be forced to hold Bitcoin. Like, in fact,
425
00:40:18.555 --> 00:40:19.455
from what I understand,
426
00:40:19.835 --> 00:40:25.055
that's a second step. Like, basically, if you receive a Bitcoin payment from America or wherever,
427
00:40:25.650 --> 00:40:29.110
or from someone in your store, from what I understand, into this new system,
428
00:40:29.490 --> 00:40:31.830
it will actually automatically convert into,
429
00:40:32.369 --> 00:40:38.095
into the the the sort of the the doll the, you know, the sort of dollar denominated account in the in the app.
430
00:40:38.395 --> 00:40:42.815
To withdraw into Bitcoin into your own custody requires a second step.
431
00:40:43.180 --> 00:40:46.319
So I I thought the whole thing was a very wrong headed critique,
432
00:40:47.020 --> 00:40:48.800
but we'll see we'll see how it goes.
433
00:40:49.420 --> 00:40:52.480
The second thing is that the mining piece is really interesting because,
434
00:40:53.825 --> 00:40:56.485
yeah, like, the the the they're obviously gonna do,
435
00:40:58.545 --> 00:41:11.865
geothermal mining with the volcanic energy. There's 2 interesting parts to this. Number 1, almost okay. So all Central American countries, which are relatively poor compared to the the region around them, have volcanoes, and they have stranded energy that they can't can't access.
436
00:41:13.045 --> 00:41:22.750
And the cool part is now what they can do is sell and then I know Max Kieser and a bunch of other people have said this, but they're actually gonna do it. Like, these countries, Guatemala,
437
00:41:23.050 --> 00:41:24.109
Honduras, Panama,
438
00:41:24.785 --> 00:41:41.440
Colombia, they they can sell bonds based on the future earnings of the renewable energy, and that's not possible today, like, before Bitcoin. That would be, like, you can't monetize stranded renewable energy like that very well. You're gonna be able to do it. That's very interesting. So it gives these countries
439
00:41:42.060 --> 00:41:42.800
an alternative
440
00:41:43.365 --> 00:41:48.025
to borrowing from the fucking IMF or the World Bank. Right? It allows them to to borrow
441
00:41:48.405 --> 00:41:57.830
against what they already own. Right? Really interesting from a development and kinda, like, you know, geopolitical into independence point of view. So I thought that was worth mentioning too.
442
00:41:58.265 --> 00:42:00.765
443
00:42:01.545 --> 00:42:05.244
the proof is in the IMF and the World Bank being pretty pissed off about the world.
444
00:42:05.865 --> 00:42:24.370
445
00:42:24.770 --> 00:42:44.560
446
00:42:45.260 --> 00:42:50.480
the first one being that, you know, that's a legal tender law and it requires them to accept Bitcoin.
447
00:42:51.065 --> 00:42:52.125
Mhmm. I mean,
448
00:42:53.065 --> 00:42:56.765
like like, people can't expect like, we live in a certain world,
449
00:42:57.225 --> 00:43:03.750
you know, and it's a world of legal tender laws. All these people were forced to accept US dollars for however many years already,
450
00:43:05.090 --> 00:43:12.694
and now they're they're basically, we would have seen a law that said they're forced to accept US dollars through a shitty US dollar
451
00:43:12.994 --> 00:43:13.815
government app,
452
00:43:14.194 --> 00:43:19.920
and instead, it's a lightning compatible Bitcoin app, and they can choose which one it is. Like, it's strictly a benefit.
453
00:43:20.540 --> 00:43:28.880
454
00:43:29.215 --> 00:43:31.715
Bitcoin isn't money because it's not legal tender.
455
00:43:32.175 --> 00:43:41.230
And you're like, wait a second. Now it's legal tender and now you're finding some other way to complain about it. You have to realize they're never gonna, like, give up and and
456
00:43:41.690 --> 00:43:56.430
and they're just gonna dig in however they can. I just thought it was funny how, you know, now we have its legal tender and they find some excuse. Oh, it's it's enforced to legal tender. Like, what? As if, like, the dollar isn't, like, forced, like, in a, you know, de facto way?
457
00:43:57.050 --> 00:44:09.345
So we'll see. I mean, I think it's worthy to we all should be paying attention to this. I think Bitcoiners should go there. I'm planning to go this summer for sure and and just see how it's, like, working and see how we can all contribute.
458
00:44:09.990 --> 00:44:11.609
Obviously, trying to
459
00:44:11.910 --> 00:44:12.789
460
00:44:13.430 --> 00:44:22.835
they have a a carve out in the actual bill that is very obvious carve out. It was like, you have to accept Bitcoin if you're technically able to accept it, which is like
461
00:44:23.695 --> 00:44:40.105
462
00:44:40.565 --> 00:44:45.490
So I think a bunch of people just really got they just they kinda, you know look, classic missing,
463
00:44:46.350 --> 00:44:51.490
missing the forest for the trees. Stay focused on the signal. Signal is that a nation state adopted Bitcoin.
464
00:44:51.835 --> 00:44:58.575
The rest is largely noise. We can we can help improve it though, for sure. And what was the second criticism? It's something about mining?
465
00:44:59.170 --> 00:45:03.190
No. No. No. I just was it was a point I wanted to make about the fact that,
466
00:45:03.569 --> 00:45:06.869
it's gonna unlock the ability of many nations that are poorer,
467
00:45:07.964 --> 00:45:08.865
to capitalize
468
00:45:09.244 --> 00:45:16.865
on stranded renewables that haven't even been mined yet A 100%. Through through bonds as opposed to borrowing from the IMF or World Bank. That's really cool idea,
469
00:45:17.380 --> 00:45:29.315
470
00:45:29.935 --> 00:45:33.235
extremely powerful that you can just monetize your resources
471
00:45:33.660 --> 00:45:37.200
directly into a free market with just Internet access. Like, that's pretty
472
00:45:37.820 --> 00:45:40.880
like, I I it's completely understated how
473
00:45:42.035 --> 00:45:45.015
massive that free market is in terms of Bitcoin mining.
474
00:45:46.355 --> 00:45:51.095
475
00:45:51.740 --> 00:45:59.855
you know, or whatever resources they want. The they're gonna go ahead and, like, finance it in other countries. So it's gonna be really interesting to see moving forward on that note.
476
00:46:00.734 --> 00:46:04.515
477
00:46:05.455 --> 00:46:10.580
by another freak actually at rod armor, kc rod armor, who wrote up,
478
00:46:11.520 --> 00:46:16.180
a proposal for something that another freak, Eric Eric Sirion on Twitter,
479
00:46:17.175 --> 00:46:21.435
that's s I r I o n, has been working on, which is chamion mints,
480
00:46:21.975 --> 00:46:22.535
which is a
481
00:46:23.255 --> 00:46:24.529
an already existing
482
00:46:24.829 --> 00:46:27.490
concept that dates back to, I believe, the nineties,
483
00:46:28.670 --> 00:46:31.009
to a more trust minimized custodial
484
00:46:31.309 --> 00:46:33.985
option. The issue they always had in the past
485
00:46:34.525 --> 00:46:35.025
was,
486
00:46:36.845 --> 00:46:44.530
it relied on fiat, so it relied on on, you know, major third parties that you had to rely on to actually custody the Fiat, but they're
487
00:46:45.230 --> 00:46:46.370
mixing it together
488
00:46:46.830 --> 00:46:47.570
with Lightning
489
00:46:48.155 --> 00:46:50.975
and a federated model. So it's custodial Lightning
490
00:46:51.515 --> 00:46:58.140
that gives you very good privacy properties. So right now, custodial Lightning options, whether you're using Gloy Money or a wallet of
491
00:46:58.600 --> 00:47:00.220
Satoshi or Chivo Wallet,
492
00:47:01.240 --> 00:47:05.100
is is is not private at all to the custodian. The custodian can see everything.
493
00:47:05.455 --> 00:47:08.995
You're also you usually have to trust the custodian a 100%.
494
00:47:09.695 --> 00:47:21.190
The Galloy money, while they they have this multisig to hold the the custody, so that's strictly better. But in this, it's a larger federation, so something like Liquid. So you'd have, like, a 16 member federation
495
00:47:21.809 --> 00:47:29.255
that custodies the funds, so you'd have to they'd all have to screw you over to take your money. And then on the privacy side, it'd be,
496
00:47:30.995 --> 00:47:31.975
extremely private.
497
00:47:32.610 --> 00:47:46.195
So that is a very promising thing, I think, especially if if we had many of them. But I I I think that is, it is a long time off, but it's it's it's one of those things just like we said earlier, I think. You know? We're we're we're looking at the suitcase cell phone.
498
00:47:47.375 --> 00:47:52.390
Yeah. Yeah. And 6102 is mentioning Scriptcash, which I think was Frank Braun's, proposal,
499
00:47:53.570 --> 00:47:55.990
which was also Chalmun based, I think, 6102.
500
00:47:57.650 --> 00:47:59.510
But I don't know what's happening with that.
501
00:47:59.895 --> 00:48:03.195
But there's all these different things that are just way above our pay grade.
502
00:48:03.815 --> 00:48:10.210
And I know it kinda sounds like a blind faith type of thing, but I think the important thing is you build the you have to build a strong foundation.
503
00:48:10.990 --> 00:48:12.610
And then as this other stuff,
504
00:48:14.510 --> 00:48:24.715
you know, gets built out, like, at least it gets built out on this top foundation, and there's gonna be, you know, there's gonna be mishaps along the way, and there's gonna be different paths we take that might not work out well.
505
00:48:25.339 --> 00:48:28.880
And we hopefully, we'll learn from those mistakes and we'll improve. Right?
506
00:48:29.500 --> 00:48:33.200
507
00:48:33.579 --> 00:48:36.195
stuff. I was with someone the other day.
508
00:48:36.495 --> 00:48:55.225
She was in El Salvador and I was, like, helping helping her understand this and set her up real quick with the Moonwallet, which by the way, of course, has this, like, killer Spanish version in El Salvador. So it's she is super easy for her to download and just love the way that the flow, is set up where it you know, I used to be. I remember a couple years ago,
509
00:48:55.685 --> 00:49:13.180
I'm trying to onboard people, and some of these wallets would, like, immediately ask, you know, for you to write down these 24 words, and that's, like, the worst possible flow for onboarding someone who doesn't know what Bitcoin is. So I just I love the way that the Moon Wallet has it as, like, the emergency kit. It's very that's a smart way of branding it. Like, that's the emergency kit is your is your seed, and you wanna write it down.
510
00:49:13.805 --> 00:49:20.945
But basically, this she's able to set it up and, like, I just immediately send her Bitcoin and, like, you know, she's sending lightning back to me and it's, like,
511
00:49:21.420 --> 00:49:29.760
her mind is completely blown because she's like, I don't I never put in an ID. Like, what how does this even work? And I'm like, yeah. That's the magic of it. It literally is magic. So
512
00:49:31.265 --> 00:49:34.964
you're gonna drag a certain percentage of actual noncustodial
513
00:49:35.265 --> 00:49:42.330
use up. Right? It's inevitable. So so that's another upside to mention. That's, just to be clear, that's Moon with 2 u's. Yes.
514
00:49:43.830 --> 00:49:45.050
515
00:49:45.510 --> 00:49:49.495
The freaks are well aware. I I love Moon Wallet. I talk about it a lot. I use Moon Wallet.
516
00:49:50.295 --> 00:49:51.115
I think,
517
00:49:52.055 --> 00:49:53.675
Moonwallet is a perfect example
518
00:49:54.135 --> 00:49:55.755
of this, like, bleeding edge
519
00:49:57.440 --> 00:50:02.099
that, you know, even 6 months ago, I couldn't really fathom that we'd have that kind of UX
520
00:50:02.720 --> 00:50:03.460
in a
521
00:50:03.920 --> 00:50:07.744
a relatively new way. There's still trust certain trust elements there,
522
00:50:08.204 --> 00:50:14.305
but, you know, I I think I think these are just growing pains. And I I I think even like, if you go back 2 years,
523
00:50:16.089 --> 00:50:17.069
you know, I was
524
00:50:18.410 --> 00:50:20.910
just digesting constant constant Bitcoin
525
00:50:21.450 --> 00:50:34.150
all the time, and I couldn't even fathom where we are today. You know? Like, I I I was completely caught off guard by a lot of lightning stuff, a lot of the the coin joint tools. Samura Wallet completely caught me off guard. It's way farther ahead
526
00:50:35.410 --> 00:51:00.015
527
00:51:00.315 --> 00:51:12.000
they're gonna try and do that attack that with key send. So they're gonna basically have an option in the app, hopefully, in the next year. But you go into your Moon Wallet and you just you just create, like, a, like, a string or a QR,
528
00:51:12.375 --> 00:51:19.995
and then you could just plug that into your Twitter bio or whatever. And then it just it's like a rotating it rotates the public key and, like, just could receive
529
00:51:20.330 --> 00:51:21.470
lightning, which would
530
00:51:21.850 --> 00:51:26.270
531
00:51:27.184 --> 00:51:31.684
the single most important use case for an activist today is is to be able to easily
532
00:51:31.984 --> 00:51:32.484
accept
533
00:51:32.785 --> 00:51:37.910
Bitcoin that's from around the world without, like, hosting a BTC pay server on some platform.
534
00:51:38.610 --> 00:51:40.690
535
00:51:41.625 --> 00:51:47.565
There's also stuff to look at with Bolt 12. What Rusty is doing with offers is really cool, so you could have a similar functionality.
536
00:51:47.945 --> 00:51:57.300
At the end of the day, it's just gonna come down to the wallet manufacturer and what they want, how they wanna approach it. But from what I'm seeing, I think by this time next year, there'll be 2 or 3 different ways to do it.
537
00:51:57.600 --> 00:51:59.700
And you'll bay basically be able to
538
00:52:00.975 --> 00:52:08.195
offer that as part of your wallet. Like, your wallet will just generate, like, a static lightning address that that will that you could put up on wherever,
539
00:52:08.930 --> 00:52:10.710
will having pretty minimal privacy,
540
00:52:11.090 --> 00:52:11.590
vulnerabilities,
541
00:52:11.890 --> 00:52:17.345
which is crazy. And and it forces Twitter's hand. That's the the main idea here. Because as we all know, you know,
542
00:52:18.065 --> 00:52:24.325
Jack has a lot of control over Square, but very little at Twitter. I think he has, like, very small percentage of the power there.
543
00:52:24.950 --> 00:52:34.570
So I don't know how much he can actually push Lightning integration into their tip system. It seems like that's where it's going, but let's just imagine that if all of a sudden Right. A lot of popular accounts
544
00:52:35.335 --> 00:52:45.550
are have figured out this way to, like, just insert their lightning tip jar, that's gonna in the same way that Clubhouse forced Twitter to do spaces, that's gonna force Twitter to integrate Lightning. Right? So,
545
00:52:45.850 --> 00:52:50.270
but you can see where you're going with the product road map. Yeah. I mean, I think if Jack had,
546
00:52:50.855 --> 00:52:56.475
547
00:52:56.855 --> 00:52:59.575
I I I think, ultimately, you know, I don't even
548
00:53:00.760 --> 00:53:05.020
a a a direct lightning integration to Twitter isn't as appealing to me as having,
549
00:53:05.320 --> 00:53:13.234
you know, a bunch of open source, tools that allow you to take these donations because, ultimately, when Twitter does bend the knee and add,
550
00:53:14.815 --> 00:53:17.394
you know, lightning, it's gonna be in a centralized
551
00:53:17.940 --> 00:53:27.160
custodial kind of surveillance type relationship anyway, and we're gonna have a lot of the same pain points that we have with something like Cash App, right, where where people's accounts get frozen and
552
00:53:27.485 --> 00:53:34.545
and and funds are blocked for whatever reason or they fail KYC checks. It's gonna be inundated with all this different ID information.
553
00:53:35.460 --> 00:53:37.640
So, ultimately, what we wanna see regardless,
554
00:53:38.420 --> 00:53:41.640
I think it's even bigger than forcing their hand. Right? Like, I wanna see,
555
00:53:42.260 --> 00:53:42.920
you know,
556
00:53:43.505 --> 00:53:49.444
this time next year or maybe 2 years, you know, maybe I'm being a little bit too high time preference, like, 4 or 5 different ways
557
00:53:49.744 --> 00:53:55.690
that you can basically just paste the static text string somewhere, whether that's a Twitter bio or Reddit bio or,
558
00:53:56.790 --> 00:54:03.904
you know, a Telegram chat or something and accept donations from around the world in a semi private way. Like, because right now, you can do it
559
00:54:04.444 --> 00:54:11.420
with a fixed on chain address, and you're paying on chain fees, and everyone can just track everything that's happening there. Right? And that's obviously not ideal.
560
00:54:12.040 --> 00:54:16.840
561
00:54:17.320 --> 00:54:27.505
but I Yeah. We have a problem left in coin. Let's just put it this way. There's there's there's several options coming out. It's very exciting. And here's the thing, like, just think about the way that lightning
562
00:54:27.990 --> 00:54:31.450
wallets and apps I mean, you talk to let you talk to some of the wallet developers.
563
00:54:31.910 --> 00:54:32.569
I mean,
564
00:54:33.270 --> 00:54:38.255
some sort of coin join probably more like a a pay join, but that's gonna be like native,
565
00:54:38.875 --> 00:54:44.815
in these apps in the next year or 2. Like like, when you when you open and close and stuff like that, it's gonna be amazing. And,
566
00:54:45.515 --> 00:54:46.015
the
567
00:54:46.760 --> 00:55:14.335
the point here is that when you had, the signal people put the altcoin in their their thing, their their main argument was that was don't wanna don't wanna revisit it too much, but their main argument was like, oh, it's lightning's not ready. Well, guess what? It's gonna be ready in, like, a year for sure. I mean, there's already a nation state rolling out with it. It. So I just think that excuse is a bad one, and I think that rather than saying it's not ready, you should actually just work on helping make it ready. Yeah. And mobile coin isn't fucking ready either. They're fucking full of shit. You just have to follow the incentives once again. Right? Like, they they
568
00:55:15.035 --> 00:55:22.940
569
00:55:23.400 --> 00:55:35.675
that he even though it's OpenStreet, he rules with a relatively iron fist, and it's not a coincidence that MobileCoin got put in there. I I mean, I I think it kinda just stalled. Right? Like, I don't think Yeah. I haven't seen it integrated into signal on my end,
570
00:55:36.055 --> 00:55:41.980
so I don't know what's going on there. I mean, I I remember it was, like, pumped and dumped on them, so, like, that was probably
571
00:55:42.360 --> 00:55:52.994
a big wake up call. Went down, like, 10 x on there. I think so. It would behoove me since we are having this topic. You know, samurai has led the way in terms of pay nims, which is also a static,
572
00:55:53.720 --> 00:55:56.860
text string that you can use to pay people. Unfortunately,
573
00:55:57.880 --> 00:56:03.894
they're the only wallet that supports it, which is a major negative when it comes to accepting donations. I I think,
574
00:56:04.375 --> 00:56:06.635
Jimmy Wales of Wikipedia mentioned this,
575
00:56:07.095 --> 00:56:27.255
and I've seen this as a pain point because Seal Dispatch you know, Rabbit Hole Recap has sponsors, including KYC sponsors, and that really kills me. I don't like that. I I think it I it's it's just it's follow the incentives. Right? And as much as I make sure to not let it corrupt me, I want the show to be completely supported audience,
576
00:56:28.275 --> 00:56:29.415
and I've been struggling
577
00:56:29.760 --> 00:56:45.375
to basically streamline the donation methods. Right? Because Jimmy Wales mentioned this on Wikipedia. The more times and he kind of used this as a cop out for not accepting Bitcoin, but I'll just forget that for a second because they're donation based service. And the more options you have for people donating,
578
00:56:45.835 --> 00:56:53.890
the less likely they are to donate. But if you stick with a single option, like PayNIMS or something, and the only people that can donate are samurai users,
579
00:56:54.190 --> 00:57:04.335
you're also screwed from that point. So we're kinda stuck in a situation here where you're you're offering many different options to support, and as a result, you probably get less donations than you would otherwise.
580
00:57:05.050 --> 00:57:06.270
And these are little nuances
581
00:57:06.650 --> 00:57:07.150
around,
582
00:57:08.650 --> 00:57:11.630
you know, audience supported work, community funded work,
583
00:57:12.570 --> 00:57:13.055
that
584
00:57:13.535 --> 00:57:17.694
that people on the receiving end don't really like to talk about. It's kind of like,
585
00:57:18.655 --> 00:57:22.675
it's a little bit of a dirty topic that no one really wants to discuss out in the open,
586
00:57:23.150 --> 00:57:29.730
587
00:57:30.385 --> 00:57:36.645
But, I mean, I'll just say it's, like, it's not super fast to set up. It takes a little bit of time and there's, like, a fee you have to pay. And
588
00:57:36.945 --> 00:57:45.250
at the end of the day, it's it's a short term thing anyway because at least for the purposes of what we're looking at, like, it's gotta be a lightning solution. Like, it it these
589
00:57:45.650 --> 00:57:51.195
you know, we just you have to know that fees are gonna get like, the dollar is gonna get weaker. Bitcoin's gonna get stronger.
590
00:57:52.375 --> 00:57:59.660
Fees are gonna get 15, 20, 30, 40, $50, and the people that I'm working with need to be able to send 5 to 10. So it's just it is what it is. You know?
591
00:58:01.240 --> 00:58:03.880
592
00:58:04.680 --> 00:58:07.420
this is a sore topic for me, Gladstein, because
593
00:58:08.425 --> 00:58:12.605
because I we we have right now, we're sitting on an apparent Chinese,
594
00:58:13.705 --> 00:58:14.205
mining,
595
00:58:14.665 --> 00:58:22.590
you know, restrictions or ban or whatever you wanna call it, the largest difficulty adjustment downward in history, and the mempools keep clearing.
596
00:58:23.290 --> 00:58:27.150
And people keep paying 1 separate bite, and I expected the high fees already.
597
00:58:28.375 --> 00:58:35.950
So so I I do have a lot of fruits keeping me in my purse in total. We do. We sell $20 fees, like, 2 months ago. Like, this is the same.
598
00:58:36.410 --> 00:58:50.924
599
00:58:51.450 --> 00:58:59.390
600
00:58:59.795 --> 00:59:02.694
should go up with adoption unless block space increases.
601
00:59:03.395 --> 00:59:10.290
Right? Like, that's a it's a it's a very simple logical thing, and and Yeah. But but, it might take a little bit longer,
602
00:59:10.910 --> 00:59:28.069
than I expected, but it is We'll have Panem's, and we'll have on chain solutions, and people will use that. But the Lightning solution will be, like, hugely helpful for for the community that I'm working with for sure. Yeah. We have ride or die freaks, Trinity, in the comments saying that we should measure fees and tomatoes. Like, that's what I'm saying. Like, you gotta measure it in,
603
00:59:28.869 --> 00:59:31.210
in some kind of good that people need to survive.
604
00:59:31.829 --> 00:59:35.460
I don't know if they need tomatoes, but but it it is what it is.
605
00:59:36.045 --> 00:59:36.785
Okay. So
606
00:59:37.565 --> 00:59:38.305
El Salvador,
607
00:59:38.845 --> 00:59:39.984
I I mean, I think
608
00:59:41.405 --> 00:59:46.820
very fucking cool. I look forward to visiting there. I fucking love what the guys at Bitcoin Beach are doing. Doing.
609
00:59:48.800 --> 00:59:51.060
I I I I do you know,
610
00:59:51.760 --> 00:59:54.660
to me, the way the way I look at these things as
611
00:59:56.005 --> 00:59:59.225
as, you know, a public Bitcoiner that has a platform,
612
01:00:01.205 --> 01:00:03.305
is that it tends to be
613
01:00:03.650 --> 01:00:11.750
in Bitcoin land that you get better engagement if just everything is super rosy and bullish and has no trade offs or no issues.
614
01:00:12.975 --> 01:00:14.115
So I figure
615
01:00:14.655 --> 01:00:16.835
if I'm losing a bunch of my privacy,
616
01:00:17.855 --> 01:00:22.230
you know, chilling with the freaks twice a week, then my role should be
617
01:00:23.010 --> 01:00:31.285
to be a necessary contrarian or just someone that, you know, is constantly just on the lookout and just wants the freaks to be constantly on the lookout.
618
01:00:31.585 --> 01:00:37.204
And the way I do see it playing out, and maybe I'm just being because I I listened to his his McCormick,
619
01:00:37.869 --> 01:00:38.369
show,
620
01:00:38.829 --> 01:00:43.329
and he just he seems like, what can you expect from a president besides that? Like, that was, like,
621
01:00:43.630 --> 01:00:49.865
as like, absolutely amazing, his grasp of Bitcoin. I mean, he was talking about sats like he was thinking in sats. Like,
622
01:00:50.165 --> 01:00:52.744
I'm still trying to get some of the freaks to think in sats,
623
01:00:53.420 --> 01:00:57.200
and this guy is just throwing sats left and right. Like, it's his standard already.
624
01:00:59.020 --> 01:01:11.375
But I do think that there's gonna be, like, a pain point period where people start getting their funds blocked or seized with Chivo Wallet. And, hopefully, at that point, that will be the the real that's the real incentive to go out and seek,
625
01:01:11.690 --> 01:01:16.349
you know, a different open source wallet that is more sovereign that gives you more control every month. Right?
626
01:01:16.650 --> 01:01:19.095
627
01:01:19.974 --> 01:01:28.680
the large percentage of folks using this wallet are gonna be, you know, in the remittance market, it's easy. They just have their family just start sending to the address that they control. So I mean,
628
01:01:28.980 --> 01:01:31.960
you'll start seeing that. And just a note on him, on Bukele,
629
01:01:32.420 --> 01:01:37.000
yeah, of course, he's very polished. He's like an Obama Clinton level politician. He's incredible.
630
01:01:37.355 --> 01:01:41.215
But you you know, again, and, you know, we've already gone through this before, but,
631
01:01:42.155 --> 01:01:43.695
let's be careful about him.
632
01:01:44.075 --> 01:01:50.100
What's interesting is he does have an opportunity here. Basically, in Salvador, you know, in in El Salvador, the
633
01:01:50.720 --> 01:01:53.220
constitution is such that he cannot run for president again.
634
01:01:54.445 --> 01:01:56.445
And he is probably gonna try and,
635
01:01:56.925 --> 01:02:11.450
you know, what what we would call, you know, extra legally, you know, change the constitution to to run again. This has happened in many countries. Obviously, it happened in Bolivia, Venezuela, etcetera. Yeah. New York City. Yeah. New York City. But at the national level,
636
01:02:12.665 --> 01:02:52.855
it is something that people obviously are worried about. But he could choose a different path, which is what I'm rooting for. Like, what if he, like, actually agrees to, like, go when he's done and whatever? He's the he he his career, you know, he moves on. He becomes like what if he become becomes like the international, like, kind of ambassador for Bitcoin and, like, just goes around to different countries kinda like doing what, like, Jimmy Carter did or whatever for, like, humanitarian I could a 100% see that. Like, that would be great. And and he could be he he has a statue. If he plays his cards right, he's got a statue right there next to Satoshi. He just can't fuck it up, so let's see what happens. You know? Well, I mean yeah. I mean, a lot of people had statues that maybe were were lower down than Satoshi but have been toppled because of their ego. But, I,
637
01:02:54.569 --> 01:02:59.470
638
01:03:00.650 --> 01:03:00.890
The
639
01:03:01.565 --> 01:03:04.705
there is this additional incentive for the first couple of
640
01:03:05.405 --> 01:03:07.585
rulers or presidents or leaders,
641
01:03:08.365 --> 01:03:10.385
that move to a Bitcoin world,
642
01:03:11.260 --> 01:03:24.255
that they become, like, international celebrities. Right? Like, no one knew who this guy was. No one was talking about El Salvador. Now all of a sudden, it's on CNBC and all over the place, and people are listening to his speeches and seeing the polls get passed and stuff. Yeah. He's an international
643
01:03:24.555 --> 01:03:27.454
celebrity now. So so that incentive is a strong,
644
01:03:28.610 --> 01:03:32.470
that's definitely a strong incentive on the positive side at least for,
645
01:03:32.930 --> 01:03:37.750
you know, maybe the first 20 countries or something like that. Right? Like, the first movers, especially if they
646
01:03:38.404 --> 01:03:39.464
also personally
647
01:03:40.325 --> 01:03:47.750
are, you know, accumulating Bitcoin and their country is accumulating Bitcoin because, you know, they're gonna put their country on the map for a long time, and they're gonna, you know,
648
01:03:48.390 --> 01:03:50.970
really squirrel away some generational wealth. Right?
649
01:03:51.590 --> 01:03:53.370
650
01:03:54.390 --> 01:03:58.474
El Salvador piece is that, again, geo going up to the geopolitical level,
651
01:03:59.335 --> 01:04:00.875
we are kind of at this crossroads.
652
01:04:01.655 --> 01:04:11.420
Let's put Bitcoin to the side for a second where we have, like, the Washington consensus, which is like, you know, the way that the United States and the World Bank, the IMF, and to the to it to some extent, the EU,
653
01:04:11.880 --> 01:04:18.765
kinda control the world's flow of money and all the rules and how nations develop and which ones get access to nukes, etcetera, etcetera.
654
01:04:19.705 --> 01:04:41.615
You know, which ones were gonna be held down, which ones were gonna be forced to have structural reforms or austerity, etcetera. Now you have the rise of China. So you have, like, the kind of China kind of belt and road thing. And now you have, like, a third thing. So in the cold war, you had the Americans and Soviets and you had the non aligned movement. Right? So what if we have like the Nakamoto consensus, which is like all the Bitcoin parties. Like, you could conceivably start seeing
655
01:04:41.970 --> 01:05:04.650
parties in many countries where the the only platform really is that they're a Bitcoin party. And then, like, people will vote for their wallet just like they do in some countries. They'll vote for the party that has the lowest taxes. Like, they'll vote for the party that's gonna be most pro Bitcoin. Like, that's a possibility here that we have, know, the Washington consensus and we have the Nakamoto consensus. So I thought that would be kind of, kinda interesting to see pop up.
656
01:05:05.430 --> 01:05:08.825
657
01:05:11.545 --> 01:05:16.204
So Yeah. Exactly. Okay. So, yeah, I that would not surprise me at all, especially if,
658
01:05:17.390 --> 01:05:21.410
you know, especially if we're correct with the Bitcoin price. You know? Bitcoiners will have more money,
659
01:05:21.870 --> 01:05:24.770
and, corruption runs a lot of this world. So
660
01:05:26.105 --> 01:05:31.005
that naturally that naturally follows that, it'll it'll go towards political power as well.
661
01:05:33.145 --> 01:05:33.645
So
662
01:05:33.950 --> 01:05:40.589
El Salvador, positive news. I think Latin America is just gonna be, like, this really great testing ground for Bitcoin, and I look forward to,
663
01:05:41.925 --> 01:05:44.025
hopefully, seeing it blossom in the whole region.
664
01:05:44.485 --> 01:05:46.825
I love the culture down there. It's, you know,
665
01:05:47.285 --> 01:05:52.420
same time zone as us. It's very easy for me to travel down there. I know the language better than any other foreign language.
666
01:05:53.700 --> 01:05:54.600
So, selfishly,
667
01:05:55.220 --> 01:05:56.280
very happy about
668
01:05:56.740 --> 01:06:00.040
Latin America taking the helm here, and I I look forward to seeing it expand.
669
01:06:00.785 --> 01:06:05.204
Obviously, I would love to see it expand in Africa. In Africa, you have this other app aspect,
670
01:06:05.984 --> 01:06:14.230
where maybe the French have had a lot of control and been holding their grip for a while, but you also have this creeping control coming in from China. Right? Mhmm. Mhmm.
671
01:06:14.530 --> 01:06:15.510
And I feel like
672
01:06:16.130 --> 01:06:19.350
the US has kinda just completely dropped the ball in that regard,
673
01:06:20.194 --> 01:06:29.175
in terms of trying to stop that Chinese expansion there. It's almost like a it's been a vacuum of European and and American influence, and the Chinese have kinda come in.
674
01:06:29.500 --> 01:06:30.380
Bitcoin could be
675
01:06:32.059 --> 01:06:34.160
I mean, Bitcoin is the best tool
676
01:06:34.540 --> 01:06:36.000
to to fight that Chinese
677
01:06:36.700 --> 01:06:39.040
that Chinese in that region. Right?
678
01:06:40.125 --> 01:06:48.865
679
01:06:49.390 --> 01:06:49.890
peaceful
680
01:06:50.270 --> 01:06:56.609
parallel monetary network, which is which is kind of amazing. So, yeah, high level view on El Salvador, like, historic
681
01:06:56.915 --> 01:06:58.995
historic kind of moment. Very kind of under
682
01:06:59.395 --> 01:07:01.815
it's even even even watching it live,
683
01:07:02.595 --> 01:07:03.735
we're it's being underestimated.
684
01:07:04.115 --> 01:07:06.599
Like, you have to remember that very few newspapers
685
01:07:07.220 --> 01:07:08.040
covered it.
686
01:07:08.820 --> 01:07:15.480
You know, it's not like it was on the front page of the New York Times. So when we in, like, 20, 30 years, when we go back and look at, like, Bitcoin history,
687
01:07:16.165 --> 01:07:26.060
we're gonna have to pick some of these, we have to dig for some of these events because the the the world media was not exactly excited about it. Let's put it that way. You'll just you'll go listen to the Bitcoin podcasts.
688
01:07:26.680 --> 01:07:33.964
Yeah. You have to mean I mean, credit to Peter for getting the first interview, you know, and not CNN. I mean, I thought that was pretty interesting.
689
01:07:34.265 --> 01:07:39.789
690
01:07:40.089 --> 01:07:43.930
there's no easy way for me to bet with Bitcoin on these things yet. Mhmm.
691
01:07:44.650 --> 01:07:45.150
Hopefully,
692
01:07:46.365 --> 01:07:49.265
hopefully, the boys working on discrete log contracts,
693
01:07:49.805 --> 01:07:52.465
will have a nice pretty UX for us,
694
01:07:52.845 --> 01:07:53.245
for the
695
01:07:54.359 --> 01:07:55.579
in the near future.
696
01:07:55.960 --> 01:08:02.185
But I would have bet on Peter getting that interview. Like, he's a fucking hustler. I'm not really that surprised that he got it, but props to him for sure.
697
01:08:04.425 --> 01:08:11.530
Did you see he even he took a picture he took a picture with him with this little dispatch hat. You tried to get him to wear it, and the guy was like, I'm not wearing that hat. I
698
01:08:12.070 --> 01:08:13.530
699
01:08:15.190 --> 01:08:19.610
700
01:08:22.885 --> 01:08:28.985
China, you know, so Chinese the supposedly, China is kicking out miners right now. They're restricting mining,
701
01:08:29.980 --> 01:08:33.119
and the miners are moving their hash rate,
702
01:08:33.980 --> 01:08:34.480
and
703
01:08:35.179 --> 01:08:41.675
I I guess they're they're moving their miners. They're moving their actual hardware out of the country, allegedly. This is what we're being told.
704
01:08:42.135 --> 01:08:44.395
Mhmm. We have the largest difficulty adjustment,
705
01:08:45.680 --> 01:08:49.380
downward in the history of Bitcoin, it appears. That's that's what we're on,
706
01:08:50.160 --> 01:08:51.380
track for right now,
707
01:08:53.735 --> 01:08:56.395
and that would be indicative of that kind of situation.
708
01:08:56.855 --> 01:08:58.875
It would also be indicative of a
709
01:08:59.495 --> 01:09:01.995
state sponsored 51% attack. But,
710
01:09:02.850 --> 01:09:05.190
where do you stand here in terms
711
01:09:07.010 --> 01:09:11.245
of China and Bitcoin and the next 5 years or something like that?
712
01:09:11.785 --> 01:09:13.725
713
01:09:14.585 --> 01:09:15.085
interpretations.
714
01:09:15.545 --> 01:09:21.870
So one is based on, some conversations I've had with, like, some American miners who are obviously as you've as you've pointed out very
715
01:09:22.330 --> 01:09:22.810
they're very,
716
01:09:24.090 --> 01:09:32.075
you know, biased towards their own, opinions. But let you know, just looking at the numbers. Okay. So the hash rate peaked at a 180
717
01:09:32.615 --> 01:09:34.075
x a hash per second,
718
01:09:36.250 --> 01:09:40.990
in early May, now it's now it's at like 90. So we've lost half. Okay. So,
719
01:09:41.450 --> 01:09:50.205
you know, we can speculate, but generally speaking, you know, we we're seeing that the network lost about half of its hash rate from its peak just about 5 weeks ago.
720
01:09:51.500 --> 01:09:54.240
And that from what we can understand,
721
01:09:54.780 --> 01:09:59.280
most of these minors are not getting arrested. A few of them actually did from what we can see.
722
01:09:59.995 --> 01:10:07.455
But a lot of them are just like openly communicated on social media and they're just like, shit, we're going elsewhere. They were holding conferences to figure out where to go next.
723
01:10:09.100 --> 01:10:14.159
And it's gonna take them a long time to plug in because there's just not that much, Isn't that weird to you?
724
01:10:14.860 --> 01:10:17.679
Which part? Oh, it's all weird to me, but which which part?
725
01:10:18.505 --> 01:10:20.844
726
01:10:21.625 --> 01:10:50.060
727
01:10:50.440 --> 01:10:52.125
a lot of photo video evidence of, like,
728
01:10:52.605 --> 01:10:59.500
you know, empty mining, you know, husks at at at farms and and, you know, footage of of
729
01:10:59.980 --> 01:11:01.500
machines being moved. And,
730
01:11:02.700 --> 01:11:04.480
that seems to probably go
731
01:11:05.180 --> 01:11:07.120
to Malaysia, Kazakhstan, Russia,
732
01:11:07.660 --> 01:11:08.800
the US, Canada.
733
01:11:09.825 --> 01:11:12.245
And I guess this this this particular narrative
734
01:11:12.625 --> 01:11:13.285
is that,
735
01:11:14.305 --> 01:11:21.989
the chai it wasn't the CCP, but the Chinese miners were this huge asset for Bitcoin. They protected it in its infancy. And then those those individuals are gonna go elsewhere.
736
01:11:22.290 --> 01:11:39.690
And and and the argument that that some of these miners make is that this is so great because the those Chinese miners who were such a great resource for Bitcoin, they're just gonna go elsewhere and it'll be better because they won't be under the CCP's rule anymore. So that's their this is the one argument. Argument a is that this is a fantastic thing for Bitcoin.
737
01:11:40.470 --> 01:11:44.570
That it's less about the drop off in in hash rate and more about the decentralization
738
01:11:44.950 --> 01:11:50.735
now. Where it was maybe even easier before for maybe a state to to to get some sort of influence.
739
01:11:51.275 --> 01:11:52.175
Harder now.
740
01:11:53.490 --> 01:11:56.150
741
01:11:57.970 --> 01:12:00.870
if if we success if this difficulty adjustment
742
01:12:01.170 --> 01:12:01.890
goes down
743
01:12:02.415 --> 01:12:08.755
you know, largest difficulty ever, and then the hardware is actually moving out of China, and it moves to all these different other jurisdictions, I you know, and
744
01:12:17.845 --> 01:12:23.385
a smaller operation is harder to detect and regulate and control than these large corporate operations.
745
01:12:24.645 --> 01:12:27.590
And then the difficulty goes back up, and we
746
01:12:28.389 --> 01:12:29.849
come back up to near ovals,
747
01:12:31.190 --> 01:12:31.929
I think
748
01:12:32.710 --> 01:12:35.210
we will be in the most bullish situation
749
01:12:35.905 --> 01:12:38.245
in Bitcoin's history in terms of,
750
01:12:39.425 --> 01:12:44.165
the robustness of our of our mining infrastructure and then not being in a single location.
751
01:12:45.630 --> 01:12:50.130
I don't think we passed that threshold yet. We have to see what happens here Totally.
752
01:12:50.829 --> 01:12:51.329
Because
753
01:12:51.869 --> 01:12:57.015
there is a significant level of hash in China, or there was 5 5 weeks ago.
754
01:12:58.115 --> 01:13:00.375
And if you wanted to do
755
01:13:01.075 --> 01:13:03.015
a state level attack on Bitcoin
756
01:13:03.470 --> 01:13:09.010
as the Chinese. Basically, the shitcoiner FUD that we've heard all these years and all this time
757
01:13:09.550 --> 01:13:10.050
is
758
01:13:10.485 --> 01:13:14.105
you would basically pull a large portion of Hash off the network,
759
01:13:15.204 --> 01:13:19.784
and you would you wouldn't want people to think that was happening, so you would tell them that
760
01:13:20.350 --> 01:13:33.935
that's that's you know, there's Hash is leaving the country, and it's they just need to plug in. And you might even test it out with a couple seasons of, oh, well, it's the rainy season, and don't worry about this hash rug pull, and we've gone down 14% in difficulty. That's completely normal.
761
01:13:34.715 --> 01:13:35.455
And then
762
01:13:35.820 --> 01:13:42.400
what you would do is instead of doing a traditional 51% attack so so a traditional 51% attack is the idea is
763
01:13:42.860 --> 01:13:59.560
I send a payment to you. I own the private keys. You settle up that thing. Maybe you send me tomatoes, you know, and then I have the tomatoes, and then I reverse the transaction. And I keep the Bitcoin, and I have the tomatoes. And, obviously, the tomatoes could be 100 of 1,000,000 of dollars if you're doing it to an exchange or something like that or a merchant.
764
01:14:00.420 --> 01:14:04.585
Also, with lightning, if you have a lightning counter party, you can fuck with the Lightning
765
01:14:05.205 --> 01:14:08.025
counter party. Now a government state attack,
766
01:14:08.565 --> 01:14:26.554
you wouldn't necessarily if you just wanted to kill Bitcoin, there's a lot of reasons the Chinese government would wanna kill Bitcoin. I think everyone agrees on that. You know? They they want their centralized digital yuan, and they want it to be worldwide. They want everyone to use WePay. That would be the fucking best thing in the world. And so in in that situation, what you would do
767
01:14:27.470 --> 01:14:28.930
to me, logically,
768
01:14:29.470 --> 01:14:30.610
is you would do this,
769
01:14:30.990 --> 01:14:33.170
and then after difficulty goes down,
770
01:14:33.630 --> 01:14:35.970
you would then just do a constant reorganization.
771
01:14:37.325 --> 01:14:38.785
So you would just
772
01:14:39.085 --> 01:14:41.265
keep basic growth forking the
773
01:14:41.885 --> 01:14:46.225
the chain. It wouldn't even be a fork because it'd be valid consensus rules,
774
01:14:46.800 --> 01:14:50.659
and you'd basically have a DDOS attack if if you had over 51%
775
01:14:50.960 --> 01:14:51.780
of the hash.
776
01:14:54.455 --> 01:14:57.594
And they they they could you know, they would do they would do this
777
01:14:58.375 --> 01:15:03.250
if if they wanted to do a massive reorg and really screw with us, they could do that by
778
01:15:04.110 --> 01:15:13.885
just mining in the background on a different chain that we don't know about and then releasing all the blocks at once. But they could also do an active attack where they're just constantly reorging the tip.
779
01:15:14.505 --> 01:15:20.090
So that's kind of what I'm looking at in I think it's a very unlikely type of attack, But if it was gonna happen,
780
01:15:21.590 --> 01:15:26.889
this would be the time for it to happen. Yeah. And this is what it would look like. It would look like this. Yeah. So so the
781
01:15:27.375 --> 01:15:30.195
782
01:15:30.974 --> 01:15:37.310
and it it looks perfectly like this. And and we'll see what happens. But, obviously, as you say, I think that's very unlikely.
783
01:15:38.010 --> 01:15:39.790
Look. I think what most people don't
784
01:15:41.130 --> 01:15:47.355
should realize is that all these great powers make huge mistakes in history. They all screw up. They do something terrible.
785
01:15:47.815 --> 01:15:51.514
And, you know, you could look at America's invasion of Iraq, Vietnam,
786
01:15:51.870 --> 01:15:59.170
Soviets and Afghanistan. You could look at Napoleon or Hitler trying to invade Russia. Like, no matter how powerful they are, they always make a fatal mistake,
787
01:15:59.710 --> 01:16:01.010
or several, in fact.
788
01:16:01.935 --> 01:16:03.875
And maybe this is just this blunder.
789
01:16:04.255 --> 01:16:05.715
I mean, you know, we'll see.
790
01:16:06.815 --> 01:16:13.940
But if it is a blunder and they aren't about to attack the network or in the process of doing so, this is tremendously bullish. Right?
791
01:16:14.660 --> 01:16:27.750
Because again, it just removes their ability to sort of fuck with the network. Now the concern starts to be what's the US hash rate. Right? So we were at, like, 8 to 10% before the drop. So now people think we're at, like, maybe 20 to 25%.
792
01:16:28.449 --> 01:16:30.150
So we don't really want the US
793
01:16:30.610 --> 01:16:34.790
to get 50 either. Right? So the question is, is there gonna be some kinda, like, ghash
794
01:16:36.355 --> 01:16:39.335
momentum or initiative among American miners
795
01:16:39.715 --> 01:16:42.215
if we get close where they'll go elsewhere?
796
01:16:42.690 --> 01:16:48.710
And I think some miners would do that and I think others wouldn't, but it would be interesting to see. I think another thing that people,
797
01:16:49.489 --> 01:16:53.965
in this scenario a, where it actually is a blunder and and a a lot of the money is gonna come to the
798
01:16:54.425 --> 01:16:57.725
US, some of the miners I spoke to were basically saying that
799
01:16:58.440 --> 01:17:00.780
they we shouldn't underestimate the Biden administration's,
800
01:17:01.560 --> 01:17:05.135
like, kind of, like, policies on energy stuff. Like,
801
01:17:05.614 --> 01:17:14.034
look at think about it this way. If they put collect Marathon, like, Marathon has I think one of Marathon's biggest mines is, like, old coal plant or whatever.
802
01:17:14.414 --> 01:17:20.820
So if the Biden administration did a carbon tax, a moderate carbon tax of $50 per ton
803
01:17:21.360 --> 01:17:34.060
on some of these, companies, it would increase their energy cost by 5¢ per kilowatt hour. Right? So that would move them from wherever they are now for 5¢ to 9 or 10¢, which would make them completely it would make they they couldn't make any money. So
804
01:17:34.760 --> 01:17:38.700
people are maybe underestimating the Biden administration's sort of green policies
805
01:17:39.080 --> 01:17:40.060
here as well.
806
01:17:40.415 --> 01:17:56.950
And maybe maybe that ends up forcing American miners to go elsewhere. So we'll see what happens here, but there is a concern about American miners getting to 50% now. And we have we have to be realistic about that. I think there's there's 2 things that so so there's short term incentives and long term incentives. So long term,
807
01:17:57.785 --> 01:18:03.085
808
01:18:04.185 --> 01:18:28.329
is, you know I mean, specifically, like, if if we go back to the Segwit two x days and we and we go back to the b cash days, I mean, not only was there a large portion of Chinese hash, but there was a single company that was controlling a large portion of the manufacturing and the hash, which is Bitmain. Right? And they fell from grace. So it is it is we are strictly in a better situation today. But Totally. The the long term incentive is
809
01:18:28.630 --> 01:18:29.289
is that
810
01:18:29.590 --> 01:18:31.130
governments will inherently,
811
01:18:33.555 --> 01:18:35.255
you know, make it regulatory,
812
01:18:37.155 --> 01:18:39.574
not cost it will be cost effective
813
01:18:40.035 --> 01:18:51.100
to be distributed and be small operations because these large corporate miners, like you said, like Marathon and stuff, are gonna end up having to pay higher costs, and they're gonna have to move around, basically, to try and
814
01:18:51.445 --> 01:18:52.905
keep profitability. Right?
815
01:18:53.445 --> 01:18:55.305
But that's more of a long term thing,
816
01:18:56.405 --> 01:19:01.050
that that will take some time to to play out. And right now, we're in this kind of
817
01:19:02.010 --> 01:19:03.389
short term situation.
818
01:19:04.889 --> 01:19:07.710
So so if if we we we do agree
819
01:19:08.250 --> 01:19:10.590
that if the official story is correct,
820
01:19:11.475 --> 01:19:15.495
and China is basically pushing out a large amount of hash out of their
821
01:19:15.875 --> 01:19:16.375
jurisdiction
822
01:19:16.755 --> 01:19:19.395
Mhmm. With no repercussions to the individual minors
823
01:19:19.970 --> 01:19:24.710
By the way, this is a country that has strict capital controls and very little freedom. Right.
824
01:19:25.330 --> 01:19:33.735
They're making a massive mistake. Right? This is if if if you wanna control Bitcoin or attack Bitcoin, you need you wanna you wanna keep that hash
825
01:19:34.360 --> 01:19:37.100
not only in your your borders, but you wanna keep it regulated
826
01:19:37.960 --> 01:19:38.460
and,
827
01:19:39.080 --> 01:19:47.765
you know, you want all the operators tagged and bagged. You want them all known. You want them to know that you know where they live. You know what their assets are. You know who their family is,
828
01:19:48.465 --> 01:19:50.245
and you wanna keep them under your thumb.
829
01:19:51.025 --> 01:19:51.525
So
830
01:19:52.390 --> 01:19:54.950
strictly speaking from the Chinese perspective
831
01:19:56.230 --> 01:19:57.610
Chinese government perspective,
832
01:19:58.790 --> 01:20:00.490
if the official story is correct,
833
01:20:01.685 --> 01:20:08.505
they are gonna we're gonna be talking about this for decades. Right? Like, this is gonna be a massive, massive mistake. Yeah. They're they're probably gonna
834
01:20:09.320 --> 01:20:14.140
Yeah. Probably be the death of the yeah. They'll probably be the death of the digital yuan. It's like this
835
01:20:14.760 --> 01:20:19.020
is this is, you know, when when when push comes to shove and we talk about
836
01:20:19.915 --> 01:20:23.435
Bitcoin becoming the next reserve currency in 10 years, it's going to be
837
01:20:24.795 --> 01:20:34.980
this was one of the pivotal moments that meant that it wasn't the digital yuan, instead it was Bitcoin. I mean, it sounds crazy, but it it yeah. It could be Xi Jinping's lasting legacy that he fucked this one up.
838
01:20:35.605 --> 01:20:36.105
839
01:20:36.804 --> 01:20:37.784
you know, look,
840
01:20:38.485 --> 01:20:38.985
it's
841
01:20:40.085 --> 01:20:48.150
it it could be something where it look, they end up realizing a mistake in a year or 2 and having to buy back in at a higher price like everybody else. So we'll we'll we'll see. But,
842
01:20:49.030 --> 01:20:54.730
we're all gonna be watching. I mean, that's the crazy part is you can just see this happen. I mean, you could just watch the hash rate drop. So,
843
01:20:55.415 --> 01:20:56.395
unlike other
844
01:20:56.855 --> 01:20:58.475
monetary systems where the,
845
01:20:59.574 --> 01:21:01.275
issues get hidden behind,
846
01:21:02.375 --> 01:21:03.515
bureaucracy and,
847
01:21:04.820 --> 01:21:06.520
semantics and euphemisms.
848
01:21:06.900 --> 01:21:13.725
Like, this one's just pretty transparent. We can kinda see what's going on. Obviously, we can't see whether or not they're perpetrating some kind of
849
01:21:14.605 --> 01:21:15.105
attack.
850
01:21:16.205 --> 01:21:20.385
But leaving aside the the kind of, let's say, fringe 3 d chess thing,
851
01:21:21.165 --> 01:21:28.829
and, again, assuming, yeah, that that they are making this mistake. It's super bullish as you as as you say for the network for network security,
852
01:21:29.369 --> 01:21:30.030
for decentralization.
853
01:21:30.409 --> 01:21:34.255
Again, this the only concern here now is is probably the US.
854
01:21:34.955 --> 01:21:43.409
And, honestly, it's funny because our own politicians may may may also prevent us from achieving that dominance, which is the crazy part.
855
01:21:44.670 --> 01:21:51.625
In the same way that the CCP should have realized, if they haven't, that that they really would benefit them or behoove them to have this control over it.
856
01:21:52.185 --> 01:21:53.085
American politicians
857
01:21:53.465 --> 01:21:58.925
should probably think about that as well. Although, I hope they don't, obviously. But, like, let's just say if you're in their shoes,
858
01:21:59.320 --> 01:22:06.220
but they're gonna shoot themselves in the foot because they're gonna they're gonna go after the mining infrastructure most likely given all the signals we've seen.
859
01:22:06.574 --> 01:22:11.795
So so we'll see. I mean, it might just be a bunch of global powers shooting themselves in the foot here.
860
01:22:12.495 --> 01:22:14.034
861
01:22:16.000 --> 01:22:18.740
if if the understanding of the power of having,
862
01:22:19.120 --> 01:22:22.800
you know, a lot of large minor operations in your borders
863
01:22:23.605 --> 01:22:25.864
But when when that understanding really becomes
864
01:22:27.045 --> 01:22:28.425
prevalent or widespread,
865
01:22:30.780 --> 01:22:47.505
Ideally, most countries will not have a large enough amount of the hash to do anything with it. So it kind of ends up in, like, a a standoff situation where they're all just trying to make sure no other countries have it, which is one of the long term incentives that should keep Bitcoin secure or at least what I'm hoping would keep you know, help keep Bitcoin secure.
866
01:22:47.820 --> 01:22:50.480
Right now, we're kind of in this special situation because
867
01:22:51.340 --> 01:22:56.080
of how Bitcoin mining developed to begin with. China already had a large amount of hash.
868
01:22:56.795 --> 01:23:00.335
Right? So they're in this privileged situation, the Chinese government,
869
01:23:02.715 --> 01:23:03.455
and they
870
01:23:03.900 --> 01:23:11.200
they could really flex it if they wanted to. So so so we have people we have freaks in the in the comments saying so they're asking,
871
01:23:11.805 --> 01:23:15.825
what are we watching for? Right? Like, we try and keep this actionable actionable Bitcoin discussion.
872
01:23:16.365 --> 01:23:17.585
So first of all,
873
01:23:17.965 --> 01:23:25.950
if if they start doing and 61 to 2 made a point in here, and I thought I was clear about this, but, yeah, it's either gonna be it would either be a deep reorg to just completely,
874
01:23:27.530 --> 01:23:29.070
lose faith in the
875
01:23:29.565 --> 01:23:37.265
in in the the chain settlement and just create a lot large amount of FUD, which you you reorg a lot of blocks. You do, like, a shadow
876
01:23:37.790 --> 01:23:40.929
you do a shadow chain, and then you release them all at the same time.
877
01:23:41.230 --> 01:23:51.585
And all of a sudden, like, a bunch of exchanges are lose like, lost a shit ton of money, and you you just fuck around with everything. And you can even make those shadow blocks completely empty blocks. So the transactions never fucking happened. And
878
01:23:51.965 --> 01:24:02.940
and and so all these exchanges are just completely underwater because, you know, people traded Bitcoin for shitcoins and Fiat and all this fucking shit, and there was just, you know, a massive reorganization.
879
01:24:03.695 --> 01:24:08.275
Or you can do this constant fuck around where you're just reorging the tip over and over again.
880
01:24:09.455 --> 01:24:15.570
And that is that would be like a DDoS attack. That would be a denial of service attack. The chain would just became basically unusable,
881
01:24:17.150 --> 01:24:18.370
unless we changed,
882
01:24:19.150 --> 01:24:22.930
unless we changed our algorithm, the shot 256 algorithm,
883
01:24:23.265 --> 01:24:24.165
which is a
884
01:24:25.345 --> 01:24:29.685
basically, it's it's a nuclear weapon. It's a it's a deterrent because if we changed it,
885
01:24:30.625 --> 01:24:35.390
we'd brick all miners. So if there's good miners and bad miners, and I'm doing this in air quotes,
886
01:24:36.170 --> 01:24:41.470
we would make it so the good miners hardware also wouldn't work. So you only wanna do that as, like, a last ditch thing,
887
01:24:42.005 --> 01:24:44.585
and it's kind of just like a threat that we hold out there.
888
01:24:45.205 --> 01:24:45.705
So
889
01:24:46.325 --> 01:24:53.370
but that's what we would have to do in that situation, basically. We would have to do a we would have to brick all ASICs, and we'd have to move to another algorithm.
890
01:24:54.390 --> 01:24:54.890
Ideally
891
01:24:56.630 --> 01:24:57.530
and, you know, I've
892
01:24:58.550 --> 01:25:05.055
spent many days drinking with BitCorners talking about these different scenarios, but you'd you'd want an algorithm that was
893
01:25:05.435 --> 01:25:08.175
easy to make into ASICs and try and get back through the,
894
01:25:09.160 --> 01:25:13.020
you know, try and get back through the bootstrap period as quick as possible.
895
01:25:14.840 --> 01:25:25.165
You know, or I I even theorized, you know, sometimes that you could try you can try and if there's there's a couple other networks that already have basics, and you could basically try and steal their algo.
896
01:25:26.330 --> 01:25:27.790
But the problem is,
897
01:25:28.330 --> 01:25:32.750
you know, a lot of all this manufacturing is happening in Taiwan, which is in Chinese backdoor,
898
01:25:33.690 --> 01:25:34.190
backyard.
899
01:25:34.625 --> 01:25:38.405
And in China is where a lot of the assemblage and the shipping happens.
900
01:25:38.785 --> 01:25:49.829
Mhmm. So, you know, we don't really have if if they they they they have the leg up if they want to start manufacturing on the new whatever the new algo is. So it'll be real it would be really fucking messy.
901
01:25:50.770 --> 01:25:53.909
Let's assume that Matt is just being paranoid uncle,
902
01:25:54.324 --> 01:25:58.344
and none of this is gonna happen, and we're gonna be in the Super Bowl situation.
903
01:25:59.844 --> 01:26:04.410
In that situation, what we would wanna see is we wanna see this difficulty adjustment down,
904
01:26:05.590 --> 01:26:12.715
and then the next period, difficulty adjustment goes back up because how how long does it take to ship these things? Or, like, the next two periods,
905
01:26:13.015 --> 01:26:14.715
difficulty adjustment goes back up,
906
01:26:15.015 --> 01:26:16.155
hash rate recovers.
907
01:26:17.110 --> 01:26:20.809
And then we see self reported hash rate, which, by the way, we can't verify
908
01:26:21.829 --> 01:26:26.655
when these miners say they're mining whatever amount. Self reported hash rate in America and Kazakhstan
909
01:26:27.675 --> 01:26:31.455
and Iceland and El Salvador and all these different places that they're going,
910
01:26:32.920 --> 01:26:42.265
go up, and maybe get pictures and videos and stuff from from those miners saying, look. We actually, in fact, bought all these miners and maybe even plebs. You know? Like, I know,
911
01:26:42.885 --> 01:26:54.530
as far as I'm concerned, if if you're a freak and you're not trying to accumulate cheap miners right now, you're short Bitcoin. So, like, I you know, I'm trying to accumulate miners, and if they actually arrive at my door,
912
01:26:56.110 --> 01:27:00.885
then, like, the 3 minors or whatever I got, like, will actually be there. Right?
913
01:27:01.985 --> 01:27:05.605
So so that's kind of what we're looking for. This is gonna be,
914
01:27:06.060 --> 01:27:10.000
you know, a month long process, a month and a half long process. If we get past that
915
01:27:10.460 --> 01:27:11.679
transitory phase,
916
01:27:12.940 --> 01:27:24.660
then we end up in, like, a super bullish green pastures type of situation. But until then, I think the safe assumption that Bitcoiners should be making I'm not saying to sell your Bitcoin. What's the alternative? You know? Like, I'm I'm not selling shit.
917
01:27:25.680 --> 01:27:30.740
Is the safe assumption to be it should be just be skeptical here and be watching Mhmm. And to not,
918
01:27:31.125 --> 01:27:33.304
you know at least on the bare minimum,
919
01:27:33.925 --> 01:27:43.130
you should be waiting more confirmations before you do any kind of real settlement, when you have these big hash pulls. You should you should be waiting a longer period of time because,
920
01:27:43.590 --> 01:27:45.930
you know, the the network hash is decreasing.
921
01:27:48.245 --> 01:27:52.745
922
01:27:53.205 --> 01:27:58.320
we'll get back to that all time high of hash rate, even by the end of this year. So I think people are expecting
923
01:27:58.940 --> 01:28:01.360
a longer than just like a month or 2,
924
01:28:01.900 --> 01:28:02.400
process,
925
01:28:02.930 --> 01:28:04.000
you know, but,
926
01:28:04.485 --> 01:28:07.705
yeah, if if, again, if there's not, like, some crazy attack happening
927
01:28:08.325 --> 01:28:25.155
in front of our eyes, then, then this is this is, this is very bullish. Yeah. And it's it's crazy to think about again that, like, the mainstream media is just again, in 20 years when we look back, this will be a massive geopolitical moment, regardless of what's happening, whether it was an attack on Bitcoin or whether they were stupid and they blundered.
928
01:28:25.534 --> 01:28:35.929
It'll be up right up there with any other event of the last 20 years, and, and yet the media of the time were clueless. I can't really think of a of a corollary. It's it's kind of interesting.
929
01:28:36.550 --> 01:28:39.130
930
01:28:39.585 --> 01:28:41.284
like, tuned in to that specific
931
01:28:41.824 --> 01:28:43.125
niche to realize.
932
01:28:44.304 --> 01:28:45.685
933
01:28:46.304 --> 01:28:54.659
you know, when big geopolitical events happen, they tend to be reported on. This one just beyond their I mean, it's just it's just beyond their understanding.
934
01:28:54.960 --> 01:29:04.555
Like, they just they haven't really wrapped their mind around it. Like, they don't even know that Bitcoin mining is a thing except that it's they think it's bad for the environment. They don't understand the political aspect of it at all.
935
01:29:05.220 --> 01:29:12.520
It's it's it's kind of crazy, but it's all changing right in front of our eyes. So, yeah, exciting exciting to be here to break down the
936
01:29:12.975 --> 01:29:18.435
937
01:29:20.010 --> 01:29:24.510
I mean, look. This is super exciting shit. Like, to me, this is very exciting. I think,
938
01:29:25.210 --> 01:29:27.390
it is gonna, you know, have massive geopolitical
939
01:29:27.770 --> 01:29:28.270
ramifications
940
01:29:28.730 --> 01:29:29.230
for,
941
01:29:29.555 --> 01:29:31.415
you know, maybe the next century even,
942
01:29:32.675 --> 01:29:34.055
maybe longer. But,
943
01:29:35.475 --> 01:29:38.295
yeah, I just, it's it's just it's just funny.
944
01:29:38.890 --> 01:29:42.430
So so one thing that I did want to mention that I meant to mention earlier,
945
01:29:42.890 --> 01:29:47.710
so I apologize at this point, freaks. Like, we we were we did kinda go deep into the conversation,
946
01:29:48.485 --> 01:29:51.784
is that Bitcoin does have this difficulty adjustment, which is this idea
947
01:29:52.324 --> 01:29:54.344
that when Hash leaves the network,
948
01:29:55.820 --> 01:29:56.320
after
949
01:29:57.180 --> 01:29:59.600
a target of 2 weeks, but it's 2016
950
01:30:00.060 --> 01:30:04.985
blocks. So when Hash leaves, it takes longer than 2 weeks. When Hash gets added, it's shorter than 2 weeks.
951
01:30:06.505 --> 01:30:09.324
The difficulty of how hard it is to mine Bitcoin
952
01:30:09.625 --> 01:30:10.125
changes,
953
01:30:11.065 --> 01:30:23.320
based on, you know, how much hardware was mining it, how powerful the hardware was mining it beforehand. And that's what the this difficulty adjustment we talked about, and that's what makes sure that, you know, Bitcoin remains robust even if,
954
01:30:23.835 --> 01:30:26.655
you know, you have Hash leaving and adding to the network.
955
01:30:27.115 --> 01:30:29.295
So you can't just have, you know, someone just
956
01:30:29.755 --> 01:30:38.480
load up the network with a shit ton of power and just take over the network. Right? Because the difficulty will will adjust and take all the Bitcoin. You know, take all the advanced Bitcoin.
957
01:30:38.955 --> 01:30:41.775
And that's what we call that's what we call the difficulty adjustment.
958
01:30:42.554 --> 01:30:52.240
So there you go for that, freaks. It's a very powerful tool. And, also, one thing to mention is people say, like, why is the difficulty adjustment 2016 blocks instead of, like,
959
01:30:52.780 --> 01:30:56.320
a 100 blocks? A lot of shit coins like to lower their difficulty adjustment,
960
01:30:57.335 --> 01:31:03.915
is because if you have a smaller difficulty adjustment, it allows larger miners to play bigger games. So, like, we're talking about here,
961
01:31:05.580 --> 01:31:19.355
with this scenario, like, if this was a state sponsored attack, really, at this point in Bitcoin's history, only a state can pull off this kind of attack, a state like China that has a massive incentive to do it. Because what you're doing is you're basically forfeiting all this revenue
962
01:31:19.815 --> 01:31:28.340
for this long period of time. And in this case, it's really it's not just this difficulty period. You know, we've had multiple negative difficulty periods over the last,
963
01:31:29.155 --> 01:31:33.895
6 weeks, 7 weeks, so you're forfeiting a shit you're forfeiting 1,000,000 of dollars of revenue,
964
01:31:35.235 --> 01:31:41.690
under probably 100 of 1,000,000 of dollars of revenue if you wanna pull off this kind of attack, and that's a natural defense mechanism.
965
01:31:42.150 --> 01:31:42.890
It's just
966
01:31:43.510 --> 01:31:51.034
it's not a perfect mechanism, especially if you're, you know, one of the most powerful countries in the world and you're trying to institute your global surveillance coin
967
01:31:52.614 --> 01:31:54.235
and global surveillance money.
968
01:31:55.090 --> 01:31:56.070
969
01:31:56.850 --> 01:32:00.230
you know, assuming, again, this is not some, like, fringe attack,
970
01:32:01.090 --> 01:32:02.230
3 d chess thing.
971
01:32:02.565 --> 01:32:07.945
It's funny because the Chinese government is probably seeing this as a crackdown. They're like, we gotta crackdown on this thing
972
01:32:08.324 --> 01:32:12.370
and, that's gonna hurt them pretty badly in the end. So,
973
01:32:13.230 --> 01:32:14.190
it's kind of like this,
974
01:32:14.830 --> 01:32:23.675
Bitcoin's like this thing that if you fight it, it it will cost you over time, you know. You see that at every level. You know what it is, Alex? The weird thing to me is
975
01:32:25.095 --> 01:32:27.915
976
01:32:29.090 --> 01:32:35.670
they've proven themselves over the last decade to be very adept at controlling their populace and geopolitical maneuvers.
977
01:32:36.205 --> 01:32:40.145
They're very effective. I think they made the fools of the US in many ways
978
01:32:40.685 --> 01:32:41.185
repeatedly,
979
01:32:43.300 --> 01:32:43.800
and
980
01:32:44.900 --> 01:32:46.980
I I don't they don't even need to do, like,
981
01:32:48.740 --> 01:32:51.800
you know, they don't even need to do this attack that we just discussed.
982
01:32:52.345 --> 01:32:56.525
They could just seize the miners and not, you know, not let the hardware leave the country.
983
01:32:57.305 --> 01:32:59.900
Right? Like, they they're like, this idea that
984
01:33:00.620 --> 01:33:08.719
that it's it's it's not a weird move that they're just like, oh, you can just leave the country with your hardware and sell it and just keep that money for your family
985
01:33:09.525 --> 01:33:15.864
or, you know, move your operation is just really to me, it just rings a bunch of alarm bells. To me, it just seems illogical.
986
01:33:16.300 --> 01:33:19.680
987
01:33:20.380 --> 01:33:22.080
the depth to which the knowledge,
988
01:33:22.940 --> 01:33:23.440
photographs,
989
01:33:24.364 --> 01:33:26.784
data, video footage, whatever has penetrated,
990
01:33:27.965 --> 01:33:31.585
the space. This would have to be so well pulled off. And I I don't know,
991
01:33:32.489 --> 01:33:36.750
like, the Chinese government's good at, like, doing stuff with force, but they're not particularly
992
01:33:37.369 --> 01:33:38.349
good at,
993
01:33:39.929 --> 01:33:42.804
hiding stuff. Like, you know, I mean,
994
01:33:43.425 --> 01:34:06.725
like, we all know about what's happening in Xinjiang and, you know, whatever you however you feel about, like, the legacy of of the coronavirus. Like, obviously, they they tried to hide that and that didn't like, obviously, we figured that out pretty fast. So I don't know. It would be so hard to, like, manufacture all this, like, kind of fake news and manipulate, like, trusted people in the community. I mean, they they just did that with they literally just did that with COVID, though.
995
01:34:07.620 --> 01:34:09.960
No. But the no. But then we found out that
996
01:34:10.340 --> 01:34:15.720
it it existed. What I was pointing to is that when they tried to hide it and then, like, the world found out about it.
997
01:34:16.695 --> 01:34:22.955
So, like, with this, it's different. Right? It's like they would have had to manipulate all these people in the Bitcoin community,
998
01:34:23.495 --> 01:34:28.280
to convince them to say certain things and publish certain media. It it would be a very impressive,
999
01:34:29.380 --> 01:34:34.600
1000
01:34:34.980 --> 01:34:36.265
to completely
1001
01:34:36.885 --> 01:34:44.265
lock down their economies globally, something that we never expected ever, and they started the whole movement and then just kinda made it happen.
1002
01:34:45.750 --> 01:34:46.730
1003
01:34:47.510 --> 01:34:52.784
1004
01:34:53.565 --> 01:34:55.264
would lock down their whole economies,
1005
01:34:56.605 --> 01:35:05.420
what China was doing in in Wuhan. Right? Well, at less less so than what they were doing in Wuhan. They were, like, welding people in and shit according to the videos we saw.
1006
01:35:06.360 --> 01:35:13.965
I would have said you were fucking crazy. Right? And then meanwhile, you have, like, our boy Stefan is, like, trying to escape Australia right now. This is the aftermath.
1007
01:35:15.705 --> 01:35:18.000
1008
01:35:18.400 --> 01:35:22.180
fair. Fair. I think it's a little a little different in as much as like,
1009
01:35:22.560 --> 01:35:26.574
they got a lot of if this is a con, they got a lot of people to bite. Yeah.
1010
01:35:27.114 --> 01:35:28.014
So we'll see.
1011
01:35:28.395 --> 01:35:31.454
I think it's I agree. We have to be very skeptical both of
1012
01:35:32.235 --> 01:35:50.485
on both ends here. Both of the what's happening in El Salvador. Yeah. Like, let's be skeptical and let's also be skeptical what's happening in China. But regardless, it's a massive geopolitical moment. You know, we don't know which one will be more, have a bigger legacy in 10 years. Both will be huge, and it's crazy that they happen sort of simultaneously, kind of completely unrelated to one another.
1013
01:35:51.025 --> 01:35:54.710
But that's just kinda how Bitcoin works, man. So, hopefully,
1014
01:35:55.330 --> 01:35:59.429
the rosy side, if we're looking looking through the rose tinted glasses, we've got,
1015
01:36:00.050 --> 01:36:03.110
nation state adoption of Bitcoin legal tender on the one hand,
1016
01:36:03.715 --> 01:36:06.775
with a leader who's actually gonna allow citizens to use,
1017
01:36:07.715 --> 01:36:13.880
the official app in a way where they can pay external lightning invoices and receive from anywhere. And on the other hand, you have potentially,
1018
01:36:14.980 --> 01:36:16.840
the sort of effective decentralization
1019
01:36:17.540 --> 01:36:22.645
potentially permanently of the Bitcoin mining infrastructure. So it could be a pretty big week in Bitcoin history
1020
01:36:23.425 --> 01:36:27.765
1021
01:36:28.980 --> 01:36:33.719
they only can do it this one time. Right. So it it'll be messy. It would be chaos,
1022
01:36:34.340 --> 01:36:38.495
but, it'll be nice to kind of put behind us the,
1023
01:36:38.795 --> 01:36:42.735
you know, the specter of China as a as an attack vector.
1024
01:36:43.115 --> 01:36:44.260
We we do have,
1025
01:36:44.659 --> 01:36:52.340
one freak mentioning, like, if they put backdoors in the ASICs before shipping them out. Mhmm. Decent enough theory. You know, I did the Bitmain had,
1026
01:36:54.425 --> 01:36:57.885
Bitmain had both covert ASIC boost where they had a
1027
01:36:58.264 --> 01:37:02.284
special firmware version for themselves or enabling firmware
1028
01:37:02.630 --> 01:37:16.035
for themselves that allow them to mine better than their customers. Mhmm. They also had a kill switch that was discovered at one point. They never used it, but they had a remote kill switch that if you were running, like, an an s I don't think s nine. I think it was earlier than that. Like, if you're running an s 5 or an s 3,
1029
01:37:16.655 --> 01:37:17.715
they could just remotely
1030
01:37:18.015 --> 01:37:21.850
knock it off through the Internet, but they never used it. So, yes, that's possible.
1031
01:37:22.630 --> 01:37:27.610
It's just another thing that you should consider. I mean, this is one of the reasons why why Marty,
1032
01:37:28.150 --> 01:37:34.665
and I a 100% agree with him here, is is saying that it's a it's a it's a national security issue for all all countries
1033
01:37:35.045 --> 01:37:38.985
to have domestic manufacturing across the board, like, everything we use,
1034
01:37:39.449 --> 01:37:43.630
all of our computers, all our phones, you know, they're all fucking built over there.
1035
01:37:44.330 --> 01:37:47.389
We we need to build our own stuff. If if you wanna say that,
1036
01:37:48.025 --> 01:37:50.445
there's backdoors in ASICs, okay, there could be.
1037
01:37:50.985 --> 01:37:54.284
But there could be backdoors in your phones too or your computers or
1038
01:37:54.620 --> 01:37:57.440
the fucking control systems on Boeing's or whatever.
1039
01:37:58.140 --> 01:37:59.920
So that's just a whole another conversation.
1040
01:38:00.540 --> 01:38:05.574
So I wanted to keep this kind of tight. I think we've had a really great conversation so far. But before we leave,
1041
01:38:05.875 --> 01:38:07.335
I kinda wanted to discuss,
1042
01:38:08.755 --> 01:38:14.170
while I have you, I mean, this is kind of your bread and butter, like, the implications of something like
1043
01:38:14.550 --> 01:38:20.305
a a WeChat being very successful in Africa. Right? Because we already see it being extremely successful
1044
01:38:20.685 --> 01:38:21.585
in China.
1045
01:38:22.285 --> 01:38:27.185
And before all these COVID restrictions happened when I was traveling abroad and stuff, I saw it in Europe
1046
01:38:27.520 --> 01:38:46.860
in different like, you'd be in Italy or something, and you'd go into a store, and they'd have the we the WePay QR code there because they knew the Chinese tourists were rich, and they were coming in, and they wanted to pay with it. What are you looking at there in terms of concerns of of the the spread of that and and what that means for the average person that kind of gets forced into using it.
1047
01:38:47.960 --> 01:38:48.860
1048
01:38:49.320 --> 01:38:51.900
I think there's infrastructure and then there's, like, personal
1049
01:38:52.280 --> 01:38:56.155
electronics. And on the infrastructure piece, the Chinese government is,
1050
01:38:57.655 --> 01:38:59.870
very advanced in terms of both, like,
1051
01:39:00.510 --> 01:39:04.290
resource extraction from Africa and also setting up,
1052
01:39:05.790 --> 01:39:07.810
investments, making cheap loans,
1053
01:39:08.270 --> 01:39:11.905
basically, like shackling these kind of these governments to them.
1054
01:39:12.605 --> 01:39:15.825
They've been very adept at that. There's a recent piece that's really stunning
1055
01:39:16.205 --> 01:39:17.505
that I'd recommend reading,
1056
01:39:18.420 --> 01:39:19.400
in the New Yorker,
1057
01:39:19.860 --> 01:39:20.360
about
1058
01:39:21.460 --> 01:39:23.560
rare earth mineral mining in the Congo.
1059
01:39:24.580 --> 01:39:26.920
I'll just give you guys the the title here.
1060
01:39:27.575 --> 01:39:30.715
It's called the dark side of Congo's cobalt rush.
1061
01:39:31.815 --> 01:39:36.635
And it basically you know, this reporter is there for a while interviewing all kinds of people and
1062
01:39:37.130 --> 01:39:41.630
the Chinese have basically taken over. It's like the the they they come in, they take,
1063
01:39:42.090 --> 01:39:48.525
control over the territory and they have all the mines and that they they they have this, like, dominance over rare earth minerals.
1064
01:39:48.985 --> 01:39:54.045
So at that level, they've been quite effective. But on the sort of, like, personal electronics monetary level,
1065
01:39:54.860 --> 01:39:55.840
not very effective,
1066
01:39:56.220 --> 01:39:56.720
yet.
1067
01:39:57.340 --> 01:40:04.425
I know some even Bitcoiners in Africa are concerned because a lot of the phones are actually made by China, the phones that people use. So, for example,
1068
01:40:04.725 --> 01:40:09.065
Ethiopia is undergoing this massive thing where, like, over the next 5 to 10 years,
1069
01:40:10.245 --> 01:40:13.440
something like 60% of their population is gonna,
1070
01:40:13.740 --> 01:40:19.200
adopt a phone for the first time and they're worried that, like, maybe the majority of those phones will be made by China,
1071
01:40:19.895 --> 01:40:21.435
maybe even the absolute majority,
1072
01:40:22.055 --> 01:40:25.115
or almost all of them. So there is a concern about the hardware,
1073
01:40:25.895 --> 01:40:27.515
but as far as the money piece,
1074
01:40:28.340 --> 01:40:30.920
not not happening yet. Like, the yuan is, like,
1075
01:40:31.539 --> 01:40:32.039
2%.
1076
01:40:32.340 --> 01:40:34.360
It accounts for, like, 2% of,
1077
01:40:35.515 --> 01:40:38.094
kind of reserve you know, national reserves,
1078
01:40:38.795 --> 01:40:41.054
trade, things like that, anywhere from 2 to 3%
1079
01:40:41.435 --> 01:40:44.094
at the moment. Whereas, the euro is at, like,
1080
01:40:46.219 --> 01:40:51.199
10% or somewhere between 10 15%, and the US is at, like, 60%,
1081
01:40:51.900 --> 01:40:54.495
or something like that. So their
1082
01:40:54.795 --> 01:40:55.775
ability to penetrate,
1083
01:40:56.235 --> 01:40:57.695
with the digital yuan,
1084
01:40:58.635 --> 01:41:02.895
forget the, like, DSEP or blockchain part of it or whatever, but just the just the yuan generally,
1085
01:41:04.349 --> 01:41:06.429
it's just not been very effective so far.
1086
01:41:06.750 --> 01:41:09.170
And you just have to just look around. Like, no one's
1087
01:41:09.630 --> 01:41:12.610
it it's it's it's not that dominant in
1088
01:41:13.615 --> 01:41:16.515
in in major African, like, capitals yet.
1089
01:41:17.295 --> 01:41:18.195
So we'll see.
1090
01:41:18.735 --> 01:41:20.355
A lot of it is kind of a mess,
1091
01:41:22.250 --> 01:41:25.150
but, it's certainly something to to keep an eye out on.
1092
01:41:26.250 --> 01:41:31.150
But this makes the Bitcoin project so important, you know, because even if it was being more successful,
1093
01:41:31.455 --> 01:41:33.955
we'd at least have, like, this, like, alternative option.
1094
01:41:34.815 --> 01:41:37.955
1095
01:41:38.655 --> 01:41:43.780
1096
01:41:44.480 --> 01:41:54.615
but let's just put it this way. The Chinese government digitized society in a breathtaking fashion, like, in 10 years basically. Like, people went from, like, very little digital anything to, like, digital everything.
1097
01:41:55.075 --> 01:41:56.375
So that was very effective.
1098
01:41:57.580 --> 01:42:00.960
You know, as far as the social credit system, there is not like one credit score.
1099
01:42:01.580 --> 01:42:06.605
There are many different systems in many different parts of China defined designed by both municipal and
1100
01:42:07.565 --> 01:42:08.864
corporate kind of entities.
1101
01:42:09.645 --> 01:42:15.505
The general goal, I think, by the end of this year is that, like, the Chinese government wants everybody on, like, one kind of system.
1102
01:42:16.210 --> 01:42:22.470
But as as some people have said, it's more like Kafkaesque than Orwellian right now. A lot of it is like broken, doesn't work, isn't it's not interoperable.
1103
01:42:23.215 --> 01:42:30.355
So it's it's, they're having a bear of a time with that. As far as the DCP, like, this kind of, like, central bank digital currency,
1104
01:42:31.430 --> 01:42:34.730
that's being rolled out pretty aggressively in different pockets of China.
1105
01:42:36.230 --> 01:42:48.515
But it kind of remains to be seen how much more control that even gives the government because they're working with the corporate banks because they don't wanna freak the corporate banks out. So they basically cut a deal with the corporate banks so that, like, the corporate banks help distribute the the DCP.
1106
01:42:49.880 --> 01:42:50.380
So
1107
01:42:50.840 --> 01:42:52.060
so so we'll see.
1108
01:42:53.320 --> 01:42:57.100
I mean, again, let's be let's keep keep our eyes open here.
1109
01:42:58.005 --> 01:43:00.985
But I would I would I would be a little careful at at
1110
01:43:02.565 --> 01:43:05.545
assuming that they're gonna be able to pull everything they wanna pull off,
1111
01:43:06.660 --> 01:43:14.905
And maybe that that that aligns more with the scenario here that that this was a huge strategic blunder to to kick out the miners
1112
01:43:15.285 --> 01:43:18.505
in China, assuming, you know, that they're not planning some devious attack.
1113
01:43:19.125 --> 01:43:30.250
1114
01:43:31.965 --> 01:43:56.844
1115
01:43:57.290 --> 01:44:10.825
they're choosing dollars and euros and maybe some Swiss francs and Australian dollars, and they're choosing gold. And they're not choosing digital they're not choosing the yuan. So so we'll see. I mean, look, if that number gets starts creeping up to 8, 10%, okay, then
1116
01:44:11.205 --> 01:44:14.930
then then then we have a discussion here. But, like, it's of my view that it's
1117
01:44:15.410 --> 01:44:39.300
far more likely that Bitcoin starts to actually become a bigger chunk of international reserves and settlements over the next decade. But So we won't have, like, American children spending digital yuan through TikTok in 5 years? Or Yeah. It seems unlikely. I think they're more likely to spend Bitcoin, but but, we could we could we could still fuck it up. We'll see. I feel like TikTok is, like, a good cautionary tale. Right? Like, they that's, like, a major surveillance operation.
1118
01:44:39.715 --> 01:44:45.014
Crazy. I'm sure a lot of freaks are watching the Europe Cup, and if you look at the advertisers, it's, like, all Chinese companies.
1119
01:44:45.875 --> 01:44:46.650
They they, like,
1120
01:44:47.370 --> 01:44:56.110
1121
01:44:56.534 --> 01:44:57.034
unfortunately,
1122
01:44:57.815 --> 01:45:02.315
the Ukraine game went into, extra time, and we started while it was an extra time.
1123
01:45:03.175 --> 01:45:05.840
But it was good to see, Ukraine pull that off.
1124
01:45:07.040 --> 01:45:11.300
Yeah. I mean, TikTok advertisements are all over that shit. I saw AntChain advertisements.
1125
01:45:11.920 --> 01:45:14.980
You know, China's all over that. Mhmm. Yep.
1126
01:45:15.655 --> 01:45:18.635
Before I leave you, before we leave the freaks,
1127
01:45:20.855 --> 01:45:22.555
and before actually, before I forget,
1128
01:45:22.949 --> 01:45:28.250
looking forward to participating in the B Word event with you and the Oslo Freedom Forum with you.
1129
01:45:28.630 --> 01:45:30.275
I'm very excited about that.
1130
01:45:31.554 --> 01:45:32.034
But,
1131
01:45:32.675 --> 01:45:35.255
the the topic of the day was Worldcoin.
1132
01:45:37.235 --> 01:45:38.614
This almost Orwellian
1133
01:45:40.080 --> 01:45:41.380
concept shitcoin
1134
01:45:41.760 --> 01:45:47.700
that, Sam Altman of Y Combinator came up with that requires everyone to scan their
1135
01:45:48.125 --> 01:45:49.585
irises, their eyes,
1136
01:45:50.285 --> 01:45:53.425
to receive an airdrop, basically, an eye based
1137
01:45:53.885 --> 01:45:55.585
KYC airdrop mechanism,
1138
01:45:56.540 --> 01:46:02.160
to have a global currency that competes with Bitcoin. Do you have any thoughts for the freaks on that?
1139
01:46:02.940 --> 01:46:04.160
1140
01:46:05.180 --> 01:46:13.775
just it's just kind of the just the ego required from this guy to to name his project Worldcoin and to to claim that it's gonna help everybody in the world and
1141
01:46:14.635 --> 01:46:15.135
to
1142
01:46:15.480 --> 01:46:19.020
go so far down the rabbit hole on this to to raise
1143
01:46:19.560 --> 01:46:29.875
$25,000,000 from famous people. I mean, I just would love to be a fly in the wall in his investment pitch to these people. And they've got, like, what, a model of this, like, orb or whatever, like, how fucking ridiculous is this?
1144
01:46:30.895 --> 01:46:48.844
No. But it's, like, it's just a shame because this money should be if this if these people were effective altruists like they claim to be, they would be figuring out how to help educate people and how to improve Bitcoin user to e UX and and and the the network itself. Like, that's what they'd be doing if they really cared about economic independence and,
1145
01:46:49.385 --> 01:46:51.485
increasing, you know, living standards abroad,
1146
01:46:51.960 --> 01:47:06.525
or even in American communities that are that are like under banked, like, and and more vulnerable. Like, they would be just working on Bitcoin. Instead, they let their ego go to them and they make their own stuff. And it's all gonna be a huge freaking waste because no one is gonna use this thing. So it's if anything, it's just sad.
1147
01:47:06.905 --> 01:47:10.445
But it is crazy, yeah, to see like, a quote unquote, like, very prominent
1148
01:47:10.770 --> 01:47:11.670
Silicon Valley icon
1149
01:47:12.370 --> 01:47:14.070
pushing a surveillance
1150
01:47:14.850 --> 01:47:15.350
cryptocurrency.
1151
01:47:17.489 --> 01:47:37.895
You know, that's supposed to be a UBI for the world. Like, this idea that you'd you'd help people by, like, sucking up their personal data is exactly what Satoshi was trying to get away from if you if you read that if you read the white paper carefully on that piece, like like, you know, we're just trying to get away from centralized control and the ability for us to feel to interact financially without
1152
01:47:38.355 --> 01:47:43.735
having to disclose our whole ID stack is the key. And it's just funny that this guy's going in the total opposite direction.
1153
01:47:44.110 --> 01:47:46.929
So just remarkable remarkable to see.
1154
01:47:47.230 --> 01:47:48.989
1155
01:47:50.510 --> 01:47:54.335
I mean, I would I would first start with that. You know, I I do think
1156
01:47:54.715 --> 01:47:58.255
that him and his investors legitimately do not understand Bitcoin.
1157
01:47:58.795 --> 01:48:02.015
I think this is kind of proof of that. So it is bullish in the effect,
1158
01:48:02.930 --> 01:48:05.670
that, we're front running them. They haven't really
1159
01:48:06.130 --> 01:48:10.070
invested the amount of money that they should have into putting it into Bitcoin.
1160
01:48:10.705 --> 01:48:12.965
So it's nice that we're ahead of them on that.
1161
01:48:13.985 --> 01:48:14.805
I am
1162
01:48:15.665 --> 01:48:21.220
unfortunately expecting that we're gonna have more of these Orwellian schemes before people basically learn their lesson.
1163
01:48:22.320 --> 01:48:29.795
I think an important takeaway for the freaks is that this is why proof of work exists in the first place, distributed proof of work with this difficulty adjustment mechanism.
1164
01:48:30.255 --> 01:48:32.115
It's a trust minimized way
1165
01:48:32.655 --> 01:48:36.275
of distributing the supply based on how much work you actually do,
1166
01:48:36.880 --> 01:48:39.460
and all of these airdrop to the world schemes.
1167
01:48:40.079 --> 01:48:46.885
I retweeted a tweet that I did in, like, 2018. Like, people have been talking about this shit forever. They always require a a trusted third party
1168
01:48:47.505 --> 01:48:48.325
who determines
1169
01:48:48.865 --> 01:48:50.645
whether or not you've gotten your
1170
01:48:51.105 --> 01:48:52.805
share of the airdrop yet,
1171
01:48:53.570 --> 01:48:54.070
versus,
1172
01:48:55.570 --> 01:48:59.590
you know, scamming it or or fraudulent. And and and we've seen,
1173
01:49:00.744 --> 01:49:04.764
half assed attempts at this with Stellar, for instance, and Stellar did it through Keybase,
1174
01:49:05.385 --> 01:49:08.460
and they basically didn't have KYC. So what was happening was,
1175
01:49:08.940 --> 01:49:17.920
scammers were just making tons of Keybase accounts and collecting the airdrop and then selling it for hard money. They're selling it for Bitcoin, and then they were probably a lot of them were probably going into US dollars afterwards,
1176
01:49:18.465 --> 01:49:21.445
and Keybase had to put a kibosh on it. They, like, added,
1177
01:49:21.905 --> 01:49:25.525
like, a kind of a KYC element. So all of these elements will always require
1178
01:49:26.130 --> 01:49:27.350
some kind of KYC.
1179
01:49:27.650 --> 01:49:35.510
In this case, you know, whether that's a national ID or DNA or something, in this case, they're relying on eye scans because a lot of these countries don't have,
1180
01:49:37.635 --> 01:49:41.335
you know, they don't have very effective ID mechanisms. So it's it's like the,
1181
01:49:41.795 --> 01:49:45.550
you know, the the advanced KYC. It's like the next level of KYC.
1182
01:49:46.890 --> 01:49:55.775
So yeah. I mean, this this scheme will fail. It is a money grab. They do have a pre mine with investors. That's where the investors expect to make money off of this. That's why they invested.
1183
01:49:57.514 --> 01:50:02.130
And it is just straight Orwellian that you're, like, holding a carrot out
1184
01:50:02.770 --> 01:50:30.315
1185
01:50:31.335 --> 01:50:37.030
yeah, like fiction. It almost reads like an April fools joke. Exactly. Yeah. And that's why in
1186
01:50:37.410 --> 01:50:58.310
1187
01:50:59.264 --> 01:51:05.205
everyone who thinks proof of stake is the way, anyone who supported the ICO model, stuff like that, like, they're all
1188
01:51:05.585 --> 01:51:11.110
against this idea of this distributed proof of work, this, you know, this trust minimized way of of distributing,
1189
01:51:13.010 --> 01:51:18.230
distributing wealth based on how much work you put in, verifiable work, work that anyone can verify themselves
1190
01:51:18.675 --> 01:51:22.615
that actually work took place without any kind of KYC or anything like that. Right?
1191
01:51:23.315 --> 01:51:24.115
So there's definitely,
1192
01:51:24.515 --> 01:51:25.450
there's definitely a
1193
01:51:26.810 --> 01:51:28.570
a a non understanding, I think, and,
1194
01:51:29.130 --> 01:51:31.210
that's our advantage freaks. That's our,
1195
01:51:32.090 --> 01:51:34.030
this is this is our alpha. We,
1196
01:51:34.864 --> 01:51:37.125
it it might seem clear to us and
1197
01:51:37.744 --> 01:51:40.005
but the majority of the world is just completely
1198
01:51:42.040 --> 01:51:49.500
1199
01:51:50.735 --> 01:51:55.475
1200
01:51:56.735 --> 01:51:59.635
I wanna remind the freaks that they can go support,
1201
01:52:00.480 --> 01:52:00.980
hrf@hrf.com?org.
1202
01:52:01.960 --> 01:52:02.460
Do
1203
01:52:03.440 --> 01:52:11.025
1204
01:52:11.405 --> 01:52:16.630
is great. Yeah. Hrf.org is good, and we have the Twitter handles. That's good too. And we have hf.org/devfund,
1205
01:52:17.650 --> 01:52:19.030
and that's where you can learn about
1206
01:52:19.330 --> 01:52:20.630
all the dev fund stuff
1207
01:52:21.865 --> 01:52:23.485
we have coming later this year,
1208
01:52:24.185 --> 01:52:28.125
for sure in in the debt fund space. So that'll be good to to track. Awesome.
1209
01:52:29.679 --> 01:52:33.139
1210
01:52:36.055 --> 01:52:45.710
1211
01:52:46.830 --> 01:52:47.489
And then,
1212
01:52:48.350 --> 01:52:51.170
you know, enjoy that on your 4th July. And,
1213
01:52:52.430 --> 01:52:59.265
yeah. If you are interested in joining us in person to meet some activists and help some people understand Bitcoin, you should go to oslo freedomform.com
1214
01:52:59.725 --> 01:53:01.585
and and and just apply.
1215
01:53:02.290 --> 01:53:10.870
And, if you note that you're in this Bitcoin community, we'll we'll get you in and, you'll get to see what's happening there in Miami. It's gonna be pretty fun.
1216
01:53:11.345 --> 01:53:26.520
1217
01:53:27.974 --> 01:53:31.355
streaming stats, the Breeze, and other podcast 2 point o apps,
1218
01:53:32.135 --> 01:53:33.755
using the tipping dot me,
1219
01:53:34.370 --> 01:53:37.270
or the ln URL that's here. All those links are at dispatch.com.
1220
01:53:37.810 --> 01:53:43.270
I'm aware that it is down right now. I do not know why. It happened right before we started
1221
01:53:43.575 --> 01:53:46.555
broadcasting, so I will get on top of that as soon as we finish.
1222
01:53:47.495 --> 01:53:50.955
And I'll see you on Thursday for rabbit hole recap. Cheers.
1223
01:53:52.110 --> 01:53:53.010
Thanks, Alex.
1224
01:53:53.550 --> 01:53:54.289
See you.
1225
01:54:08.225 --> 01:54:11.580
1226
01:54:12.360 --> 01:54:13.020
for lovers
1227
01:54:13.400 --> 01:54:23.675
had a bible, and his left hand had a bottle in the other. He said all you're really giving is the sunshine in your name.
1228
01:54:24.270 --> 01:54:29.650
We both started laughing when the sky started to rain. Get along
1229
01:54:30.030 --> 01:54:33.015
down the road. We got a long way
1230
01:55:09.575 --> 01:55:10.075
lonely?
1231
01:55:11.015 --> 01:55:12.795
Did she leave her hometown
1232
01:55:13.095 --> 01:55:15.435
thinking she'd end up in LA?
1233
01:55:15.975 --> 01:55:26.989
Did she break down in the desert and get stuck beside the highway? Get along, long down the road. We got a long, long way to go. Scared to live,
1234
01:55:27.290 --> 01:55:28.995
scared to die. We ain't
1235
01:55:46.785 --> 01:55:47.605
get along?
1236
01:56:08.225 --> 01:56:12.485
Find out when you die, the keys to heaven can't be bought.
1237
01:56:13.105 --> 01:56:19.960
We still don't know what love is, but we sure know what it's not. Sometimes you got to get along
1238
01:56:20.340 --> 01:56:23.265
down the road. We got a long, long way
1239
01:57:21.800 --> 01:57:26.300
