July 28, 2021
CD32: understanding your legal rights with @deliver8tor
EPISODE: 0.3.2
BLOCK: 692959
PRICE: 2630 sats per dollar
TOPICS: understanding your legal rights, 4th amendment, third party doctrine, trusted third parties, coinjoin is legal, overcompliance, avoiding KYC, censorship, circular economy, boating accidents
@deliver8tor: https://twitter.com/deliver8tor
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00:00 - Using the financial system for societal issues
01:29 - The political dynamic of private sector involvement
09:08 - The role of privacy in Bitcoin
17:50 - The impact of regulations on private Bitcoin usage
27:12 - The Financial Action Task Force (FATF) and its impact on Bitcoin
38:38 - The importance of CoinJoin for financial privacy
47:50 - CoinJoin and its legal status
50:47 - BlockFi's 1099 issue
57:50 - The risks of trusting third parties
01:29:05 - Privacy and the use of CoinJoin
01:30:41 - The normalization of Tor usage and VPNs
01:40:59 - The encroachment on privacy and the future
02:07:34 - Discussion about Bitcoin and Ethereum performance
02:09:10 - Conversation about the demand for garbage vaporware shitcoins
02:11:10 - Conversation about Section 230 and its impact
02:14:45 - Discussion about the empty Bitcoin mempool
02:19:02 - Conversation about freedom, privacy, and making your own decisions
02:22:21 - Discussion about citadels and geographic relocation
02:28:30 - Conversation about the influence and regulations of Facebook, Twitter, etc.
WEBVTT
NOTE
Transcription provided by Podhome.fm
Created: 3/17/2024 4:32:02 PM
Duration: 10060.617
Channels: 1
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You may know that I've long thought about trying to use the financial system to deal with all sorts of issues that,
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that we're confronting in society.
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But one of the things that's happened over the years is anytime anyone's raised the idea of using the financial system for the purposes that you're describing,
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there's been huge financial blowback. And I'll I'll just give you an example. There were a number of banks after, the Parkland shooting,
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that decided they were going to effectively stop making loans,
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to gun manufacturers,
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and that became a huge political issue,
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with several, and, republicans effectively saying that they were going to make it very difficult
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for those companies,
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effectively,
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in terms of how they're gonna be regulated and the like. And so I'm curious about how you think about
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that that dynamic, that political dynamic, the the private sector jumping in, in many cases, in a way that the public sector won't, and yet they won't because there are people on the other side of the argument?
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It's a fair question, Andrew, and I've admired your leadership in your columns and over the years on this issue. And I think you're right in terms of diagnosing
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that the financial system, which makes so much of our economy work and society function, has a role to play.
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Now in the current environment in which we're living, where everything is politicized,
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people seem so polarized. You're right that there is some risk here. But let's be clear. There's nothing political
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about pummeling police officers on the steps of the Capitol. Right? There's nothing partisan
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about beating up people because they're wearing yarmulkes
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or defacing
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black churches or some of the other activity that we've seen. And I think people on both sides of the aisle can agree
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that when extremists exploit these kinds of systems, we all suffer. Now look, If you walk into a Bank of America with a neo Nazi armband with a swastika up there and you say, hey. I wanna hold I wanna open an account. The company has to choose whether they work with you or not. That's not my decision at ADL.
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But I think it's our job to help uncover what's happening so the companies can ensure that their systems aren't used for illegal
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purposes. Some systems you guys were talking about Bitcoin a bit earlier. Things like Bitcoin are very ripe to be and vulnerable
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to be used by extremists because of the way those technologies work. But the mainstream
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banking institutions and financial systems,
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they have a kind they're required to behave with the kind of transparency,
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and they owe it to their shareholders to make sure they're not allowing extremists to exploit their services. Jonathan, one one of the
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Happy Bitcoin Tuesday, freaks. It's your boy, Matt O'Dell, here for another Citadel Dispatch.
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The interactive live show about Bitcoin distributed systems privacy and open source software.
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If you're tuning in from the audio stream,
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that was the Anti Defamation League CEO
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on CNBC
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essentially assinuating
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that Nazis are using Bitcoin. I expect that to be a continued narrative,
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especially among,
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especially targeted at sovereign Bitcoiners, Bitcoiners that use Bitcoin without third parties,
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in a relatively private way.
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I'm pretty excited about this show.
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Before we get started, I just wanna give a really quick shout out to all the freaks who support it.
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Without your support for dispatch, the show would not exist.
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I want this I want dispatch. I've always wanted dispatch. Part of the mission has been to be an audience funded show for the audience, by the audience.
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That includes
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all the freaks who join us in the live chat and participate with the discussion. You make this show unique, but it also includes
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all the freaks who support the show, whether that's your podcasting 2 point o. If you go to new podcast apps.com,
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you can download
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a whole assortment of different podcast apps that support streaming sats, and you can just load it up with sats, and you can stream sats as you listen. It's really, really cool
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just watching the sats stream in after it gets uploaded to the podcast feeds. It's as simple as just installing the podcast app,
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searching Citadel dispatch, loading it up with some sats, deciding how much you wanna stream, and just go for it. So I do appreciate the freaks that do that. You can also contribute through lightning,
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at citadel dispatch.com.
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I also have my pay NIM there. Big thank you to the samurai team. They gave me plus Odell.
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All pay NIM start with plus, so I got the Odell pay NIM.
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So you can go to sidledispatch.com
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if you want to scan that QR code to add me to your samurai wallet.
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I got my first few, pay nim donations, which was pretty fucking cool.
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Or you can go to ciddle dispatch.com/stack
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where you can get merch if you wanna support the show that way if that's how you prefer to do it. What's really cool about that is
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if you wanna buy a hat, the only way you can do it is either through PayNimz or Lightning.
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So there's a bunch of freaks that made their first Lightning payments,
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to to get hats, which is you know, it's it's pretty cool. It's just eating your own dog food. I really enjoy it.
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So, anyway, guys, with all that said, appreciate you all. You guys make this special every Tuesday, every Bitcoin Tuesday.
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I think this is gonna be a very special one.
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We have,
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Rafael Yacobbe joining us. This is serial dispatch 32.
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He's a friend. He's become a close friend, and he's a Bitcoin lawyer.
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On Twitter, his handle is the Liberator with an 8 instead of an a.
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How's it going, Raff?
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It's going pretty good. I mean, I'm I'm happy to be here a long time well, listener of RHR and then just gotten so busy that I need to become a long time listener of Citadel dispatch. But I know I've been promising to come on for a long time and
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appreciate you inviting me. Excited for this.
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Yeah. Absolutely, man. It has been a long time coming.
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And I haven't seen you in person in a minute too, so I I hope to see you in person again soon. We We're we're both in Miami, but,
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I mean, I don't know how it was for you, but I tried to, like
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well, I basically got an email or a text message from everyone that I've met in the last 5 years
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saying something
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like, can't wait to hang out in in Miami
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at the Bitcoin conference.
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And, like, it would it was physically impossible
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to meet even a third of the people that I would like to have met. You know what I mean? Clients and friends and people you know, potential clients and,
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I don't know, see people that I haven't seen in a while. So I don't know how you did it. I mean, I think next time,
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maybe the move is just like, say, hey. I'm gonna be here
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at this time.
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Like, come see me. Yeah. You hold court. You hold court somewhere. Yeah. So I mistakes were made. Lessons were learned. I tried to, like, do too many things
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and
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could not do them.
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Yeah. It was just for me, it was just like a straight,
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it was a week of just a straight whirlwind. No sleep Yeah. Just from one thing to the next. And and god forbid I had plans to do anything because it was just, you know, let's see where the tide takes me. Yeah.
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Yeah. Pretty much. But those we have big corners everywhere. It's pretty cool,
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that we have big corners in so many different professions. You know? They,
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they pigeonhole us and call us, you know, scary supercoaters,
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shadowy supercoaters, but,
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you know, we have big corner plumbers, we have carpenters, we have lawyers,
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we have,
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I don't know, meter maids probably. We're just all over the place.
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Agreed. I don't know about the meter maids, but in general, I agree. There's a big corner meter maid somewhere who's just taken his government salary and put it into Bitcoin. I thought the meter maids were all XRP maximalist.
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Sorry to offend anyone out there who does that.
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Well, as you can tell, this is a live show. I've never considered Bitcoin or meter maids before. It just kind of came into my head.
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Yeah. Because I I just had to park my car. So, anyway,
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let's get to the good stuff. I mean, I think,
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it's pretty timely to have you on.
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Usually, I don't really get along with lawyers, but I've always gotten along famously with you, which means you're either a great lawyer or you're a spook.
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But,
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with everything going on right now in society with this encroachment of our rights, feels like on every single landscape,
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but, obviously, this is a Bitcoin show, specifically to Bitcoin, especially.
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I think it's more timely than ever to have you on, and I think the freaks can appreciate a legal perspective on a lot of the things that we discuss.
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So, I mean, to start, the the main question I see all the time, I mean, we'll just dive right into it,
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Is
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is privacy criminal? Is is trying to seek privacy
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in your everyday life,
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a criminal act? Is it something that people should be ashamed of? Is it something that other people should be suspicious of?
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How do you frame that when you talk when you think about it yourself?
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Sure.
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Well,
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I don't think that privacy is criminal. I mean, I that's not a controversial position in the Bitcoin space, obviously.
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You know, maybe the the ADL would disagree with that based on that clip that you put in the beginning, which I actually hadn't seen before the show. I mean, I just heard about, you know, what they're what they're doing or trying to do, but,
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certainly not criminal. I mean, I feel like
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it's not necessarily a legal take, but for me,
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privacy is essential for having security. I mean, no matter what your security system is for your life or your finances or whatever else you're doing, If people know exactly how it works and they know all the details, then they can, you know, unwind it and undermine it and exploit it. And so just
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at a very, very basic level, you need to have privacy in order to have security, and security is a pretty fundamental,
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you know, human right,
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that human right natural right that everyone should be able to recognize.
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I forgot the rest of the question. That was the the I mean, I think that was a pretty it's a pretty good answer. I don't think anyone's really surprised with the answer. Before we dive into it, I guess I kinda skipped.
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You wanna tell us a little about yourself? I mean, you're you're based in America,
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So the we do have a global audience here, but most of it a lot of it will be American focused, I guess.
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You wanna just tell the freaks a little bit about yourself?
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Sure. So
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well, I'm a lawyer. I live in Miami, grew up in New York, Long Island, Long Island,
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and,
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you know, lived in California for a while, moved out to Miami a couple of months ago.
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And I've been working, you know, in the Bitcoin
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crypto space
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since end of 2017,
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early 2018, and, you know, that's that's a 100% of the work that I do.
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A lot of it is
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a lot of it is regulatory work, a big part of it. And so, you know, that's
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working with a lot of exchanges and
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helping them deal with the Bank Secrecy Act and money transmitter laws and then, you know, various DeFi things,
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all all varieties of hopefully censorship resistant
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decentralized technology.
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Cool. Cool. Yeah. So if if Freaks want to learn more about him, I get what's your website? Thecryptolawyers.com?
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That's right. Thecryptolawyers.com.
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He did tell me before the show
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that, he has more clients than he can handle. So,
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I guess, I I I I don't wanna turn I don't wanna turn anybody down, but, I mean, I'm happily
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happy to be so busy and that I've had such great opportunities to work with so many, you know, awesome companies doing doing cool stuff.
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That being said, I try my best to, like, just make time for the things that are important and matter. So I don't want to, you know, discourage anyone from contacting me if they have a question or have a project or something.
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That's what that's what we love about you.
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So for better or worse, I mean, I think you're just gonna get busier from here. I mean, I I look at regulatory landscape for Bitcoin, and I just see,
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it's weird. I just feel like I'm living in a world where I feel like
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war is brewing,
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and everyone else, there's so many people that are just completely blissfully ignorant to it. Do you feel like
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do you feel like we passed the worst of regulatory hurdles in America in terms of Bitcoin, or do you think it
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it gets, you know, more anti privacy, more anti sovereign from here?
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Yeah. So this is something that I've, you know, been talking about with friends.
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I was
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in I was in Colombia for the last 5 days
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with KYC enthusiast,
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friend of the pod.
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I think you met him at the, at Big Mike 2021. Yeah. Great nimb. He's not actually a KYC enthusiast.
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No. No. He loves it, dude. He he when we were in Columbia, he was just walking around showing everybody his ID, and he was like, please take the shit. You know?
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But we were we were
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we were brainstorming,
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you know,
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where things are going
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and whether there would be a divide between, you know, KYC Bitcoin and non KYC Bitcoin, and we've got all these big institutions that are getting in on it. And
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on one side of it, there's this risk that they create the, you know, walled garden. Right? And and and and and,
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you know, there's the KYC Bitcoin world and non KYC Bitcoin. And the other side of it is, like,
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the more these big institutions get into Bitcoin,
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the more lobbying power we have.
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And
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from my point of view,
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like, big corporations,
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they just they they they always get what they want. Like, I can't think of a time when Google and Amazon and Facebook, like, have something terrible that happens to them. Like, terrible things just don't happen to them. They basically run the country.
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Yeah. And so, you know, as as big institutions get involved in Bitcoin in one way or another, even if it's, you know,
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k y
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c Bitcoin,
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they still have some kind of financial interest
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in Bitcoin continuing
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and people being able to use it.
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And
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I think that decreases the chances of some kind of, you know, drastic, like, widespread ban. Right? Because if, like,
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there's, I don't know, a couple
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$1,000,000,000,000
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in companies that don't want that to happen and are actively profiting from it now,
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even if they're kind of functioning as an arm of the surveillance state a little bit,
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they're just gonna they're just gonna put the brakes on that, I think. But I don't it's unclear how that's all gonna play out. You know what I mean? At some point, we'll be at a point where there's too many people with money that want Bitcoin around that you just you just don't get to take it away anymore. So from my perspective, like, I think we've passed the point of an outright
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Bitcoin ban or outright Bitcoin hostility in America.
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And and and to be clear,
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up until
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probably late 2017,
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I was operating under the assumption that we would see that.
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So
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I would agree that,
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in general, that's a positive development. It's it's something that maybe, you know, I didn't really get public in the space until around that time,
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So it's not a prediction
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that I publicly made that I was wrong about, but it was a prediction that I felt inside, and I was wrong about that. So that it's wrong in a good way,
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but
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I do feel
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I I've I feel like so we passed that point,
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but just because
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their incentives are aligned with us
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in
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the overarching picture of
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outright Bitcoin bans
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doesn't mean that their incentives are aligned with us
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in terms of whether or not you are a sovereign Bitcoiner and you're trying to use Bitcoin in a private way. And I feel
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the pressure of
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these institutions
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to try and
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mold Bitcoin regulation that you know, a big thing we see is is is so called regulatory moats, and and a perfect example in the Bitcoin space is basically what Coinbase did. Coinbase got in the door first,
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in America,
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and then they made
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it really difficult for competitors to come into the space.
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Right.
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We
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basically, what happens is they they use regulations to basically create government like, de facto government monopolies.
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So I'm really mostly concerned about
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this
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them using their influence and their power to try and
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try and
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curtail private Bitcoin usage. Like, I could even see I I I'm right now, I'm up hopefully, this is another prediction I'm wrong about. I'm operating under the assumption that it'll be extremely difficult, if not impossible,
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to withdraw your Bitcoin from these services,
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in 5 years. Do you think that that is a
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do you think I'm wrong on that that assumption or that expectation?
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Well, if you
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okay. So we're just we'll just use the the incentives that we talked about earlier just as, like, an assumption that they'll continue. Right? That there's there's these big institutions that profit from people buying Bitcoin. And Bitcoin that you can't withdraw to your own wallet
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is worth nothing
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as far as I'm concerned. It's worth nothing.
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I mean,
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I I I can't think of a use case for it. If you can't withdraw it, you can't self custody it, you can't spend it where you want to.
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I guess they can't print more Bitcoin, but if it's all locked up on an exchange
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But say that to GBTC holders or say that to,
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you know, the Michael Sailors of the world who are just withdrawing from Coinbase and then sending it to a regulated custodian.
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Right. Well, for for GBDC,
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the fact that the rest of the Bitcoin can be withdrawn and used gives Bitcoin value. But if all of the Bitcoin or, you know, a meaningful amount of the Bitcoin can't be can't be withdrawn and used, I personally don't see
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the value prop being very strong at all.
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And
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if the value prop's not very strong,
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like, they they, you know, they withdraw they they they prevent self custody and then, you know, way fewer people buy Bitcoin and some people sell their Bitcoin and the price is going down,
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it it it's gonna take these businesses are just not gonna be as popular,
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like, at
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all. Right? But people love using Robinhood,
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and, you know, Robinhood has a very successful, you know, quote, unquote, crypto arm. Right. And you can't withdraw anything from there. Right. I think it's the same thing as GBDC. Like, Robinhood Robinhood
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Bitcoin
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is valuable
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because real Bitcoin exists in the wild.
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Right? But if you if if real Bitcoin didn't exist in the wild, then Robinhood Bitcoin and GBDC, they're worth nothing
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or, you know, a lot less.
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I mean, look, I I could be wrong about it too. I'm not saying that you're wrong, but No. I think you're right. I think you're right. My concern is
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I don't know if the powers that be agree with us,
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and
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they could still be wrong,
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and they can, you know, hurt the value prop of Bitcoin. They could hurt the value of Bitcoin,
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and just
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the the the effects of that are it's a it's a lagging effect. It's not something
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you know, to to a lot to a lot of the the powers that be in those in that arena,
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they see
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regulatory acceptance as a positive price factor,
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and it might be a positive price factor in the short term. I mean, it definitely reduces the supply of Bitcoin.
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Mhmm.
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So
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so I could see custodial bans not custodial bans. So
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I have to be very careful in my wording here. It's because it's it's restrictions
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that make it practically impossible to pull out your Bitcoin.
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Mhmm.
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That would reduce the supply. I could see in the short term that increasing the price of Bitcoin,
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But long term,
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obviously,
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it it it it dampens the possibility of a healthy, you know,
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Bitcoin ecosystem.
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Mhmm.
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Well, I'm certainly not counting on them agreeing with our position on things for ideological reasons, just counting on
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them, hopefully,
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agreeing for their own financial gain.
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I mean Right. Like I said, you you you get rid of self custody.
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Now Bitcoin is way less valuable because it's way less useful for a large majority of people,
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and it's not worth as much. And now they're not making as much money as they could if they allowed Bitcoin to be free the way it should be.
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I I don't know if those incentives are gonna play out with the right outcome for us. I I hope that they do. I mean
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Right.
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I don't know. I don't see there also has to be somebody
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who's, like, really motivated to get that done, right, to get those restrictions done. And, like, in in in Europe,
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that could happen at any moment because you don't even they don't even pretend like you have any really basic freedom over there. I mean, that was just like that's just gone. But in the US, like, we're at least we try to pretend,
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and, like, somebody has to be the person, like, demanding that we have get rid of whatever freedom you have remaining.
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And, you know, there are some complainers in in congress, right, like Elizabeth Warren and people like that, but
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I don't know. I feel like they're
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I mean, we had a professor from Cornell. I mean, the one of the things I think we have to our advantage
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is that you have so many different jurisdictions. Right? Bitcoin is global,
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and
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these politicians tend to you know,
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it's it's very hard for them to collaborate with each other. They have difficulty coming to agreements.
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So
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our our greatest advantage is that if
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there's restrictions in one place of the world, maybe there won't be restrictions in another place of the world,
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and Bitcoin will flourish there instead, and people will move there, and companies will move there, and that jurisdiction will benefit. And, hopefully, over a long enough time scale,
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people will compel their politicians to, you know, improve their
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regulation or their laws on Bitcoin,
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basically, as an incentive to seek out tax revenue and,
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you know, just a better better GDP, you know, just better economic growth in their jurisdiction.
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But recently, I mean, we had a professor from Cornell. I think he posted in The Hill,
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basically calling for g 20 nations to come together
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and go after Bitcoin. Right?
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Mhmm.
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And that would be
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I don't know if I don't think they could ever come together and do it, but, you know, that that is the narrative that is playing out right now. Right?
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Yeah. I mean,
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hard to tell. I'm I'm not I'm not globally, politically savvy enough to know, like, how, you know, how well they all collaborate with each other for these kinds of things. I mean, FinCEN is is the primary or the treasury department rather that is the primary regulator here that would be
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most likely to be involved in that process.
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And
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FinCEN, even if I don't really agree with them about certain things, has at least they understand Bitcoin, and, like, they can demonstrate that they understand Bitcoin,
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and have been relatively
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consistent
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in their position on things, relatively thoughtful in their guidance. Like, just it's a it's a major, major difference compared to, like, the SEC,
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right, who who's, like, all over the place
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and
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can't can't give straight answers about, like, simple questions about, like, which which coins and tokens are securities and, you know, they kind of overstep their balance on a lot of things, I think.
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So, you know, we did have that that issue at the end of the last presidency with
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Mnuchin or whatever.
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Right.
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And I think he,
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he just hasn't you know, he he's a globalist. I think Trump called him a globalist. I think he said Trump said something like he's a globalist, but I like him. I think he was talking about Mnuchin. But, he kind of had his own little agenda in particular, but that hasn't happened
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so dramatically
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so dramatically now. So I'm hoping that FinCEN
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being thoughtful
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doesn't become so radical. That's just not been their style so far.
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Well, that's a very optimistic take. I
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I appreciate it. I hope you're right. I hope so too.
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The so, Freaks, you know, we have a lawyer in the house. Obviously, as as with all dispatches, feel free to put your questions in
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the chat. We will try and get to them as much as best as possible.
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To those who are not aware, the live show is broadcast via Twitter, Twitch, and YouTube. All the links are at sildispatch.com.
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And that live that live stream, any of those platforms, if you participate in the live chat, it gets streamed directly into the broadcast,
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for all eternity, which then you could download the video stream on bitcoin tv.com, which is a very novel aspect of dispatch
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that I've grown to love.
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So we will try to get to as many questions as possible if you put them in the chat.
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And, if we don't get to them right away, I am writing them down. So don't,
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get,
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yeah. I've I've been patient,
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so so I I haven't actually been watching the chat. But, also, I don't know if I can zoom down to see the past questions. Like, do they just pop up and then they're gone? I I can see the past questions, but you can't. I have
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I have moderator privileges.
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Anyway,
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the
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so so okay.
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Where do we wanna go from here? So we got we have FinCEN.
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We have FATFA. Right? The big news is FATFA with their travel rule,
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the Financial Action Task Force,
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which is a group of unelected bureaucrats
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that basically decide on guidance that a bunch of member countries, including the US and the European countries,
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then take and implement into their own law. So we have,
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basically, travel rule implementations happening in America
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and Europe and the UK separately because they are technically not Europe now.
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And it's all they're
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they're all basing their implementations off of FATFA, and FATFA has been pretty
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focused, I think, on on Bitcoin and crypto at large.
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Do you consider that an existential threat to Bitcoiners, or do you think that
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are you optimistic about that as well?
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Sure. So, yeah, like you said, you know, unelected
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bureaucrats, and up up till recently, I think the director
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of the FATF was,
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from China,
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obviously, where we shouldn't be taking any lessons about, like,
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financial privacy or surveillance, and it's ridiculous that they would even be in that position to be making
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proposed rules for anybody else.
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But,
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I mean, the the last piece of proposed guidance, which they're now in the process of
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revising,
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was, like,
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totally unreasonable.
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And across the line, it just had all these things in it that that didn't make technological sense in addition to just making not, you know, not making political sense or or, you know, not making sense in general.
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And
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it's worth keeping in mind that that nobody's really required to no countries are required to adopt their recommendations. They can exert some pressure and try to, you know, put your country on the blacklist and things like that, but, obviously, the US is not gonna go on the blacklist. Right? So that's not so we just they don't have any real,
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unilateral power to enforce,
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you know,
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what they the way things they want things to be in the US.
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And what I'm
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the silver lining that I'm hoping to get out of this is that the more unreasonable their recommendations
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are,
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the easier it is to say no to them. You know what I mean? If they were really, like,
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slowly one step at a time
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creeping in the wrong direction,
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then, you know,
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countries will say, well, we'll just agree to this incremental step. It's not really a big deal. It's only a minor change, and they just do that every year, right, until it gets worse and worse and worse. But they're trying to go,
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you know, so quickly with it that,
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like, it's really, really easy to make a defense to their proposed changes
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and to be able to kind of embarrass them. And if we can, you know, get a couple of the right people
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in congress or working with FinCEN to show why, you know,
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the FATF is just not worth listening to on these things, then then we can resist. Now I don't know if other countries will resist or not, but but
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I'm trying to be optimistic on that too.
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Yeah. I mean, I think in general,
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when it comes to the traditional finance world, kind of where America lands is where we go.
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Right. So
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I you can look at that in an optimistic way, or I I guess it'd be worse if it was if if the euro if the EU was kind of the ones who decide
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who ends up on on on blacklists and, like, which member banks end up on blacklists and stuff compared to the United States.
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Yeah. Okay.
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Definitely worse.
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We do. As as you said earlier, we do have,
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but, anyway, so
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the the trend the overwhelming trend with FATFA
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stuff
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hap it seems to be
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we don't want
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people transacting
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in a private way
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on these networks.
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They have shown a
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lack of understanding of how Bitcoin works,
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for sure,
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in terms of what they're requesting,
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But the main gist of their argument and the main,
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you
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know, goals that they seem to have,
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I think most regulators
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tend to agree with,
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which is this idea that
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we should know all the people that are transacting in Bitcoin, and we should be able to track all these transactions if we want to, and then we should be able to go after the individual actors,
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if
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00:30:48.100 --> 00:30:52.120
if we believe that they're breaking laws or they're doing something that we disagree with.
414
00:30:54.580 --> 00:30:57.000
With the travel rule, the idea is
415
00:30:57.895 --> 00:31:04.635
that if 2 regulated parties are transacting between each other for their customers, their users,
416
00:31:05.040 --> 00:31:09.860
They need to be able to handle information between each other on who's sending and who's receiving.
417
00:31:10.960 --> 00:31:16.565
I haven't really seen much pushback on that as a concept. Have you seen pushback on your side?
418
00:31:17.424 --> 00:31:18.885
Well, pushback from who?
419
00:31:19.985 --> 00:31:21.205
I mean, I from
420
00:31:21.585 --> 00:31:22.405
a regulated,
421
00:31:23.860 --> 00:31:24.760
you know, regulated
422
00:31:25.060 --> 00:31:26.920
companies Oh, I see what you mean. Yeah.
423
00:31:27.380 --> 00:31:32.600
The the politicians in the different countries. So as it applies to Bitcoin, I mean,
424
00:31:33.135 --> 00:31:39.635
there are various, you know, organizations or companies that are, like, trying to create systems to make this doable, but
425
00:31:40.420 --> 00:31:56.970
for the most part, it's just not doable currently. Right? Because there's just not a method for easily exchanging that information. And so, you know, if it's impossible to comply with the regulation, then you could just not comply with it. I mean, you know, that's a I think that's a pretty decent defense if you were gonna get in trouble for that.
426
00:31:57.450 --> 00:31:58.669
Right. So
427
00:32:00.809 --> 00:32:06.429
I think, ultimately, it's not it's not really the biggest issue because it's so easy to circumvent.
428
00:32:07.265 --> 00:32:15.525
Like, you can just always withdraw your Bitcoin to your own wallet. You should always do that anyway. And then if you wanna send it somewhere else afterwards, then then do that. But,
429
00:32:16.240 --> 00:32:16.900
you know,
430
00:32:17.360 --> 00:32:26.365
like, you could just go around it. I mean, it's just it's just a rule that that is that is from the traditional financial system, and it still exists, and nobody's changed it. And so
431
00:32:26.985 --> 00:32:34.880
now exchanges are supposed to follow it because it was in the rule which was written for, you know, traditional financial institutions, like, 60 years ago.
432
00:32:35.580 --> 00:32:38.080
I mean, that's what that's what a lot of it is. Right?
433
00:32:38.755 --> 00:32:46.680
It's not like they created the travel rule just for crypto. It already existed. It doesn't make any sense for crypto, and now they have to figure out how to, you know, how to enforce it
434
00:32:47.400 --> 00:32:48.860
for for crypto or Bitcoin.
435
00:32:49.560 --> 00:32:55.820
But it feels like does it not feel like the first it that that's, like, what you nail down first. So you do that first,
436
00:32:56.355 --> 00:32:59.255
and then you start trying to basically put restrictions
437
00:32:59.635 --> 00:33:02.775
on people withdrawing to their own sovereign wallets.
438
00:33:03.235 --> 00:33:09.850
Am I am I completely off here? Is is that not No. I mean, you're right. It's how you would do it if you were gonna do it? It's
439
00:33:10.390 --> 00:33:13.370
certainly incrementally worse than it not existing,
440
00:33:13.750 --> 00:33:14.549
right, if they just
441
00:33:15.205 --> 00:33:16.425
you know, if you could just
442
00:33:16.725 --> 00:33:17.225
withdraw
443
00:33:18.085 --> 00:33:22.185
and the Bitcoin goes where it's gonna go, that would be more ideal than them
444
00:33:22.540 --> 00:33:27.600
collecting information and sending it back and forth and all that, but we should all be trying to get off of
445
00:33:28.060 --> 00:33:30.320
KYC exchanges when possible anyway.
446
00:33:30.815 --> 00:33:33.394
I mean, it should be a last resort.
447
00:33:33.774 --> 00:33:35.394
I feel like in the short term,
448
00:33:37.375 --> 00:33:39.235
the optimistic take is
449
00:33:39.710 --> 00:33:43.250
that it actually kind of encourages best practices. Right? Because,
450
00:33:44.430 --> 00:33:47.810
from an exchange or a regulated provider's point of view,
451
00:33:48.435 --> 00:33:48.935
it's
452
00:33:49.555 --> 00:33:54.055
they prefer now, under a travel rule regime, they prefer if you just
453
00:33:54.595 --> 00:34:01.980
withdraw constantly to your own wallet instead of using their wallet as, like, a wall a proper wallet and paying people from it. Right.
454
00:34:03.320 --> 00:34:06.220
My my my concern is more long term.
455
00:34:08.755 --> 00:34:11.255
I I just yeah. I I I feel like
456
00:34:12.275 --> 00:34:15.415
like maybe, like, that's the opening salvo, and it's just
457
00:34:16.170 --> 00:34:19.310
it just gets worse from here. It gets worse before it gets better.
458
00:34:20.090 --> 00:34:22.910
Well, long term, we have to make them obsolete.
459
00:34:23.825 --> 00:34:27.045
Right. Right? So maybe we're talking about the medium term.
460
00:34:27.425 --> 00:34:37.410
Yeah. True. True. Uh-huh. But I know what you mean. I mean, it's not Yeah. I'm talking about the medium term because I think long term, like, I'm bullish on this idea of a Bitcoin circular economy existing. I think, ultimately,
461
00:34:37.710 --> 00:34:38.210
regulations
462
00:34:39.150 --> 00:34:40.849
will will make these
463
00:34:41.625 --> 00:34:42.125
companies,
464
00:34:42.744 --> 00:34:43.724
you know, uncompetitive
465
00:34:44.105 --> 00:34:44.605
against
466
00:34:44.984 --> 00:34:46.365
projects that are
467
00:34:46.905 --> 00:34:52.370
that are, you know, sovereignty focused and privacy focused, and and users will seek out those
468
00:34:52.750 --> 00:35:03.605
projects because they'll be so much more superior to regulated counterparts. And they they will have less friction, and it'll have better UX. That that's my long term expectation. Right? So medium term, though
469
00:35:05.880 --> 00:35:09.020
and I and to be clear, like, I don't really think it's a threat to Bitcoin,
470
00:35:09.640 --> 00:35:10.300
the network,
471
00:35:11.320 --> 00:35:14.940
or Bitcoin, the protocol. I think it's a threat to individual Bitcoiners
472
00:35:16.265 --> 00:35:17.565
who are not, you
473
00:35:17.865 --> 00:35:19.805
know, doing best practices today
474
00:35:20.265 --> 00:35:24.765
that maybe have their funds on a KYC exchange. Maybe they have them on even Robinhood.
475
00:35:25.110 --> 00:35:26.730
I don't think there's many listeners
476
00:35:27.670 --> 00:35:29.770
of this show that have their funds on Robinhood,
477
00:35:31.030 --> 00:35:31.850
but I think,
478
00:35:32.595 --> 00:35:43.060
a lot of the freaks have friends and family that have their funds on Robinhood. I know I do. I get a text all the time, like, how do I withdraw from Robinhood? And it just kills me. Like, it makes it completely obvious how big the scam is. Right.
479
00:35:43.460 --> 00:35:47.380
When you get that text, because they just get tricked into it, and they don't even realize.
480
00:35:48.820 --> 00:35:52.994
And then you have other, you know, you have other platform you have platforms like Cash App, where
481
00:35:53.855 --> 00:35:56.515
they don't give you for for friction purposes,
482
00:35:57.455 --> 00:36:00.595
they don't give you the brunt of your KYC till it comes time to withdraw.
483
00:36:01.180 --> 00:36:04.640
So, like, you think you're all set up and you got everything ready to go,
484
00:36:05.420 --> 00:36:09.440
and then when you comes time to withdraw, you either fail the KYC check
485
00:36:09.965 --> 00:36:10.465
or
486
00:36:11.165 --> 00:36:18.365
you'd get hit with you know, you gotta scan your I don't even know what they do now at this point, but you have to scan your ID or something like that, and it's
487
00:36:19.270 --> 00:36:24.550
I'm And then you get hit with withdrawal limits. Right? You can only withdraw a certain amount of Bitcoin at a time. You can't even
488
00:36:25.270 --> 00:36:31.445
Yeah. I think I never did the KYC on Cash App, and so I just bought some Bitcoin there at some point and then just never did the KYC.
489
00:36:31.825 --> 00:36:32.565
And I guess,
490
00:36:32.865 --> 00:36:35.125
well, I guess the thing to do is just sell it.
491
00:36:35.930 --> 00:36:39.630
Well, like, obviously, you can't use Cash App without KYC because
492
00:36:40.010 --> 00:36:53.529
they attached it to your bank account or whatever, but they do, like, enhanced KYC when it comes time to actually withdraw your Bitcoin. Right. Right. Yeah. The 2nd level. 2nd level. And I think that's pretty common. So I think there's a lot of people that just have Bitcoin on exchanges, and they're gonna
493
00:36:55.109 --> 00:37:00.950
they're just gonna they're there's gonna be a point of pain depending on their jurisdiction at different times. And
494
00:37:01.585 --> 00:37:06.885
Right. And, you know, they'll learn no lesson, but they're gonna learn it by burning the fuck out of themselves, not because
495
00:37:07.265 --> 00:37:08.730
you know, not in a positive way.
496
00:37:09.930 --> 00:37:13.390
Well, everyone that's been in Bitcoin for a while has learned all kinds of lessons.
497
00:37:13.690 --> 00:37:16.109
Right. Lots of burning. I mean,
498
00:37:16.725 --> 00:37:24.345
I don't know. If you if you've been interested in Bitcoin for, like, 5 plus years, you probably could have been, like, 25 x richer than you are. Right?
499
00:37:24.670 --> 00:37:36.805
Right. You could have had way more Bitcoin. You probably traded some of it. You probably bought some shit coins, and this is just another one of those lessons where just people are gonna learn different lessons now. Like, instead of getting hacked and getting phished
500
00:37:37.105 --> 00:37:40.085
and, you know, downloading some virus and losing all your Bitcoin,
501
00:37:40.625 --> 00:37:49.190
you might get confiscated by the state or something like that. I don't know. It seems like a I prefer the old way, I mean, of of losing your Bitcoin, but,
502
00:37:50.780 --> 00:37:51.095
but
503
00:37:51.655 --> 00:38:05.799
we everyone has to learn lessons. You know what I mean? Expensive ones. Probably way more expensive than these. We'll see. I don't know. But one thing I wanted to mention about the travel rule, something that I've been thinking about lately is that we have a very tiny set of
504
00:38:06.339 --> 00:38:07.240
financial privacy
505
00:38:07.835 --> 00:38:10.555
laws in the US, and and one of the main ones is,
506
00:38:11.355 --> 00:38:14.095
the Gramm Leach Bliley Act, GLBA,
507
00:38:15.140 --> 00:38:18.279
and that requires that financial institutions have to safeguard,
508
00:38:18.579 --> 00:38:21.240
you know, private, nonpersonal financial information.
509
00:38:21.779 --> 00:38:22.279
And,
510
00:38:23.220 --> 00:38:23.799
you know,
511
00:38:24.845 --> 00:38:28.065
there there are good arguments to be made there that, like,
512
00:38:28.684 --> 00:38:30.820
CoinJoin, which I'm sure we're gonna talk about,
513
00:38:31.220 --> 00:38:41.545
you know Yes, sir. Is is hopefully gonna be necessary for for complying with the law, not just not just something that is you're allowed to do, but that
514
00:38:41.845 --> 00:38:47.704
you should be required to do. Otherwise, you go straight to jail. So we're gonna start with Coinbase, and we're gonna start with BlockFi.
515
00:38:48.005 --> 00:38:48.905
Straight to jail.
516
00:38:49.480 --> 00:38:53.820
I mean, this is an argument that, I love that comes out of Francis Pouillet.
517
00:38:54.120 --> 00:38:56.460
Right. Sorry if I butchered your name, Francis,
518
00:38:56.760 --> 00:39:00.885
and Canada with Bold Bitcoin because they coin join all user deposits.
519
00:39:03.265 --> 00:39:08.165
It that doesn't necessarily help the individual user's privacy, but his argument is basically
520
00:39:08.970 --> 00:39:13.790
if we're supposed to safeguard financial privacy of all of our users as a total,
521
00:39:15.290 --> 00:39:19.575
the only way to responsibly do that is CoinJoin. If you don't use CoinJoin, you're not complying,
522
00:39:19.955 --> 00:39:21.895
with Canadian privacy law.
523
00:39:23.315 --> 00:39:26.775
I do think that most operators in the space of regulated
524
00:39:27.200 --> 00:39:29.940
businesses do not have the balls that Bold Bitcoin has,
525
00:39:31.360 --> 00:39:34.100
and most of them just tend to roll over and overcomply.
526
00:39:35.200 --> 00:39:35.700
You
527
00:39:37.105 --> 00:39:45.204
you mentioned and at the end of the day, like, look, we're in Bitcoin because of incentives. Right? I believe that the incentives that people act greedy over over the long enough term
528
00:39:46.100 --> 00:39:47.560
makes Bitcoin more robust.
529
00:39:48.420 --> 00:39:54.280
But we can't ignore the incentives on the short term. That means that these regulated businesses are gonna do
530
00:39:55.245 --> 00:39:57.005
what is best for them, and,
531
00:39:58.125 --> 00:40:05.050
they're gonna do things that you know, I mean, we saw a perfect example is Eric Voorhees, who is very vocally anti state,
532
00:40:06.470 --> 00:40:08.170
completely bent the knee on ShapeShift,
533
00:40:10.205 --> 00:40:17.025
and added KYC. And why? It's because his funds were at risk. They were gonna take his money. He became rich. He became a big target,
534
00:40:18.049 --> 00:40:23.589
and they put him in jail. And he wanted to look out for himself, and that that's the incentive that did that.
535
00:40:24.130 --> 00:40:26.150
Since then, there's been all these different
536
00:40:27.415 --> 00:40:32.635
strategies he's made to try and remove the KYC, and he has removed the KYC rest recently. We'll see,
537
00:40:33.255 --> 00:40:34.590
you know, how that works out,
538
00:40:35.230 --> 00:40:38.290
on a on a long term. A lot of it, I think, is just decentralization
539
00:40:38.590 --> 00:40:44.924
theater. But in general, it's good to see, you know, regulated operators kinda stand up and and try and fight for their users,
540
00:40:46.345 --> 00:40:48.424
and fight for Bitcoin. I I just think that's
541
00:40:49.520 --> 00:40:50.820
it's kind of rare.
542
00:40:51.280 --> 00:40:54.180
Right. One thing to keep in mind is that,
543
00:40:54.800 --> 00:40:58.580
you know, many of them probably don't wanna talk about it. They don't wanna talk about it publicly,
544
00:40:59.225 --> 00:41:01.165
and there's this kind of, like,
545
00:41:01.785 --> 00:41:06.445
you know, game theory of which exchanges are gonna take what position on on CoinJoin.
546
00:41:07.065 --> 00:41:07.565
And,
547
00:41:08.210 --> 00:41:14.470
you know, if it that's gonna push the industry standard in one direction or another. But something else to consider is that
548
00:41:14.770 --> 00:41:15.330
the more
549
00:41:15.875 --> 00:41:21.815
even if they're gonna be KYC exchanges, the more the more businesses there are, the harder they are to
550
00:41:22.115 --> 00:41:23.015
to regulate
551
00:41:25.390 --> 00:41:35.885
and harder they are to kind of crack down on, I think. I mean, if you just have, like, you know, Coinbase and Kraken and and and and BlockFi and, you know Gemini. Other major ones like that, right, then
552
00:41:36.985 --> 00:41:41.060
they can have really high standards. They create the regulatory moat. They make it difficult for competitors
553
00:41:49.865 --> 00:41:51.165
that are that are small,
554
00:41:52.585 --> 00:41:54.684
and ideally doing smaller volume,
555
00:41:55.145 --> 00:41:55.645
then
556
00:41:56.460 --> 00:41:57.599
there's just more
557
00:41:58.059 --> 00:41:58.559
flexibility
558
00:41:58.859 --> 00:41:59.839
there, I think.
559
00:42:00.380 --> 00:42:00.880
And,
560
00:42:02.140 --> 00:42:07.815
well, you can just get away with more stuff. That's just how it is. You know what I mean? Like, it's just not that easy to regulate
561
00:42:08.115 --> 00:42:09.655
10,000 corner corner
562
00:42:10.115 --> 00:42:13.974
businesses than it is to, like, just log in to Coinbase's
563
00:42:15.060 --> 00:42:19.560
cloud, right, and see all the data, see everything they're doing, and monitor it in real time.
564
00:42:20.260 --> 00:42:24.965
Right. So to the extent that KYC businesses are gonna continue to grow
565
00:42:25.265 --> 00:42:25.765
and
566
00:42:26.065 --> 00:42:28.725
and and thrive, which they basically are whether we like it or not,
567
00:42:29.105 --> 00:42:33.520
it's for me, I prefer that there be more of them and that they'd be smaller.
568
00:42:34.060 --> 00:42:34.560
But,
569
00:42:36.940 --> 00:42:42.205
disclosure, that's good for me as a lawyer, obviously, because I work with lots of them. But, also, I just want it to be that way.
570
00:42:43.465 --> 00:42:45.005
Right. But, I mean, we have,
571
00:42:46.425 --> 00:42:49.885
I mean, we have companies, large companies, well funded companies,
572
00:42:50.850 --> 00:42:51.750
like BlockFi
573
00:42:52.050 --> 00:42:52.550
and
574
00:42:53.170 --> 00:42:53.670
Bottlepay
575
00:42:54.610 --> 00:42:55.110
that
576
00:42:55.730 --> 00:42:58.150
seem to over comply in a lot of ways,
577
00:42:59.825 --> 00:43:03.285
where regulations don't necessarily say they have to. I mean,
578
00:43:03.585 --> 00:43:09.445
BlockFi is probably one of the darlings of the industry from a lot of people's perspectives. I mean, obviously, not mine.
579
00:43:10.680 --> 00:43:13.500
They're raising a shit ton of money. They're constantly on CNBC.
580
00:43:14.840 --> 00:43:17.635
They have these high interest rates that attract, you know,
581
00:43:18.115 --> 00:43:20.615
new Bitcoiners into depositing their funds.
582
00:43:21.075 --> 00:43:27.350
And then, you know, they they pay podcasters for the ad model. You know, they pay for their sponsorships. They get the mid rolls.
583
00:43:28.230 --> 00:43:37.234
It's one of the reasons why I started Ciel dispatch and why it has no ads. It's because I feel like the incentives are aligned with the the listener rather than these, you know, regulated
584
00:43:37.615 --> 00:43:41.234
companies that are the ones that'll pay the big dollars to,
585
00:43:42.815 --> 00:43:46.740
for the ad deals. But I have so on the screen right now, I have,
586
00:43:47.040 --> 00:43:47.860
from BlockFi,
587
00:43:49.040 --> 00:43:51.220
this is their prohibited uses page.
588
00:43:53.065 --> 00:43:54.285
You can't withdraw
589
00:43:54.744 --> 00:43:58.045
or deposit from any mixing services, which attempt to
590
00:43:58.880 --> 00:44:03.780
obfuscate the source of funds, which includes CoinJoin even though they call it mixing. CoinJoin isn't mixing.
591
00:44:04.880 --> 00:44:05.940
Peer to peer exchanges,
592
00:44:06.240 --> 00:44:07.460
which do not do KYC,
593
00:44:08.395 --> 00:44:09.775
gambling sites, or
594
00:44:10.635 --> 00:44:12.815
funds known to belong to darknet marketplaces.
595
00:44:13.435 --> 00:44:14.495
So if you
596
00:44:15.250 --> 00:44:19.829
if you fall under any of those baskets, whether that's on the deposit or withdrawal side,
597
00:44:21.730 --> 00:44:23.829
they'll close your account. So they
598
00:44:24.325 --> 00:44:26.985
they direct directly prohibit they're basically
599
00:44:27.285 --> 00:44:33.720
hourly attacking Bitcoin fungibility. You know? Yeah. Yeah. Agreed. I mean, it's really disappointing that they're, like, explicitly
600
00:44:35.380 --> 00:44:35.880
explicitly
601
00:44:37.140 --> 00:44:38.680
not even hiding their
602
00:44:39.300 --> 00:44:41.240
hostility towards, you know,
603
00:44:41.765 --> 00:44:42.984
basic best practices
604
00:44:43.365 --> 00:44:50.345
and proper proper Bitcoin usage, and it and it puts all their customers in danger. I mean, I I called their CEO out about it a while ago.
605
00:44:51.309 --> 00:44:56.609
I mean, they even had a hack. Right? They had a hack where private data was taken, and, literally, they just
606
00:44:56.990 --> 00:44:59.490
their all their users are are naked on the blockchain,
607
00:45:00.555 --> 00:45:02.255
because they're not allowed to use CoinJoin.
608
00:45:03.035 --> 00:45:07.535
And, I mean, you mentioned earlier, you mentioned, you know, a lot of these I I think we should give
609
00:45:08.710 --> 00:45:15.849
regulated operators a break in some regard because I understand if they don't they don't wanna come out specifically pro privacy,
610
00:45:17.005 --> 00:45:17.505
publicly.
611
00:45:17.805 --> 00:45:19.744
Maybe they're doing things in back channels,
612
00:45:20.205 --> 00:45:23.185
but to do the opposite and come out publicly
613
00:45:23.970 --> 00:45:26.789
against privacy best practices when using Bitcoin,
614
00:45:30.529 --> 00:45:32.950
seems unforgivable to me. It is unforgivable.
615
00:45:33.875 --> 00:45:35.175
Hashtag delete BlockFi.
616
00:45:36.435 --> 00:45:45.880
Okay. Well, I'm glad we got that out of the way. Yeah. While we're here, I mean, you brought up CoinJoin. I think of of, you know, obviously, dispatch talks about using CoinJoin. I I think,
617
00:45:48.900 --> 00:45:56.005
I I want to be absolutely clear here that, you know, we just were discussing BlockFi, and BlockFi puts CoinJoin under mixing services.
618
00:45:56.384 --> 00:46:02.120
To me, a mixing service is a custodial service that you send Bitcoin to, and they send you someone else's Bitcoin.
619
00:46:02.900 --> 00:46:05.080
A coin join transaction is a
620
00:46:05.700 --> 00:46:08.520
is a is a standard Bitcoin send transaction,
621
00:46:10.115 --> 00:46:13.095
that's collaborative. You have multiple parties in the send,
622
00:46:13.875 --> 00:46:17.974
and it incorporates privacy best practices in that send,
623
00:46:18.570 --> 00:46:24.590
so that your transaction isn't immediately obvious on chain whether or not ownership changed hands and where it changed.
624
00:46:25.855 --> 00:46:29.075
It is something that I like to see become more common in the space.
625
00:46:29.694 --> 00:46:37.869
One of the main arguments I hear is, if I use CoinJoin, I can't use Block Fi. And if I can't use Block Fi, maybe I can't use other regulated
626
00:46:38.970 --> 00:46:42.349
products in the future, whether that's BlockFi or something else,
627
00:46:43.165 --> 00:46:44.625
that it is an illegal
628
00:46:45.565 --> 00:46:49.825
thing to do, that that that it's not legal in America to use CoinJoin.
629
00:46:51.140 --> 00:46:59.559
I do I do before we get to it, I just want to say to the listeners, I think me and Rafael were on Stephan's podcast, I think, in 2019, late 2019.
630
00:47:00.805 --> 00:47:02.185
But I'm sure if you go to stephanlovera.com
631
00:47:02.725 --> 00:47:07.385
and search, you can pull it up. And we talked about this topic specifically at length.
632
00:47:08.805 --> 00:47:11.210
But for the freaks here now,
633
00:47:12.470 --> 00:47:13.690
do you believe CoinJoin
634
00:47:14.069 --> 00:47:16.730
is legal in the United States using CoinJoin?
635
00:47:17.845 --> 00:47:20.184
I do. I mean, it is, and
636
00:47:21.444 --> 00:47:25.865
the regulations that are relevant don't apply to individual users. So it's not like
637
00:47:26.210 --> 00:47:29.430
there's rules about how you can use your Bitcoin assuming it's a noncriminal
638
00:47:30.049 --> 00:47:33.589
you know, you're not doing something that's criminal. Right? So the rules are on the financial institutions
639
00:47:34.210 --> 00:47:34.950
that would,
640
00:47:35.455 --> 00:47:35.955
you
641
00:47:36.335 --> 00:47:43.955
know, potentially limit or restrict people who are using CoinJoin, and and the rule comes from the Bank Secrecy Act and requires that they take
642
00:47:44.390 --> 00:47:45.849
reasonable measures to
643
00:47:46.150 --> 00:47:54.775
prevent money laundering, you know, based on the kind of customers they have and the risks and blah blah blah. So it's kind of like a flexible standard. It's not it's definitely not a black and white thing.
644
00:47:55.635 --> 00:47:56.135
You
645
00:47:56.755 --> 00:48:01.974
know, there's CoinJoin is not written into the law. There's no statute that says it's legal legal or illegal,
646
00:48:03.200 --> 00:48:03.780
but FinCEN
647
00:48:04.240 --> 00:48:04.740
described
648
00:48:05.520 --> 00:48:06.020
CoinJoin,
649
00:48:06.400 --> 00:48:18.744
you know, pretty spot on in their in their 2019 guidance, which was the last big piece of guidance that they put out, and they talked about how wallets that facilitate CoinJoin aren't money services businesses and therefore don't have to do KYC,
650
00:48:19.125 --> 00:48:21.859
don't have to report anything. Right? They're just software.
651
00:48:22.160 --> 00:48:23.700
And if they wanted to
652
00:48:24.720 --> 00:48:27.140
if they wanted to point out that they think that
653
00:48:27.815 --> 00:48:37.710
doing coin join is is evidence of criminality, then they could have just said so. I mean, there's, like, literally nothing stopping them from saying that. They could have said that it was suspicious, and they just didn't, and
654
00:48:38.890 --> 00:48:40.490
that's a good sign. I mean, they're
655
00:48:41.050 --> 00:48:46.095
it's ridiculous that that BlockFi takes a more conservative position than than than FinCEN itself.
656
00:48:46.395 --> 00:48:51.615
You know, when when BlockFi is trying to make 1,000,000,000 of dollars off of of Bitcoin and Bitcoiners.
657
00:48:52.450 --> 00:48:54.630
One last thing to mention about BlockFi, because it just
658
00:48:54.930 --> 00:48:58.950
particularly annoyed me, is that if you deposit stable coins to BlockFi,
659
00:48:59.635 --> 00:49:00.855
they will send you a 10.99
660
00:49:01.315 --> 00:49:03.175
even if you don't have a taxable event.
661
00:49:03.635 --> 00:49:09.029
So if you deposit stable coins where you don't wanna give them your Bitcoin, but you put your stable coins in, they're gonna send you a 10.99
662
00:49:09.329 --> 00:49:09.829
spontaneously.
663
00:49:11.089 --> 00:49:12.710
That also goes to the IRS,
664
00:49:13.250 --> 00:49:32.790
and they're gonna mark your cost basis on the stable coins as 0 or unknown. So, like, if you deposit a 100 grand, they're gonna send something to the IRS saying, this person deposited a 100 grand, and we don't know what they paid for those stable coins even though, of course, the price of a stable coin is always a dollar. Right? Or ideally, almost always a dollar. And so supposed to be.
665
00:49:33.285 --> 00:49:37.305
Right. Supposed to be most of the time, it usually is. You know? And so
666
00:49:37.765 --> 00:49:42.184
the result of that is that if you deposit stable coins to BlockFi, BlockFi
667
00:49:42.730 --> 00:49:43.630
is going to
668
00:49:44.170 --> 00:49:45.550
make it look to the IRS
669
00:49:46.090 --> 00:49:51.070
like you have whatever that that amount of money in, like, undeclared income. Like, they're turning you into a criminal.
670
00:49:51.605 --> 00:49:52.905
You know? And then you have
671
00:49:53.205 --> 00:50:02.740
to explain to the IRS, you know, in your tax filing, well, actually, I deposited those, but, like, they weren't really taxable income because I only paid a dollar for them because that's what stable coins cost.
672
00:50:03.040 --> 00:50:06.180
So that's just, like, insult. And then what? You have to show, like, proof.
673
00:50:06.640 --> 00:50:12.234
Do you have to show proof in that situation that you bought them for a dollar? You basically have to fill in the blank. Right?
674
00:50:12.615 --> 00:50:28.734
So they're saying you you had you had a $100 of stable coins, and now you have to fill in the blank and say, well, I I paid a $100 for them. So there's no taxable event, which is obvious. Right? But now more of your data is going to the IRS, and they know more about your, you know, crypto activity.
675
00:50:29.194 --> 00:50:29.694
And,
676
00:50:29.994 --> 00:50:33.055
like, you're now in a compromised position where
677
00:50:33.420 --> 00:50:35.360
you have to correct their perception
678
00:50:35.740 --> 00:50:41.840
of you. And even in, like, a best case scenario, your your time is extremely wasted, and time is valuable.
679
00:50:42.300 --> 00:50:43.555
Yep. So
680
00:50:44.175 --> 00:50:47.075
it's really, like I I don't know what their problem is.
681
00:50:47.935 --> 00:50:49.055
Do you think that is,
682
00:50:49.615 --> 00:50:52.440
do you think that's over compliance, or do you think that is
683
00:50:53.319 --> 00:50:54.859
just, poor execution
684
00:50:55.160 --> 00:50:56.540
laziness on their part?
685
00:50:57.079 --> 00:51:00.780
Well, their their anti coin joint position is definitely over compliance.
686
00:51:01.095 --> 00:51:01.994
And the 1099
687
00:51:02.295 --> 00:51:03.434
issue, I think,
688
00:51:03.734 --> 00:51:05.115
is because they've
689
00:51:05.815 --> 00:51:07.994
they might be registered as a broker dealer.
690
00:51:08.750 --> 00:51:11.170
And so because they have a securities registration,
691
00:51:11.630 --> 00:51:14.530
broker dealers always do the automatic 10.90 nines.
692
00:51:14.910 --> 00:51:18.625
Whereas, like, other businesses that are just dealing in commodities and not securities
693
00:51:19.165 --> 00:51:27.830
only have to send 10 10.90 nines under certain circumstances. Right? If there's a taxable event or, you know, sales above a certain amount, a certain number of transactions,
694
00:51:28.290 --> 00:51:35.345
but they could have thought about that when they were getting these licenses, They could have maybe created a separate entity for doing Bitcoin stuff,
695
00:51:35.964 --> 00:51:44.440
you know, separate from the security stuff so that they don't have to send it for 10.90 nines. Like, you should be thinking about that. I mean, it's like shitcoin support kind of compromised them a bit there.
696
00:51:45.060 --> 00:51:49.960
Is that what you're saying? Because, like, the shitcoins can be classified as securities, but Bitcoin is not a security.
697
00:51:50.765 --> 00:51:55.665
I don't I don't think they're taking the position that the shitcoins that they support are securities.
698
00:51:56.205 --> 00:52:06.130
I think it has something to do with the lending and the interest earning product. Right? Like, if you saw recently, like, a couple of states are going after them saying that the interest earning product
699
00:52:06.589 --> 00:52:07.490
that they're giving
700
00:52:08.045 --> 00:52:12.945
is an offering of securities. Like, if you Yeah. The actual product itself is the security. Yeah.
701
00:52:13.245 --> 00:52:13.745
Yeah.
702
00:52:14.205 --> 00:52:19.410
But and they and they have probably some kind of federal registration, but they didn't deal with the state issue.
703
00:52:21.470 --> 00:52:27.805
It's not it's not clear yet. I mean, it's just, like, just happening over the last week or so. But if you're building a product
704
00:52:28.505 --> 00:52:38.200
for people that use Bitcoin, like, you should be thinking about what am I going to have report about them and, like, I wanna know that if I was ever gonna sign up for an exchange, I would wanna know
705
00:52:38.740 --> 00:52:45.915
when they're gonna send my send me 10.90 nines or when they're gonna send 10.10.90 nines to the IRS and when they wouldn't and under what conditions. So
706
00:52:47.000 --> 00:52:57.194
it's hard to give them the benefit of the doubt. I mean Right. You you should have their CEO on here and ask him some questions. You know what I mean? I mean, I don't think he's gonna come on dispatch, to be honest. Mhmm.
707
00:52:58.535 --> 00:53:00.714
It is a live show, so there's no edits.
708
00:53:01.255 --> 00:53:01.755
Uh-huh.
709
00:53:02.055 --> 00:53:14.885
Provably no edits, and you can't control what the the live chat is not moderated, so you can't control what comes up on the live chat either. Nice. So I kind of doubt that he would come on dispatch. But if he wanted to, he'd be welcome to.
710
00:53:16.485 --> 00:53:22.025
Okay. So, I mean, let's go back a little bit. You said CoinJoin is completely legal in the United States, it seems like.
711
00:53:24.280 --> 00:53:25.020
Do you
712
00:53:25.320 --> 00:53:29.340
think that that could change in the future? Do you have concerns that in the future,
713
00:53:29.800 --> 00:53:30.780
it could be considered
714
00:53:31.080 --> 00:53:31.580
a
715
00:53:34.345 --> 00:53:35.484
a criminal act.
716
00:53:36.665 --> 00:53:38.045
I mean, that seems pretty
717
00:53:38.585 --> 00:53:39.885
that seems pretty unlikely.
718
00:53:40.185 --> 00:53:40.505
What's
719
00:53:42.730 --> 00:53:44.910
pretty unlikely because it's probably not
720
00:53:45.529 --> 00:53:49.549
probably not constitutional. I mean, I'm not a con law expert, but
721
00:53:50.885 --> 00:53:53.224
what's a a greater risk is that
722
00:53:54.325 --> 00:53:58.425
BlockFi leads the way and other exchanges copy them and all take this position
723
00:53:58.805 --> 00:53:59.305
because
724
00:54:00.260 --> 00:54:10.285
the the anti money laundering regulations don't tell you exactly what you need to do or not to. They just kind of set up these incentives that, well, you have to make sure you're doing as much as everyone else is doing.
725
00:54:10.585 --> 00:54:13.725
Right? So you can say, well, it's reasonable because everyone's doing it.
726
00:54:14.105 --> 00:54:23.245
And then you have, you know, compliance companies that wanna sell you something, and and, you know, the more suspicious stuff that's happening, the more you need them.
727
00:54:23.645 --> 00:54:27.825
Right? You know, you could see this happening with Chainalysis or companies like that that
728
00:54:29.085 --> 00:54:35.620
the incentives are just in the wrong direction. The incentives are towards over compliance or greater and greater compliance and greater and greater costs,
729
00:54:36.000 --> 00:54:46.975
which, you know, also benefit the big companies because it makes makes it more difficult for competitors to to compete and get started. Right? Like, even even now, if you start a new Bitcoin exchange
730
00:54:48.150 --> 00:54:50.170
and you wanna create, you know, a reasonable
731
00:54:50.550 --> 00:54:51.050
privacy
732
00:54:52.070 --> 00:54:52.570
respecting
733
00:54:52.870 --> 00:54:57.905
compliance program to the extent such a thing is possible, which I try to do when I work with clients,
734
00:54:58.605 --> 00:55:02.704
you you might just get forced into doing things you don't wanna do if you wanna get a bank account.
735
00:55:03.380 --> 00:55:10.120
So, like, even though the law doesn't require that you do any of these things, the bank that, you know, you might share a bank with Coinbase,
736
00:55:10.515 --> 00:55:13.735
and Coinbase wants these requirements to be as high as possible
737
00:55:14.755 --> 00:55:24.460
to make it difficult for you to get the account to compete with them. Right. The regulatory moat that we discussed earlier. Exactly. I mean, Coinbase is a a fantastic example because Coinbase,
738
00:55:25.000 --> 00:55:28.185
they literally brought the chain surveillance in house. Right? They bought
739
00:55:29.305 --> 00:55:35.005
I forget the firm, but it was, like, former hacking team guys who had the chain surveillance company. Right. They hired them.
740
00:55:35.440 --> 00:55:37.220
They they aqua hired them,
741
00:55:37.599 --> 00:55:40.980
and then they fired an undisclosed amount of them because they got shit about it.
742
00:55:41.520 --> 00:55:43.540
But now they have their own chain surveillance
743
00:55:45.745 --> 00:55:53.445
project in house that they actually appear to be out you know, they they they sell that as a product to to, I guess, competitors.
744
00:55:54.250 --> 00:56:00.030
But, specifically, they've been selling it to the US government for, you know, pennies. They had to cover their costs.
745
00:56:00.730 --> 00:56:04.145
Yeah. They had to cover their costs. Right? They need that extra 100 k or whatever.
746
00:56:05.165 --> 00:56:10.705
They make 100 of 1,000,000 of dollars. Yeah. But, they needed the 100 k from the US government and the DEA.
747
00:56:11.150 --> 00:56:20.369
Coinbase did a bunch of things, I mean, on this regulatory mode front. First, they went and got all the money. Was the firm, by the way. Yeah. Continue. They they went and got all the money transmitter licenses.
748
00:56:21.895 --> 00:56:25.035
Before it was totally clear that they were really gonna be necessary.
749
00:56:25.575 --> 00:56:39.839
You know, like, money transmitter licenses were created for consumer protection for people that used Western Union and companies like that where you're giving them money and trusting them to send it somewhere else for you. Right? Trusting that it's gonna get to the destination. And it's not, like, immediately obvious that
750
00:56:40.225 --> 00:56:41.365
those make sense
751
00:56:42.225 --> 00:56:48.405
for crypto exchanges at all. I mean, the fact that there's 50 different ones and each state's law is a little bit different
752
00:56:49.299 --> 00:56:52.680
also creates a regulatory moat. So Coinbase went and got all the licenses.
753
00:56:52.980 --> 00:56:54.359
They went to the big banks.
754
00:56:54.819 --> 00:56:58.855
They got their bank account, and then if you wanna get a bank account where they get a bank account,
755
00:56:59.474 --> 00:57:03.815
right, then you need to do, you know, all the things that they're doing. So
756
00:57:04.400 --> 00:57:06.260
they're they're they're not acting in
757
00:57:06.880 --> 00:57:10.420
Bitcoin's best interest despite But they're following their own incentives.
758
00:57:10.720 --> 00:57:11.220
Right?
759
00:57:11.599 --> 00:57:12.099
Yep.
760
00:57:12.480 --> 00:57:12.980
Yep.
761
00:57:13.355 --> 00:57:17.454
Like, no one should be surprised. I I think they're following their own incentives
762
00:57:17.835 --> 00:57:20.015
at least on a short to medium term.
763
00:57:21.450 --> 00:57:29.390
Wait. I'm sorry. My my phone rang and interrupted us for, like, 2 seconds. Could you repeat that again? No. I just thought they're following their own incentives. Like, people shouldn't be surprised,
764
00:57:29.785 --> 00:57:36.365
at least on a short to medium term. I mean Yeah. Specifically, Brian Armstrong doesn't seem to understand long term Bitcoin. So
765
00:57:36.960 --> 00:57:40.340
anyone who expects his incentives to align with with Bitcoin,
766
00:57:40.960 --> 00:57:43.380
on a long term basis, I think, would be
767
00:57:44.434 --> 00:57:55.000
is is being naive and just not understanding, you know, what they're operating under and how they're operating. Yeah. But but short to medium term, their their their incentives clearly are, you know,
768
00:57:55.860 --> 00:58:00.345
to create this regulatory moat and make it as hard as possible for competitors to come in.
769
00:58:01.224 --> 00:58:07.645
Right? Yeah. It it's not just them. I mean, it's it's it's the problem with the system is that we have these, you know, flexible
770
00:58:08.185 --> 00:58:09.724
flexible set of regulations.
771
00:58:10.570 --> 00:58:21.965
And like I mentioned earlier, nobody wants to be the outlier, so people wanna be extra conservative. And then they're extra conservative, and they kind of push it in the wrong direction. And then you also have the compliance company selling them the extra stuff. And so
772
00:58:22.265 --> 00:58:28.160
Right. And the incentives of the chain surveillance companies is to try and make the chain surveillance companies relevant. Right?
773
00:58:29.180 --> 00:58:39.125
Right. Well, they they wanna make money, and and and then the goal is to prevent money laundering and criminal activity, so they have to find more money laundering or suspicious activity or criminal activity
774
00:58:39.585 --> 00:58:42.164
to make themselves more valuable. And then, of course,
775
00:58:42.490 --> 00:58:45.869
it's just a one-sided assessment. Right? Like, we don't know
776
00:58:46.170 --> 00:58:52.109
you know, they're they're making all these judgments about what everyone is doing on chain, and and nobody ever gets to, like, dispute
777
00:58:52.845 --> 00:58:54.225
what they're saying is happening.
778
00:58:55.005 --> 00:58:59.905
Right. And Garrett said it was called and proprietary. We have no idea what they're doing. Yeah.
779
00:59:01.290 --> 00:59:02.190
But they're they're
780
00:59:02.810 --> 00:59:07.790
you know, you you mentioned this on when when we did Stephan's pod together in, like, 2019,
781
00:59:09.535 --> 00:59:15.635
that they, like, kind of create the problem so that they could be the solution to the problem. But since then, they've been
782
00:59:16.655 --> 00:59:18.355
they they've been, you know,
783
00:59:19.520 --> 00:59:23.540
they've been operating under a tight line. It's kind of weird. Like, during the b word,
784
00:59:24.800 --> 00:59:28.165
initiative, I guess they're calling it, but the that virtual conference that
785
00:59:28.565 --> 00:59:30.345
ARK Invest and Square put on,
786
00:59:32.005 --> 00:59:36.410
for institutional investors that are thinking about Bitcoin, they have one the Chainalysis guy's on.
787
00:59:37.210 --> 00:59:39.390
And his his argument is basically
788
00:59:40.970 --> 00:59:42.589
that there is criminal activity,
789
00:59:44.085 --> 00:59:48.665
among Bitcoin users, and that's why you need them. But the criminal activity is minimal,
790
00:59:49.285 --> 00:59:58.640
so that's why you should launch a Bitcoin company or invest in Bitcoin. They they kind of it's this weird incentive structure where they both are trying to
791
01:00:00.715 --> 01:00:02.175
advocate for their need,
792
01:00:02.635 --> 01:00:03.935
but at the same time,
793
01:00:04.795 --> 01:00:14.940
trying to get more investment in the space. Have you noticed that? Yeah. Well, there's a there's a name for an organism that that needs its host to stay alive, right, in order to
794
01:00:15.240 --> 01:00:15.900
to sustain
795
01:00:16.705 --> 01:00:19.285
while also feeding from the host as much as possible.
796
01:00:21.185 --> 01:00:24.405
Right? I I believe we call them parasites. That's right.
797
01:00:25.130 --> 01:00:26.829
I mean, that's you know,
798
01:00:28.089 --> 01:00:28.829
the the
799
01:00:29.450 --> 01:00:35.275
it's not just private companies that could be parasites. Obviously, the government is the the giant parasite living on top of all of us.
800
01:00:35.575 --> 01:00:37.674
Yeah. This is why you're one of my favorite lawyers.
801
01:00:38.934 --> 01:00:40.075
So back to CoinJoin,
802
01:00:40.775 --> 01:00:42.875
you don't think CoinJoin will be made
803
01:00:44.600 --> 01:00:45.340
specifically illegal?
804
01:00:45.880 --> 01:00:49.260
You think that our constitutional protections do help us to a degree.
805
01:00:49.880 --> 01:00:51.740
I tend to agree with you.
806
01:00:52.305 --> 01:01:06.680
What what about the freaks who at least in America, I mean I I I don't I don't wanna rely on political solutions. Right? That's what I'm asking. Agree. That's the whole point. Network. Yeah. So so I guess we're using CoinJoin instead of advocating for better privacy regulation.
807
01:01:07.299 --> 01:01:08.440
Right. Agreed.
808
01:01:08.819 --> 01:01:09.400
I mean,
809
01:01:10.135 --> 01:01:15.435
everyone's just gotta do what they need to do, you know, regardless of what the pieces of paper say.
810
01:01:16.855 --> 01:01:17.355
So
811
01:01:17.815 --> 01:01:18.875
yeah. I mean, I
812
01:01:19.670 --> 01:01:20.730
relatively, provocatively
813
01:01:21.030 --> 01:01:22.089
I mean, intentionally
814
01:01:22.470 --> 01:01:29.965
look. There's over 300 hours of me talking about Bitcoin publicly, often junk. I think I said once that the constitution was a shit coin.
815
01:01:30.585 --> 01:01:31.085
Mhmm.
816
01:01:31.705 --> 01:01:35.770
But, I'm glad we have it. I'm glad we're not, you know, in some of these other countries
817
01:01:46.394 --> 01:01:49.694
but I'm I'm I'm concern I'm channeling the freaks. I'm concerned
818
01:01:50.075 --> 01:01:50.575
that
819
01:01:51.434 --> 01:01:55.214
I won't be able to sell it at a regulated institution in the future.
820
01:01:55.940 --> 01:01:57.240
What do you say to them?
821
01:01:58.019 --> 01:01:58.519
Mhmm.
822
01:01:59.460 --> 01:02:01.539
I mean, there's there's not
823
01:02:02.485 --> 01:02:15.510
there's kind of trade offs with everything. You know what I mean? Like, there's there's not a 0% chance that that happens. It's theoretically possible that they could all take that position and be really hostile about it. And, you know, FinCEN says you can't take any coin to win anything. Right?
824
01:02:16.450 --> 01:02:16.950
So
825
01:02:17.330 --> 01:02:19.670
that's a risk, but having all of your
826
01:02:20.615 --> 01:02:22.234
data and all of your
827
01:02:23.015 --> 01:02:24.075
financial history
828
01:02:24.615 --> 01:02:26.315
relatively public and easy
829
01:02:26.615 --> 01:02:27.115
to
830
01:02:27.630 --> 01:02:29.010
be investigated is
831
01:02:29.870 --> 01:02:34.370
is at least as great of a risk or a greater risk, or maybe you don't think it's a risk at all.
832
01:02:34.990 --> 01:02:36.690
So then, like, don't do it. But
833
01:02:37.934 --> 01:02:40.355
I would I'll I would rather take
834
01:02:41.775 --> 01:02:45.555
I would rather take the risk that I can't sell any Bitcoin on Coinbase.
835
01:02:46.095 --> 01:02:47.075
You know what I mean?
836
01:02:47.400 --> 01:02:55.420
Yeah. I mean, I agree with you a 100%. I just want the freaks to hear from you. Yeah. Well, it's a decision that each person needs to make, but,
837
01:02:56.635 --> 01:02:59.935
like, if you're a believer in Bitcoin and Bitcoin's future,
838
01:03:00.235 --> 01:03:09.890
then you will find ways to be able to use it and spend it that don't that don't rely on, you know, regulated exchanges. I mean, that's that's the direction that we're going. Right? The circular economy
839
01:03:10.190 --> 01:03:16.105
and, you know, having our own network of people that can do what they want and do what they need to do. I mean
840
01:03:17.224 --> 01:03:17.724
so
841
01:03:18.345 --> 01:03:26.770
but there's not a 0% chance. I mean, it's just it's just a trade off and and a worth worthwhile one from my point of view. So, I mean, like, the easy answer is, like, if you're
842
01:03:27.710 --> 01:03:30.025
first of all, you know, this is
843
01:03:30.484 --> 01:03:41.910
we're all about personal responsibility here at dispatch. So I do I do like how you framed it that, ultimately, like, people should educate themselves, and they should make educated decisions that suit their situation best.
844
01:03:44.725 --> 01:03:48.745
If you're, you know, if you're a trader and you're just trying to trade for Fiat,
845
01:03:49.605 --> 01:03:54.265
and you're just trying to short term, you know, buy and sell Bitcoin for,
846
01:03:56.310 --> 01:03:57.530
more US dollars,
847
01:03:58.150 --> 01:04:00.890
then by all means, I think you should still self custody.
848
01:04:02.525 --> 01:04:06.945
But by all means, you know, you just send it from 1 you just send it right out to your,
849
01:04:07.245 --> 01:04:13.970
you know, whatever your hardware wallet is or whatever wallet you use, and then you just send it back in without any coin join, and you do your sell.
850
01:04:15.150 --> 01:04:15.890
But if
851
01:04:16.510 --> 01:04:18.930
if you're in this long term, to me,
852
01:04:20.275 --> 01:04:22.295
if a if a company doesn't
853
01:04:22.675 --> 01:04:23.735
accept your
854
01:04:24.515 --> 01:04:31.660
your your right to to use Bitcoin in a relatively private fashion, then you don't use that company. Then they're not an option anyway.
855
01:04:32.119 --> 01:04:32.619
Right.
856
01:04:33.240 --> 01:04:38.425
Yeah. And and if if we're talking about long term Bitcoin value, like you were talking about earlier in terms of
857
01:04:38.905 --> 01:04:40.045
restrictions on
858
01:04:40.585 --> 01:04:42.125
sovereign usage of Bitcoin,
859
01:04:43.785 --> 01:04:48.460
I think if you can't use Bitcoin in a sovereign way, you know, to buy something
860
01:04:48.920 --> 01:04:50.060
or to sell something,
861
01:04:50.600 --> 01:04:53.900
then we have way bigger problems than you not being able to
862
01:04:54.815 --> 01:05:11.450
deposit on Coinbase or BlockFi. Like, why what are we here for? I mean, I'm I'm here because I think failure is not an option. I think the alternative is an absolute financial surveillance state, and we're already kind of in it. But it just gets worse from here if if we don't succeed on on this front. Right?
863
01:05:11.795 --> 01:05:21.730
Yeah. I mean, if if people are worried about that, you know, what they're really saying is that they they they need to make sure they have fiat liquidity when they need it, and it would be better to use
864
01:05:22.610 --> 01:05:23.510
I mean, look.
865
01:05:23.810 --> 01:05:29.990
Without giving recommendations about software, do your own research. I'm not a software developer, but it'd be better to use, you know,
866
01:05:30.755 --> 01:05:37.335
something more noncustodial like HODL HODL to be able to put your Bitcoin in, you know, and and borrow against it,
867
01:05:38.035 --> 01:05:40.340
rather than use a KYC exchange to sell it.
868
01:05:40.900 --> 01:05:46.200
Now it's not the same as it's not the same as selling it, but, hopefully, there's gonna be a little bit more DeFi
869
01:05:46.660 --> 01:05:49.560
on Bitcoin where people will be able to, for example,
870
01:05:49.925 --> 01:05:50.825
you know, trade,
871
01:05:51.125 --> 01:05:57.305
I don't know, trade derivatives on Bitcoin that if you really wanna take if you really wanna take some profits, then you can do that without KYC,
872
01:05:58.250 --> 01:06:05.150
and without custody you know, custodial trusted third parties. I mean Like a bit mix where the founders can't get arrested or something.
873
01:06:05.610 --> 01:06:06.110
Yeah.
874
01:06:06.410 --> 01:06:07.310
Or, like,
875
01:06:08.325 --> 01:06:11.705
a lot of the stuff that currently exists on Ethereum just on Bitcoin.
876
01:06:12.245 --> 01:06:27.535
But That's that's the hot take of the day. The hot take of the day. We're an hour in. You got your hot take, freaks. Yeah. Well, then, Rob, I mean, I I'm gonna keep going with that. I would rather use Ethereum than do KYC on Bitcoin, and, like, it's not even close. Now that doesn't mean that I'm saying other people should do that too, but,
877
01:06:29.035 --> 01:06:35.710
like, you can you can, you know, use wrapped Bitcoin and, like, borrow against your Bitcoin today, like, they're cheap.
878
01:06:36.090 --> 01:06:42.110
You know, obviously, you have to trust Ethereum, and there's trade offs and decentralized and AWS and all that, but,
879
01:06:42.924 --> 01:06:44.464
well, there's options.
880
01:06:44.765 --> 01:06:47.105
But you don't think, like, a lot of that is just decentralization
881
01:06:47.405 --> 01:06:49.585
theater that they actually if you have
882
01:06:50.920 --> 01:06:53.180
got Anthony in the chat just trolling us.
883
01:06:53.720 --> 01:06:57.020
You don't you don't think a lot of that is just decentralized theater where
884
01:06:57.320 --> 01:06:59.180
there really are people that they can
885
01:06:59.785 --> 01:07:05.245
crush on, you know, and and force to comply. I mean, like, we're watching, basically, Uniswap right now. Yeah.
886
01:07:06.960 --> 01:07:10.340
Trying to turn corporate to to to suit their investors
887
01:07:11.119 --> 01:07:17.045
and and their own incentives, and they're just hiding under the veneer of decentralization when it's not really decentralized.
888
01:07:17.825 --> 01:07:18.485
I agree.
889
01:07:19.025 --> 01:07:20.805
They absolutely are. I mean, fortunately,
890
01:07:21.345 --> 01:07:34.435
Uniswap doesn't require you to trust them with your money. Right? You know what I mean? Like, you just swap your tokens. You know, you wrap the Bitcoin for USTT or USDC, and then you're out. So it doesn't matter as much with them. But as far as phony
891
01:07:34.895 --> 01:07:35.395
decentralization
892
01:07:35.775 --> 01:07:37.155
goes, they're literally
893
01:07:37.935 --> 01:07:49.760
the the the leader in terms of pretending to be decentralized as far as I can tell. I mean I mean, you also have, like, the Trons and the Solanas and the BNBs that are all fucking fake decentralized too. Right?
894
01:07:50.365 --> 01:07:53.665
That's true, but I don't think that they pretend as hard as Uniswap does.
895
01:07:54.684 --> 01:07:56.305
Uniswap is the lead pretender.
896
01:07:56.765 --> 01:07:57.750
Do you know what I mean?
897
01:07:58.230 --> 01:08:04.010
So, I mean, if you're gonna borrow against your Bitcoin, you can use HODL HODL right now. Right. I mean, it's not,
898
01:08:05.325 --> 01:08:13.184
you know, it's it's not necessarily as I I mean, multisig is a smart contract, I guess. So you you you can you can it it's non custodial
899
01:08:13.565 --> 01:08:14.065
multisig,
900
01:08:15.089 --> 01:08:16.150
without KYC.
901
01:08:16.450 --> 01:08:18.390
I don't I honestly, I don't
902
01:08:18.770 --> 01:08:21.350
love the idea of borrowing against Bitcoin, period.
903
01:08:22.665 --> 01:08:28.925
Why not? But I would agree with the premise that, like, I would refuse to use KYC services if if I was going to do it.
904
01:08:29.540 --> 01:08:37.400
You mean because of liquidation risk or or something? Yeah. Because of liquidation risk. Because, like and liquidation risk and also in all of these,
905
01:08:38.020 --> 01:08:38.520
situations,
906
01:08:39.165 --> 01:08:45.505
if you're gonna do it in a non KYC fashion, I mean, you're then you have so called stable coins risk.
907
01:08:46.210 --> 01:08:49.670
Right? And stable coins are all pretty much centralized. There's no,
908
01:08:51.170 --> 01:08:58.325
decentralized stable coins, so you have a bunch of third party risk if you're gonna be holding, you know, Tether or USDC or even Dai.
909
01:08:58.945 --> 01:09:05.300
I I guess it depends what people are doing when they borrow. Right? Because a lot of people that might borrow against Bitcoin are using it to, like,
910
01:09:05.600 --> 01:09:13.475
spend it. Right? They're gonna, like, convert the USDC to dollars and then pay for real world not real world, fiat world liabilities.
911
01:09:14.015 --> 01:09:16.735
And so they're not, like, holding it. But I guess if you were just
912
01:09:17.640 --> 01:09:23.420
yeah. I I I don't see why you would borrow against Bitcoin and then just hold the stable coins. Right? Right. What because
913
01:09:24.360 --> 01:09:40.520
I don't know what the benefit of that would be. Well, some people leverage it. They use it as leverage. Right? Yeah. So you're buying more Bitcoin and then buy Bitcoin. Yeah. So you're not you're not relying on the stable coin in that case. Oh, true. Just buying more Good point. Buy more Bitcoin. So I don't think if people are borrowing, they're not usually holding the stable coin, but, like, with HODL HODL,
914
01:09:40.820 --> 01:09:43.160
the obvious risk or one of the obvious risks
915
01:09:43.460 --> 01:09:44.120
is that
916
01:09:44.775 --> 01:09:46.074
there's a risk of collusion.
917
01:09:46.855 --> 01:09:54.820
You know what I mean? Like, there's there's, you know, the lender, and then there's the borrower, and there's huddle huddle in the middle. And, like, because it's non KYC
918
01:09:55.520 --> 01:10:15.890
They could be both. They could be both. I don't think they're both. I use it all the time. I hope they're not both. I'm gonna get right to put both. There's no way for us to prove that they're not, though. Right. Right. Right. So there's so it's not totally trustless. Right? I happen to trust them, but I understand that I'm trusting them. Right. But the none of the Ethereum, DeFi should've either.
919
01:10:16.990 --> 01:10:21.075
I don't know. That's that's harder harder to tell. I mean, Uniswap,
920
01:10:21.614 --> 01:10:22.114
like,
921
01:10:23.375 --> 01:10:28.790
Uniswap just did such a bad job with their with their token, which is intended to be a governance token because
922
01:10:29.570 --> 01:10:30.630
long story short,
923
01:10:31.250 --> 01:10:43.324
basically, half the tokens are with the foundation venture capital investors and then people that act on their behalf and act exactly the way they want them to act. Right? And now they're getting to the point where they're awarding themselves
924
01:10:43.890 --> 01:10:47.430
1,000,000 of dollars worth of tokens that they're gonna dump on token holders
925
01:10:48.050 --> 01:10:49.110
to be able to,
926
01:10:49.570 --> 01:10:50.150
you know,
927
01:10:50.450 --> 01:10:54.925
do various things that they themselves were basically unilaterally approved.
928
01:10:55.225 --> 01:10:57.405
Right? So, like, let let's award ourselves $10,000,000
929
01:10:58.105 --> 01:11:08.410
to educate people about DeFi. And then, of course, they hold the majority of the tokens. Everyone votes the way that they want them to vote, except for the actual token holders who probably would not have approved that kind of proposal.
930
01:11:11.040 --> 01:11:11.540
But
931
01:11:11.855 --> 01:11:14.675
I think if they if they had if they had never done a token,
932
01:11:15.295 --> 01:11:23.350
which they didn't need to do a token, then you would just have Uniswap that would just be a smart contract on Ethereum. You'd have smart contract risk. You'd have Ethereum risk, but
933
01:11:24.130 --> 01:11:26.390
it kind of not Ethereum risk is pretty high.
934
01:11:28.125 --> 01:11:31.265
I don't know. I'm not qualified enough to know exactly how high it is.
935
01:11:32.045 --> 01:11:37.505
I mean, you probably know better than me, but, like, the centralization risk, like, with AWS,
936
01:11:39.469 --> 01:11:44.050
how come nobody showed it down yet? I know. I'd I I wrestle with that all the time.
937
01:11:44.510 --> 01:11:49.265
I wrestle with that all the time, but maybe we just expect things to happen quicker. Maybe it just hasn't happened yet.
938
01:11:51.245 --> 01:11:56.840
Maybe. I literally have no idea. It could be enough. I mean, one of the things we always talk about on the on
939
01:11:57.460 --> 01:12:01.400
about this show and rabbit hole recap is, like, you don't really know how much,
940
01:12:02.594 --> 01:12:07.415
you know, security or decentralization is enough until it's not enough, and then it's too late.
941
01:12:08.034 --> 01:12:20.130
But I think you know, Tron still exists. Like, everyone knows you can just stop Tron by hitting Justin Sun or BNB, you know? But, I mean, he's seen Binance CZ seems to be under a shit ton of pressure right now.
942
01:12:20.985 --> 01:12:22.925
That might be a good case study for us.
943
01:12:23.385 --> 01:12:32.490
Yeah. I think he's handling it pretty well. I mean, I don't follow everything that they're doing. You know, Disclosure, I've done some work for them before, but I'm not, like, in contact on a daily basis at all. But,
944
01:12:34.150 --> 01:12:34.650
well,
945
01:12:34.950 --> 01:12:35.850
I think Binance,
946
01:12:36.945 --> 01:12:42.645
the Hong Kong multi version still has the 2 Bitcoin limit for withdrawals. No. He lowered it today.
947
01:12:43.425 --> 01:12:44.165
To what?
948
01:12:44.659 --> 01:12:46.119
Point 06 Bitcoin.
949
01:12:47.460 --> 01:12:48.360
Oh, that's disappointing.
950
01:12:48.820 --> 01:12:54.585
But it was already lower anyway because I know so many people, and you probably have clients that got shotgun KYC'd underneath
951
01:12:54.885 --> 01:12:56.505
the 2 Bitcoin limit anyway.
952
01:12:57.765 --> 01:13:04.949
I don't I know it's happened. They hold it hostage, and they won't let you withdraw unless you give KYC even though their terms say you can withdraw without it.
953
01:13:05.570 --> 01:13:08.725
Yeah. I haven't had that many people contact me about that. I mean,
954
01:13:10.005 --> 01:13:17.145
I haven't had that many people contact me about that. I know what's happened. I mean, look. As far as exchange complaints goes, nobody comes close to Coinbase.
955
01:13:17.520 --> 01:13:22.020
Like, I literally got, like, a 1,000 emails of people complaining about Coinbase over the last,
956
01:13:22.480 --> 01:13:27.675
I don't know, 3 or 4 years. I think that's just because they have the they have probably the most users?
957
01:13:28.775 --> 01:13:32.555
No. It's not proportional to the amount of users they have. I mean,
958
01:13:33.150 --> 01:13:43.055
it's vastly disproportional. Like, for a long time, it was, like, 99 a half percent Coinbase complaints. Wow. Coinbase doesn't have 99 a half percent market share.
959
01:13:43.615 --> 01:13:44.595
They just have
960
01:13:45.135 --> 01:13:48.115
99 a half percent of shitty customer service, I think.
961
01:13:49.775 --> 01:13:50.595
That's interesting.
962
01:13:51.150 --> 01:14:01.245
It's just a common trend. Exchanges start small, and then they get big, and then they have shitty customer service. And, like, once that start okay in the beginning, just get bad. I mean,
963
01:14:02.185 --> 01:14:11.290
it sucks. Like, Google, you know, don't be evil. Right? Right. Don't be able to like, the most evil company ever now. They're, like, professionally evil. It's like their business model. Yeah. Yeah.
964
01:14:11.750 --> 01:14:16.570
And I think they believed it in the beginning when they said don't be evil, and then they they grew out of it.
965
01:14:17.270 --> 01:14:18.570
They grew out of their ethics.
966
01:14:19.344 --> 01:14:32.720
They all seem to. All the big companies seem to do it. The money talks, man. The incentives. You gotta follow the incentives. So, I mean, I think you would agree with me that I think, you know, every custodian in this space will either bend the knee eventually or exit scam,
967
01:14:33.660 --> 01:14:37.555
or or most will. There's a, like, there's a few that have unwound,
968
01:14:38.415 --> 01:14:39.315
in a relatively,
969
01:14:42.975 --> 01:14:47.650
ethical manner. I mean, I I'm pretty proud that, like, Bottlepay when Bottlepay was no KYC,
970
01:14:48.190 --> 01:14:53.090
and when AMLD 5 forced them to add KYC, they let everyone withdraw before
971
01:14:53.415 --> 01:14:55.035
they launch their KYC product.
972
01:14:56.614 --> 01:14:58.635
I'm trying to think of who else has
973
01:14:59.094 --> 01:15:05.210
there there's been a there's been a couple custodians that have done it, I you would say, like, the right way. But most custodians,
974
01:15:06.310 --> 01:15:07.850
are either gonna bend the knee
975
01:15:08.470 --> 01:15:14.065
to regulators because they got big enough and they became a target, a la Binance, Bittrex, Poloniex,
976
01:15:15.245 --> 01:15:20.110
or they're gonna exit scam in a which we've seen in the darknet markets a lot,
977
01:15:21.310 --> 01:15:24.530
and one last money grab because they realized that the,
978
01:15:25.469 --> 01:15:30.095
you know, that that that the walls are pushing in on them and they have no choice. Would you agree?
979
01:15:31.375 --> 01:15:34.595
I I think so. Yeah. I mean, that covers a lot of potential
980
01:15:35.295 --> 01:15:37.740
a lot of potential companies, but that seems like
981
01:15:38.620 --> 01:15:40.640
that seems like the way things are going unless,
982
01:15:41.580 --> 01:15:44.480
well, unless things change radically, which they probably won't.
983
01:15:44.835 --> 01:15:50.935
Not in the right not in the right direction, so it's really up to individual people to, you know, emancipate themselves
984
01:15:51.635 --> 01:15:53.495
from trusted third parties.
985
01:15:54.140 --> 01:15:57.199
Right. Trusted third parties are a security hole. I thought we all
986
01:15:57.659 --> 01:15:58.640
understood this.
987
01:15:59.260 --> 01:16:03.679
In Lightningland, we see this a lot. Like, there's there's a bunch of popular custodial wallets
988
01:16:04.364 --> 01:16:06.465
that I just at any moment,
989
01:16:07.005 --> 01:16:07.985
they could either
990
01:16:08.925 --> 01:16:14.370
I I don't I the the 2 most popular ones, I don't expect to exit scam, but they could just implement KYC
991
01:16:15.070 --> 01:16:17.170
and not allow you to withdraw unless you comply.
992
01:16:18.350 --> 01:16:18.850
And,
993
01:16:19.710 --> 01:16:27.925
in general, if you're talking to lawyers about this kind of thing, they'll tell you that if you if you give a window where people can withdraw,
994
01:16:28.945 --> 01:16:29.445
then
995
01:16:29.905 --> 01:16:33.950
you might be liable for that. Right? Like, I even in Binance's case today,
996
01:16:36.010 --> 01:16:38.830
that wasn't, like, a slow rollout. It was just boom.
997
01:16:39.450 --> 01:16:42.955
You can't you can't withdraw more than 0.06. They didn't give people a window.
998
01:16:44.715 --> 01:16:45.215
Yeah.
999
01:16:47.595 --> 01:16:47.995
I don't
1000
01:16:48.955 --> 01:16:56.460
it's not obvious to me why they would be liable for for for giving the window. I don't I I'm not aware of any rule that says you can't give a window.
1001
01:16:56.760 --> 01:17:00.140
Right. So But they overcomply, and they just do it anyway because they're scared.
1002
01:17:00.785 --> 01:17:04.085
Yeah. Well, I mean, as far as Giant exchanges go,
1003
01:17:05.185 --> 01:17:06.485
they're not on the overcompliant
1004
01:17:06.785 --> 01:17:07.285
side.
1005
01:17:08.050 --> 01:17:08.550
Binance.
1006
01:17:08.930 --> 01:17:09.430
Right.
1007
01:17:10.450 --> 01:17:12.710
So we we we appreciate that, I think.
1008
01:17:13.250 --> 01:17:19.965
I mean, the fact that they had the 2 Bitcoin limit while the vast majority of exchanges didn't have anything like that
1009
01:17:20.425 --> 01:17:24.844
is like they were they were they were holding out for a long, long time considering their size.
1010
01:17:25.540 --> 01:17:31.159
I'm telling you, man. They weren't really because they were I had so many people reach out to me that they got shotgun KYC ed. Yep.
1011
01:17:31.780 --> 01:17:39.835
I don't know. I mean Which is almost worse. It's, like, worse because you, like, tell them these are our terms of service. You can withdraw, you know, 2 Bitcoin a day without
1012
01:17:40.969 --> 01:17:41.469
verifying,
1013
01:17:42.010 --> 01:17:47.025
and and then they hit you with it anyway. And and with them, it's, you know, it's a full facial scan.
1014
01:17:47.585 --> 01:17:50.725
And and a bunch of those facial scans got leaked when they got hacked.
1015
01:17:51.105 --> 01:17:51.605
Right.
1016
01:17:52.465 --> 01:17:53.205
I guess
1017
01:17:54.304 --> 01:17:55.105
I mean, it's a
1018
01:17:55.760 --> 01:18:00.180
It's a low bar. Well, it's a yeah. It is a low bar, and it's all relative. I mean, like,
1019
01:18:00.560 --> 01:18:05.300
US exchanges just do KYC the entire time from the very beginning. So, like,
1020
01:18:05.745 --> 01:18:08.405
I don't and what percentage of people are getting shocked on KYC'd.
1021
01:18:08.705 --> 01:18:12.485
I don't know. I don't know how many users they have. I only hear about the ones that do.
1022
01:18:13.010 --> 01:18:16.790
Right. So I'm guessing that the amount of people that got shot on KYC was, like,
1023
01:18:17.330 --> 01:18:18.230
sub 1%.
1024
01:18:19.010 --> 01:18:23.675
Alright. Sub 1%. The worst part is is when they say they're doing it they're doing it for your own protection,
1025
01:18:24.295 --> 01:18:28.635
which is what they usually say. Like, when BlockFi got hacked, they they actually added KYC,
1026
01:18:28.970 --> 01:18:31.710
additional KYC, and they said they were doing it for your protection.
1027
01:18:32.090 --> 01:18:32.590
Uh-huh.
1028
01:18:33.370 --> 01:18:34.110
Yeah. I agree.
1029
01:18:34.570 --> 01:18:35.790
Which is very common.
1030
01:18:36.410 --> 01:18:36.910
So
1031
01:18:37.515 --> 01:18:40.415
when we're talking about 3rd parties, I wanted to have, like, a brief,
1032
01:18:40.955 --> 01:18:44.094
quick discussion. You know, the 4th amendment of the constitution,
1033
01:18:45.275 --> 01:18:46.815
protects us from
1034
01:18:48.270 --> 01:18:50.050
unreasonable searches and seizures.
1035
01:18:51.150 --> 01:18:51.650
Specifically,
1036
01:18:52.190 --> 01:18:54.370
if you wanna search someone's home, for instance,
1037
01:18:54.995 --> 01:19:00.614
you need a warrant for that. And, you know, it could be argued, you know, whether or not that warrant process
1038
01:19:01.315 --> 01:19:03.255
is sufficiently adequate,
1039
01:19:03.880 --> 01:19:07.980
but at least they need to go in front of a judge and get a warrant to search your house.
1040
01:19:09.080 --> 01:19:11.500
We have something called the third party doctrine
1041
01:19:11.865 --> 01:19:14.525
in the United States, which is precedence that says that
1042
01:19:14.905 --> 01:19:17.725
if you voluntarily give your information to a third party,
1043
01:19:18.585 --> 01:19:33.485
you can expect privacy. It's basically like you're in the public square, and it's been used against email providers. It's been used against ISPs. It's been used against banks. I mean, you talked about the Bank Secrecy Act. It's called the Bank Secrecy Act, but, really, the Bank Secrecy Act means that you have no privacy in banks.
1044
01:19:35.224 --> 01:19:36.204
Do you think
1045
01:19:36.505 --> 01:19:37.005
there's
1046
01:19:40.060 --> 01:19:48.385
do you do you think that's something that Bitcoiners should I to me, that's the optimistic take in, in in America for Bitcoiners. There's this idea that
1047
01:19:48.844 --> 01:19:51.665
if we remove third parties from the equation, if we
1048
01:19:52.180 --> 01:20:00.520
if we understand that third parties are security holes, and we try and use Bitcoin in a sovereign way without trusting third parties, without giving third parties our private information,
1049
01:20:01.804 --> 01:20:03.264
that at least that
1050
01:20:05.085 --> 01:20:08.145
they're you they would need a warrant. A warrant would be needed,
1051
01:20:08.860 --> 01:20:14.719
to get our personal information rather than just, you know, these John Doe style subpoenas that they hit,
1052
01:20:15.725 --> 01:20:19.265
Coinbase with and they hit Gemini with, I believe, and they hit Kraken with,
1053
01:20:19.725 --> 01:20:24.545
where they're just asking for a large amount of information on a large amount of users without any
1054
01:20:25.870 --> 01:20:27.570
reasonable suspicion of guilt.
1055
01:20:28.590 --> 01:20:29.090
Mhmm.
1056
01:20:29.630 --> 01:20:30.130
Well,
1057
01:20:31.389 --> 01:20:36.215
if you're not using third parties, then there's no third party to send the subpoena to.
1058
01:20:36.835 --> 01:20:37.335
So
1059
01:20:37.875 --> 01:20:39.335
you know? Or, you know,
1060
01:20:39.715 --> 01:20:41.974
that's a start. Right? They'd have to get the information
1061
01:20:43.020 --> 01:20:53.265
directly from you, and then you can take steps to have best practices so that you're not collecting and hoarding all kinds of private information, just waiting for somebody to come take it from
1062
01:20:54.525 --> 01:20:55.185
you. So
1063
01:20:55.725 --> 01:20:58.385
certainly preferable to not trust third parties. But,
1064
01:20:59.885 --> 01:21:01.825
unfortunately, the third party doctrine
1065
01:21:03.030 --> 01:21:06.730
is basically one of those things that was created before the digital age
1066
01:21:07.830 --> 01:21:10.970
that has worked out really, really badly in the digital age.
1067
01:21:11.350 --> 01:21:19.635
You know what I mean? Where you you need you need to send information to 3rd parties all the time to Our whole life is on the Internet. Yeah. To do everything just
1068
01:21:21.270 --> 01:21:33.665
for for absolutely basic fundamental necessities, you have to trust third parties with information all the time. And if it's not gonna be private, then then you have very, very, very little privacy. And it's really something that the supreme court should,
1069
01:21:34.285 --> 01:21:36.225
you know, get their shit together on.
1070
01:21:36.930 --> 01:21:38.710
Right? Revisit that a little bit.
1071
01:21:39.250 --> 01:21:42.870
A 100%. I mean, I don't really have much faith. But Yeah.
1072
01:21:43.490 --> 01:21:44.230
And as
1073
01:21:44.535 --> 01:21:47.595
you had mentioned I'd love to see you in the Supreme Court arguing for it.
1074
01:21:49.015 --> 01:21:51.275
Unlikely, but who knows? We'll we'll we'll see.
1075
01:21:52.910 --> 01:21:59.170
But as far as the Bank Secrecy Act goes, I remember reading reading about the history of it, and it it had been challenged in the seventies
1076
01:21:59.870 --> 01:22:01.250
by a group of,
1077
01:22:02.335 --> 01:22:14.470
banks, actually, who didn't want to provide so much information about their customers to the government, which is interesting because now we view banks as being, like, actively hostile to our interest. But back then, they were, like, wanting to protect their customers,
1078
01:22:14.930 --> 01:22:25.005
and they and they challenged it on they challenged the currency transaction report, the CTR reports that were you know, if you if you deposit or withdraw 10 k in cash, right, they have to file that report.
1079
01:22:25.705 --> 01:22:28.125
They challenged that on 4th amendment grounds,
1080
01:22:29.610 --> 01:22:31.070
but the lawyers
1081
01:22:31.449 --> 01:22:34.510
forgot to allege on behalf of the clients
1082
01:22:34.810 --> 01:22:36.270
that their clients actually
1083
01:22:36.935 --> 01:22:38.875
did deposit or withdraw a 10 k.
1084
01:22:39.175 --> 01:22:55.115
And so the government was able to argue that, well, you're complaining about the CTRs, but you haven't even said that you even that it would even apply to you because you you didn't say that you withdraw or you deposit more than 10 k. So the supreme court got to say that they didn't even have to consider it, which is
1085
01:22:56.135 --> 01:22:59.915
ridiculous technicality. And then, of course, they never brought it up again. So
1086
01:23:00.370 --> 01:23:04.070
certain components of the Bank Secrecy Act had never been ruled on by the Supreme Court.
1087
01:23:04.530 --> 01:23:08.665
So, like, that if they had if they had pleaded it properly,
1088
01:23:09.125 --> 01:23:21.520
the Supreme Court could have said that parts of the Bank Secrecy Act were unconstitutional at that point, but it just didn't work out. So, hopefully, we can get some wins in the future. I mean, I I think there's there's a very strong incentive here for these regulated,
1089
01:23:22.540 --> 01:23:23.040
companies
1090
01:23:23.739 --> 01:23:26.800
to try and push back against us because it adds so much friction,
1091
01:23:27.525 --> 01:23:34.744
you know, to their to their user experience. I mean, no. I don't I don't think, you know, PayPal wants to ban people's accounts.
1092
01:23:35.670 --> 01:23:40.170
I think PayPal would like to offer every single person account with as little friction as possible.
1093
01:23:40.869 --> 01:23:45.425
So I'm surprised that we don't see more pushback. I I guess, just they're scared maybe,
1094
01:23:46.125 --> 01:23:50.945
or why do you think we don't see more pushback against it? Like, it obviously would be in their best interest if they had,
1095
01:23:51.805 --> 01:23:53.585
more lenient regs in that regard.
1096
01:23:54.250 --> 01:24:02.670
It's I mean, one one part of it is, like, the competitive advantage from the big you know, the regulatory mode, but I think the other part might just be that, like, it's easier
1097
01:24:03.375 --> 01:24:08.195
to build software, make your software faster and easier to use than it is to, like,
1098
01:24:08.815 --> 01:24:09.715
lobby politicians.
1099
01:24:10.815 --> 01:24:18.130
I'm not sure. I'm totally guessing. You know what I mean? Like, they could just, like, work on making the screen where you do KYC really easy to click,
1100
01:24:18.989 --> 01:24:20.130
make the buttons bigger
1101
01:24:20.785 --> 01:24:22.725
rather than, like, you know,
1102
01:24:23.185 --> 01:24:28.405
spending a lot of time and effort trying to get the laws changed to make it easier, which will also make it easier for their competition.
1103
01:24:29.105 --> 01:24:29.605
Right.
1104
01:24:30.130 --> 01:24:37.030
Yeah. It's it hurts their regulatory moat, which is the the opposite incentive. Yeah. I mean, while we're talking about it so, like, Kraken,
1105
01:24:38.210 --> 01:24:38.710
I,
1106
01:24:40.295 --> 01:24:40.795
like,
1107
01:24:41.735 --> 01:24:42.235
Kraken
1108
01:24:43.495 --> 01:24:48.554
Jesse Powell of Kraken, the CEO of Kraken, has been very outspoken pro privacy,
1109
01:24:51.160 --> 01:24:55.420
But at the same time, his organization is a custodian. It's a regulated custodian.
1110
01:24:58.055 --> 01:25:01.275
And so I'm gonna pull up on the screen their transparency
1111
01:25:01.655 --> 01:25:02.155
report
1112
01:25:02.695 --> 01:25:04.635
Mhmm. Of law enforcement requests,
1113
01:25:05.830 --> 01:25:10.090
and I'm pretty sure none of these had warrants. I don't I don't think they had warrants.
1114
01:25:11.670 --> 01:25:19.175
But you you just look at the scale of them and look at that little chart on the bottom left. I mean, that shit is going it feels like it's going parabolic with Bitcoin.
1115
01:25:19.715 --> 01:25:22.535
I wanna see 2020. Did they release 1 for 2020?
1116
01:25:23.360 --> 01:25:27.380
I'm not sure if they did. Oh, brilliant. I mean, I'm gonna use DuckDuckGo.
1117
01:25:28.480 --> 01:25:32.975
If they if if you find it, put it in put it in our chat, and then I can pull it up.
1118
01:25:33.594 --> 01:25:36.815
They might not have because they're trying to IPO right now.
1119
01:25:37.675 --> 01:25:41.135
And just everyone It would have been it would have been released in the beginning of 2021.
1120
01:25:42.869 --> 01:25:43.369
Right?
1121
01:25:43.830 --> 01:25:44.330
Yeah.
1122
01:25:44.710 --> 01:25:48.650
I don't see it. I mean, I just looked it up real quick. Look at this. The majority are the US.
1123
01:25:51.245 --> 01:25:53.505
They break it down by law enforcement agencies.
1124
01:25:53.965 --> 01:25:57.665
The FBI had a 116 requests. The DEA had 73 requests.
1125
01:25:58.489 --> 01:25:59.310
Total 432
1126
01:25:59.929 --> 01:26:04.429
requests from the US, number 2 was Great Britain at 86 requests,
1127
01:26:04.810 --> 01:26:05.790
total 710
1128
01:26:06.330 --> 01:26:06.830
requests,
1129
01:26:07.555 --> 01:26:15.975
but it has over 1200 impacted accounts, whatever that means. There's more impacted accounts than requests. I don't know how that works.
1130
01:26:17.110 --> 01:26:19.530
I'm I'm guessing that they're asking about, like,
1131
01:26:20.070 --> 01:26:20.730
you know,
1132
01:26:21.909 --> 01:26:29.505
somebody deposited, where did it go, and maybe it got spread among a a bunch of different accounts. It's kind of hard to tell. And, also, about the warrants,
1133
01:26:29.805 --> 01:26:30.465
you know,
1134
01:26:32.125 --> 01:26:33.265
I'm guessing that
1135
01:26:33.645 --> 01:26:34.545
many of them
1136
01:26:35.830 --> 01:26:40.490
okay. I'm I'm I'm guessing that Kraken put up more of a fight on the warrants issue than some of the other exchanges.
1137
01:26:41.030 --> 01:26:43.210
Yeah. I mean, I think Coinbase just, like,
1138
01:26:44.095 --> 01:26:48.515
has, like, a special portal where they just give you give give law enforcement all the information.
1139
01:26:49.135 --> 01:27:01.245
Yeah. Although, I mean, Coinbase did fight with the IRS about the Yeah. They did. The United Airlines a while back and and, you know, got kind of a deal. That was good. The original John Doe request, they they actually fought it, and then they
1140
01:27:01.625 --> 01:27:08.525
lost. Well, they came fought anything since then. Yeah. They came to a settlement that wasn't the worst possible outcome. I mean, definitely
1141
01:27:09.130 --> 01:27:11.469
It was anyone who transacted more than $20,000
1142
01:27:12.409 --> 01:27:15.790
in a 3 month period, whether that was send, receive, buy, or sell.
1143
01:27:16.495 --> 01:27:19.795
They handed over all other information. I I remember it being
1144
01:27:20.415 --> 01:27:31.780
well, okay. There was the part of it that was about users from 2013 to 2016 or something like that or 2013 to 20. That's what I'm talking about. But then moving forward, it was 2 200 transactions and at least $20,000
1145
01:27:32.240 --> 01:27:32.900
in sales.
1146
01:27:33.495 --> 01:27:35.015
So, like, you could make one
1147
01:27:35.735 --> 01:27:40.555
yeah. It basically just screwed all the day traders for sure. But if you were just somebody who made a couple of transactions,
1148
01:27:41.260 --> 01:27:44.480
even if they were large amounts, then there is no 10.99 for you.
1149
01:27:47.100 --> 01:27:47.600
So
1150
01:27:48.615 --> 01:27:52.395
there's a foghorn going on in the background right now, Freaks. If you hear that, I apologize.
1151
01:27:55.900 --> 01:27:57.679
Yeah. So just to go back,
1152
01:27:59.260 --> 01:28:01.599
we got custodians. So we had UTXO,
1153
01:28:02.060 --> 01:28:04.639
rider die freak UTXO in the comments asking,
1154
01:28:05.585 --> 01:28:06.085
if,
1155
01:28:07.824 --> 01:28:16.980
if tomorrow in a hypothetical situation, every Bitcoin transaction became a coin join, every spend was a coin join, how do you think that would affect the regulatory landscape?
1156
01:28:18.400 --> 01:28:21.460
I think it would be great. It would be great because
1157
01:28:22.465 --> 01:28:24.804
not all you know, assuming that some
1158
01:28:25.105 --> 01:28:28.485
custodians or regulated entities, you know, treat them as suspicious,
1159
01:28:29.080 --> 01:28:33.900
it it's kind of hard to argue that that's something that everyone is doing is suspicious. It's just not suspicious anymore.
1160
01:28:35.160 --> 01:28:40.605
Right? If everyone's doing it, if it's just Right. If all the transactions are like that, then it's obviously not 100%
1161
01:28:40.985 --> 01:28:42.045
suspicious transactions,
1162
01:28:42.425 --> 01:28:43.164
and so
1163
01:28:43.465 --> 01:28:49.820
that would be that would be ideal. I mean, the more people that that do coin join, I think I think the better. So it becomes a bigger,
1164
01:28:50.120 --> 01:28:50.780
you know,
1165
01:28:51.800 --> 01:28:55.900
a bigger part of the total number of transactions, and it starts to, like, materially
1166
01:28:56.445 --> 01:29:02.625
depart from the amount of transactions that we know are actually criminal. Right. We want, like, 10,000,000 people doing coin join rather
1167
01:29:03.165 --> 01:29:14.615
than 20,000 or whatever it is. Yeah. We don't want it we don't want it to be like we know that there's 20,000 criminals that use Bitcoin, and we know that there's 20,000 people that use CoinJoin. Right? Even though they're not the same people, a lot of the criminals are dumb.
1168
01:29:15.575 --> 01:29:17.915
You know? Like, you they get caught all the time.
1169
01:29:19.415 --> 01:29:21.275
Well, the ones we hear about didn't use CoinJoin.
1170
01:29:22.520 --> 01:29:24.780
Or used it badly or used it incorrectly.
1171
01:29:25.239 --> 01:29:26.780
Right? Or used a shitty implementation.
1172
01:29:27.320 --> 01:29:27.820
Yeah.
1173
01:29:28.760 --> 01:29:29.260
So
1174
01:29:29.745 --> 01:29:32.885
the more people do it, the you know, we we gotta try
1175
01:29:33.345 --> 01:29:42.420
to get things in our favor in terms of privacy. Right? If more people are doing it, it becomes harder to reject those transactions, and exchanges have a better financial reason, you know,
1176
01:29:42.880 --> 01:29:47.460
not to reject those transactions and not to discriminate against more users for
1177
01:29:48.165 --> 01:29:50.505
for just doing basic security stuff like that.
1178
01:29:50.885 --> 01:29:59.750
Yeah. I tend to agree. Yeah. I mean, I I I I I don't wanna lie VPNs are, like, kind of a good example or even Tor usage. Yeah. Yeah. Same thing.
1179
01:30:00.130 --> 01:30:03.829
Right? Like, the the normalization of Tor usage in and specifically
1180
01:30:04.130 --> 01:30:06.425
in America has been fantastic. I mean, you don't see someone
1181
01:30:07.685 --> 01:30:08.185
getting,
1182
01:30:09.844 --> 01:30:17.639
you you don't you don't see criminal prosecution just for using Tor, or you don't see VPNs getting hit by, you know,
1183
01:30:18.900 --> 01:30:19.960
burdensome regulation.
1184
01:30:21.625 --> 01:30:30.445
Well, don't give them any ideas. Yeah. I mean, I could I could see VPNs getting hit. I mean, VPNs are kind of a custodian of your data. They are custodian of your data.
1185
01:30:30.810 --> 01:30:34.030
Right. Okay. I hope I'm not giving that. We'll we'll change the subject. I don't wanna give ideas.
1186
01:30:34.969 --> 01:30:44.575
I mean, they're also spread all over the place, so they're they're not like, it's easy. I think it's not too hard. Arbitrage at its finest. Yeah. Right. Because they're natively digital or almost natively digital.
1187
01:30:45.989 --> 01:30:53.610
Right. I mean, we have Randy McMillan in the comments reminding me once again that that Elizabeth Warren said today that shadowy supercoders are running Bitcoin, so,
1188
01:30:54.775 --> 01:30:57.915
which harkens back to the superpredators of Clinton's era.
1189
01:31:00.135 --> 01:31:06.980
And I just feel this narrative increasing. So so we also have another question from the audience. By the way, Friex, keep the questions coming.
1190
01:31:07.380 --> 01:31:08.760
From BTC Pins,
1191
01:31:09.139 --> 01:31:10.599
who by the way,
1192
01:31:11.265 --> 01:31:13.445
one of the cool aspects of dispatch is
1193
01:31:14.065 --> 01:31:16.325
I have been selling hats to support the show,
1194
01:31:18.065 --> 01:31:18.805
but, also,
1195
01:31:19.120 --> 01:31:27.460
we have, 2 great freaks have been selling their own merch and then giving me a 3rd cut, they keep a 3rd cut, and then a third goes to open source devs.
1196
01:31:28.395 --> 01:31:32.815
And BTC Pins is one of them. So I do really appreciate him and his support of dispatch,
1197
01:31:33.675 --> 01:31:36.335
and just his support of Bitcoin in general.
1198
01:31:37.080 --> 01:31:38.940
So he's asking so he's a merchant,
1199
01:31:40.440 --> 01:31:43.100
and he's asking if there's any legal concerns,
1200
01:31:43.695 --> 01:31:45.315
I guess, specifically in America,
1201
01:31:46.975 --> 01:31:51.555
regarding him deleting customer info after he's processed their order.
1202
01:31:52.890 --> 01:31:54.750
I don't I don't think so. I mean,
1203
01:31:55.530 --> 01:31:56.510
seems like
1204
01:31:57.050 --> 01:32:01.525
companies probably wanna keep the data so they can sell it, and they can monetize it, and they can study it. Right?
1205
01:32:03.125 --> 01:32:15.060
And so there's financial reasons why companies will keep it, but I don't think there's anything that says that you you you can't delete it, probably should delete it, or at least, like, anonymize it if you can. Although, I don't know. It's it's questionable how how possible that really is.
1206
01:32:15.440 --> 01:32:34.050
Right? Like, if you you don't have somebody's name, you just know everything they bought, and you know their address. Like, you know, you don't need their name. You already know you already know who they are. It's like an anonymized location data. Like, bullshit. Like, you know the person went to work every day, and then you know the person went to their house every day. And you you can't you're gonna anonymize that data. Like, that's bullshit.
1207
01:32:34.465 --> 01:32:36.965
Yeah. But nothing that I know of. You know? Obviously,
1208
01:32:37.745 --> 01:32:39.365
I don't know, not legal advice.
1209
01:32:39.745 --> 01:32:54.675
Right? Right. This whole episode is not legal advice. I'm surprised you didn't start it off with a disclaimer. That's one of the reasons why I love you. Yeah. Well, it's just so cheesy. It's so cheesy, and it's like, you know, people would have to argue that they that they were reasonable in believing that they were getting legal advice, and and I don't think
1210
01:32:55.375 --> 01:32:57.875
well, anyway, lawyers are just neurotic. You know?
1211
01:32:58.255 --> 01:33:03.155
Yeah. I I feel that. I mean, in general, I I wanna see, you know, more merchants
1212
01:33:04.080 --> 01:33:13.425
actively deleting data. You know, you shouldn't that data is a liability. If if you care about your customers, you don't wanna hold that data. You wanna hold as little data as possible. And projects in general should be
1213
01:33:13.824 --> 01:33:19.844
optimizing for as little knowledge of their customers as possible. Right? It just becomes an overbearing liability on them
1214
01:33:20.145 --> 01:33:26.710
to hand over that information or secure that information. I mean, we see hacks happen all the fucking time. It's just gonna happen more and more. Right?
1215
01:33:27.010 --> 01:33:27.510
Yep.
1216
01:33:30.505 --> 01:33:33.645
I've still been pacing, so I haven't been keeping up with the questions. I apologize.
1217
01:33:34.264 --> 01:33:37.565
Yeah. I mean, the freaks haven't really given us any more questions.
1218
01:33:40.780 --> 01:33:44.640
I'm I'm a little bit disappointed, Freaks. I expected more questions from you guys.
1219
01:33:45.020 --> 01:33:46.560
What else do we have here?
1220
01:33:50.475 --> 01:33:51.855
Privacy. I mean,
1221
01:33:52.475 --> 01:33:54.015
while we're waiting for them,
1222
01:33:58.070 --> 01:34:05.690
the economist asked me some questions before the show started. Okay. You wanna answer one of his questions? You wanna read the question first and then answer it?
1223
01:34:06.855 --> 01:34:07.675
Okay. They're
1224
01:34:08.295 --> 01:34:11.835
they're all paragraphs long. Very tough questions. Very good questions.
1225
01:34:12.695 --> 01:34:21.245
I'm gonna try to find and summarize the easy why we've had them on the show multiple times. Alright. I bet. Yeah. Let's see if I can even answer any of these. The I remember being like,
1226
01:34:21.725 --> 01:34:24.065
this is too hard for me. I didn't get enough sleep for this.
1227
01:34:25.565 --> 01:34:29.025
Okay. Let me see. Oh, we appreciate you. Thank you.
1228
01:34:30.930 --> 01:34:36.390
Okay. I'm reading it. I'm gonna paraphrase it, and then I'm gonna answer it, right, so people understand what the question is.
1229
01:34:37.090 --> 01:34:37.990
Let's see.
1230
01:34:40.805 --> 01:34:45.705
Okay. So the first question was about home home mining Bitcoin and taxes,
1231
01:34:46.885 --> 01:34:47.385
and
1232
01:34:50.150 --> 01:34:54.650
he had said people seem to think that they should voluntarily claim their mining rewards as income.
1233
01:34:55.590 --> 01:34:57.515
But if you DCA Bitcoin,
1234
01:34:57.975 --> 01:35:04.635
you don't pay income tax. Right? So why should you pay income tax, you know, when you're DCA ing through your electric bill?
1235
01:35:05.540 --> 01:35:12.360
Does that make sense? Right? Like, when you buy Bitcoin, you don't have to pay for it. Yeah. I mean, I know what he's asking. Yeah. What's your answer?
1236
01:35:12.675 --> 01:35:15.255
And then and then he said,
1237
01:35:17.235 --> 01:35:23.090
interested in the argument that a Bitcoin is text, if that would hold any water in a lawsuit against the IRS.
1238
01:35:24.270 --> 01:35:34.275
And to that, I have literally no idea the Bitcoin is text thing. I mean, like, we're hoping Bitcoin is considered speech because it should be. I mean, it's code, and then it's protect under the first amendment.
1239
01:35:35.135 --> 01:35:35.540
Yep.
1240
01:35:36.580 --> 01:35:40.680
So that's a great question. It's too hard for me. I don't know the answer. I mean, I just like
1241
01:35:42.905 --> 01:35:47.965
It's an optimistic constitution poll is what it is. I think so. I think so.
1242
01:35:49.065 --> 01:35:49.565
And,
1243
01:35:50.250 --> 01:35:55.150
yeah, mining rewards, you're you're considered to be doing work, so it's like income rather than
1244
01:35:55.530 --> 01:35:59.105
capital expenditure, but it's really it's really similar to just DC ing into Bitcoin.
1245
01:36:01.025 --> 01:36:02.725
I mean, you're just paying the electric bill. Well, I mean, the answer is
1246
01:36:03.665 --> 01:36:05.045
also not legal advice.
1247
01:36:05.825 --> 01:36:07.925
The answer is your income tax
1248
01:36:08.270 --> 01:36:09.890
on on mining is,
1249
01:36:12.110 --> 01:36:24.965
the the amount of money you brought in minus your expenses. Right. Should be very low anyway. Right. So it's not it's not the full it's not the the full mining revenue you bring in. It's it's your profit. Right? It's your income. Yeah.
1250
01:36:25.320 --> 01:36:31.260
And with DCA, that's not the case. I mean, there's no income there. It's you're literally trading whatever fiat for
1251
01:36:31.720 --> 01:36:33.820
KYC Bitcoin. Right? Right.
1252
01:36:35.075 --> 01:36:36.855
But if if your electric cost
1253
01:36:37.155 --> 01:36:37.655
exceeds
1254
01:36:38.035 --> 01:36:42.935
the amount of Bitcoin you bring in, you're actually taking a loss. I mean, I'm not saying that Bitcoiners should
1255
01:36:43.960 --> 01:36:47.660
try and get that loss. Like, you'll probably just get fucked if you try,
1256
01:36:47.960 --> 01:36:48.860
but, technically,
1257
01:36:49.320 --> 01:36:52.220
you could, I guess. But we need the rest of our tax lawyers.
1258
01:36:53.295 --> 01:37:01.475
Yeah. I'm not the tax lawyer. I feel too passionately about it, so I just decided I wasn't gonna be wasn't gonna be a tax lawyer because I probably wouldn't be good at it.
1259
01:37:02.969 --> 01:37:06.590
I'm gonna copy one of his his other questions into our chat
1260
01:37:07.690 --> 01:37:08.909
so you can see it.
1261
01:37:11.094 --> 01:37:17.594
Right? I don't need it Yeah. Posted in the main chat. Yeah. But it's about the FATF travel rule, see if that works.
1262
01:37:18.215 --> 01:37:19.530
Yep. I think
1263
01:37:20.090 --> 01:37:21.310
Wait. It doesn't?
1264
01:37:21.850 --> 01:37:24.350
Okay. The chat doesn't let me post the entire question.
1265
01:37:25.130 --> 01:37:26.750
There's a there's a character limit.
1266
01:37:28.185 --> 01:37:28.685
Classic.
1267
01:37:29.304 --> 01:37:31.405
Yep. They're trying to censor us.
1268
01:37:32.344 --> 01:37:38.590
So he was saying people might be confused about the FATF travel rule and whether it only applies to exchanges,
1269
01:37:40.489 --> 01:37:43.870
about it only applying to exchanges sending Bitcoin across the US border,
1270
01:37:44.565 --> 01:37:49.625
and people might believe that it applies to private users needing to comply with suspicious activity reports.
1271
01:37:51.620 --> 01:37:55.640
Happy to clear that up. The travel rule doesn't apply to individuals. It only applies to
1272
01:37:56.180 --> 01:37:57.160
financial institutions,
1273
01:37:58.340 --> 01:37:58.840
so
1274
01:37:59.515 --> 01:38:02.095
you don't have to report your friends for suspicious activity,
1275
01:38:03.115 --> 01:38:09.929
and you don't have to I mean, if you're sending money to a friend in another country, I don't know. What are you supposed to do? Send them send them their own information?
1276
01:38:10.790 --> 01:38:14.489
It just doesn't make sense unless it's unless there's a third party involved.
1277
01:38:14.949 --> 01:38:21.195
Right. I mean, we discussed this earlier. Right? It's it's specifically between 2 regulated parties. I do think that it could,
1278
01:38:22.455 --> 01:38:26.475
it could just be the, you know, the first shot. It could be the setup shot.
1279
01:38:26.980 --> 01:38:28.440
But right now, it's just,
1280
01:38:30.100 --> 01:38:33.160
it's just one regulated institution to another. I mean,
1281
01:38:34.365 --> 01:38:40.950
I'm sure there's freaks out there that send from one exchange to another, but, like, I don't know what you're doing. At least, like
1282
01:38:42.230 --> 01:38:42.730
yeah.
1283
01:38:43.430 --> 01:38:52.705
I think there's just there I'm I'm guessing the people that do that are primarily just trading and just accepting that it's gonna be a big VC and, yeah, that just is what it is. Right? And, hopefully, that's separate from their
1284
01:38:53.485 --> 01:38:54.705
from the rest of their stack.
1285
01:38:55.085 --> 01:38:57.745
I mean, if you're trading with your whole stack, you got a problem.
1286
01:38:58.500 --> 01:38:59.000
Right.
1287
01:38:59.699 --> 01:39:04.199
Yeah. I mean, the overwhelming majority of people who trade are just gonna lose money.
1288
01:39:05.860 --> 01:39:06.760
Yeah. I agree.
1289
01:39:07.204 --> 01:39:07.484
And,
1290
01:39:08.085 --> 01:39:12.985
Learned learned that lesson already. Have a huge data and tax burden on top.
1291
01:39:16.340 --> 01:39:20.200
So, I mean, while we're waiting for more questions from the freaks, if they ever come,
1292
01:39:21.620 --> 01:39:25.480
let's bring up some hot topics. Hot topics shit, the edgy shit.
1293
01:39:25.985 --> 01:39:27.605
It's, well, I'm sure right?
1294
01:39:28.304 --> 01:39:34.645
Of course, dude. I I try not I've been trying not to, but, especially as it goes on and I drink more, I tend to,
1295
01:39:35.940 --> 01:39:37.300
tends to get a little bit more,
1296
01:39:38.020 --> 01:39:38.520
frisky.
1297
01:39:40.820 --> 01:39:52.155
Yeah. You're a 100% allowed too. My grandmother asked me. She's like, how do I not get kicked off the radio? I was like, this is just not pricing, grandma. You don't you don't you don't under you don't understand how the Internet works.
1298
01:39:53.494 --> 01:39:53.960
Yeah.
1299
01:39:54.360 --> 01:40:02.450
They're they're trying. They're trying to kick us off the radio, the Internet. Going to. Well, this is one of the reasons why I launched bitcoin tv.com, so it's a,
1300
01:40:03.775 --> 01:40:05.315
a censorship resistant,
1301
01:40:06.014 --> 01:40:08.914
spot for Bitcoin content including so they'll dispatch.
1302
01:40:09.295 --> 01:40:09.795
Right.
1303
01:40:11.070 --> 01:40:15.969
But, yeah, I expect that I expect that more I expect that to happen more.
1304
01:40:16.750 --> 01:40:18.769
You know, we already saw we saw
1305
01:40:19.115 --> 01:40:26.655
what Biden's spokesperson was like, if you get kicked off of 1 platform, we're gonna have to kick you off. We wanted to be able to kick you off all the platforms at the same time,
1306
01:40:27.930 --> 01:40:32.030
which is, like, a really dangerous framing to hear come from the administration.
1307
01:40:33.210 --> 01:40:35.870
So I'm, like, curious. You know, we have, like, all this,
1308
01:40:37.195 --> 01:40:41.855
recent developments along vaccine passports in a lot of different areas of the world.
1309
01:40:43.994 --> 01:40:45.054
Do you see
1310
01:40:46.320 --> 01:40:50.020
are are do you do you feel like there's an encroachment on privacy
1311
01:40:52.695 --> 01:40:56.795
that that do you think do you feel like obviously, there's an encroachment on privacy.
1312
01:40:57.415 --> 01:40:58.875
Do you feel like it's increasing?
1313
01:40:59.175 --> 01:41:06.199
Softwalls. You know? Do you feel like it's increasing, though? Like, do you feel like it's only the beginning of this shit? Like, do you think it gets worse from here?
1314
01:41:07.780 --> 01:41:10.199
In terms of the vaccine passports and all that?
1315
01:41:10.565 --> 01:41:17.945
Just every you know, just privacy in general, whether you're traveling or whether you're trying to work a job or you're trying to buy a house.
1316
01:41:18.470 --> 01:41:18.790
Yeah.
1317
01:41:19.590 --> 01:41:24.890
It's bigger than Bitcoin. Right? Like, it's it's just everywhere. Everywhere around us is just getting worse.
1318
01:41:25.590 --> 01:41:26.650
Yeah. I mean,
1319
01:41:27.535 --> 01:41:37.155
honestly, it does feel kinda fucked now that we've established that we're a lot of curse. I mean, that's just the that's just the the most accurate way I know how to describe it. I mean, I
1320
01:41:38.159 --> 01:41:39.780
I wanna be optimistic, but,
1321
01:41:41.360 --> 01:41:42.020
you know,
1322
01:41:42.400 --> 01:41:44.340
Bitcoin and and things like it
1323
01:41:44.955 --> 01:41:45.455
that
1324
01:41:45.995 --> 01:41:53.489
are are give me hope and make me optimistic, but anything that relies on politics, I'm not optimistic about for the most part or just varying degrees
1325
01:41:53.869 --> 01:41:56.449
of pessimistic or not that optimistic about.
1326
01:41:56.829 --> 01:41:57.409
I mean,
1327
01:41:57.869 --> 01:42:04.325
you know, we've got some states in the here in the US that do things differently, like Florida does things differently. I moved here from California
1328
01:42:04.864 --> 01:42:08.565
partially because of the lockdowns, obviously, because of the taxes too, but
1329
01:42:09.490 --> 01:42:11.910
there's some there's some counter movements.
1330
01:42:14.210 --> 01:42:22.465
Not enough, though. You know what I mean? Not as many as there could be. You know? Especially in Europe. I mean, I feel bad for what appears to be happening there.
1331
01:42:24.844 --> 01:42:27.650
Not sure what to make of all that. I mean, look. Plenty of people have
1332
01:42:28.449 --> 01:42:31.670
said all there is that that needs to be said about it. It's obviously unfair
1333
01:42:33.090 --> 01:42:34.870
and bordering on totally ridiculous
1334
01:42:36.125 --> 01:42:39.265
or or they seem to be ridiculous. They seem to protest more, though.
1335
01:42:39.645 --> 01:42:41.425
So that's the optimistic take.
1336
01:42:42.125 --> 01:42:45.700
The your the Europeans, you mean? Yeah. Do you think they're gonna take it?
1337
01:42:46.420 --> 01:42:57.845
Well, they do seem to protest more. I mean, I certainly see more videos of them protesting, but, also, their lockdowns are way more strict than ours are. Right. Way, way, way more. Yeah. And they've been going on for much, much longer.
1338
01:42:59.185 --> 01:43:01.925
I mean, we did have some we did have some lockdown protests
1339
01:43:03.730 --> 01:43:09.670
here, you know, minor ones here and there, but I don't think they got nearly as bad in the US as they did in other places.
1340
01:43:10.625 --> 01:43:15.525
Okay. So we have a great Bitcoin question. I agree with you, by the way. I didn't mean to cut you off. It's okay.
1341
01:43:16.784 --> 01:43:20.450
From Quinn Solo, I've been stacking and coin joining for a few years now.
1342
01:43:21.170 --> 01:43:34.575
If the IRS comes after me because of a KYC exchange reporting that his withdrawals went through coin join, is there a situation where you think he'd have to prove to them that he still has the Bitcoin and hasn't sold? Could he be forced to dox himself
1343
01:43:35.275 --> 01:43:36.335
to prove that?
1344
01:43:39.240 --> 01:43:42.780
Okay. I'm reading the question again on the screen while I think about the answer.
1345
01:43:47.335 --> 01:43:50.075
So the KYC exchange says that you bought Bitcoin.
1346
01:43:50.455 --> 01:43:51.755
You withdrew to CoinJoin.
1347
01:43:52.295 --> 01:43:52.795
Right.
1348
01:43:53.480 --> 01:43:56.020
I think the burden is on them to
1349
01:43:56.400 --> 01:43:56.900
demonstrate
1350
01:43:57.840 --> 01:43:59.940
why you have gains that you didn't declare.
1351
01:44:00.295 --> 01:44:07.115
Do you know what I mean? And if you didn't sell any, then you don't have any gains. So, like, if you bought a car or something well, how'd you buy this car?
1352
01:44:08.160 --> 01:44:15.380
Right. They could ask they could ask you that, but under his hypothetical, he's just been coin joining and stacking and not actually selling.
1353
01:44:16.635 --> 01:44:19.614
So if you're not if you're not actually selling, then then,
1354
01:44:20.395 --> 01:44:28.890
you know, they could investigate it. But if you haven't actually sold anything, of course, that's not a very good. It's not ideal. Right? If you haven't done anything wrong, you have nothing to worry about.
1355
01:44:29.350 --> 01:44:30.250
Right. But
1356
01:44:31.030 --> 01:44:33.370
I think the burden is on them to prove it. And
1357
01:44:34.375 --> 01:44:39.355
as absurd as this sounds, all the tax lawyers I talk to tell me that, like, there's nobody working with the IRS.
1358
01:44:40.215 --> 01:44:43.880
Like like, they're not nearly as active as they could be, which is
1359
01:44:44.820 --> 01:44:46.840
for most of us in the Bitcoin world,
1360
01:44:47.220 --> 01:44:48.280
myself included,
1361
01:44:48.695 --> 01:44:50.075
like, I spend, you know,
1362
01:44:50.935 --> 01:45:08.825
15 to 20 minutes a day worrying about the IRS probably. I don't know if everyone else does, but, or at least some portion of my day. You know what I mean? Or my life, maybe not on a daily basis, but you get the idea. Right? It's a concern. Even if you haven't done anything wrong, you really don't want them going through all your stuff. And as of now,
1363
01:45:09.205 --> 01:45:10.825
they're, like, way, way, way behind.
1364
01:45:11.520 --> 01:45:16.900
Like Right. There's so much stuff that's happened in Bitcoin and crypto in general that, like, they they
1365
01:45:17.280 --> 01:45:19.460
they haven't even scratched the surface of it.
1366
01:45:21.735 --> 01:45:31.320
And let's hope let's hope it let's hope it stays that way. Yeah. I mean, I would I would say that I worry about it enough that I, like, basically self censor myself around the topic and try not to talk about it.
1367
01:45:31.780 --> 01:45:35.160
I I would urge the freaks to pay their taxes. Pay your taxes.
1368
01:45:35.540 --> 01:45:38.905
Early. I pay them early. And, yeah, pay them early. And,
1369
01:45:40.344 --> 01:45:40.844
yeah,
1370
01:45:41.784 --> 01:45:45.244
but but my biggest fear my biggest fear is yeah.
1371
01:45:45.570 --> 01:45:47.830
Or not my biggest fear, but one of my fears is,
1372
01:45:48.210 --> 01:45:49.670
you know, if we're right about Bitcoin,
1373
01:45:50.130 --> 01:45:51.750
the chain is gonna last forever.
1374
01:45:52.610 --> 01:45:55.364
It's always gonna be there. Anyone can look at it in the
1375
01:45:55.665 --> 01:46:01.445
future. The data the external data that links to the chain, including KYC data, but also other data,
1376
01:46:03.710 --> 01:46:05.730
is only going to increase from here.
1377
01:46:06.110 --> 01:46:06.610
So
1378
01:46:07.630 --> 01:46:17.865
if your government or someone else gets their shit together and starts analyzing the chain with this new information, they can hurt you in the future even if they haven't hurt you yet. That data is always gonna be there.
1379
01:46:19.045 --> 01:46:19.545
Right.
1380
01:46:20.080 --> 01:46:26.340
Definitely risk. We got some good questions here, I think. Yeah. We got a bunch of good questions given. So another question we got is,
1381
01:46:27.655 --> 01:46:29.835
we commonly hear in the Bitcoin world,
1382
01:46:30.454 --> 01:46:32.875
I got into a boating accident, I lost my Bitcoin.
1383
01:46:35.040 --> 01:46:36.100
Is this a real
1384
01:46:37.520 --> 01:46:39.699
is this a is this a real defense,
1385
01:46:40.719 --> 01:46:45.775
in, like, a 61 02 type situation where there's government seizure or maybe,
1386
01:46:46.715 --> 01:46:51.935
you know, in there I I could see, like, a a a soft government seizure being
1387
01:46:52.370 --> 01:46:57.270
unrealized capital gains tax. Basically, you have to pay cap gains even if you haven't sold.
1388
01:46:59.385 --> 01:47:03.485
Is is a boating accident a reasonable strategy, or is that just a meme?
1389
01:47:05.145 --> 01:47:12.710
I think it's probably just a meme, but like I said, not not a tax lawyer. So I haven't gotten the opportunity to, like, you know, fight the IRS on this particular
1390
01:47:13.410 --> 01:47:14.710
on this particular issue.
1391
01:47:16.574 --> 01:47:17.235
I think
1392
01:47:17.695 --> 01:47:22.675
mostly a meme, but there's kinda some truth to it because a lot of people have lost a lot of Bitcoin,
1393
01:47:23.110 --> 01:47:26.170
like, legitimately lost a lot of Bitcoin in, like, all kinds of ways.
1394
01:47:26.710 --> 01:47:27.210
And
1395
01:47:27.829 --> 01:47:31.530
this is one of those things that the IRS is, like, so, so far behind on.
1396
01:47:32.395 --> 01:47:50.570
Like, they they don't they they haven't even they don't even know what DeFi is. Like, they haven't talked about it at all. Like, they've got so many things to deal with, not just beyond Bitcoin, just stuff that people are doing, whatever it is you think about it. Like, there's so many there's probably, like, a, I don't know, 1,000,000,000 and billions of transactions that
1397
01:47:51.145 --> 01:47:54.685
they haven't even started to figure out how to categorize properly.
1398
01:47:55.385 --> 01:48:06.410
I mean, they just, like, made some random attempts, and and they were not that impressive. And like I said, the tax lawyers tell me that they're not that busy over there. Now, of course, that might change, and we can't just count on that continuing, but
1399
01:48:07.595 --> 01:48:11.215
we've got enough bad stuff going on. It doesn't have to all be bad. You know what I mean?
1400
01:48:13.275 --> 01:48:16.770
I don't know. Yeah. I mean, but once again, that's just all on saying. About the
1401
01:48:17.330 --> 01:48:22.310
yeah. Yeah. I'm not sure about the boating accident thing. I think by the time
1402
01:48:23.315 --> 01:48:27.495
by the time we have unrealized capital gains taxes and potential confiscation,
1403
01:48:27.955 --> 01:48:30.750
like, we gotta be out. Do you know what I mean?
1404
01:48:31.369 --> 01:48:35.070
Yeah. Like, people should have already emancipated themselves as much as possible.
1405
01:48:35.770 --> 01:48:37.150
Like, you know,
1406
01:48:37.784 --> 01:48:39.804
whatever that means to you. For me,
1407
01:48:41.385 --> 01:48:47.160
obviously, Bitcoin is a part of that. Guns are a part of that. Being self employed is a part of that. You know? Becoming
1408
01:48:47.540 --> 01:48:48.040
becoming
1409
01:48:49.060 --> 01:48:51.000
hard to cancel. You know?
1410
01:48:51.460 --> 01:48:54.520
Right. Becoming self reliant and having a network and
1411
01:48:55.415 --> 01:48:57.195
theoretically, having a game plan.
1412
01:48:57.655 --> 01:48:59.915
Although long term game plans are kinda challenging,
1413
01:49:00.375 --> 01:49:06.840
you know, considering, like, where things have gone from, like, 2 years ago to now. Right? Prelockdowns to postlockdowns, like,
1414
01:49:07.140 --> 01:49:07.800
you know,
1415
01:49:08.820 --> 01:49:11.160
that's a that's a big one. Big big change
1416
01:49:12.075 --> 01:49:13.935
in terms of, like, being able to just go.
1417
01:49:14.315 --> 01:49:15.935
Right? Right. So
1418
01:49:16.315 --> 01:49:18.715
yeah. I mean, 2020 was the year we're just
1419
01:49:21.070 --> 01:49:25.650
I mean, if if you live through 2020 and you think that these things can happen fast
1420
01:49:26.030 --> 01:49:28.055
and that the majority of people will just
1421
01:49:28.535 --> 01:49:30.075
roll over and take them.
1422
01:49:30.695 --> 01:49:34.875
I don't know where you've been living. Like, you're just under a rock or some shit.
1423
01:49:36.860 --> 01:49:47.065
But, like, this shit can happen real quick. So we have a quest It's okay. I just wanna mention one thing that it's it does seem pretty dismal that bad things can happen so quickly, but it also, I think, is just a testament
1424
01:49:47.764 --> 01:49:55.210
to how unpredictable things can be in general. Like, you know, I guess I guess people could have predicted it, but, like, the
1425
01:49:56.230 --> 01:50:01.290
the excessive money printing and the lockdowns and and, you know, potential, like,
1426
01:50:02.230 --> 01:50:03.450
resistance to that,
1427
01:50:03.915 --> 01:50:04.415
Like,
1428
01:50:04.875 --> 01:50:06.175
we might be 1,
1429
01:50:07.114 --> 01:50:07.614
you
1430
01:50:07.994 --> 01:50:10.895
know, active money printer session away from, like,
1431
01:50:11.675 --> 01:50:20.630
things changing in a big, big way. You know what I mean? I don't know. Like, I was I was in I was in Colombia, which we're not gonna talk about, but I was just there. And time brought up.
1432
01:50:21.170 --> 01:50:24.685
Right. I was just there, and, like, you know, the prices on everything
1433
01:50:25.385 --> 01:50:32.740
are are oftentimes taped over because they need to keep adjusting them, and they're already in, like, some phase of hyper not hyperbickerization,
1434
01:50:33.120 --> 01:50:33.620
hyperinflation.
1435
01:50:34.320 --> 01:50:35.220
Hopefully, hyperbickerization.
1436
01:50:37.040 --> 01:50:37.540
And,
1437
01:50:38.605 --> 01:50:39.105
well,
1438
01:50:40.205 --> 01:50:43.025
I we you know, I don't know when it's gonna happen here, but
1439
01:50:44.125 --> 01:50:49.090
it's obviously a possibility to consider that it's going to happen at some point. Probably will happen everywhere else first.
1440
01:50:49.550 --> 01:50:57.615
Everyone's gonna try to dump them Right. Because they're the reserve. Lesser fiat, shake coin bags, and get our and get our bags, and then eventually dump our bags into Bitcoin.
1441
01:50:59.535 --> 01:51:04.035
Well, that's one of the fucked up parts about these laws is that they're based on a world where
1442
01:51:04.575 --> 01:51:08.400
inflation doesn't exist. Right? Like, you were talked earlier about the $10,000
1443
01:51:08.860 --> 01:51:11.200
CTR requirement. Yeah. I mean, $10,000
1444
01:51:11.900 --> 01:51:12.400
in
1445
01:51:13.525 --> 01:51:14.185
in 1970
1446
01:51:14.805 --> 01:51:20.345
is way different than $10,000 today, but it's never been increased. I mean, the other thing is, like, in a hyper inflationary
1447
01:51:20.725 --> 01:51:21.225
environment,
1448
01:51:23.240 --> 01:51:24.700
you're liable for the hyperinflationary
1449
01:51:25.160 --> 01:51:25.660
gains.
1450
01:51:27.160 --> 01:51:31.820
I mean, I it helps people that are in debt more than it does if you're holding real assets,
1451
01:51:33.825 --> 01:51:37.365
which is a reverse incentive than it should be if you actually cared about your citizens.
1452
01:51:38.145 --> 01:51:42.245
Yeah. Well, the there's gonna be all kinds of totally absurd incentives
1453
01:51:43.860 --> 01:51:46.040
if inflation continues and hyperinflation
1454
01:51:46.340 --> 01:51:53.545
happens. I mean, like, it's already really weird that, like, used cars are going up in value 10% in a month, and that's happening.
1455
01:51:53.925 --> 01:51:59.065
Right. You know what I mean? Cars and watches and real estate and stock and Bitcoin. Bitcoin. Right?
1456
01:51:59.605 --> 01:52:02.585
Like, everything. Every anything besides dollars
1457
01:52:03.030 --> 01:52:04.070
is is going up in value.
1458
01:52:05.750 --> 01:52:06.250
And,
1459
01:52:07.350 --> 01:52:14.554
well, it's weird, and I think even normal non Bitcoiners are starting to notice that. I mean, I've talked to my parents about it, and, like,
1460
01:52:15.255 --> 01:52:19.915
I've talked to them about monetary policy before. It's not something that everyone's parents are interested in, but
1461
01:52:21.494 --> 01:52:34.815
but, like Few. You could just ask people and, like, do you think it's normal that, like, used cars are going up in value 10% in a month? Like, that should strike them as strange. And it's not just about the, you know, the chip shortage or whatever.
1462
01:52:36.395 --> 01:52:37.910
There's weird stuff going on.
1463
01:52:39.190 --> 01:52:42.090
Yeah. But when you sell that used car for the increased
1464
01:52:42.470 --> 01:52:43.690
price, you gotta pay
1465
01:52:44.790 --> 01:52:45.850
you gotta pay up.
1466
01:52:47.145 --> 01:52:56.590
That's true. Man, I'm I'm I'm about to sell my car that I've had for 10 years, and I'm gonna sell it at a 50% profit. Someone was accusing you of driving a Mercedes in the chat. Do you have a Mercedes?
1467
01:52:57.370 --> 01:52:58.110
Not yet.
1468
01:52:58.650 --> 01:53:03.630
If if your car is if your car is younger than Bitcoin, then you're you're short Bitcoin in my book.
1469
01:53:05.295 --> 01:53:08.034
What if what if what if you got a huge Fiat loan for the car?
1470
01:53:09.215 --> 01:53:10.914
Then you're I then you're not short.
1471
01:53:11.375 --> 01:53:13.315
I don't know. It's just,
1472
01:53:15.330 --> 01:53:18.530
I just say that because my car is older than Bitcoin. So No. My 2
1473
01:53:19.250 --> 01:53:22.950
2002 Honda s 2000 classic. Yes. So we get to flex on everybody.
1474
01:53:23.605 --> 01:53:24.805
They're all short. Yep.
1475
01:53:26.805 --> 01:53:29.625
So, I mean, freaks. There's a lot of questions on taxes here.
1476
01:53:30.405 --> 01:53:33.900
He's not a tax lawyer. I'm not a tax lawyer. Like, if you have other questions,
1477
01:53:34.280 --> 01:53:34.780
specifically,
1478
01:53:35.160 --> 01:53:35.660
you
1479
01:53:36.680 --> 01:53:39.820
know, our civil rights, stuff like that, privacy rights,
1480
01:53:40.685 --> 01:53:42.305
Those are probably better questions.
1481
01:53:44.365 --> 01:53:47.665
What's the latest on the other? Turn into, like, a tax AMA.
1482
01:53:48.080 --> 01:53:50.980
What what's the latest on whether Monero is a shitcoin?
1483
01:53:52.480 --> 01:53:53.699
You wanna talk about this?
1484
01:53:54.080 --> 01:53:55.300
I don't think it's a shitcoin.
1485
01:53:55.655 --> 01:53:57.755
I do I do think it's a shitcoin.
1486
01:53:58.215 --> 01:53:59.435
Wow. Okay.
1487
01:53:59.815 --> 01:54:00.875
Good talk. So
1488
01:54:01.255 --> 01:54:01.755
so
1489
01:54:02.510 --> 01:54:06.210
there's an influencer on Twitter that I'm not gonna say his name,
1490
01:54:06.510 --> 01:54:12.474
wanted me to answer that question for him on Twitter, and I would not answer it for him on Twitter. But I've talked about it many times,
1491
01:54:15.094 --> 01:54:22.570
and, you know, he just operates in bad faith and makes up bullshit, so I'm not gonna engage in him engage with him in good faith anymore. That's not gonna happen.
1492
01:54:23.270 --> 01:54:34.635
But my argument would be it I mean, it depends on your definitions of a shit coin. I'm laughing at the chat. Sorry. I'm not not laughing. No. Laugh at the chat. That's that's how you should do. If you if you own a car, Matt, you're short Bitcoin.
1493
01:54:36.710 --> 01:54:38.010
That should be a problem.
1494
01:54:38.550 --> 01:54:42.230
Yeah. Well, you know, time is also money and life is short, so don't be,
1495
01:54:42.790 --> 01:54:52.655
2 crazy freaks. So I mean, it depends what your argument what what your definition of a shit coin is. And, I mean, obviously, the definition of a shit coin is not necessarily hard to find,
1496
01:54:53.380 --> 01:54:53.880
but,
1497
01:54:55.540 --> 01:54:57.480
I think that long term,
1498
01:54:58.260 --> 01:55:01.080
the Monero token will go down in value
1499
01:55:01.865 --> 01:55:02.925
compared to Bitcoin.
1500
01:55:03.865 --> 01:55:07.165
So to me, that puts it in the shitcoin basket.
1501
01:55:09.210 --> 01:55:13.389
I also think, you know, like, the Chrysler building's a shitcoin. I think Apple stock's a shitcoin.
1502
01:55:15.050 --> 01:55:18.110
I think our cars are shitcoin. Under under that definition,
1503
01:55:18.489 --> 01:55:18.945
well,
1504
01:55:20.545 --> 01:55:21.605
I have no idea.
1505
01:55:22.465 --> 01:55:39.445
I have no idea. But if that's the definition, then, like, that's you know, there's I thought it I I thought it would be based on, like, it's, you know, long term scalability or auditability or things like that, how decentralized it is. Well, so that should be great. So then you're talking about the protocol. You're not talking about the token. Yeah. I see.
1506
01:55:41.264 --> 01:55:47.364
The the the token is the use is the useful product of the protocol. And I'm not trying to say, like, I think,
1507
01:55:49.290 --> 01:55:59.295
it's not a question of whether or not I think it should decrease in value. I just think it will. Right? And my thesis is that Bitcoin is so fucking hard that everything in comparison to it
1508
01:55:59.835 --> 01:56:00.335
will
1509
01:56:00.715 --> 01:56:04.014
decrease compared to it. Like, Bitcoin will outperform everything.
1510
01:56:05.650 --> 01:56:10.050
It's just it's it's an it's it's it's a thesis. It's an expectation more so than,
1511
01:56:10.770 --> 01:56:11.430
a declaration.
1512
01:56:11.890 --> 01:56:13.750
What about as a tool for privacy?
1513
01:56:14.095 --> 01:56:17.715
As a tool for privacy, I think it's extremely useful today. Yep.
1514
01:56:18.815 --> 01:56:20.435
And I've said that in the past.
1515
01:56:22.690 --> 01:56:25.110
You know, I I I and I think
1516
01:56:25.730 --> 01:56:31.315
I think, in general, the community is very focused on a very noble cause, which is very accessible
1517
01:56:31.695 --> 01:56:32.835
transactional privacy.
1518
01:56:34.175 --> 01:56:36.275
I just question whether or not
1519
01:56:36.735 --> 01:56:40.050
it can accrue value long term against Bitcoin, and I don't think it will.
1520
01:56:41.170 --> 01:56:45.349
Well, I mean, seems reason reasonable that there would be, like, a
1521
01:56:46.050 --> 01:56:47.429
extra privacy premium.
1522
01:56:48.965 --> 01:56:49.465
Like,
1523
01:56:49.765 --> 01:56:55.945
it maybe Bitcoin can get privacy on chain usable, a coin join. Right? But
1524
01:56:56.800 --> 01:57:00.580
to the extent that it doesn't get adopted and there's a need for a greater degree of privacy,
1525
01:57:00.880 --> 01:57:11.715
there's always gonna be some need for that, and people will be willing to pay for that. But it is a question of, like, why would anyone hold it for longer than they actually need it? And somebody has to hold it for it to accrue value.
1526
01:57:13.090 --> 01:57:16.949
Right. I guess you could hold it speculating that other people are gonna need privacy,
1527
01:57:17.409 --> 01:57:18.790
which is a reasonable speculation.
1528
01:57:19.489 --> 01:57:24.315
So my my thesis is my thesis is for a chain like Monero to
1529
01:57:25.915 --> 01:57:27.215
their short term incentives
1530
01:57:27.675 --> 01:57:31.614
are set up in a way that they want to have easy swaps
1531
01:57:32.220 --> 01:57:36.560
that are censorship resistant with Bitcoin. And that makes sense because Bitcoin's the most liquid
1532
01:57:37.260 --> 01:57:40.960
market, and they they want if if if they get
1533
01:57:41.275 --> 01:57:44.655
delisted from a bunch of exchanges, they want to have easy access,
1534
01:57:46.315 --> 01:57:49.375
swaps between Bitcoin and Monero. Right? Mhmm.
1535
01:57:50.230 --> 01:57:53.850
But long term, that hurts them as well. Because if you have
1536
01:57:54.390 --> 01:57:55.850
censorship resistant swaps
1537
01:57:56.550 --> 01:57:57.850
between the two chains,
1538
01:57:58.445 --> 01:58:09.040
then that means you can easily move between the two chains. So if it gives you any kind of you can any kind of privacy benefit Monero gives you, you take advantage of as a Bitcoiner without holding the token long term.
1539
01:58:09.820 --> 01:58:15.440
Right? So it's like, damned if you do, damned if you don't. And if they don't do it, then some other,
1540
01:58:15.795 --> 01:58:21.414
you know, fork of Monero or some other privacy focused chain would do it instead. So they're they have to do it.
1541
01:58:21.715 --> 01:58:24.054
But if they do it, then why would you hold it?
1542
01:58:25.000 --> 01:58:25.740
I agree.
1543
01:58:26.840 --> 01:58:28.680
It's a concern. I mean, we'll see,
1544
01:58:29.400 --> 01:58:29.900
yeah.
1545
01:58:31.320 --> 01:58:37.715
There's We have Anthony in the chat. If you did something highly illegal, would you accept Monero and convert it to Bitcoin or keep it Monero?
1546
01:58:38.095 --> 01:58:42.349
And that's what I'm saying. Like, I I think, like, if you're, like, a ransomware person or something,
1547
01:58:42.969 --> 01:58:51.065
like, it makes sense to to receive your ransom in Monero. There's a lot less ways for you to fuck it up, But, like, then you hold it in Bitcoin.
1548
01:58:52.005 --> 01:58:58.560
You use you use the swap to go back to Bitcoin, and you hold the Bitcoin instead. There's definitely some Monero Maxis that disagree.
1549
01:58:59.020 --> 01:59:02.159
100%. I'm well aware. They're always in my mentions.
1550
01:59:02.460 --> 01:59:02.960
Yeah.
1551
01:59:03.420 --> 01:59:03.920
Yeah.
1552
01:59:08.135 --> 01:59:12.395
Well, I'm glad we had that conversation. Are you happy you brought it up? I'm sure why not.
1553
01:59:13.860 --> 01:59:22.280
We get it's we got some we got some questions out of it. That's good. I think it's inter it's just it's really interesting dynamic, just, the whole discussion around it,
1554
01:59:23.915 --> 01:59:29.695
because I get shit on from both sides whenever I talk about it, which is, you know, you're doing something right when that's what happens.
1555
01:59:30.155 --> 01:59:32.690
Yeah. I think maybe I'm just
1556
01:59:33.170 --> 01:59:34.630
patting myself on the back.
1557
01:59:36.449 --> 01:59:41.110
But, it's in it it does seem like the chain that big corners are most insecure about.
1558
01:59:42.094 --> 01:59:44.835
At least certain influencers are most insecure about.
1559
01:59:45.775 --> 01:59:49.395
And I would say to them, well, let's improve Bitcoin privacy guarantees.
1560
01:59:50.250 --> 01:59:55.710
I don't expect it on the protocol layer, but let's do it on the app layer, and let's do it on the education layer.
1561
01:59:56.010 --> 02:00:00.425
I mean, it's the same thing with with Ethereum and smart contracts and Bitcoin.
1562
02:00:01.445 --> 02:00:06.090
Like, I that's the way it comes off to me. Maybe that's that's a that's a hotter take than
1563
02:00:06.409 --> 02:00:08.190
than was expected, but, like,
1564
02:00:09.290 --> 02:00:10.429
you know, sometimes
1565
02:00:11.449 --> 02:00:17.775
sometimes okay. You know how Cardano has been, like, proclaiming that they're gonna have smart contracts for, like, 5 years. Right? The smart contracts are coming.
1566
02:00:18.155 --> 02:00:18.655
Right.
1567
02:00:19.115 --> 02:00:22.575
Like, I remember from 2017 when, like, the value prop for Cardano
1568
02:00:23.500 --> 02:00:34.284
was, like, Charles Hoskinson is smart and smart contracts are coming. And then 5 years later Mhmm. Literally no progress made on that. And it's still the same narrative. It's exactly the same. It's, hey, smart, and they're coming.
1569
02:00:35.225 --> 02:00:47.700
And I and I and I hope, you know, that as far as Bitcoin goes, that that the smart contracts are coming, and it's not like smart Bitcoin developers are working on it. The smart contracts are coming kinda thing. You know what I mean?
1570
02:00:48.795 --> 02:01:04.139
Right. I'm saying that as someone who doesn't know how to code, so, like, you know, I'm not demanding that people build them faster. But it's the same thing. Right? Like, if for whatever reason you wanna use one of the ETH casinos or the BNB casinos, like, you can do that. You just, you know, you swap into that token,
1571
02:01:04.645 --> 02:01:08.264
You'd use it, and you but you don't hold the token. You hold Bitcoin.
1572
02:01:08.565 --> 02:01:12.344
Right. Well, I I think I I feel like wrapped Bitcoin is useful
1573
02:01:13.045 --> 02:01:13.864
on Ethereum,
1574
02:01:14.630 --> 02:01:27.505
but I don't know all the trade offs of Rapid Bitcoin. It's super centralized. It's run by BitGo. Like, they can just censor you at any fucking point, and they probably will start censoring people. We already saw with USDC. They started they have blacklists on u USDC. They just
1575
02:01:28.045 --> 02:01:39.480
circle is worth, you know, way too many 1,000,000,000 of dollars, and they'll just blacklist you at will and then make you prove that you're not a criminal after the fact. Do they It's they have all over again. Do they have the admin key,
1576
02:01:39.835 --> 02:01:43.295
admin power to be able to freeze specific transactions? Like Yes.
1577
02:01:43.755 --> 02:01:45.695
Addresses. They can freeze the whole address.
1578
02:01:46.929 --> 02:02:12.025
Alright. There you go. You heard it here first. But the question is, like, if they get forced to do it, and if I'm just I could just be wrong that they just never get forced to do it. I just think they will eventually, but maybe they don't. But I think that's a low low hanging fruit. If they can definitely do if they can do it, then that's a problem. It doesn't matter whether or not they're forced to do it. That's my point. Yeah. Yeah. I guess then the the the corollary question is, like,
1579
02:02:12.885 --> 02:02:14.185
what stuff you're doing,
1580
02:02:15.685 --> 02:02:18.345
which which kinds of things you might do that
1581
02:02:18.725 --> 02:02:19.225
require
1582
02:02:20.310 --> 02:02:22.010
maximum censorship resistance.
1583
02:02:22.390 --> 02:02:23.450
Do you know what I mean?
1584
02:02:23.910 --> 02:02:38.580
Right. Like, maybe it makes sense to use Rap Bitcoin for stuff that you're just not worried about. Like That's what I'm saying. Yeah. Right? Like, taking Right. Like, but your savings, your family savings are gonna be held in real Bitcoin Yes. In, you know, proper storage without trusted third parties.
1585
02:02:38.960 --> 02:02:39.460
Right.
1586
02:02:39.920 --> 02:02:45.615
Because, like, what it let's say you needed to take a collateralized loan and the choices were BlockFi,
1587
02:02:46.235 --> 02:02:46.735
right,
1588
02:02:47.355 --> 02:02:58.039
where you have to give them your Bitcoin and take a loan against it and then the 10.90 nines and the KYC and the custody and all that, or compound where you have to trust wrapped Bitcoin, but you don't have to do KYC,
1589
02:02:59.780 --> 02:03:02.840
and you can and you could borrow against the Bitcoin there.
1590
02:03:03.300 --> 02:03:03.765
Like,
1591
02:03:04.725 --> 02:03:08.185
I I guess it's a subjective determination for for each person,
1592
02:03:08.645 --> 02:03:15.739
but one of those seems more attractive than the other. Or I don't know. Maybe not. I mean, look. But I feel like you can't even have people can't even have these conversations.
1593
02:03:16.280 --> 02:03:17.820
Right. No one has the conversation.
1594
02:03:18.679 --> 02:03:27.135
But well, there's a conversation to be had about that, I think, or at least there's it's a debatable issue. But I would avoid KYC at all costs. Me too.
1595
02:03:28.235 --> 02:03:29.435
Me too. But I just wouldn't hold
1596
02:03:30.450 --> 02:03:35.510
I also I couldn't take I I refuse to take the risk of holding long term any of these things.
1597
02:03:36.770 --> 02:03:42.445
Yeah. But maybe it's just not you know, it's Well, the KYC is forever. For me. Right?
1598
02:03:43.224 --> 02:03:45.645
Whereas the risk of using wrapped Bitcoin
1599
02:03:46.500 --> 02:03:52.360
and Ethereum are only as long as you actually use them. I can't believe you said it so many times on the show so far.
1600
02:03:55.085 --> 02:03:57.185
What what are you gonna do? You gotta take a loan
1601
02:03:58.045 --> 02:04:10.050
besides huddle huddle, which is the third option, or things like it. I mean, these are real dilemmas that people have. Right. And, like, there's, like, not obvious easy answers where, like, you know, you can just, like,
1602
02:04:10.805 --> 02:04:12.585
predict the the morally correct
1603
02:04:12.965 --> 02:04:15.864
Bitcoin purest answer. There are, like, challenges.
1604
02:04:16.245 --> 02:04:20.810
We have Anthony coming in with the Bitcoin purest answer to use Liquid instead of Ethereum,
1605
02:04:22.950 --> 02:04:29.085
and I would argue that I'm confronted with the same exact situation. Like, I wouldn't wanna be in liquid long term.
1606
02:04:30.025 --> 02:04:40.409
I would I would be trying to hold as much Bitcoin as possible, real Bitcoin as possible rather than being in the liquid ecosystem. I if I was gonna use something in liquid ecosystem, I would do it the bare minimum.
1607
02:04:41.325 --> 02:04:43.585
Do do they have a platform for collateralized
1608
02:04:44.045 --> 02:04:45.265
lending on liquid?
1609
02:04:46.125 --> 02:04:50.385
So HODL HODL offers that. They they support liquid tether.
1610
02:04:52.280 --> 02:04:58.280
Right. But also, I mean, I know there's a But, like, natively natively on chain. Yeah. There was just
1611
02:04:59.095 --> 02:05:02.155
just recently, there was a there's an there's a new,
1612
02:05:02.855 --> 02:05:05.675
project out called TrueDEX, which is trying to offer
1613
02:05:06.909 --> 02:05:10.369
a so called decentralized exchange with atomic swaps on liquid.
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And in the most cringe way possible, they're calling it LiFi,
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which is just like, come on, guys. Like, you didn't hire a single marketing person. Like, what the fuck are you talking about? What what was its what is that supposed to stand for?
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Liquid finance instead of Oh. DeFi.
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Okay.
NOTE
Transcription provided by Podhome.fm
Created: 3/17/2024 4:32:02 PM
Duration: 10060.617
Channels: 1
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that we're confronting in society.
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But one of the things that's happened over the years is anytime anyone's raised the idea of using the financial system for the purposes that you're describing,
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there's been huge financial blowback. And I'll I'll just give you an example. There were a number of banks after, the Parkland shooting,
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that decided they were going to effectively stop making loans,
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to gun manufacturers,
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and that became a huge political issue,
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with several, and, republicans effectively saying that they were going to make it very difficult
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for those companies,
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effectively,
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in terms of how they're gonna be regulated and the like. And so I'm curious about how you think about
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that that dynamic, that political dynamic, the the private sector jumping in, in many cases, in a way that the public sector won't, and yet they won't because there are people on the other side of the argument?
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that the financial system, which makes so much of our economy work and society function, has a role to play.
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Now in the current environment in which we're living, where everything is politicized,
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people seem so polarized. You're right that there is some risk here. But let's be clear. There's nothing political
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about pummeling police officers on the steps of the Capitol. Right? There's nothing partisan
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about beating up people because they're wearing yarmulkes
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or defacing
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black churches or some of the other activity that we've seen. And I think people on both sides of the aisle can agree
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that when extremists exploit these kinds of systems, we all suffer. Now look, If you walk into a Bank of America with a neo Nazi armband with a swastika up there and you say, hey. I wanna hold I wanna open an account. The company has to choose whether they work with you or not. That's not my decision at ADL.
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But I think it's our job to help uncover what's happening so the companies can ensure that their systems aren't used for illegal
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purposes. Some systems you guys were talking about Bitcoin a bit earlier. Things like Bitcoin are very ripe to be and vulnerable
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to be used by extremists because of the way those technologies work. But the mainstream
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banking institutions and financial systems,
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they have a kind they're required to behave with the kind of transparency,
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and they owe it to their shareholders to make sure they're not allowing extremists to exploit their services. Jonathan, one one of the
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The interactive live show about Bitcoin distributed systems privacy and open source software.
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If you're tuning in from the audio stream,
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that was the Anti Defamation League CEO
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on CNBC
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essentially assinuating
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that Nazis are using Bitcoin. I expect that to be a continued narrative,
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especially among,
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especially targeted at sovereign Bitcoiners, Bitcoiners that use Bitcoin without third parties,
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in a relatively private way.
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I'm pretty excited about this show.
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Before we get started, I just wanna give a really quick shout out to all the freaks who support it.
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Without your support for dispatch, the show would not exist.
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I want this I want dispatch. I've always wanted dispatch. Part of the mission has been to be an audience funded show for the audience, by the audience.
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That includes
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all the freaks who join us in the live chat and participate with the discussion. You make this show unique, but it also includes
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all the freaks who support the show, whether that's your podcasting 2 point o. If you go to new podcast apps.com,
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you can download
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a whole assortment of different podcast apps that support streaming sats, and you can just load it up with sats, and you can stream sats as you listen. It's really, really cool
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just watching the sats stream in after it gets uploaded to the podcast feeds. It's as simple as just installing the podcast app,
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searching Citadel dispatch, loading it up with some sats, deciding how much you wanna stream, and just go for it. So I do appreciate the freaks that do that. You can also contribute through lightning,
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at citadel dispatch.com.
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I also have my pay NIM there. Big thank you to the samurai team. They gave me plus Odell.
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All pay NIM start with plus, so I got the Odell pay NIM.
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So you can go to sidledispatch.com
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if you want to scan that QR code to add me to your samurai wallet.
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I got my first few, pay nim donations, which was pretty fucking cool.
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Or you can go to ciddle dispatch.com/stack
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where you can get merch if you wanna support the show that way if that's how you prefer to do it. What's really cool about that is
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if you wanna buy a hat, the only way you can do it is either through PayNimz or Lightning.
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So there's a bunch of freaks that made their first Lightning payments,
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to to get hats, which is you know, it's it's pretty cool. It's just eating your own dog food. I really enjoy it.
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So, anyway, guys, with all that said, appreciate you all. You guys make this special every Tuesday, every Bitcoin Tuesday.
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I think this is gonna be a very special one.
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We have,
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Rafael Yacobbe joining us. This is serial dispatch 32.
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He's a friend. He's become a close friend, and he's a Bitcoin lawyer.
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On Twitter, his handle is the Liberator with an 8 instead of an a.
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How's it going, Raff?
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appreciate you inviting me. Excited for this.
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And I haven't seen you in person in a minute too, so I I hope to see you in person again soon. We We're we're both in Miami, but,
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well, I basically got an email or a text message from everyone that I've met in the last 5 years
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saying something
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like, can't wait to hang out in in Miami
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at the Bitcoin conference.
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And, like, it would it was physically impossible
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to meet even a third of the people that I would like to have met. You know what I mean? Clients and friends and people you know, potential clients and,
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I don't know, see people that I haven't seen in a while. So I don't know how you did it. I mean, I think next time,
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maybe the move is just like, say, hey. I'm gonna be here
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at this time.
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Like, come see me. Yeah. You hold court. You hold court somewhere. Yeah. So I mistakes were made. Lessons were learned. I tried to, like, do too many things
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and
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could not do them.
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it was a week of just a straight whirlwind. No sleep Yeah. Just from one thing to the next. And and god forbid I had plans to do anything because it was just, you know, let's see where the tide takes me. Yeah.
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Yeah. Pretty much. But those we have big corners everywhere. It's pretty cool,
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that we have big corners in so many different professions. You know? They,
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they pigeonhole us and call us, you know, scary supercoaters,
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shadowy supercoaters, but,
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you know, we have big corner plumbers, we have carpenters, we have lawyers,
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we have,
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I don't know, meter maids probably. We're just all over the place.
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Sorry to offend anyone out there who does that.
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Yeah. Because I I just had to park my car. So, anyway,
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let's get to the good stuff. I mean, I think,
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it's pretty timely to have you on.
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Usually, I don't really get along with lawyers, but I've always gotten along famously with you, which means you're either a great lawyer or you're a spook.
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But,
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with everything going on right now in society with this encroachment of our rights, feels like on every single landscape,
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but, obviously, this is a Bitcoin show, specifically to Bitcoin, especially.
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I think it's more timely than ever to have you on, and I think the freaks can appreciate a legal perspective on a lot of the things that we discuss.
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So, I mean, to start, the the main question I see all the time, I mean, we'll just dive right into it,
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Is
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is privacy criminal? Is is trying to seek privacy
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in your everyday life,
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a criminal act? Is it something that people should be ashamed of? Is it something that other people should be suspicious of?
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How do you frame that when you talk when you think about it yourself?
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Well,
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I don't think that privacy is criminal. I mean, I that's not a controversial position in the Bitcoin space, obviously.
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You know, maybe the the ADL would disagree with that based on that clip that you put in the beginning, which I actually hadn't seen before the show. I mean, I just heard about, you know, what they're what they're doing or trying to do, but,
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certainly not criminal. I mean, I feel like
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it's not necessarily a legal take, but for me,
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privacy is essential for having security. I mean, no matter what your security system is for your life or your finances or whatever else you're doing, If people know exactly how it works and they know all the details, then they can, you know, unwind it and undermine it and exploit it. And so just
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at a very, very basic level, you need to have privacy in order to have security, and security is a pretty fundamental,
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you know, human right,
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that human right natural right that everyone should be able to recognize.
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You wanna tell us a little about yourself? I mean, you're you're based in America,
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So the we do have a global audience here, but most of it a lot of it will be American focused, I guess.
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You wanna just tell the freaks a little bit about yourself?
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well, I'm a lawyer. I live in Miami, grew up in New York, Long Island, Long Island,
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and,
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you know, lived in California for a while, moved out to Miami a couple of months ago.
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And I've been working, you know, in the Bitcoin
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crypto space
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since end of 2017,
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early 2018, and, you know, that's that's a 100% of the work that I do.
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A lot of it is
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a lot of it is regulatory work, a big part of it. And so, you know, that's
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working with a lot of exchanges and
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helping them deal with the Bank Secrecy Act and money transmitter laws and then, you know, various DeFi things,
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all all varieties of hopefully censorship resistant
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decentralized technology.
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that, he has more clients than he can handle. So,
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happy to be so busy and that I've had such great opportunities to work with so many, you know, awesome companies doing doing cool stuff.
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That being said, I try my best to, like, just make time for the things that are important and matter. So I don't want to, you know, discourage anyone from contacting me if they have a question or have a project or something.
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So for better or worse, I mean, I think you're just gonna get busier from here. I mean, I I look at regulatory landscape for Bitcoin, and I just see,
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it's weird. I just feel like I'm living in a world where I feel like
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war is brewing,
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and everyone else, there's so many people that are just completely blissfully ignorant to it. Do you feel like
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do you feel like we passed the worst of regulatory hurdles in America in terms of Bitcoin, or do you think it
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it gets, you know, more anti privacy, more anti sovereign from here?
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I was
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in I was in Colombia for the last 5 days
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with KYC enthusiast,
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friend of the pod.
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I think you met him at the, at Big Mike 2021. Yeah. Great nimb. He's not actually a KYC enthusiast.
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No. No. He loves it, dude. He he when we were in Columbia, he was just walking around showing everybody his ID, and he was like, please take the shit. You know?
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But we were we were
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we were brainstorming,
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you know,
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where things are going
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and whether there would be a divide between, you know, KYC Bitcoin and non KYC Bitcoin, and we've got all these big institutions that are getting in on it. And
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on one side of it, there's this risk that they create the, you know, walled garden. Right? And and and and and,
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you know, there's the KYC Bitcoin world and non KYC Bitcoin. And the other side of it is, like,
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the more these big institutions get into Bitcoin,
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the more lobbying power we have.
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And
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from my point of view,
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like, big corporations,
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they just they they they always get what they want. Like, I can't think of a time when Google and Amazon and Facebook, like, have something terrible that happens to them. Like, terrible things just don't happen to them. They basically run the country.
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Yeah. And so, you know, as as big institutions get involved in Bitcoin in one way or another, even if it's, you know,
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k y
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c Bitcoin,
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they still have some kind of financial interest
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in Bitcoin continuing
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and people being able to use it.
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And
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I think that decreases the chances of some kind of, you know, drastic, like, widespread ban. Right? Because if, like,
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there's, I don't know, a couple
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$1,000,000,000,000
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in companies that don't want that to happen and are actively profiting from it now,
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even if they're kind of functioning as an arm of the surveillance state a little bit,
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they're just gonna they're just gonna put the brakes on that, I think. But I don't it's unclear how that's all gonna play out. You know what I mean? At some point, we'll be at a point where there's too many people with money that want Bitcoin around that you just you just don't get to take it away anymore. So from my perspective, like, I think we've passed the point of an outright
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And and and to be clear,
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up until
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probably late 2017,
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I was operating under the assumption that we would see that.
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So
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I would agree that,
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in general, that's a positive development. It's it's something that maybe, you know, I didn't really get public in the space until around that time,
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So it's not a prediction
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that I publicly made that I was wrong about, but it was a prediction that I felt inside, and I was wrong about that. So that it's wrong in a good way,
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but
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I do feel
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I I've I feel like so we passed that point,
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but just because
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their incentives are aligned with us
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in
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the overarching picture of
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outright Bitcoin bans
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doesn't mean that their incentives are aligned with us
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in terms of whether or not you are a sovereign Bitcoiner and you're trying to use Bitcoin in a private way. And I feel
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the pressure of
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these institutions
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to try and
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mold Bitcoin regulation that you know, a big thing we see is is is so called regulatory moats, and and a perfect example in the Bitcoin space is basically what Coinbase did. Coinbase got in the door first,
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in America,
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and then they made
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it really difficult for competitors to come into the space.
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Right.
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We
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basically, what happens is they they use regulations to basically create government like, de facto government monopolies.
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So I'm really mostly concerned about
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this
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them using their influence and their power to try and
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try and
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curtail private Bitcoin usage. Like, I could even see I I I'm right now, I'm up hopefully, this is another prediction I'm wrong about. I'm operating under the assumption that it'll be extremely difficult, if not impossible,
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to withdraw your Bitcoin from these services,
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in 5 years. Do you think that that is a
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do you think I'm wrong on that that assumption or that expectation?
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okay. So we're just we'll just use the the incentives that we talked about earlier just as, like, an assumption that they'll continue. Right? That there's there's these big institutions that profit from people buying Bitcoin. And Bitcoin that you can't withdraw to your own wallet
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is worth nothing
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as far as I'm concerned. It's worth nothing.
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I mean,
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I I I can't think of a use case for it. If you can't withdraw it, you can't self custody it, you can't spend it where you want to.
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I guess they can't print more Bitcoin, but if it's all locked up on an exchange
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you know, the Michael Sailors of the world who are just withdrawing from Coinbase and then sending it to a regulated custodian.
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the fact that the rest of the Bitcoin can be withdrawn and used gives Bitcoin value. But if all of the Bitcoin or, you know, a meaningful amount of the Bitcoin can't be can't be withdrawn and used, I personally don't see
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the value prop being very strong at all.
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And
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if the value prop's not very strong,
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like, they they, you know, they withdraw they they they prevent self custody and then, you know, way fewer people buy Bitcoin and some people sell their Bitcoin and the price is going down,
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it it it's gonna take these businesses are just not gonna be as popular,
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like, at
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and, you know, Robinhood has a very successful, you know, quote, unquote, crypto arm. Right. And you can't withdraw anything from there. Right. I think it's the same thing as GBDC. Like, Robinhood Robinhood
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is valuable
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because real Bitcoin exists in the wild.
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Right? But if you if if real Bitcoin didn't exist in the wild, then Robinhood Bitcoin and GBDC, they're worth nothing
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or, you know, a lot less.
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I mean, look, I I could be wrong about it too. I'm not saying that you're wrong, but No. I think you're right. I think you're right. My concern is
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and
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they could still be wrong,
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and they can, you know, hurt the value prop of Bitcoin. They could hurt the value of Bitcoin,
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and just
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the the the effects of that are it's a it's a lagging effect. It's not something
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you know, to to a lot to a lot of the the powers that be in those in that arena,
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they see
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regulatory acceptance as a positive price factor,
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and it might be a positive price factor in the short term. I mean, it definitely reduces the supply of Bitcoin.
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so I could see custodial bans not custodial bans. So
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I have to be very careful in my wording here. It's because it's it's restrictions
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that make it practically impossible to pull out your Bitcoin.
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Mhmm.
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That would reduce the supply. I could see in the short term that increasing the price of Bitcoin,
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But long term,
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obviously,
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it it it it dampens the possibility of a healthy, you know,
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Bitcoin ecosystem.
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Well, I'm certainly not counting on them agreeing with our position on things for ideological reasons, just counting on
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them, hopefully,
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agreeing for their own financial gain.
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I mean Right. Like I said, you you you get rid of self custody.
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Now Bitcoin is way less valuable because it's way less useful for a large majority of people,
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and it's not worth as much. And now they're not making as much money as they could if they allowed Bitcoin to be free the way it should be.
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I I don't know if those incentives are gonna play out with the right outcome for us. I I hope that they do. I mean
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who's, like, really motivated to get that done, right, to get those restrictions done. And, like, in in in Europe,
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that could happen at any moment because you don't even they don't even pretend like you have any really basic freedom over there. I mean, that was just like that's just gone. But in the US, like, we're at least we try to pretend,
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and, like, somebody has to be the person, like, demanding that we have get rid of whatever freedom you have remaining.
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And, you know, there are some complainers in in congress, right, like Elizabeth Warren and people like that, but
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I don't know. I feel like they're
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is that you have so many different jurisdictions. Right? Bitcoin is global,
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and
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these politicians tend to you know,
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it's it's very hard for them to collaborate with each other. They have difficulty coming to agreements.
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So
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our our greatest advantage is that if
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there's restrictions in one place of the world, maybe there won't be restrictions in another place of the world,
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and Bitcoin will flourish there instead, and people will move there, and companies will move there, and that jurisdiction will benefit. And, hopefully, over a long enough time scale,
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people will compel their politicians to, you know, improve their
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regulation or their laws on Bitcoin,
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basically, as an incentive to seek out tax revenue and,
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you know, just a better better GDP, you know, just better economic growth in their jurisdiction.
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But recently, I mean, we had a professor from Cornell. I think he posted in The Hill,
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basically calling for g 20 nations to come together
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and go after Bitcoin. Right?
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I don't know if I don't think they could ever come together and do it, but, you know, that that is the narrative that is playing out right now. Right?
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hard to tell. I'm I'm not I'm not globally, politically savvy enough to know, like, how, you know, how well they all collaborate with each other for these kinds of things. I mean, FinCEN is is the primary or the treasury department rather that is the primary regulator here that would be
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most likely to be involved in that process.
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And
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FinCEN, even if I don't really agree with them about certain things, has at least they understand Bitcoin, and, like, they can demonstrate that they understand Bitcoin,
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and have been relatively
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consistent
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in their position on things, relatively thoughtful in their guidance. Like, just it's a it's a major, major difference compared to, like, the SEC,
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right, who who's, like, all over the place
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and
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can't can't give straight answers about, like, simple questions about, like, which which coins and tokens are securities and, you know, they kind of overstep their balance on a lot of things, I think.
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So, you know, we did have that that issue at the end of the last presidency with
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Mnuchin or whatever.
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Right.
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And I think he,
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he just hasn't you know, he he's a globalist. I think Trump called him a globalist. I think he said Trump said something like he's a globalist, but I like him. I think he was talking about Mnuchin. But, he kind of had his own little agenda in particular, but that hasn't happened
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so dramatically
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so dramatically now. So I'm hoping that FinCEN
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being thoughtful
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doesn't become so radical. That's just not been their style so far.
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I appreciate it. I hope you're right. I hope so too.
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The so, Freaks, you know, we have a lawyer in the house. Obviously, as as with all dispatches, feel free to put your questions in
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the chat. We will try and get to them as much as best as possible.
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To those who are not aware, the live show is broadcast via Twitter, Twitch, and YouTube. All the links are at sildispatch.com.
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And that live that live stream, any of those platforms, if you participate in the live chat, it gets streamed directly into the broadcast,
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for all eternity, which then you could download the video stream on bitcoin tv.com, which is a very novel aspect of dispatch
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that I've grown to love.
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So we will try to get to as many questions as possible if you put them in the chat.
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And, if we don't get to them right away, I am writing them down. So don't,
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get,
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so so I I haven't actually been watching the chat. But, also, I don't know if I can zoom down to see the past questions. Like, do they just pop up and then they're gone? I I can see the past questions, but you can't. I have
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Anyway,
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the
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so so okay.
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Where do we wanna go from here? So we got we have FinCEN.
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We have FATFA. Right? The big news is FATFA with their travel rule,
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the Financial Action Task Force,
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which is a group of unelected bureaucrats
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that basically decide on guidance that a bunch of member countries, including the US and the European countries,
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then take and implement into their own law. So we have,
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basically, travel rule implementations happening in America
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and Europe and the UK separately because they are technically not Europe now.
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And it's all they're
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they're all basing their implementations off of FATFA, and FATFA has been pretty
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focused, I think, on on Bitcoin and crypto at large.
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Do you consider that an existential threat to Bitcoiners, or do you think that
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are you optimistic about that as well?
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bureaucrats, and up up till recently, I think the director
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of the FATF was,
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from China,
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obviously, where we shouldn't be taking any lessons about, like,
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financial privacy or surveillance, and it's ridiculous that they would even be in that position to be making
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proposed rules for anybody else.
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But,
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I mean, the the last piece of proposed guidance, which they're now in the process of
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revising,
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was, like,
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totally unreasonable.
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And across the line, it just had all these things in it that that didn't make technological sense in addition to just making not, you know, not making political sense or or, you know, not making sense in general.
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And
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it's worth keeping in mind that that nobody's really required to no countries are required to adopt their recommendations. They can exert some pressure and try to, you know, put your country on the blacklist and things like that, but, obviously, the US is not gonna go on the blacklist. Right? So that's not so we just they don't have any real,
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unilateral power to enforce,
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you know,
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what they the way things they want things to be in the US.
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And what I'm
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the silver lining that I'm hoping to get out of this is that the more unreasonable their recommendations
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are,
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the easier it is to say no to them. You know what I mean? If they were really, like,
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slowly one step at a time
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creeping in the wrong direction,
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then, you know,
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countries will say, well, we'll just agree to this incremental step. It's not really a big deal. It's only a minor change, and they just do that every year, right, until it gets worse and worse and worse. But they're trying to go,
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you know, so quickly with it that,
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like, it's really, really easy to make a defense to their proposed changes
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and to be able to kind of embarrass them. And if we can, you know, get a couple of the right people
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in congress or working with FinCEN to show why, you know,
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the FATF is just not worth listening to on these things, then then we can resist. Now I don't know if other countries will resist or not, but but
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I'm trying to be optimistic on that too.
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386
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when it comes to the traditional finance world, kind of where America lands is where we go.
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388
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389
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who ends up on on on blacklists and, like, which member banks end up on blacklists and stuff compared to the United States.
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Yeah. Okay.
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392
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393
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but, anyway, so
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the the trend the overwhelming trend with FATFA
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stuff
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hap it seems to be
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we don't want
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people transacting
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in a private way
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on these networks.
401
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They have shown a
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lack of understanding of how Bitcoin works,
403
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for sure,
404
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in terms of what they're requesting,
405
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But the main gist of their argument and the main,
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you
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know, goals that they seem to have,
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I think most regulators
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tend to agree with,
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which is this idea that
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we should know all the people that are transacting in Bitcoin, and we should be able to track all these transactions if we want to, and then we should be able to go after the individual actors,
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if
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if we believe that they're breaking laws or they're doing something that we disagree with.
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With the travel rule, the idea is
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that if 2 regulated parties are transacting between each other for their customers, their users,
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They need to be able to handle information between each other on who's sending and who's receiving.
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I haven't really seen much pushback on that as a concept. Have you seen pushback on your side?
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419
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420
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a regulated,
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you know, regulated
422
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423
00:31:27.380 --> 00:31:32.600
The the politicians in the different countries. So as it applies to Bitcoin, I mean,
424
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there are various, you know, organizations or companies that are, like, trying to create systems to make this doable, but
425
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for the most part, it's just not doable currently. Right? Because there's just not a method for easily exchanging that information. And so, you know, if it's impossible to comply with the regulation, then you could just not comply with it. I mean, you know, that's a I think that's a pretty decent defense if you were gonna get in trouble for that.
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Right. So
427
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I think, ultimately, it's not it's not really the biggest issue because it's so easy to circumvent.
428
00:32:07.265 --> 00:32:15.525
Like, you can just always withdraw your Bitcoin to your own wallet. You should always do that anyway. And then if you wanna send it somewhere else afterwards, then then do that. But,
429
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you know,
430
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like, you could just go around it. I mean, it's just it's just a rule that that is that is from the traditional financial system, and it still exists, and nobody's changed it. And so
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now exchanges are supposed to follow it because it was in the rule which was written for, you know, traditional financial institutions, like, 60 years ago.
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I mean, that's what that's what a lot of it is. Right?
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It's not like they created the travel rule just for crypto. It already existed. It doesn't make any sense for crypto, and now they have to figure out how to, you know, how to enforce it
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for for crypto or Bitcoin.
435
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436
00:32:56.355 --> 00:32:59.255
and then you start trying to basically put restrictions
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on people withdrawing to their own sovereign wallets.
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Am I am I completely off here? Is is that not No. I mean, you're right. It's how you would do it if you were gonna do it? It's
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440
00:33:13.750 --> 00:33:14.549
right, if they just
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you know, if you could just
442
00:33:16.725 --> 00:33:17.225
withdraw
443
00:33:18.085 --> 00:33:22.185
and the Bitcoin goes where it's gonna go, that would be more ideal than them
444
00:33:22.540 --> 00:33:27.600
collecting information and sending it back and forth and all that, but we should all be trying to get off of
445
00:33:28.060 --> 00:33:30.320
KYC exchanges when possible anyway.
446
00:33:30.815 --> 00:33:33.394
I mean, it should be a last resort.
447
00:33:33.774 --> 00:33:35.394
448
00:33:37.375 --> 00:33:39.235
the optimistic take is
449
00:33:39.710 --> 00:33:43.250
that it actually kind of encourages best practices. Right? Because,
450
00:33:44.430 --> 00:33:47.810
from an exchange or a regulated provider's point of view,
451
00:33:48.435 --> 00:33:48.935
it's
452
00:33:49.555 --> 00:33:54.055
they prefer now, under a travel rule regime, they prefer if you just
453
00:33:54.595 --> 00:34:01.980
withdraw constantly to your own wallet instead of using their wallet as, like, a wall a proper wallet and paying people from it. Right.
454
00:34:03.320 --> 00:34:06.220
My my my concern is more long term.
455
00:34:08.755 --> 00:34:11.255
I I just yeah. I I I feel like
456
00:34:12.275 --> 00:34:15.415
like maybe, like, that's the opening salvo, and it's just
457
00:34:16.170 --> 00:34:19.310
it just gets worse from here. It gets worse before it gets better.
458
00:34:20.090 --> 00:34:22.910
459
00:34:23.825 --> 00:34:27.045
Right. Right? So maybe we're talking about the medium term.
460
00:34:27.425 --> 00:34:37.410
461
00:34:37.710 --> 00:34:38.210
regulations
462
00:34:39.150 --> 00:34:40.849
will will make these
463
00:34:41.625 --> 00:34:42.125
companies,
464
00:34:42.744 --> 00:34:43.724
you know, uncompetitive
465
00:34:44.105 --> 00:34:44.605
against
466
00:34:44.984 --> 00:34:46.365
projects that are
467
00:34:46.905 --> 00:34:52.370
that are, you know, sovereignty focused and privacy focused, and and users will seek out those
468
00:34:52.750 --> 00:35:03.605
projects because they'll be so much more superior to regulated counterparts. And they they will have less friction, and it'll have better UX. That that's my long term expectation. Right? So medium term, though
469
00:35:05.880 --> 00:35:09.020
and I and to be clear, like, I don't really think it's a threat to Bitcoin,
470
00:35:09.640 --> 00:35:10.300
the network,
471
00:35:11.320 --> 00:35:14.940
or Bitcoin, the protocol. I think it's a threat to individual Bitcoiners
472
00:35:16.265 --> 00:35:17.565
who are not, you
473
00:35:17.865 --> 00:35:19.805
know, doing best practices today
474
00:35:20.265 --> 00:35:24.765
that maybe have their funds on a KYC exchange. Maybe they have them on even Robinhood.
475
00:35:25.110 --> 00:35:26.730
I don't think there's many listeners
476
00:35:27.670 --> 00:35:29.770
of this show that have their funds on Robinhood,
477
00:35:31.030 --> 00:35:31.850
but I think,
478
00:35:32.595 --> 00:35:43.060
a lot of the freaks have friends and family that have their funds on Robinhood. I know I do. I get a text all the time, like, how do I withdraw from Robinhood? And it just kills me. Like, it makes it completely obvious how big the scam is. Right.
479
00:35:43.460 --> 00:35:47.380
When you get that text, because they just get tricked into it, and they don't even realize.
480
00:35:48.820 --> 00:35:52.994
And then you have other, you know, you have other platform you have platforms like Cash App, where
481
00:35:53.855 --> 00:35:56.515
they don't give you for for friction purposes,
482
00:35:57.455 --> 00:36:00.595
they don't give you the brunt of your KYC till it comes time to withdraw.
483
00:36:01.180 --> 00:36:04.640
So, like, you think you're all set up and you got everything ready to go,
484
00:36:05.420 --> 00:36:09.440
and then when you comes time to withdraw, you either fail the KYC check
485
00:36:09.965 --> 00:36:10.465
or
486
00:36:11.165 --> 00:36:18.365
you'd get hit with you know, you gotta scan your I don't even know what they do now at this point, but you have to scan your ID or something like that, and it's
487
00:36:19.270 --> 00:36:24.550
I'm And then you get hit with withdrawal limits. Right? You can only withdraw a certain amount of Bitcoin at a time. You can't even
488
00:36:25.270 --> 00:36:31.445
489
00:36:31.825 --> 00:36:32.565
And I guess,
490
00:36:32.865 --> 00:36:35.125
well, I guess the thing to do is just sell it.
491
00:36:35.930 --> 00:36:39.630
492
00:36:40.010 --> 00:36:53.529
they attached it to your bank account or whatever, but they do, like, enhanced KYC when it comes time to actually withdraw your Bitcoin. Right. Right. Yeah. The 2nd level. 2nd level. And I think that's pretty common. So I think there's a lot of people that just have Bitcoin on exchanges, and they're gonna
493
00:36:55.109 --> 00:37:00.950
they're just gonna they're there's gonna be a point of pain depending on their jurisdiction at different times. And
494
00:37:01.585 --> 00:37:06.885
Right. And, you know, they'll learn no lesson, but they're gonna learn it by burning the fuck out of themselves, not because
495
00:37:07.265 --> 00:37:08.730
you know, not in a positive way.
496
00:37:09.930 --> 00:37:13.390
497
00:37:13.690 --> 00:37:16.109
Right. Lots of burning. I mean,
498
00:37:16.725 --> 00:37:24.345
I don't know. If you if you've been interested in Bitcoin for, like, 5 plus years, you probably could have been, like, 25 x richer than you are. Right?
499
00:37:24.670 --> 00:37:36.805
Right. You could have had way more Bitcoin. You probably traded some of it. You probably bought some shit coins, and this is just another one of those lessons where just people are gonna learn different lessons now. Like, instead of getting hacked and getting phished
500
00:37:37.105 --> 00:37:40.085
and, you know, downloading some virus and losing all your Bitcoin,
501
00:37:40.625 --> 00:37:49.190
you might get confiscated by the state or something like that. I don't know. It seems like a I prefer the old way, I mean, of of losing your Bitcoin, but,
502
00:37:50.780 --> 00:37:51.095
but
503
00:37:51.655 --> 00:38:05.799
we everyone has to learn lessons. You know what I mean? Expensive ones. Probably way more expensive than these. We'll see. I don't know. But one thing I wanted to mention about the travel rule, something that I've been thinking about lately is that we have a very tiny set of
504
00:38:06.339 --> 00:38:07.240
financial privacy
505
00:38:07.835 --> 00:38:10.555
laws in the US, and and one of the main ones is,
506
00:38:11.355 --> 00:38:14.095
the Gramm Leach Bliley Act, GLBA,
507
00:38:15.140 --> 00:38:18.279
and that requires that financial institutions have to safeguard,
508
00:38:18.579 --> 00:38:21.240
you know, private, nonpersonal financial information.
509
00:38:21.779 --> 00:38:22.279
And,
510
00:38:23.220 --> 00:38:23.799
you know,
511
00:38:24.845 --> 00:38:28.065
there there are good arguments to be made there that, like,
512
00:38:28.684 --> 00:38:30.820
CoinJoin, which I'm sure we're gonna talk about,
513
00:38:31.220 --> 00:38:41.545
you know Yes, sir. Is is hopefully gonna be necessary for for complying with the law, not just not just something that is you're allowed to do, but that
514
00:38:41.845 --> 00:38:47.704
you should be required to do. Otherwise, you go straight to jail. So we're gonna start with Coinbase, and we're gonna start with BlockFi.
515
00:38:48.005 --> 00:38:48.905
Straight to jail.
516
00:38:49.480 --> 00:38:53.820
517
00:38:54.120 --> 00:38:56.460
Right. Sorry if I butchered your name, Francis,
518
00:38:56.760 --> 00:39:00.885
and Canada with Bold Bitcoin because they coin join all user deposits.
519
00:39:03.265 --> 00:39:08.165
It that doesn't necessarily help the individual user's privacy, but his argument is basically
520
00:39:08.970 --> 00:39:13.790
if we're supposed to safeguard financial privacy of all of our users as a total,
521
00:39:15.290 --> 00:39:19.575
the only way to responsibly do that is CoinJoin. If you don't use CoinJoin, you're not complying,
522
00:39:19.955 --> 00:39:21.895
with Canadian privacy law.
523
00:39:23.315 --> 00:39:26.775
I do think that most operators in the space of regulated
524
00:39:27.200 --> 00:39:29.940
businesses do not have the balls that Bold Bitcoin has,
525
00:39:31.360 --> 00:39:34.100
and most of them just tend to roll over and overcomply.
526
00:39:35.200 --> 00:39:35.700
You
527
00:39:37.105 --> 00:39:45.204
you mentioned and at the end of the day, like, look, we're in Bitcoin because of incentives. Right? I believe that the incentives that people act greedy over over the long enough term
528
00:39:46.100 --> 00:39:47.560
makes Bitcoin more robust.
529
00:39:48.420 --> 00:39:54.280
But we can't ignore the incentives on the short term. That means that these regulated businesses are gonna do
530
00:39:55.245 --> 00:39:57.005
what is best for them, and,
531
00:39:58.125 --> 00:40:05.050
they're gonna do things that you know, I mean, we saw a perfect example is Eric Voorhees, who is very vocally anti state,
532
00:40:06.470 --> 00:40:08.170
completely bent the knee on ShapeShift,
533
00:40:10.205 --> 00:40:17.025
and added KYC. And why? It's because his funds were at risk. They were gonna take his money. He became rich. He became a big target,
534
00:40:18.049 --> 00:40:23.589
and they put him in jail. And he wanted to look out for himself, and that that's the incentive that did that.
535
00:40:24.130 --> 00:40:26.150
Since then, there's been all these different
536
00:40:27.415 --> 00:40:32.635
strategies he's made to try and remove the KYC, and he has removed the KYC rest recently. We'll see,
537
00:40:33.255 --> 00:40:34.590
you know, how that works out,
538
00:40:35.230 --> 00:40:38.290
on a on a long term. A lot of it, I think, is just decentralization
539
00:40:38.590 --> 00:40:44.924
theater. But in general, it's good to see, you know, regulated operators kinda stand up and and try and fight for their users,
540
00:40:46.345 --> 00:40:48.424
and fight for Bitcoin. I I just think that's
541
00:40:49.520 --> 00:40:50.820
it's kind of rare.
542
00:40:51.280 --> 00:40:54.180
543
00:40:54.800 --> 00:40:58.580
you know, many of them probably don't wanna talk about it. They don't wanna talk about it publicly,
544
00:40:59.225 --> 00:41:01.165
and there's this kind of, like,
545
00:41:01.785 --> 00:41:06.445
you know, game theory of which exchanges are gonna take what position on on CoinJoin.
546
00:41:07.065 --> 00:41:07.565
And,
547
00:41:08.210 --> 00:41:14.470
you know, if it that's gonna push the industry standard in one direction or another. But something else to consider is that
548
00:41:14.770 --> 00:41:15.330
the more
549
00:41:15.875 --> 00:41:21.815
even if they're gonna be KYC exchanges, the more the more businesses there are, the harder they are to
550
00:41:22.115 --> 00:41:23.015
to regulate
551
00:41:25.390 --> 00:41:35.885
and harder they are to kind of crack down on, I think. I mean, if you just have, like, you know, Coinbase and Kraken and and and and BlockFi and, you know Gemini. Other major ones like that, right, then
552
00:41:36.985 --> 00:41:41.060
they can have really high standards. They create the regulatory moat. They make it difficult for competitors
553
00:41:49.865 --> 00:41:51.165
that are that are small,
554
00:41:52.585 --> 00:41:54.684
and ideally doing smaller volume,
555
00:41:55.145 --> 00:41:55.645
then
556
00:41:56.460 --> 00:41:57.599
there's just more
557
00:41:58.059 --> 00:41:58.559
flexibility
558
00:41:58.859 --> 00:41:59.839
there, I think.
559
00:42:00.380 --> 00:42:00.880
And,
560
00:42:02.140 --> 00:42:07.815
well, you can just get away with more stuff. That's just how it is. You know what I mean? Like, it's just not that easy to regulate
561
00:42:08.115 --> 00:42:09.655
10,000 corner corner
562
00:42:10.115 --> 00:42:13.974
businesses than it is to, like, just log in to Coinbase's
563
00:42:15.060 --> 00:42:19.560
cloud, right, and see all the data, see everything they're doing, and monitor it in real time.
564
00:42:20.260 --> 00:42:24.965
Right. So to the extent that KYC businesses are gonna continue to grow
565
00:42:25.265 --> 00:42:25.765
and
566
00:42:26.065 --> 00:42:28.725
and and thrive, which they basically are whether we like it or not,
567
00:42:29.105 --> 00:42:33.520
it's for me, I prefer that there be more of them and that they'd be smaller.
568
00:42:34.060 --> 00:42:34.560
But,
569
00:42:36.940 --> 00:42:42.205
disclosure, that's good for me as a lawyer, obviously, because I work with lots of them. But, also, I just want it to be that way.
570
00:42:43.465 --> 00:42:45.005
571
00:42:46.425 --> 00:42:49.885
I mean, we have companies, large companies, well funded companies,
572
00:42:50.850 --> 00:42:51.750
like BlockFi
573
00:42:52.050 --> 00:42:52.550
and
574
00:42:53.170 --> 00:42:53.670
Bottlepay
575
00:42:54.610 --> 00:42:55.110
that
576
00:42:55.730 --> 00:42:58.150
seem to over comply in a lot of ways,
577
00:42:59.825 --> 00:43:03.285
where regulations don't necessarily say they have to. I mean,
578
00:43:03.585 --> 00:43:09.445
BlockFi is probably one of the darlings of the industry from a lot of people's perspectives. I mean, obviously, not mine.
579
00:43:10.680 --> 00:43:13.500
They're raising a shit ton of money. They're constantly on CNBC.
580
00:43:14.840 --> 00:43:17.635
They have these high interest rates that attract, you know,
581
00:43:18.115 --> 00:43:20.615
new Bitcoiners into depositing their funds.
582
00:43:21.075 --> 00:43:27.350
And then, you know, they they pay podcasters for the ad model. You know, they pay for their sponsorships. They get the mid rolls.
583
00:43:28.230 --> 00:43:37.234
It's one of the reasons why I started Ciel dispatch and why it has no ads. It's because I feel like the incentives are aligned with the the listener rather than these, you know, regulated
584
00:43:37.615 --> 00:43:41.234
companies that are the ones that'll pay the big dollars to,
585
00:43:42.815 --> 00:43:46.740
for the ad deals. But I have so on the screen right now, I have,
586
00:43:47.040 --> 00:43:47.860
from BlockFi,
587
00:43:49.040 --> 00:43:51.220
this is their prohibited uses page.
588
00:43:53.065 --> 00:43:54.285
You can't withdraw
589
00:43:54.744 --> 00:43:58.045
or deposit from any mixing services, which attempt to
590
00:43:58.880 --> 00:44:03.780
obfuscate the source of funds, which includes CoinJoin even though they call it mixing. CoinJoin isn't mixing.
591
00:44:04.880 --> 00:44:05.940
Peer to peer exchanges,
592
00:44:06.240 --> 00:44:07.460
which do not do KYC,
593
00:44:08.395 --> 00:44:09.775
gambling sites, or
594
00:44:10.635 --> 00:44:12.815
funds known to belong to darknet marketplaces.
595
00:44:13.435 --> 00:44:14.495
So if you
596
00:44:15.250 --> 00:44:19.829
if you fall under any of those baskets, whether that's on the deposit or withdrawal side,
597
00:44:21.730 --> 00:44:23.829
they'll close your account. So they
598
00:44:24.325 --> 00:44:26.985
they direct directly prohibit they're basically
599
00:44:27.285 --> 00:44:33.720
600
00:44:35.380 --> 00:44:35.880
explicitly
601
00:44:37.140 --> 00:44:38.680
not even hiding their
602
00:44:39.300 --> 00:44:41.240
hostility towards, you know,
603
00:44:41.765 --> 00:44:42.984
basic best practices
604
00:44:43.365 --> 00:44:50.345
and proper proper Bitcoin usage, and it and it puts all their customers in danger. I mean, I I called their CEO out about it a while ago.
605
00:44:51.309 --> 00:44:56.609
606
00:44:56.990 --> 00:44:59.490
their all their users are are naked on the blockchain,
607
00:45:00.555 --> 00:45:02.255
because they're not allowed to use CoinJoin.
608
00:45:03.035 --> 00:45:07.535
And, I mean, you mentioned earlier, you mentioned, you know, a lot of these I I think we should give
609
00:45:08.710 --> 00:45:15.849
regulated operators a break in some regard because I understand if they don't they don't wanna come out specifically pro privacy,
610
00:45:17.005 --> 00:45:17.505
publicly.
611
00:45:17.805 --> 00:45:19.744
Maybe they're doing things in back channels,
612
00:45:20.205 --> 00:45:23.185
but to do the opposite and come out publicly
613
00:45:23.970 --> 00:45:26.789
against privacy best practices when using Bitcoin,
614
00:45:30.529 --> 00:45:32.950
seems unforgivable to me. It is unforgivable.
615
00:45:33.875 --> 00:45:35.175
616
00:45:36.435 --> 00:45:45.880
617
00:45:48.900 --> 00:45:56.005
I I want to be absolutely clear here that, you know, we just were discussing BlockFi, and BlockFi puts CoinJoin under mixing services.
618
00:45:56.384 --> 00:46:02.120
To me, a mixing service is a custodial service that you send Bitcoin to, and they send you someone else's Bitcoin.
619
00:46:02.900 --> 00:46:05.080
A coin join transaction is a
620
00:46:05.700 --> 00:46:08.520
is a is a standard Bitcoin send transaction,
621
00:46:10.115 --> 00:46:13.095
that's collaborative. You have multiple parties in the send,
622
00:46:13.875 --> 00:46:17.974
and it incorporates privacy best practices in that send,
623
00:46:18.570 --> 00:46:24.590
so that your transaction isn't immediately obvious on chain whether or not ownership changed hands and where it changed.
624
00:46:25.855 --> 00:46:29.075
It is something that I like to see become more common in the space.
625
00:46:29.694 --> 00:46:37.869
One of the main arguments I hear is, if I use CoinJoin, I can't use Block Fi. And if I can't use Block Fi, maybe I can't use other regulated
626
00:46:38.970 --> 00:46:42.349
products in the future, whether that's BlockFi or something else,
627
00:46:43.165 --> 00:46:44.625
that it is an illegal
628
00:46:45.565 --> 00:46:49.825
thing to do, that that that it's not legal in America to use CoinJoin.
629
00:46:51.140 --> 00:46:59.559
I do I do before we get to it, I just want to say to the listeners, I think me and Rafael were on Stephan's podcast, I think, in 2019, late 2019.
630
00:47:00.805 --> 00:47:02.185
But I'm sure if you go to stephanlovera.com
631
00:47:02.725 --> 00:47:07.385
and search, you can pull it up. And we talked about this topic specifically at length.
632
00:47:08.805 --> 00:47:11.210
But for the freaks here now,
633
00:47:12.470 --> 00:47:13.690
do you believe CoinJoin
634
00:47:14.069 --> 00:47:16.730
is legal in the United States using CoinJoin?
635
00:47:17.845 --> 00:47:20.184
636
00:47:21.444 --> 00:47:25.865
the regulations that are relevant don't apply to individual users. So it's not like
637
00:47:26.210 --> 00:47:29.430
there's rules about how you can use your Bitcoin assuming it's a noncriminal
638
00:47:30.049 --> 00:47:33.589
you know, you're not doing something that's criminal. Right? So the rules are on the financial institutions
639
00:47:34.210 --> 00:47:34.950
that would,
640
00:47:35.455 --> 00:47:35.955
you
641
00:47:36.335 --> 00:47:43.955
know, potentially limit or restrict people who are using CoinJoin, and and the rule comes from the Bank Secrecy Act and requires that they take
642
00:47:44.390 --> 00:47:45.849
reasonable measures to
643
00:47:46.150 --> 00:47:54.775
prevent money laundering, you know, based on the kind of customers they have and the risks and blah blah blah. So it's kind of like a flexible standard. It's not it's definitely not a black and white thing.
644
00:47:55.635 --> 00:47:56.135
You
645
00:47:56.755 --> 00:48:01.974
know, there's CoinJoin is not written into the law. There's no statute that says it's legal legal or illegal,
646
00:48:03.200 --> 00:48:03.780
but FinCEN
647
00:48:04.240 --> 00:48:04.740
described
648
00:48:05.520 --> 00:48:06.020
CoinJoin,
649
00:48:06.400 --> 00:48:18.744
you know, pretty spot on in their in their 2019 guidance, which was the last big piece of guidance that they put out, and they talked about how wallets that facilitate CoinJoin aren't money services businesses and therefore don't have to do KYC,
650
00:48:19.125 --> 00:48:21.859
don't have to report anything. Right? They're just software.
651
00:48:22.160 --> 00:48:23.700
And if they wanted to
652
00:48:24.720 --> 00:48:27.140
if they wanted to point out that they think that
653
00:48:27.815 --> 00:48:37.710
doing coin join is is evidence of criminality, then they could have just said so. I mean, there's, like, literally nothing stopping them from saying that. They could have said that it was suspicious, and they just didn't, and
654
00:48:38.890 --> 00:48:40.490
that's a good sign. I mean, they're
655
00:48:41.050 --> 00:48:46.095
it's ridiculous that that BlockFi takes a more conservative position than than than FinCEN itself.
656
00:48:46.395 --> 00:48:51.615
You know, when when BlockFi is trying to make 1,000,000,000 of dollars off of of Bitcoin and Bitcoiners.
657
00:48:52.450 --> 00:48:54.630
One last thing to mention about BlockFi, because it just
658
00:48:54.930 --> 00:48:58.950
particularly annoyed me, is that if you deposit stable coins to BlockFi,
659
00:48:59.635 --> 00:49:00.855
they will send you a 10.99
660
00:49:01.315 --> 00:49:03.175
even if you don't have a taxable event.
661
00:49:03.635 --> 00:49:09.029
So if you deposit stable coins where you don't wanna give them your Bitcoin, but you put your stable coins in, they're gonna send you a 10.99
662
00:49:09.329 --> 00:49:09.829
spontaneously.
663
00:49:11.089 --> 00:49:12.710
That also goes to the IRS,
664
00:49:13.250 --> 00:49:32.790
and they're gonna mark your cost basis on the stable coins as 0 or unknown. So, like, if you deposit a 100 grand, they're gonna send something to the IRS saying, this person deposited a 100 grand, and we don't know what they paid for those stable coins even though, of course, the price of a stable coin is always a dollar. Right? Or ideally, almost always a dollar. And so supposed to be.
665
00:49:33.285 --> 00:49:37.305
Right. Supposed to be most of the time, it usually is. You know? And so
666
00:49:37.765 --> 00:49:42.184
the result of that is that if you deposit stable coins to BlockFi, BlockFi
667
00:49:42.730 --> 00:49:43.630
is going to
668
00:49:44.170 --> 00:49:45.550
make it look to the IRS
669
00:49:46.090 --> 00:49:51.070
like you have whatever that that amount of money in, like, undeclared income. Like, they're turning you into a criminal.
670
00:49:51.605 --> 00:49:52.905
You know? And then you have
671
00:49:53.205 --> 00:50:02.740
to explain to the IRS, you know, in your tax filing, well, actually, I deposited those, but, like, they weren't really taxable income because I only paid a dollar for them because that's what stable coins cost.
672
00:50:03.040 --> 00:50:06.180
673
00:50:06.640 --> 00:50:12.234
Do you have to show proof in that situation that you bought them for a dollar? You basically have to fill in the blank. Right?
674
00:50:12.615 --> 00:50:28.734
675
00:50:29.194 --> 00:50:29.694
And,
676
00:50:29.994 --> 00:50:33.055
like, you're now in a compromised position where
677
00:50:33.420 --> 00:50:35.360
you have to correct their perception
678
00:50:35.740 --> 00:50:41.840
679
00:50:42.300 --> 00:50:43.555
680
00:50:44.175 --> 00:50:47.075
it's really, like I I don't know what their problem is.
681
00:50:47.935 --> 00:50:49.055
682
00:50:49.615 --> 00:50:52.440
do you think that's over compliance, or do you think that is
683
00:50:53.319 --> 00:50:54.859
just, poor execution
684
00:50:55.160 --> 00:50:56.540
laziness on their part?
685
00:50:57.079 --> 00:51:00.780
686
00:51:01.095 --> 00:51:01.994
And the 1099
687
00:51:02.295 --> 00:51:03.434
issue, I think,
688
00:51:03.734 --> 00:51:05.115
is because they've
689
00:51:05.815 --> 00:51:07.994
they might be registered as a broker dealer.
690
00:51:08.750 --> 00:51:11.170
And so because they have a securities registration,
691
00:51:11.630 --> 00:51:14.530
broker dealers always do the automatic 10.90 nines.
692
00:51:14.910 --> 00:51:18.625
Whereas, like, other businesses that are just dealing in commodities and not securities
693
00:51:19.165 --> 00:51:27.830
only have to send 10 10.90 nines under certain circumstances. Right? If there's a taxable event or, you know, sales above a certain amount, a certain number of transactions,
694
00:51:28.290 --> 00:51:35.345
but they could have thought about that when they were getting these licenses, They could have maybe created a separate entity for doing Bitcoin stuff,
695
00:51:35.964 --> 00:51:44.440
you know, separate from the security stuff so that they don't have to send it for 10.90 nines. Like, you should be thinking about that. I mean, it's like shitcoin support kind of compromised them a bit there.
696
00:51:45.060 --> 00:51:49.960
697
00:51:50.765 --> 00:51:55.665
698
00:51:56.205 --> 00:52:06.130
I think it has something to do with the lending and the interest earning product. Right? Like, if you saw recently, like, a couple of states are going after them saying that the interest earning product
699
00:52:06.589 --> 00:52:07.490
that they're giving
700
00:52:08.045 --> 00:52:12.945
is an offering of securities. Like, if you Yeah. The actual product itself is the security. Yeah.
701
00:52:13.245 --> 00:52:13.745
Yeah.
702
00:52:14.205 --> 00:52:19.410
But and they and they have probably some kind of federal registration, but they didn't deal with the state issue.
703
00:52:21.470 --> 00:52:27.805
It's not it's not clear yet. I mean, it's just, like, just happening over the last week or so. But if you're building a product
704
00:52:28.505 --> 00:52:38.200
for people that use Bitcoin, like, you should be thinking about what am I going to have report about them and, like, I wanna know that if I was ever gonna sign up for an exchange, I would wanna know
705
00:52:38.740 --> 00:52:45.915
when they're gonna send my send me 10.90 nines or when they're gonna send 10.10.90 nines to the IRS and when they wouldn't and under what conditions. So
706
00:52:47.000 --> 00:52:57.194
it's hard to give them the benefit of the doubt. I mean Right. You you should have their CEO on here and ask him some questions. You know what I mean? I mean, I don't think he's gonna come on dispatch, to be honest. Mhmm.
707
00:52:58.535 --> 00:53:00.714
708
00:53:01.255 --> 00:53:01.755
Uh-huh.
709
00:53:02.055 --> 00:53:14.885
Provably no edits, and you can't control what the the live chat is not moderated, so you can't control what comes up on the live chat either. Nice. So I kind of doubt that he would come on dispatch. But if he wanted to, he'd be welcome to.
710
00:53:16.485 --> 00:53:22.025
Okay. So, I mean, let's go back a little bit. You said CoinJoin is completely legal in the United States, it seems like.
711
00:53:24.280 --> 00:53:25.020
Do you
712
00:53:25.320 --> 00:53:29.340
think that that could change in the future? Do you have concerns that in the future,
713
00:53:29.800 --> 00:53:30.780
it could be considered
714
00:53:31.080 --> 00:53:31.580
a
715
00:53:34.345 --> 00:53:35.484
a criminal act.
716
00:53:36.665 --> 00:53:38.045
717
00:53:38.585 --> 00:53:39.885
that seems pretty unlikely.
718
00:53:40.185 --> 00:53:40.505
What's
719
00:53:42.730 --> 00:53:44.910
pretty unlikely because it's probably not
720
00:53:45.529 --> 00:53:49.549
probably not constitutional. I mean, I'm not a con law expert, but
721
00:53:50.885 --> 00:53:53.224
what's a a greater risk is that
722
00:53:54.325 --> 00:53:58.425
BlockFi leads the way and other exchanges copy them and all take this position
723
00:53:58.805 --> 00:53:59.305
because
724
00:54:00.260 --> 00:54:10.285
the the anti money laundering regulations don't tell you exactly what you need to do or not to. They just kind of set up these incentives that, well, you have to make sure you're doing as much as everyone else is doing.
725
00:54:10.585 --> 00:54:13.725
Right? So you can say, well, it's reasonable because everyone's doing it.
726
00:54:14.105 --> 00:54:23.245
And then you have, you know, compliance companies that wanna sell you something, and and, you know, the more suspicious stuff that's happening, the more you need them.
727
00:54:23.645 --> 00:54:27.825
Right? You know, you could see this happening with Chainalysis or companies like that that
728
00:54:29.085 --> 00:54:35.620
the incentives are just in the wrong direction. The incentives are towards over compliance or greater and greater compliance and greater and greater costs,
729
00:54:36.000 --> 00:54:46.975
which, you know, also benefit the big companies because it makes makes it more difficult for competitors to to compete and get started. Right? Like, even even now, if you start a new Bitcoin exchange
730
00:54:48.150 --> 00:54:50.170
and you wanna create, you know, a reasonable
731
00:54:50.550 --> 00:54:51.050
privacy
732
00:54:52.070 --> 00:54:52.570
respecting
733
00:54:52.870 --> 00:54:57.905
compliance program to the extent such a thing is possible, which I try to do when I work with clients,
734
00:54:58.605 --> 00:55:02.704
you you might just get forced into doing things you don't wanna do if you wanna get a bank account.
735
00:55:03.380 --> 00:55:10.120
So, like, even though the law doesn't require that you do any of these things, the bank that, you know, you might share a bank with Coinbase,
736
00:55:10.515 --> 00:55:13.735
and Coinbase wants these requirements to be as high as possible
737
00:55:14.755 --> 00:55:24.460
738
00:55:25.000 --> 00:55:28.185
they literally brought the chain surveillance in house. Right? They bought
739
00:55:29.305 --> 00:55:35.005
I forget the firm, but it was, like, former hacking team guys who had the chain surveillance company. Right. They hired them.
740
00:55:35.440 --> 00:55:37.220
They they aqua hired them,
741
00:55:37.599 --> 00:55:40.980
and then they fired an undisclosed amount of them because they got shit about it.
742
00:55:41.520 --> 00:55:43.540
But now they have their own chain surveillance
743
00:55:45.745 --> 00:55:53.445
project in house that they actually appear to be out you know, they they they sell that as a product to to, I guess, competitors.
744
00:55:54.250 --> 00:56:00.030
But, specifically, they've been selling it to the US government for, you know, pennies. They had to cover their costs.
745
00:56:00.730 --> 00:56:04.145
Yeah. They had to cover their costs. Right? They need that extra 100 k or whatever.
746
00:56:05.165 --> 00:56:10.705
They make 100 of 1,000,000 of dollars. Yeah. But, they needed the 100 k from the US government and the DEA.
747
00:56:11.150 --> 00:56:20.369
748
00:56:21.895 --> 00:56:25.035
Before it was totally clear that they were really gonna be necessary.
749
00:56:25.575 --> 00:56:39.839
You know, like, money transmitter licenses were created for consumer protection for people that used Western Union and companies like that where you're giving them money and trusting them to send it somewhere else for you. Right? Trusting that it's gonna get to the destination. And it's not, like, immediately obvious that
750
00:56:40.225 --> 00:56:41.365
those make sense
751
00:56:42.225 --> 00:56:48.405
for crypto exchanges at all. I mean, the fact that there's 50 different ones and each state's law is a little bit different
752
00:56:49.299 --> 00:56:52.680
also creates a regulatory moat. So Coinbase went and got all the licenses.
753
00:56:52.980 --> 00:56:54.359
They went to the big banks.
754
00:56:54.819 --> 00:56:58.855
They got their bank account, and then if you wanna get a bank account where they get a bank account,
755
00:56:59.474 --> 00:57:03.815
right, then you need to do, you know, all the things that they're doing. So
756
00:57:04.400 --> 00:57:06.260
they're they're they're not acting in
757
00:57:06.880 --> 00:57:10.420
758
00:57:10.720 --> 00:57:11.220
Right?
759
00:57:11.599 --> 00:57:12.099
760
00:57:12.480 --> 00:57:12.980
Yep.
761
00:57:13.355 --> 00:57:17.454
762
00:57:17.835 --> 00:57:20.015
at least on a short to medium term.
763
00:57:21.450 --> 00:57:29.390
764
00:57:29.785 --> 00:57:36.365
765
00:57:36.960 --> 00:57:40.340
anyone who expects his incentives to align with with Bitcoin,
766
00:57:40.960 --> 00:57:43.380
on a long term basis, I think, would be
767
00:57:44.434 --> 00:57:55.000
is is being naive and just not understanding, you know, what they're operating under and how they're operating. Yeah. But but short to medium term, their their their incentives clearly are, you know,
768
00:57:55.860 --> 00:58:00.345
to create this regulatory moat and make it as hard as possible for competitors to come in.
769
00:58:01.224 --> 00:58:07.645
770
00:58:08.185 --> 00:58:09.724
flexible set of regulations.
771
00:58:10.570 --> 00:58:21.965
And like I mentioned earlier, nobody wants to be the outlier, so people wanna be extra conservative. And then they're extra conservative, and they kind of push it in the wrong direction. And then you also have the compliance company selling them the extra stuff. And so
772
00:58:22.265 --> 00:58:28.160
773
00:58:29.180 --> 00:58:39.125
774
00:58:39.585 --> 00:58:42.164
to make themselves more valuable. And then, of course,
775
00:58:42.490 --> 00:58:45.869
it's just a one-sided assessment. Right? Like, we don't know
776
00:58:46.170 --> 00:58:52.109
you know, they're they're making all these judgments about what everyone is doing on chain, and and nobody ever gets to, like, dispute
777
00:58:52.845 --> 00:58:54.225
what they're saying is happening.
778
00:58:55.005 --> 00:58:59.905
779
00:59:01.290 --> 00:59:02.190
But they're they're
780
00:59:02.810 --> 00:59:07.790
you know, you you mentioned this on when when we did Stephan's pod together in, like, 2019,
781
00:59:09.535 --> 00:59:15.635
that they, like, kind of create the problem so that they could be the solution to the problem. But since then, they've been
782
00:59:16.655 --> 00:59:18.355
they they've been, you know,
783
00:59:19.520 --> 00:59:23.540
they've been operating under a tight line. It's kind of weird. Like, during the b word,
784
00:59:24.800 --> 00:59:28.165
initiative, I guess they're calling it, but the that virtual conference that
785
00:59:28.565 --> 00:59:30.345
ARK Invest and Square put on,
786
00:59:32.005 --> 00:59:36.410
for institutional investors that are thinking about Bitcoin, they have one the Chainalysis guy's on.
787
00:59:37.210 --> 00:59:39.390
And his his argument is basically
788
00:59:40.970 --> 00:59:42.589
that there is criminal activity,
789
00:59:44.085 --> 00:59:48.665
among Bitcoin users, and that's why you need them. But the criminal activity is minimal,
790
00:59:49.285 --> 00:59:58.640
so that's why you should launch a Bitcoin company or invest in Bitcoin. They they kind of it's this weird incentive structure where they both are trying to
791
01:00:00.715 --> 01:00:02.175
advocate for their need,
792
01:00:02.635 --> 01:00:03.935
but at the same time,
793
01:00:04.795 --> 01:00:14.940
794
01:00:15.240 --> 01:00:15.900
to sustain
795
01:00:16.705 --> 01:00:19.285
while also feeding from the host as much as possible.
796
01:00:21.185 --> 01:00:24.405
797
01:00:25.130 --> 01:00:26.829
798
01:00:28.089 --> 01:00:28.829
the the
799
01:00:29.450 --> 01:00:35.275
it's not just private companies that could be parasites. Obviously, the government is the the giant parasite living on top of all of us.
800
01:00:35.575 --> 01:00:37.674
801
01:00:38.934 --> 01:00:40.075
So back to CoinJoin,
802
01:00:40.775 --> 01:00:42.875
you don't think CoinJoin will be made
803
01:00:44.600 --> 01:00:45.340
specifically illegal?
804
01:00:45.880 --> 01:00:49.260
You think that our constitutional protections do help us to a degree.
805
01:00:49.880 --> 01:00:51.740
I tend to agree with you.
806
01:00:52.305 --> 01:01:06.680
What what about the freaks who at least in America, I mean I I I don't I don't wanna rely on political solutions. Right? That's what I'm asking. Agree. That's the whole point. Network. Yeah. So so I guess we're using CoinJoin instead of advocating for better privacy regulation.
807
01:01:07.299 --> 01:01:08.440
808
01:01:08.819 --> 01:01:09.400
I mean,
809
01:01:10.135 --> 01:01:15.435
everyone's just gotta do what they need to do, you know, regardless of what the pieces of paper say.
810
01:01:16.855 --> 01:01:17.355
811
01:01:17.815 --> 01:01:18.875
yeah. I mean, I
812
01:01:19.670 --> 01:01:20.730
relatively, provocatively
813
01:01:21.030 --> 01:01:22.089
I mean, intentionally
814
01:01:22.470 --> 01:01:29.965
look. There's over 300 hours of me talking about Bitcoin publicly, often junk. I think I said once that the constitution was a shit coin.
815
01:01:30.585 --> 01:01:31.085
Mhmm.
816
01:01:31.705 --> 01:01:35.770
But, I'm glad we have it. I'm glad we're not, you know, in some of these other countries
817
01:01:46.394 --> 01:01:49.694
but I'm I'm I'm concern I'm channeling the freaks. I'm concerned
818
01:01:50.075 --> 01:01:50.575
that
819
01:01:51.434 --> 01:01:55.214
I won't be able to sell it at a regulated institution in the future.
820
01:01:55.940 --> 01:01:57.240
What do you say to them?
821
01:01:58.019 --> 01:01:58.519
822
01:01:59.460 --> 01:02:01.539
I mean, there's there's not
823
01:02:02.485 --> 01:02:15.510
there's kind of trade offs with everything. You know what I mean? Like, there's there's not a 0% chance that that happens. It's theoretically possible that they could all take that position and be really hostile about it. And, you know, FinCEN says you can't take any coin to win anything. Right?
824
01:02:16.450 --> 01:02:16.950
So
825
01:02:17.330 --> 01:02:19.670
that's a risk, but having all of your
826
01:02:20.615 --> 01:02:22.234
data and all of your
827
01:02:23.015 --> 01:02:24.075
financial history
828
01:02:24.615 --> 01:02:26.315
relatively public and easy
829
01:02:26.615 --> 01:02:27.115
to
830
01:02:27.630 --> 01:02:29.010
be investigated is
831
01:02:29.870 --> 01:02:34.370
is at least as great of a risk or a greater risk, or maybe you don't think it's a risk at all.
832
01:02:34.990 --> 01:02:36.690
So then, like, don't do it. But
833
01:02:37.934 --> 01:02:40.355
I would I'll I would rather take
834
01:02:41.775 --> 01:02:45.555
I would rather take the risk that I can't sell any Bitcoin on Coinbase.
835
01:02:46.095 --> 01:02:47.075
836
01:02:47.400 --> 01:02:55.420
Yeah. I mean, I agree with you a 100%. I just want the freaks to hear from you. Yeah. Well, it's a decision that each person needs to make, but,
837
01:02:56.635 --> 01:02:59.935
838
01:03:00.235 --> 01:03:09.890
then you will find ways to be able to use it and spend it that don't that don't rely on, you know, regulated exchanges. I mean, that's that's the direction that we're going. Right? The circular economy
839
01:03:10.190 --> 01:03:16.105
and, you know, having our own network of people that can do what they want and do what they need to do. I mean
840
01:03:17.224 --> 01:03:17.724
so
841
01:03:18.345 --> 01:03:26.770
but there's not a 0% chance. I mean, it's just it's just a trade off and and a worth worthwhile one from my point of view. So, I mean, like, the easy answer is, like, if you're
842
01:03:27.710 --> 01:03:30.025
843
01:03:30.484 --> 01:03:41.910
we're all about personal responsibility here at dispatch. So I do I do like how you framed it that, ultimately, like, people should educate themselves, and they should make educated decisions that suit their situation best.
844
01:03:44.725 --> 01:03:48.745
If you're, you know, if you're a trader and you're just trying to trade for Fiat,
845
01:03:49.605 --> 01:03:54.265
and you're just trying to short term, you know, buy and sell Bitcoin for,
846
01:03:56.310 --> 01:03:57.530
more US dollars,
847
01:03:58.150 --> 01:04:00.890
then by all means, I think you should still self custody.
848
01:04:02.525 --> 01:04:06.945
But by all means, you know, you just send it from 1 you just send it right out to your,
849
01:04:07.245 --> 01:04:13.970
you know, whatever your hardware wallet is or whatever wallet you use, and then you just send it back in without any coin join, and you do your sell.
850
01:04:15.150 --> 01:04:15.890
But if
851
01:04:16.510 --> 01:04:18.930
if you're in this long term, to me,
852
01:04:20.275 --> 01:04:22.295
if a if a company doesn't
853
01:04:22.675 --> 01:04:23.735
accept your
854
01:04:24.515 --> 01:04:31.660
your your right to to use Bitcoin in a relatively private fashion, then you don't use that company. Then they're not an option anyway.
855
01:04:32.119 --> 01:04:32.619
856
01:04:33.240 --> 01:04:38.425
857
01:04:38.905 --> 01:04:40.045
restrictions on
858
01:04:40.585 --> 01:04:42.125
sovereign usage of Bitcoin,
859
01:04:43.785 --> 01:04:48.460
I think if you can't use Bitcoin in a sovereign way, you know, to buy something
860
01:04:48.920 --> 01:04:50.060
or to sell something,
861
01:04:50.600 --> 01:04:53.900
then we have way bigger problems than you not being able to
862
01:04:54.815 --> 01:05:11.450
deposit on Coinbase or BlockFi. Like, why what are we here for? I mean, I'm I'm here because I think failure is not an option. I think the alternative is an absolute financial surveillance state, and we're already kind of in it. But it just gets worse from here if if we don't succeed on on this front. Right?
863
01:05:11.795 --> 01:05:21.730
864
01:05:22.610 --> 01:05:23.510
I mean, look.
865
01:05:23.810 --> 01:05:29.990
Without giving recommendations about software, do your own research. I'm not a software developer, but it'd be better to use, you know,
866
01:05:30.755 --> 01:05:37.335
something more noncustodial like HODL HODL to be able to put your Bitcoin in, you know, and and borrow against it,
867
01:05:38.035 --> 01:05:40.340
rather than use a KYC exchange to sell it.
868
01:05:40.900 --> 01:05:46.200
Now it's not the same as it's not the same as selling it, but, hopefully, there's gonna be a little bit more DeFi
869
01:05:46.660 --> 01:05:49.560
on Bitcoin where people will be able to, for example,
870
01:05:49.925 --> 01:05:50.825
you know, trade,
871
01:05:51.125 --> 01:05:57.305
I don't know, trade derivatives on Bitcoin that if you really wanna take if you really wanna take some profits, then you can do that without KYC,
872
01:05:58.250 --> 01:06:05.150
873
01:06:05.610 --> 01:06:06.110
874
01:06:06.410 --> 01:06:07.310
Or, like,
875
01:06:08.325 --> 01:06:11.705
a lot of the stuff that currently exists on Ethereum just on Bitcoin.
876
01:06:12.245 --> 01:06:27.535
But That's that's the hot take of the day. The hot take of the day. We're an hour in. You got your hot take, freaks. Yeah. Well, then, Rob, I mean, I I'm gonna keep going with that. I would rather use Ethereum than do KYC on Bitcoin, and, like, it's not even close. Now that doesn't mean that I'm saying other people should do that too, but,
877
01:06:29.035 --> 01:06:35.710
like, you can you can, you know, use wrapped Bitcoin and, like, borrow against your Bitcoin today, like, they're cheap.
878
01:06:36.090 --> 01:06:42.110
You know, obviously, you have to trust Ethereum, and there's trade offs and decentralized and AWS and all that, but,
879
01:06:42.924 --> 01:06:44.464
well, there's options.
880
01:06:44.765 --> 01:06:47.105
881
01:06:47.405 --> 01:06:49.585
theater that they actually if you have
882
01:06:50.920 --> 01:06:53.180
got Anthony in the chat just trolling us.
883
01:06:53.720 --> 01:06:57.020
You don't you don't think a lot of that is just decentralized theater where
884
01:06:57.320 --> 01:06:59.180
there really are people that they can
885
01:06:59.785 --> 01:07:05.245
crush on, you know, and and force to comply. I mean, like, we're watching, basically, Uniswap right now. Yeah.
886
01:07:06.960 --> 01:07:10.340
Trying to turn corporate to to to suit their investors
887
01:07:11.119 --> 01:07:17.045
and and their own incentives, and they're just hiding under the veneer of decentralization when it's not really decentralized.
888
01:07:17.825 --> 01:07:18.485
889
01:07:19.025 --> 01:07:20.805
They absolutely are. I mean, fortunately,
890
01:07:21.345 --> 01:07:34.435
Uniswap doesn't require you to trust them with your money. Right? You know what I mean? Like, you just swap your tokens. You know, you wrap the Bitcoin for USTT or USDC, and then you're out. So it doesn't matter as much with them. But as far as phony
891
01:07:34.895 --> 01:07:35.395
decentralization
892
01:07:35.775 --> 01:07:37.155
goes, they're literally
893
01:07:37.935 --> 01:07:49.760
894
01:07:50.365 --> 01:07:53.665
895
01:07:54.684 --> 01:07:56.305
Uniswap is the lead pretender.
896
01:07:56.765 --> 01:07:57.750
Do you know what I mean?
897
01:07:58.230 --> 01:08:04.010
898
01:08:05.325 --> 01:08:13.184
you know, it's it's not necessarily as I I mean, multisig is a smart contract, I guess. So you you you can you can it it's non custodial
899
01:08:13.565 --> 01:08:14.065
multisig,
900
01:08:15.089 --> 01:08:16.150
without KYC.
901
01:08:16.450 --> 01:08:18.390
I don't I honestly, I don't
902
01:08:18.770 --> 01:08:21.350
love the idea of borrowing against Bitcoin, period.
903
01:08:22.665 --> 01:08:28.925
Why not? But I would agree with the premise that, like, I would refuse to use KYC services if if I was going to do it.
904
01:08:29.540 --> 01:08:37.400
You mean because of liquidation risk or or something? Yeah. Because of liquidation risk. Because, like and liquidation risk and also in all of these,
905
01:08:38.020 --> 01:08:38.520
situations,
906
01:08:39.165 --> 01:08:45.505
if you're gonna do it in a non KYC fashion, I mean, you're then you have so called stable coins risk.
907
01:08:46.210 --> 01:08:49.670
Right? And stable coins are all pretty much centralized. There's no,
908
01:08:51.170 --> 01:08:58.325
decentralized stable coins, so you have a bunch of third party risk if you're gonna be holding, you know, Tether or USDC or even Dai.
909
01:08:58.945 --> 01:09:05.300
910
01:09:05.600 --> 01:09:13.475
spend it. Right? They're gonna, like, convert the USDC to dollars and then pay for real world not real world, fiat world liabilities.
911
01:09:14.015 --> 01:09:16.735
And so they're not, like, holding it. But I guess if you were just
912
01:09:17.640 --> 01:09:23.420
yeah. I I I don't see why you would borrow against Bitcoin and then just hold the stable coins. Right? Right. What because
913
01:09:24.360 --> 01:09:40.520
I don't know what the benefit of that would be. Well, some people leverage it. They use it as leverage. Right? Yeah. So you're buying more Bitcoin and then buy Bitcoin. Yeah. So you're not you're not relying on the stable coin in that case. Oh, true. Just buying more Good point. Buy more Bitcoin. So I don't think if people are borrowing, they're not usually holding the stable coin, but, like, with HODL HODL,
914
01:09:40.820 --> 01:09:43.160
the obvious risk or one of the obvious risks
915
01:09:43.460 --> 01:09:44.120
is that
916
01:09:44.775 --> 01:09:46.074
there's a risk of collusion.
917
01:09:46.855 --> 01:09:54.820
You know what I mean? Like, there's there's, you know, the lender, and then there's the borrower, and there's huddle huddle in the middle. And, like, because it's non KYC
918
01:09:55.520 --> 01:10:15.890
They could be both. They could be both. I don't think they're both. I use it all the time. I hope they're not both. I'm gonna get right to put both. There's no way for us to prove that they're not, though. Right. Right. Right. So there's so it's not totally trustless. Right? I happen to trust them, but I understand that I'm trusting them. Right. But the none of the Ethereum, DeFi should've either.
919
01:10:16.990 --> 01:10:21.075
I don't know. That's that's harder harder to tell. I mean, Uniswap,
920
01:10:21.614 --> 01:10:22.114
like,
921
01:10:23.375 --> 01:10:28.790
Uniswap just did such a bad job with their with their token, which is intended to be a governance token because
922
01:10:29.570 --> 01:10:30.630
long story short,
923
01:10:31.250 --> 01:10:43.324
basically, half the tokens are with the foundation venture capital investors and then people that act on their behalf and act exactly the way they want them to act. Right? And now they're getting to the point where they're awarding themselves
924
01:10:43.890 --> 01:10:47.430
1,000,000 of dollars worth of tokens that they're gonna dump on token holders
925
01:10:48.050 --> 01:10:49.110
to be able to,
926
01:10:49.570 --> 01:10:50.150
you know,
927
01:10:50.450 --> 01:10:54.925
do various things that they themselves were basically unilaterally approved.
928
01:10:55.225 --> 01:10:57.405
Right? So, like, let let's award ourselves $10,000,000
929
01:10:58.105 --> 01:11:08.410
to educate people about DeFi. And then, of course, they hold the majority of the tokens. Everyone votes the way that they want them to vote, except for the actual token holders who probably would not have approved that kind of proposal.
930
01:11:11.040 --> 01:11:11.540
But
931
01:11:11.855 --> 01:11:14.675
I think if they if they had if they had never done a token,
932
01:11:15.295 --> 01:11:23.350
which they didn't need to do a token, then you would just have Uniswap that would just be a smart contract on Ethereum. You'd have smart contract risk. You'd have Ethereum risk, but
933
01:11:24.130 --> 01:11:26.390
934
01:11:28.125 --> 01:11:31.265
935
01:11:32.045 --> 01:11:37.505
I mean, you probably know better than me, but, like, the centralization risk, like, with AWS,
936
01:11:39.469 --> 01:11:44.050
937
01:11:44.510 --> 01:11:49.265
I wrestle with that all the time, but maybe we just expect things to happen quicker. Maybe it just hasn't happened yet.
938
01:11:51.245 --> 01:11:56.840
Maybe. I literally have no idea. It could be enough. I mean, one of the things we always talk about on the on
939
01:11:57.460 --> 01:12:01.400
about this show and rabbit hole recap is, like, you don't really know how much,
940
01:12:02.594 --> 01:12:07.415
you know, security or decentralization is enough until it's not enough, and then it's too late.
941
01:12:08.034 --> 01:12:20.130
But I think you know, Tron still exists. Like, everyone knows you can just stop Tron by hitting Justin Sun or BNB, you know? But, I mean, he's seen Binance CZ seems to be under a shit ton of pressure right now.
942
01:12:20.985 --> 01:12:22.925
That might be a good case study for us.
943
01:12:23.385 --> 01:12:32.490
944
01:12:34.150 --> 01:12:34.650
well,
945
01:12:34.950 --> 01:12:35.850
I think Binance,
946
01:12:36.945 --> 01:12:42.645
the Hong Kong multi version still has the 2 Bitcoin limit for withdrawals. No. He lowered it today.
947
01:12:43.425 --> 01:12:44.165
To what?
948
01:12:44.659 --> 01:12:46.119
949
01:12:47.460 --> 01:12:48.360
950
01:12:48.820 --> 01:12:54.585
951
01:12:54.885 --> 01:12:56.505
the 2 Bitcoin limit anyway.
952
01:12:57.765 --> 01:13:04.949
I don't I know it's happened. They hold it hostage, and they won't let you withdraw unless you give KYC even though their terms say you can withdraw without it.
953
01:13:05.570 --> 01:13:08.725
954
01:13:10.005 --> 01:13:17.145
I haven't had that many people contact me about that. I know what's happened. I mean, look. As far as exchange complaints goes, nobody comes close to Coinbase.
955
01:13:17.520 --> 01:13:22.020
Like, I literally got, like, a 1,000 emails of people complaining about Coinbase over the last,
956
01:13:22.480 --> 01:13:27.675
957
01:13:28.775 --> 01:13:32.555
958
01:13:33.150 --> 01:13:43.055
it's vastly disproportional. Like, for a long time, it was, like, 99 a half percent Coinbase complaints. Wow. Coinbase doesn't have 99 a half percent market share.
959
01:13:43.615 --> 01:13:44.595
They just have
960
01:13:45.135 --> 01:13:48.115
99 a half percent of shitty customer service, I think.
961
01:13:49.775 --> 01:13:50.595
That's interesting.
962
01:13:51.150 --> 01:14:01.245
It's just a common trend. Exchanges start small, and then they get big, and then they have shitty customer service. And, like, once that start okay in the beginning, just get bad. I mean,
963
01:14:02.185 --> 01:14:11.290
964
01:14:11.750 --> 01:14:16.570
And I think they believed it in the beginning when they said don't be evil, and then they they grew out of it.
965
01:14:17.270 --> 01:14:18.570
They grew out of their ethics.
966
01:14:19.344 --> 01:14:32.720
They all seem to. All the big companies seem to do it. The money talks, man. The incentives. You gotta follow the incentives. So, I mean, I think you would agree with me that I think, you know, every custodian in this space will either bend the knee eventually or exit scam,
967
01:14:33.660 --> 01:14:37.555
or or most will. There's a, like, there's a few that have unwound,
968
01:14:38.415 --> 01:14:39.315
in a relatively,
969
01:14:42.975 --> 01:14:47.650
ethical manner. I mean, I I'm pretty proud that, like, Bottlepay when Bottlepay was no KYC,
970
01:14:48.190 --> 01:14:53.090
and when AMLD 5 forced them to add KYC, they let everyone withdraw before
971
01:14:53.415 --> 01:14:55.035
they launch their KYC product.
972
01:14:56.614 --> 01:14:58.635
I'm trying to think of who else has
973
01:14:59.094 --> 01:15:05.210
there there's been a there's been a couple custodians that have done it, I you would say, like, the right way. But most custodians,
974
01:15:06.310 --> 01:15:07.850
are either gonna bend the knee
975
01:15:08.470 --> 01:15:14.065
to regulators because they got big enough and they became a target, a la Binance, Bittrex, Poloniex,
976
01:15:15.245 --> 01:15:20.110
or they're gonna exit scam in a which we've seen in the darknet markets a lot,
977
01:15:21.310 --> 01:15:24.530
and one last money grab because they realized that the,
978
01:15:25.469 --> 01:15:30.095
you know, that that that the walls are pushing in on them and they have no choice. Would you agree?
979
01:15:31.375 --> 01:15:34.595
980
01:15:35.295 --> 01:15:37.740
a lot of potential companies, but that seems like
981
01:15:38.620 --> 01:15:40.640
that seems like the way things are going unless,
982
01:15:41.580 --> 01:15:44.480
well, unless things change radically, which they probably won't.
983
01:15:44.835 --> 01:15:50.935
Not in the right not in the right direction, so it's really up to individual people to, you know, emancipate themselves
984
01:15:51.635 --> 01:15:53.495
from trusted third parties.
985
01:15:54.140 --> 01:15:57.199
986
01:15:57.659 --> 01:15:58.640
understood this.
987
01:15:59.260 --> 01:16:03.679
In Lightningland, we see this a lot. Like, there's there's a bunch of popular custodial wallets
988
01:16:04.364 --> 01:16:06.465
that I just at any moment,
989
01:16:07.005 --> 01:16:07.985
they could either
990
01:16:08.925 --> 01:16:14.370
I I don't I the the 2 most popular ones, I don't expect to exit scam, but they could just implement KYC
991
01:16:15.070 --> 01:16:17.170
and not allow you to withdraw unless you comply.
992
01:16:18.350 --> 01:16:18.850
And,
993
01:16:19.710 --> 01:16:27.925
in general, if you're talking to lawyers about this kind of thing, they'll tell you that if you if you give a window where people can withdraw,
994
01:16:28.945 --> 01:16:29.445
then
995
01:16:29.905 --> 01:16:33.950
you might be liable for that. Right? Like, I even in Binance's case today,
996
01:16:36.010 --> 01:16:38.830
that wasn't, like, a slow rollout. It was just boom.
997
01:16:39.450 --> 01:16:42.955
You can't you can't withdraw more than 0.06. They didn't give people a window.
998
01:16:44.715 --> 01:16:45.215
999
01:16:47.595 --> 01:16:47.995
I don't
1000
01:16:48.955 --> 01:16:56.460
it's not obvious to me why they would be liable for for for giving the window. I don't I I'm not aware of any rule that says you can't give a window.
1001
01:16:56.760 --> 01:17:00.140
1002
01:17:00.785 --> 01:17:04.085
1003
01:17:05.185 --> 01:17:06.485
they're not on the overcompliant
1004
01:17:06.785 --> 01:17:07.285
side.
1005
01:17:08.050 --> 01:17:08.550
1006
01:17:08.930 --> 01:17:09.430
1007
01:17:10.450 --> 01:17:12.710
So we we we appreciate that, I think.
1008
01:17:13.250 --> 01:17:19.965
I mean, the fact that they had the 2 Bitcoin limit while the vast majority of exchanges didn't have anything like that
1009
01:17:20.425 --> 01:17:24.844
is like they were they were they were holding out for a long, long time considering their size.
1010
01:17:25.540 --> 01:17:31.159
1011
01:17:31.780 --> 01:17:39.835
I don't know. I mean Which is almost worse. It's, like, worse because you, like, tell them these are our terms of service. You can withdraw, you know, 2 Bitcoin a day without
1012
01:17:40.969 --> 01:17:41.469
verifying,
1013
01:17:42.010 --> 01:17:47.025
and and then they hit you with it anyway. And and with them, it's, you know, it's a full facial scan.
1014
01:17:47.585 --> 01:17:50.725
And and a bunch of those facial scans got leaked when they got hacked.
1015
01:17:51.105 --> 01:17:51.605
1016
01:17:52.465 --> 01:17:53.205
I guess
1017
01:17:54.304 --> 01:17:55.105
I mean, it's a
1018
01:17:55.760 --> 01:18:00.180
It's a low bar. Well, it's a yeah. It is a low bar, and it's all relative. I mean, like,
1019
01:18:00.560 --> 01:18:05.300
US exchanges just do KYC the entire time from the very beginning. So, like,
1020
01:18:05.745 --> 01:18:08.405
I don't and what percentage of people are getting shocked on KYC'd.
1021
01:18:08.705 --> 01:18:12.485
I don't know. I don't know how many users they have. I only hear about the ones that do.
1022
01:18:13.010 --> 01:18:16.790
Right. So I'm guessing that the amount of people that got shot on KYC was, like,
1023
01:18:17.330 --> 01:18:18.230
sub 1%.
1024
01:18:19.010 --> 01:18:23.675
1025
01:18:24.295 --> 01:18:28.635
which is what they usually say. Like, when BlockFi got hacked, they they actually added KYC,
1026
01:18:28.970 --> 01:18:31.710
additional KYC, and they said they were doing it for your protection.
1027
01:18:32.090 --> 01:18:32.590
1028
01:18:33.370 --> 01:18:34.110
1029
01:18:34.570 --> 01:18:35.790
Which is very common.
1030
01:18:36.410 --> 01:18:36.910
So
1031
01:18:37.515 --> 01:18:40.415
when we're talking about 3rd parties, I wanted to have, like, a brief,
1032
01:18:40.955 --> 01:18:44.094
quick discussion. You know, the 4th amendment of the constitution,
1033
01:18:45.275 --> 01:18:46.815
protects us from
1034
01:18:48.270 --> 01:18:50.050
unreasonable searches and seizures.
1035
01:18:51.150 --> 01:18:51.650
Specifically,
1036
01:18:52.190 --> 01:18:54.370
if you wanna search someone's home, for instance,
1037
01:18:54.995 --> 01:19:00.614
you need a warrant for that. And, you know, it could be argued, you know, whether or not that warrant process
1038
01:19:01.315 --> 01:19:03.255
is sufficiently adequate,
1039
01:19:03.880 --> 01:19:07.980
but at least they need to go in front of a judge and get a warrant to search your house.
1040
01:19:09.080 --> 01:19:11.500
We have something called the third party doctrine
1041
01:19:11.865 --> 01:19:14.525
in the United States, which is precedence that says that
1042
01:19:14.905 --> 01:19:17.725
if you voluntarily give your information to a third party,
1043
01:19:18.585 --> 01:19:33.485
you can expect privacy. It's basically like you're in the public square, and it's been used against email providers. It's been used against ISPs. It's been used against banks. I mean, you talked about the Bank Secrecy Act. It's called the Bank Secrecy Act, but, really, the Bank Secrecy Act means that you have no privacy in banks.
1044
01:19:35.224 --> 01:19:36.204
Do you think
1045
01:19:36.505 --> 01:19:37.005
there's
1046
01:19:40.060 --> 01:19:48.385
do you do you think that's something that Bitcoiners should I to me, that's the optimistic take in, in in America for Bitcoiners. There's this idea that
1047
01:19:48.844 --> 01:19:51.665
if we remove third parties from the equation, if we
1048
01:19:52.180 --> 01:20:00.520
if we understand that third parties are security holes, and we try and use Bitcoin in a sovereign way without trusting third parties, without giving third parties our private information,
1049
01:20:01.804 --> 01:20:03.264
that at least that
1050
01:20:05.085 --> 01:20:08.145
they're you they would need a warrant. A warrant would be needed,
1051
01:20:08.860 --> 01:20:14.719
to get our personal information rather than just, you know, these John Doe style subpoenas that they hit,
1052
01:20:15.725 --> 01:20:19.265
Coinbase with and they hit Gemini with, I believe, and they hit Kraken with,
1053
01:20:19.725 --> 01:20:24.545
where they're just asking for a large amount of information on a large amount of users without any
1054
01:20:25.870 --> 01:20:27.570
reasonable suspicion of guilt.
1055
01:20:28.590 --> 01:20:29.090
1056
01:20:29.630 --> 01:20:30.130
Well,
1057
01:20:31.389 --> 01:20:36.215
if you're not using third parties, then there's no third party to send the subpoena to.
1058
01:20:36.835 --> 01:20:37.335
So
1059
01:20:37.875 --> 01:20:39.335
you know? Or, you know,
1060
01:20:39.715 --> 01:20:41.974
that's a start. Right? They'd have to get the information
1061
01:20:43.020 --> 01:20:53.265
directly from you, and then you can take steps to have best practices so that you're not collecting and hoarding all kinds of private information, just waiting for somebody to come take it from
1062
01:20:54.525 --> 01:20:55.185
you. So
1063
01:20:55.725 --> 01:20:58.385
certainly preferable to not trust third parties. But,
1064
01:20:59.885 --> 01:21:01.825
unfortunately, the third party doctrine
1065
01:21:03.030 --> 01:21:06.730
is basically one of those things that was created before the digital age
1066
01:21:07.830 --> 01:21:10.970
that has worked out really, really badly in the digital age.
1067
01:21:11.350 --> 01:21:19.635
You know what I mean? Where you you need you need to send information to 3rd parties all the time to Our whole life is on the Internet. Yeah. To do everything just
1068
01:21:21.270 --> 01:21:33.665
for for absolutely basic fundamental necessities, you have to trust third parties with information all the time. And if it's not gonna be private, then then you have very, very, very little privacy. And it's really something that the supreme court should,
1069
01:21:34.285 --> 01:21:36.225
you know, get their shit together on.
1070
01:21:36.930 --> 01:21:38.710
Right? Revisit that a little bit.
1071
01:21:39.250 --> 01:21:42.870
1072
01:21:43.490 --> 01:21:44.230
1073
01:21:44.535 --> 01:21:47.595
1074
01:21:49.015 --> 01:21:51.275
1075
01:21:52.910 --> 01:21:59.170
But as far as the Bank Secrecy Act goes, I remember reading reading about the history of it, and it it had been challenged in the seventies
1076
01:21:59.870 --> 01:22:01.250
by a group of,
1077
01:22:02.335 --> 01:22:14.470
banks, actually, who didn't want to provide so much information about their customers to the government, which is interesting because now we view banks as being, like, actively hostile to our interest. But back then, they were, like, wanting to protect their customers,
1078
01:22:14.930 --> 01:22:25.005
and they and they challenged it on they challenged the currency transaction report, the CTR reports that were you know, if you if you deposit or withdraw 10 k in cash, right, they have to file that report.
1079
01:22:25.705 --> 01:22:28.125
They challenged that on 4th amendment grounds,
1080
01:22:29.610 --> 01:22:31.070
but the lawyers
1081
01:22:31.449 --> 01:22:34.510
forgot to allege on behalf of the clients
1082
01:22:34.810 --> 01:22:36.270
that their clients actually
1083
01:22:36.935 --> 01:22:38.875
did deposit or withdraw a 10 k.
1084
01:22:39.175 --> 01:22:55.115
And so the government was able to argue that, well, you're complaining about the CTRs, but you haven't even said that you even that it would even apply to you because you you didn't say that you withdraw or you deposit more than 10 k. So the supreme court got to say that they didn't even have to consider it, which is
1085
01:22:56.135 --> 01:22:59.915
ridiculous technicality. And then, of course, they never brought it up again. So
1086
01:23:00.370 --> 01:23:04.070
certain components of the Bank Secrecy Act had never been ruled on by the Supreme Court.
1087
01:23:04.530 --> 01:23:08.665
So, like, that if they had if they had pleaded it properly,
1088
01:23:09.125 --> 01:23:21.520
1089
01:23:22.540 --> 01:23:23.040
companies
1090
01:23:23.739 --> 01:23:26.800
to try and push back against us because it adds so much friction,
1091
01:23:27.525 --> 01:23:34.744
you know, to their to their user experience. I mean, no. I don't I don't think, you know, PayPal wants to ban people's accounts.
1092
01:23:35.670 --> 01:23:40.170
I think PayPal would like to offer every single person account with as little friction as possible.
1093
01:23:40.869 --> 01:23:45.425
So I'm surprised that we don't see more pushback. I I guess, just they're scared maybe,
1094
01:23:46.125 --> 01:23:50.945
or why do you think we don't see more pushback against it? Like, it obviously would be in their best interest if they had,
1095
01:23:51.805 --> 01:23:53.585
more lenient regs in that regard.
1096
01:23:54.250 --> 01:24:02.670
1097
01:24:03.375 --> 01:24:08.195
to build software, make your software faster and easier to use than it is to, like,
1098
01:24:08.815 --> 01:24:09.715
lobby politicians.
1099
01:24:10.815 --> 01:24:18.130
I'm not sure. I'm totally guessing. You know what I mean? Like, they could just, like, work on making the screen where you do KYC really easy to click,
1100
01:24:18.989 --> 01:24:20.130
make the buttons bigger
1101
01:24:20.785 --> 01:24:22.725
rather than, like, you know,
1102
01:24:23.185 --> 01:24:28.405
spending a lot of time and effort trying to get the laws changed to make it easier, which will also make it easier for their competition.
1103
01:24:29.105 --> 01:24:29.605
1104
01:24:30.130 --> 01:24:37.030
Yeah. It's it hurts their regulatory moat, which is the the opposite incentive. Yeah. I mean, while we're talking about it so, like, Kraken,
1105
01:24:38.210 --> 01:24:38.710
I,
1106
01:24:40.295 --> 01:24:40.795
like,
1107
01:24:41.735 --> 01:24:42.235
Kraken
1108
01:24:43.495 --> 01:24:48.554
Jesse Powell of Kraken, the CEO of Kraken, has been very outspoken pro privacy,
1109
01:24:51.160 --> 01:24:55.420
But at the same time, his organization is a custodian. It's a regulated custodian.
1110
01:24:58.055 --> 01:25:01.275
And so I'm gonna pull up on the screen their transparency
1111
01:25:01.655 --> 01:25:02.155
report
1112
01:25:02.695 --> 01:25:04.635
Mhmm. Of law enforcement requests,
1113
01:25:05.830 --> 01:25:10.090
and I'm pretty sure none of these had warrants. I don't I don't think they had warrants.
1114
01:25:11.670 --> 01:25:19.175
But you you just look at the scale of them and look at that little chart on the bottom left. I mean, that shit is going it feels like it's going parabolic with Bitcoin.
1115
01:25:19.715 --> 01:25:22.535
1116
01:25:23.360 --> 01:25:27.380
I'm not sure if they did. Oh, brilliant. I mean, I'm gonna use DuckDuckGo.
1117
01:25:28.480 --> 01:25:32.975
1118
01:25:33.594 --> 01:25:36.815
They might not have because they're trying to IPO right now.
1119
01:25:37.675 --> 01:25:41.135
1120
01:25:42.869 --> 01:25:43.369
Right?
1121
01:25:43.830 --> 01:25:44.330
1122
01:25:44.710 --> 01:25:48.650
1123
01:25:51.245 --> 01:25:53.505
1124
01:25:53.965 --> 01:25:57.665
The FBI had a 116 requests. The DEA had 73 requests.
1125
01:25:58.489 --> 01:25:59.310
Total 432
1126
01:25:59.929 --> 01:26:04.429
requests from the US, number 2 was Great Britain at 86 requests,
1127
01:26:04.810 --> 01:26:05.790
total 710
1128
01:26:06.330 --> 01:26:06.830
requests,
1129
01:26:07.555 --> 01:26:15.975
but it has over 1200 impacted accounts, whatever that means. There's more impacted accounts than requests. I don't know how that works.
1130
01:26:17.110 --> 01:26:19.530
1131
01:26:20.070 --> 01:26:20.730
you know,
1132
01:26:21.909 --> 01:26:29.505
somebody deposited, where did it go, and maybe it got spread among a a bunch of different accounts. It's kind of hard to tell. And, also, about the warrants,
1133
01:26:29.805 --> 01:26:30.465
you know,
1134
01:26:32.125 --> 01:26:33.265
I'm guessing that
1135
01:26:33.645 --> 01:26:34.545
many of them
1136
01:26:35.830 --> 01:26:40.490
okay. I'm I'm I'm guessing that Kraken put up more of a fight on the warrants issue than some of the other exchanges.
1137
01:26:41.030 --> 01:26:43.210
1138
01:26:44.095 --> 01:26:48.515
has, like, a special portal where they just give you give give law enforcement all the information.
1139
01:26:49.135 --> 01:27:01.245
1140
01:27:01.625 --> 01:27:08.525
lost. Well, they came fought anything since then. Yeah. They came to a settlement that wasn't the worst possible outcome. I mean, definitely
1141
01:27:09.130 --> 01:27:11.469
1142
01:27:12.409 --> 01:27:15.790
in a 3 month period, whether that was send, receive, buy, or sell.
1143
01:27:16.495 --> 01:27:19.795
They handed over all other information. I I remember it being
1144
01:27:20.415 --> 01:27:31.780
1145
01:27:32.240 --> 01:27:32.900
in sales.
1146
01:27:33.495 --> 01:27:35.015
So, like, you could make one
1147
01:27:35.735 --> 01:27:40.555
yeah. It basically just screwed all the day traders for sure. But if you were just somebody who made a couple of transactions,
1148
01:27:41.260 --> 01:27:44.480
even if they were large amounts, then there is no 10.99 for you.
1149
01:27:47.100 --> 01:27:47.600
1150
01:27:48.615 --> 01:27:52.395
there's a foghorn going on in the background right now, Freaks. If you hear that, I apologize.
1151
01:27:55.900 --> 01:27:57.679
Yeah. So just to go back,
1152
01:27:59.260 --> 01:28:01.599
we got custodians. So we had UTXO,
1153
01:28:02.060 --> 01:28:04.639
rider die freak UTXO in the comments asking,
1154
01:28:05.585 --> 01:28:06.085
if,
1155
01:28:07.824 --> 01:28:16.980
if tomorrow in a hypothetical situation, every Bitcoin transaction became a coin join, every spend was a coin join, how do you think that would affect the regulatory landscape?
1156
01:28:18.400 --> 01:28:21.460
1157
01:28:22.465 --> 01:28:24.804
not all you know, assuming that some
1158
01:28:25.105 --> 01:28:28.485
custodians or regulated entities, you know, treat them as suspicious,
1159
01:28:29.080 --> 01:28:33.900
it it's kind of hard to argue that that's something that everyone is doing is suspicious. It's just not suspicious anymore.
1160
01:28:35.160 --> 01:28:40.605
Right? If everyone's doing it, if it's just Right. If all the transactions are like that, then it's obviously not 100%
1161
01:28:40.985 --> 01:28:42.045
suspicious transactions,
1162
01:28:42.425 --> 01:28:43.164
and so
1163
01:28:43.465 --> 01:28:49.820
that would be that would be ideal. I mean, the more people that that do coin join, I think I think the better. So it becomes a bigger,
1164
01:28:50.120 --> 01:28:50.780
you know,
1165
01:28:51.800 --> 01:28:55.900
a bigger part of the total number of transactions, and it starts to, like, materially
1166
01:28:56.445 --> 01:29:02.625
depart from the amount of transactions that we know are actually criminal. Right. We want, like, 10,000,000 people doing coin join rather
1167
01:29:03.165 --> 01:29:14.615
than 20,000 or whatever it is. Yeah. We don't want it we don't want it to be like we know that there's 20,000 criminals that use Bitcoin, and we know that there's 20,000 people that use CoinJoin. Right? Even though they're not the same people, a lot of the criminals are dumb.
1168
01:29:15.575 --> 01:29:17.915
You know? Like, you they get caught all the time.
1169
01:29:19.415 --> 01:29:21.275
1170
01:29:22.520 --> 01:29:24.780
1171
01:29:25.239 --> 01:29:26.780
1172
01:29:27.320 --> 01:29:27.820
1173
01:29:28.760 --> 01:29:29.260
So
1174
01:29:29.745 --> 01:29:32.885
the more people do it, the you know, we we gotta try
1175
01:29:33.345 --> 01:29:42.420
to get things in our favor in terms of privacy. Right? If more people are doing it, it becomes harder to reject those transactions, and exchanges have a better financial reason, you know,
1176
01:29:42.880 --> 01:29:47.460
not to reject those transactions and not to discriminate against more users for
1177
01:29:48.165 --> 01:29:50.505
for just doing basic security stuff like that.
1178
01:29:50.885 --> 01:29:59.750
1179
01:30:00.130 --> 01:30:03.829
Right? Like, the the normalization of Tor usage in and specifically
1180
01:30:04.130 --> 01:30:06.425
in America has been fantastic. I mean, you don't see someone
1181
01:30:07.685 --> 01:30:08.185
getting,
1182
01:30:09.844 --> 01:30:17.639
you you don't you don't see criminal prosecution just for using Tor, or you don't see VPNs getting hit by, you know,
1183
01:30:18.900 --> 01:30:19.960
burdensome regulation.
1184
01:30:21.625 --> 01:30:30.445
Well, don't give them any ideas. Yeah. I mean, I could I could see VPNs getting hit. I mean, VPNs are kind of a custodian of your data. They are custodian of your data.
1185
01:30:30.810 --> 01:30:34.030
Right. Okay. I hope I'm not giving that. We'll we'll change the subject. I don't wanna give ideas.
1186
01:30:34.969 --> 01:30:44.575
1187
01:30:45.989 --> 01:30:53.610
1188
01:30:54.775 --> 01:30:57.915
which harkens back to the superpredators of Clinton's era.
1189
01:31:00.135 --> 01:31:06.980
And I just feel this narrative increasing. So so we also have another question from the audience. By the way, Friex, keep the questions coming.
1190
01:31:07.380 --> 01:31:08.760
From BTC Pins,
1191
01:31:09.139 --> 01:31:10.599
who by the way,
1192
01:31:11.265 --> 01:31:13.445
one of the cool aspects of dispatch is
1193
01:31:14.065 --> 01:31:16.325
I have been selling hats to support the show,
1194
01:31:18.065 --> 01:31:18.805
but, also,
1195
01:31:19.120 --> 01:31:27.460
we have, 2 great freaks have been selling their own merch and then giving me a 3rd cut, they keep a 3rd cut, and then a third goes to open source devs.
1196
01:31:28.395 --> 01:31:32.815
And BTC Pins is one of them. So I do really appreciate him and his support of dispatch,
1197
01:31:33.675 --> 01:31:36.335
and just his support of Bitcoin in general.
1198
01:31:37.080 --> 01:31:38.940
So he's asking so he's a merchant,
1199
01:31:40.440 --> 01:31:43.100
and he's asking if there's any legal concerns,
1200
01:31:43.695 --> 01:31:45.315
I guess, specifically in America,
1201
01:31:46.975 --> 01:31:51.555
regarding him deleting customer info after he's processed their order.
1202
01:31:52.890 --> 01:31:54.750
1203
01:31:55.530 --> 01:31:56.510
seems like
1204
01:31:57.050 --> 01:32:01.525
companies probably wanna keep the data so they can sell it, and they can monetize it, and they can study it. Right?
1205
01:32:03.125 --> 01:32:15.060
And so there's financial reasons why companies will keep it, but I don't think there's anything that says that you you you can't delete it, probably should delete it, or at least, like, anonymize it if you can. Although, I don't know. It's it's questionable how how possible that really is.
1206
01:32:15.440 --> 01:32:34.050
1207
01:32:34.465 --> 01:32:36.965
1208
01:32:37.745 --> 01:32:39.365
I don't know, not legal advice.
1209
01:32:39.745 --> 01:32:54.675
Right? Right. This whole episode is not legal advice. I'm surprised you didn't start it off with a disclaimer. That's one of the reasons why I love you. Yeah. Well, it's just so cheesy. It's so cheesy, and it's like, you know, people would have to argue that they that they were reasonable in believing that they were getting legal advice, and and I don't think
1210
01:32:55.375 --> 01:32:57.875
well, anyway, lawyers are just neurotic. You know?
1211
01:32:58.255 --> 01:33:03.155
1212
01:33:04.080 --> 01:33:13.425
actively deleting data. You know, you shouldn't that data is a liability. If if you care about your customers, you don't wanna hold that data. You wanna hold as little data as possible. And projects in general should be
1213
01:33:13.824 --> 01:33:19.844
optimizing for as little knowledge of their customers as possible. Right? It just becomes an overbearing liability on them
1214
01:33:20.145 --> 01:33:26.710
to hand over that information or secure that information. I mean, we see hacks happen all the fucking time. It's just gonna happen more and more. Right?
1215
01:33:27.010 --> 01:33:27.510
1216
01:33:30.505 --> 01:33:33.645
I've still been pacing, so I haven't been keeping up with the questions. I apologize.
1217
01:33:34.264 --> 01:33:37.565
1218
01:33:40.780 --> 01:33:44.640
I'm I'm a little bit disappointed, Freaks. I expected more questions from you guys.
1219
01:33:45.020 --> 01:33:46.560
What else do we have here?
1220
01:33:50.475 --> 01:33:51.855
Privacy. I mean,
1221
01:33:52.475 --> 01:33:54.015
while we're waiting for them,
1222
01:33:58.070 --> 01:34:05.690
the economist asked me some questions before the show started. Okay. You wanna answer one of his questions? You wanna read the question first and then answer it?
1223
01:34:06.855 --> 01:34:07.675
1224
01:34:08.295 --> 01:34:11.835
they're all paragraphs long. Very tough questions. Very good questions.
1225
01:34:12.695 --> 01:34:21.245
I'm gonna try to find and summarize the easy why we've had them on the show multiple times. Alright. I bet. Yeah. Let's see if I can even answer any of these. The I remember being like,
1226
01:34:21.725 --> 01:34:24.065
this is too hard for me. I didn't get enough sleep for this.
1227
01:34:25.565 --> 01:34:29.025
Okay. Let me see. Oh, we appreciate you. Thank you.
1228
01:34:30.930 --> 01:34:36.390
Okay. I'm reading it. I'm gonna paraphrase it, and then I'm gonna answer it, right, so people understand what the question is.
1229
01:34:37.090 --> 01:34:37.990
Let's see.
1230
01:34:40.805 --> 01:34:45.705
Okay. So the first question was about home home mining Bitcoin and taxes,
1231
01:34:46.885 --> 01:34:47.385
and
1232
01:34:50.150 --> 01:34:54.650
he had said people seem to think that they should voluntarily claim their mining rewards as income.
1233
01:34:55.590 --> 01:34:57.515
But if you DCA Bitcoin,
1234
01:34:57.975 --> 01:35:04.635
you don't pay income tax. Right? So why should you pay income tax, you know, when you're DCA ing through your electric bill?
1235
01:35:05.540 --> 01:35:12.360
1236
01:35:12.675 --> 01:35:15.255
1237
01:35:17.235 --> 01:35:23.090
interested in the argument that a Bitcoin is text, if that would hold any water in a lawsuit against the IRS.
1238
01:35:24.270 --> 01:35:34.275
1239
01:35:35.135 --> 01:35:35.540
1240
01:35:36.580 --> 01:35:40.680
So that's a great question. It's too hard for me. I don't know the answer. I mean, I just like
1241
01:35:42.905 --> 01:35:47.965
1242
01:35:49.065 --> 01:35:49.565
1243
01:35:50.250 --> 01:35:55.150
yeah, mining rewards, you're you're considered to be doing work, so it's like income rather than
1244
01:35:55.530 --> 01:35:59.105
capital expenditure, but it's really it's really similar to just DC ing into Bitcoin.
1245
01:36:01.025 --> 01:36:02.725
1246
01:36:03.665 --> 01:36:05.045
also not legal advice.
1247
01:36:05.825 --> 01:36:07.925
The answer is your income tax
1248
01:36:08.270 --> 01:36:09.890
on on mining is,
1249
01:36:12.110 --> 01:36:24.965
the the amount of money you brought in minus your expenses. Right. Should be very low anyway. Right. So it's not it's not the full it's not the the full mining revenue you bring in. It's it's your profit. Right? It's your income. Yeah.
1250
01:36:25.320 --> 01:36:31.260
And with DCA, that's not the case. I mean, there's no income there. It's you're literally trading whatever fiat for
1251
01:36:31.720 --> 01:36:33.820
KYC Bitcoin. Right? Right.
1252
01:36:35.075 --> 01:36:36.855
But if if your electric cost
1253
01:36:37.155 --> 01:36:37.655
exceeds
1254
01:36:38.035 --> 01:36:42.935
the amount of Bitcoin you bring in, you're actually taking a loss. I mean, I'm not saying that Bitcoiners should
1255
01:36:43.960 --> 01:36:47.660
try and get that loss. Like, you'll probably just get fucked if you try,
1256
01:36:47.960 --> 01:36:48.860
but, technically,
1257
01:36:49.320 --> 01:36:52.220
you could, I guess. But we need the rest of our tax lawyers.
1258
01:36:53.295 --> 01:37:01.475
1259
01:37:02.969 --> 01:37:06.590
I'm gonna copy one of his his other questions into our chat
1260
01:37:07.690 --> 01:37:08.909
so you can see it.
1261
01:37:11.094 --> 01:37:17.594
Right? I don't need it Yeah. Posted in the main chat. Yeah. But it's about the FATF travel rule, see if that works.
1262
01:37:18.215 --> 01:37:19.530
1263
01:37:20.090 --> 01:37:21.310
1264
01:37:21.850 --> 01:37:24.350
Okay. The chat doesn't let me post the entire question.
1265
01:37:25.130 --> 01:37:26.750
There's a there's a character limit.
1266
01:37:28.185 --> 01:37:28.685
1267
01:37:29.304 --> 01:37:31.405
Yep. They're trying to censor us.
1268
01:37:32.344 --> 01:37:38.590
1269
01:37:40.489 --> 01:37:43.870
about it only applying to exchanges sending Bitcoin across the US border,
1270
01:37:44.565 --> 01:37:49.625
and people might believe that it applies to private users needing to comply with suspicious activity reports.
1271
01:37:51.620 --> 01:37:55.640
Happy to clear that up. The travel rule doesn't apply to individuals. It only applies to
1272
01:37:56.180 --> 01:37:57.160
financial institutions,
1273
01:37:58.340 --> 01:37:58.840
so
1274
01:37:59.515 --> 01:38:02.095
you don't have to report your friends for suspicious activity,
1275
01:38:03.115 --> 01:38:09.929
and you don't have to I mean, if you're sending money to a friend in another country, I don't know. What are you supposed to do? Send them send them their own information?
1276
01:38:10.790 --> 01:38:14.489
It just doesn't make sense unless it's unless there's a third party involved.
1277
01:38:14.949 --> 01:38:21.195
1278
01:38:22.455 --> 01:38:26.475
it could just be the, you know, the first shot. It could be the setup shot.
1279
01:38:26.980 --> 01:38:28.440
But right now, it's just,
1280
01:38:30.100 --> 01:38:33.160
it's just one regulated institution to another. I mean,
1281
01:38:34.365 --> 01:38:40.950
I'm sure there's freaks out there that send from one exchange to another, but, like, I don't know what you're doing. At least, like
1282
01:38:42.230 --> 01:38:42.730
yeah.
1283
01:38:43.430 --> 01:38:52.705
1284
01:38:53.485 --> 01:38:54.705
from the rest of their stack.
1285
01:38:55.085 --> 01:38:57.745
I mean, if you're trading with your whole stack, you got a problem.
1286
01:38:58.500 --> 01:38:59.000
1287
01:38:59.699 --> 01:39:04.199
Yeah. I mean, the overwhelming majority of people who trade are just gonna lose money.
1288
01:39:05.860 --> 01:39:06.760
1289
01:39:07.204 --> 01:39:07.484
And,
1290
01:39:08.085 --> 01:39:12.985
1291
01:39:16.340 --> 01:39:20.200
So, I mean, while we're waiting for more questions from the freaks, if they ever come,
1292
01:39:21.620 --> 01:39:25.480
1293
01:39:25.985 --> 01:39:27.605
1294
01:39:28.304 --> 01:39:34.645
Of course, dude. I I try not I've been trying not to, but, especially as it goes on and I drink more, I tend to,
1295
01:39:35.940 --> 01:39:37.300
tends to get a little bit more,
1296
01:39:38.020 --> 01:39:38.520
frisky.
1297
01:39:40.820 --> 01:39:52.155
Yeah. You're a 100% allowed too. My grandmother asked me. She's like, how do I not get kicked off the radio? I was like, this is just not pricing, grandma. You don't you don't you don't under you don't understand how the Internet works.
1298
01:39:53.494 --> 01:39:53.960
Yeah.
1299
01:39:54.360 --> 01:40:02.450
They're they're trying. They're trying to kick us off the radio, the Internet. Going to. Well, this is one of the reasons why I launched bitcoin tv.com, so it's a,
1300
01:40:03.775 --> 01:40:05.315
a censorship resistant,
1301
01:40:06.014 --> 01:40:08.914
spot for Bitcoin content including so they'll dispatch.
1302
01:40:09.295 --> 01:40:09.795
Right.
1303
01:40:11.070 --> 01:40:15.969
But, yeah, I expect that I expect that more I expect that to happen more.
1304
01:40:16.750 --> 01:40:18.769
You know, we already saw we saw
1305
01:40:19.115 --> 01:40:26.655
what Biden's spokesperson was like, if you get kicked off of 1 platform, we're gonna have to kick you off. We wanted to be able to kick you off all the platforms at the same time,
1306
01:40:27.930 --> 01:40:32.030
which is, like, a really dangerous framing to hear come from the administration.
1307
01:40:33.210 --> 01:40:35.870
So I'm, like, curious. You know, we have, like, all this,
1308
01:40:37.195 --> 01:40:41.855
recent developments along vaccine passports in a lot of different areas of the world.
1309
01:40:43.994 --> 01:40:45.054
Do you see
1310
01:40:46.320 --> 01:40:50.020
are are do you do you feel like there's an encroachment on privacy
1311
01:40:52.695 --> 01:40:56.795
that that do you think do you feel like obviously, there's an encroachment on privacy.
1312
01:40:57.415 --> 01:40:58.875
Do you feel like it's increasing?
1313
01:40:59.175 --> 01:41:06.199
Softwalls. You know? Do you feel like it's increasing, though? Like, do you feel like it's only the beginning of this shit? Like, do you think it gets worse from here?
1314
01:41:07.780 --> 01:41:10.199
1315
01:41:10.565 --> 01:41:17.945
1316
01:41:18.470 --> 01:41:18.790
1317
01:41:19.590 --> 01:41:24.890
1318
01:41:25.590 --> 01:41:26.650
1319
01:41:27.535 --> 01:41:37.155
honestly, it does feel kinda fucked now that we've established that we're a lot of curse. I mean, that's just the that's just the the most accurate way I know how to describe it. I mean, I
1320
01:41:38.159 --> 01:41:39.780
I wanna be optimistic, but,
1321
01:41:41.360 --> 01:41:42.020
you know,
1322
01:41:42.400 --> 01:41:44.340
Bitcoin and and things like it
1323
01:41:44.955 --> 01:41:45.455
that
1324
01:41:45.995 --> 01:41:53.489
are are give me hope and make me optimistic, but anything that relies on politics, I'm not optimistic about for the most part or just varying degrees
1325
01:41:53.869 --> 01:41:56.449
of pessimistic or not that optimistic about.
1326
01:41:56.829 --> 01:41:57.409
I mean,
1327
01:41:57.869 --> 01:42:04.325
you know, we've got some states in the here in the US that do things differently, like Florida does things differently. I moved here from California
1328
01:42:04.864 --> 01:42:08.565
partially because of the lockdowns, obviously, because of the taxes too, but
1329
01:42:09.490 --> 01:42:11.910
there's some there's some counter movements.
1330
01:42:14.210 --> 01:42:22.465
Not enough, though. You know what I mean? Not as many as there could be. You know? Especially in Europe. I mean, I feel bad for what appears to be happening there.
1331
01:42:24.844 --> 01:42:27.650
Not sure what to make of all that. I mean, look. Plenty of people have
1332
01:42:28.449 --> 01:42:31.670
said all there is that that needs to be said about it. It's obviously unfair
1333
01:42:33.090 --> 01:42:34.870
and bordering on totally ridiculous
1334
01:42:36.125 --> 01:42:39.265
or or they seem to be ridiculous. They seem to protest more, though.
1335
01:42:39.645 --> 01:42:41.425
1336
01:42:42.125 --> 01:42:45.700
The your the Europeans, you mean? Yeah. Do you think they're gonna take it?
1337
01:42:46.420 --> 01:42:57.845
1338
01:42:59.185 --> 01:43:01.925
I mean, we did have some we did have some lockdown protests
1339
01:43:03.730 --> 01:43:09.670
here, you know, minor ones here and there, but I don't think they got nearly as bad in the US as they did in other places.
1340
01:43:10.625 --> 01:43:15.525
1341
01:43:16.784 --> 01:43:20.450
From Quinn Solo, I've been stacking and coin joining for a few years now.
1342
01:43:21.170 --> 01:43:34.575
If the IRS comes after me because of a KYC exchange reporting that his withdrawals went through coin join, is there a situation where you think he'd have to prove to them that he still has the Bitcoin and hasn't sold? Could he be forced to dox himself
1343
01:43:35.275 --> 01:43:36.335
to prove that?
1344
01:43:39.240 --> 01:43:42.780
1345
01:43:47.335 --> 01:43:50.075
So the KYC exchange says that you bought Bitcoin.
1346
01:43:50.455 --> 01:43:51.755
1347
01:43:52.295 --> 01:43:52.795
1348
01:43:53.480 --> 01:43:56.020
I think the burden is on them to
1349
01:43:56.400 --> 01:43:56.900
demonstrate
1350
01:43:57.840 --> 01:43:59.940
why you have gains that you didn't declare.
1351
01:44:00.295 --> 01:44:07.115
Do you know what I mean? And if you didn't sell any, then you don't have any gains. So, like, if you bought a car or something well, how'd you buy this car?
1352
01:44:08.160 --> 01:44:15.380
Right. They could ask they could ask you that, but under his hypothetical, he's just been coin joining and stacking and not actually selling.
1353
01:44:16.635 --> 01:44:19.614
So if you're not if you're not actually selling, then then,
1354
01:44:20.395 --> 01:44:28.890
you know, they could investigate it. But if you haven't actually sold anything, of course, that's not a very good. It's not ideal. Right? If you haven't done anything wrong, you have nothing to worry about.
1355
01:44:29.350 --> 01:44:30.250
Right. But
1356
01:44:31.030 --> 01:44:33.370
I think the burden is on them to prove it. And
1357
01:44:34.375 --> 01:44:39.355
as absurd as this sounds, all the tax lawyers I talk to tell me that, like, there's nobody working with the IRS.
1358
01:44:40.215 --> 01:44:43.880
Like like, they're not nearly as active as they could be, which is
1359
01:44:44.820 --> 01:44:46.840
for most of us in the Bitcoin world,
1360
01:44:47.220 --> 01:44:48.280
myself included,
1361
01:44:48.695 --> 01:44:50.075
like, I spend, you know,
1362
01:44:50.935 --> 01:45:08.825
15 to 20 minutes a day worrying about the IRS probably. I don't know if everyone else does, but, or at least some portion of my day. You know what I mean? Or my life, maybe not on a daily basis, but you get the idea. Right? It's a concern. Even if you haven't done anything wrong, you really don't want them going through all your stuff. And as of now,
1363
01:45:09.205 --> 01:45:10.825
they're, like, way, way, way behind.
1364
01:45:11.520 --> 01:45:16.900
Like Right. There's so much stuff that's happened in Bitcoin and crypto in general that, like, they they
1365
01:45:17.280 --> 01:45:19.460
they haven't even scratched the surface of it.
1366
01:45:21.735 --> 01:45:31.320
1367
01:45:31.780 --> 01:45:35.160
I I would urge the freaks to pay their taxes. Pay your taxes.
1368
01:45:35.540 --> 01:45:38.905
Early. I pay them early. And, yeah, pay them early. And,
1369
01:45:40.344 --> 01:45:40.844
yeah,
1370
01:45:41.784 --> 01:45:45.244
but but my biggest fear my biggest fear is yeah.
1371
01:45:45.570 --> 01:45:47.830
Or not my biggest fear, but one of my fears is,
1372
01:45:48.210 --> 01:45:49.670
you know, if we're right about Bitcoin,
1373
01:45:50.130 --> 01:45:51.750
the chain is gonna last forever.
1374
01:45:52.610 --> 01:45:55.364
It's always gonna be there. Anyone can look at it in the
1375
01:45:55.665 --> 01:46:01.445
future. The data the external data that links to the chain, including KYC data, but also other data,
1376
01:46:03.710 --> 01:46:05.730
is only going to increase from here.
1377
01:46:06.110 --> 01:46:06.610
So
1378
01:46:07.630 --> 01:46:17.865
if your government or someone else gets their shit together and starts analyzing the chain with this new information, they can hurt you in the future even if they haven't hurt you yet. That data is always gonna be there.
1379
01:46:19.045 --> 01:46:19.545
1380
01:46:20.080 --> 01:46:26.340
1381
01:46:27.655 --> 01:46:29.835
we commonly hear in the Bitcoin world,
1382
01:46:30.454 --> 01:46:32.875
I got into a boating accident, I lost my Bitcoin.
1383
01:46:35.040 --> 01:46:36.100
Is this a real
1384
01:46:37.520 --> 01:46:39.699
is this a is this a real defense,
1385
01:46:40.719 --> 01:46:45.775
in, like, a 61 02 type situation where there's government seizure or maybe,
1386
01:46:46.715 --> 01:46:51.935
you know, in there I I could see, like, a a a soft government seizure being
1387
01:46:52.370 --> 01:46:57.270
unrealized capital gains tax. Basically, you have to pay cap gains even if you haven't sold.
1388
01:46:59.385 --> 01:47:03.485
Is is a boating accident a reasonable strategy, or is that just a meme?
1389
01:47:05.145 --> 01:47:12.710
1390
01:47:13.410 --> 01:47:14.710
on this particular issue.
1391
01:47:16.574 --> 01:47:17.235
I think
1392
01:47:17.695 --> 01:47:22.675
mostly a meme, but there's kinda some truth to it because a lot of people have lost a lot of Bitcoin,
1393
01:47:23.110 --> 01:47:26.170
like, legitimately lost a lot of Bitcoin in, like, all kinds of ways.
1394
01:47:26.710 --> 01:47:27.210
And
1395
01:47:27.829 --> 01:47:31.530
this is one of those things that the IRS is, like, so, so far behind on.
1396
01:47:32.395 --> 01:47:50.570
Like, they they don't they they haven't even they don't even know what DeFi is. Like, they haven't talked about it at all. Like, they've got so many things to deal with, not just beyond Bitcoin, just stuff that people are doing, whatever it is you think about it. Like, there's so many there's probably, like, a, I don't know, 1,000,000,000 and billions of transactions that
1397
01:47:51.145 --> 01:47:54.685
they haven't even started to figure out how to categorize properly.
1398
01:47:55.385 --> 01:48:06.410
I mean, they just, like, made some random attempts, and and they were not that impressive. And like I said, the tax lawyers tell me that they're not that busy over there. Now, of course, that might change, and we can't just count on that continuing, but
1399
01:48:07.595 --> 01:48:11.215
we've got enough bad stuff going on. It doesn't have to all be bad. You know what I mean?
1400
01:48:13.275 --> 01:48:16.770
I don't know. Yeah. I mean, but once again, that's just all on saying. About the
1401
01:48:17.330 --> 01:48:22.310
yeah. Yeah. I'm not sure about the boating accident thing. I think by the time
1402
01:48:23.315 --> 01:48:27.495
by the time we have unrealized capital gains taxes and potential confiscation,
1403
01:48:27.955 --> 01:48:30.750
like, we gotta be out. Do you know what I mean?
1404
01:48:31.369 --> 01:48:35.070
Yeah. Like, people should have already emancipated themselves as much as possible.
1405
01:48:35.770 --> 01:48:37.150
Like, you know,
1406
01:48:37.784 --> 01:48:39.804
whatever that means to you. For me,
1407
01:48:41.385 --> 01:48:47.160
obviously, Bitcoin is a part of that. Guns are a part of that. Being self employed is a part of that. You know? Becoming
1408
01:48:47.540 --> 01:48:48.040
becoming
1409
01:48:49.060 --> 01:48:51.000
hard to cancel. You know?
1410
01:48:51.460 --> 01:48:54.520
Right. Becoming self reliant and having a network and
1411
01:48:55.415 --> 01:48:57.195
theoretically, having a game plan.
1412
01:48:57.655 --> 01:48:59.915
Although long term game plans are kinda challenging,
1413
01:49:00.375 --> 01:49:06.840
you know, considering, like, where things have gone from, like, 2 years ago to now. Right? Prelockdowns to postlockdowns, like,
1414
01:49:07.140 --> 01:49:07.800
you know,
1415
01:49:08.820 --> 01:49:11.160
that's a that's a big one. Big big change
1416
01:49:12.075 --> 01:49:13.935
in terms of, like, being able to just go.
1417
01:49:14.315 --> 01:49:15.935
1418
01:49:16.315 --> 01:49:18.715
yeah. I mean, 2020 was the year we're just
1419
01:49:21.070 --> 01:49:25.650
I mean, if if you live through 2020 and you think that these things can happen fast
1420
01:49:26.030 --> 01:49:28.055
and that the majority of people will just
1421
01:49:28.535 --> 01:49:30.075
roll over and take them.
1422
01:49:30.695 --> 01:49:34.875
I don't know where you've been living. Like, you're just under a rock or some shit.
1423
01:49:36.860 --> 01:49:47.065
1424
01:49:47.764 --> 01:49:55.210
to how unpredictable things can be in general. Like, you know, I guess I guess people could have predicted it, but, like, the
1425
01:49:56.230 --> 01:50:01.290
the excessive money printing and the lockdowns and and, you know, potential, like,
1426
01:50:02.230 --> 01:50:03.450
resistance to that,
1427
01:50:03.915 --> 01:50:04.415
Like,
1428
01:50:04.875 --> 01:50:06.175
we might be 1,
1429
01:50:07.114 --> 01:50:07.614
you
1430
01:50:07.994 --> 01:50:10.895
know, active money printer session away from, like,
1431
01:50:11.675 --> 01:50:20.630
things changing in a big, big way. You know what I mean? I don't know. Like, I was I was in I was in Colombia, which we're not gonna talk about, but I was just there. And time brought up.
1432
01:50:21.170 --> 01:50:24.685
Right. I was just there, and, like, you know, the prices on everything
1433
01:50:25.385 --> 01:50:32.740
are are oftentimes taped over because they need to keep adjusting them, and they're already in, like, some phase of hyper not hyperbickerization,
1434
01:50:33.120 --> 01:50:33.620
hyperinflation.
1435
01:50:34.320 --> 01:50:35.220
Hopefully, hyperbickerization.
1436
01:50:37.040 --> 01:50:37.540
And,
1437
01:50:38.605 --> 01:50:39.105
well,
1438
01:50:40.205 --> 01:50:43.025
I we you know, I don't know when it's gonna happen here, but
1439
01:50:44.125 --> 01:50:49.090
it's obviously a possibility to consider that it's going to happen at some point. Probably will happen everywhere else first.
1440
01:50:49.550 --> 01:50:57.615
Everyone's gonna try to dump them Right. Because they're the reserve. Lesser fiat, shake coin bags, and get our and get our bags, and then eventually dump our bags into Bitcoin.
1441
01:50:59.535 --> 01:51:04.035
1442
01:51:04.575 --> 01:51:08.400
inflation doesn't exist. Right? Like, you were talked earlier about the $10,000
1443
01:51:08.860 --> 01:51:11.200
CTR requirement. Yeah. I mean, $10,000
1444
01:51:11.900 --> 01:51:12.400
in
1445
01:51:13.525 --> 01:51:14.185
in 1970
1446
01:51:14.805 --> 01:51:20.345
is way different than $10,000 today, but it's never been increased. I mean, the other thing is, like, in a hyper inflationary
1447
01:51:20.725 --> 01:51:21.225
environment,
1448
01:51:23.240 --> 01:51:24.700
you're liable for the hyperinflationary
1449
01:51:25.160 --> 01:51:25.660
gains.
1450
01:51:27.160 --> 01:51:31.820
I mean, I it helps people that are in debt more than it does if you're holding real assets,
1451
01:51:33.825 --> 01:51:37.365
which is a reverse incentive than it should be if you actually cared about your citizens.
1452
01:51:38.145 --> 01:51:42.245
1453
01:51:43.860 --> 01:51:46.040
if inflation continues and hyperinflation
1454
01:51:46.340 --> 01:51:53.545
happens. I mean, like, it's already really weird that, like, used cars are going up in value 10% in a month, and that's happening.
1455
01:51:53.925 --> 01:51:59.065
Right. You know what I mean? Cars and watches and real estate and stock and Bitcoin. Bitcoin. Right?
1456
01:51:59.605 --> 01:52:02.585
Like, everything. Every anything besides dollars
1457
01:52:03.030 --> 01:52:04.070
is is going up in value.
1458
01:52:05.750 --> 01:52:06.250
And,
1459
01:52:07.350 --> 01:52:14.554
well, it's weird, and I think even normal non Bitcoiners are starting to notice that. I mean, I've talked to my parents about it, and, like,
1460
01:52:15.255 --> 01:52:19.915
I've talked to them about monetary policy before. It's not something that everyone's parents are interested in, but
1461
01:52:21.494 --> 01:52:34.815
but, like Few. You could just ask people and, like, do you think it's normal that, like, used cars are going up in value 10% in a month? Like, that should strike them as strange. And it's not just about the, you know, the chip shortage or whatever.
1462
01:52:36.395 --> 01:52:37.910
There's weird stuff going on.
1463
01:52:39.190 --> 01:52:42.090
1464
01:52:42.470 --> 01:52:43.690
price, you gotta pay
1465
01:52:44.790 --> 01:52:45.850
you gotta pay up.
1466
01:52:47.145 --> 01:52:56.590
1467
01:52:57.370 --> 01:52:58.110
1468
01:52:58.650 --> 01:53:03.630
If if your car is if your car is younger than Bitcoin, then you're you're short Bitcoin in my book.
1469
01:53:05.295 --> 01:53:08.034
1470
01:53:09.215 --> 01:53:10.914
1471
01:53:11.375 --> 01:53:13.315
I don't know. It's just,
1472
01:53:15.330 --> 01:53:18.530
I just say that because my car is older than Bitcoin. So No. My 2
1473
01:53:19.250 --> 01:53:22.950
2002 Honda s 2000 classic. Yes. So we get to flex on everybody.
1474
01:53:23.605 --> 01:53:24.805
They're all short. Yep.
1475
01:53:26.805 --> 01:53:29.625
So, I mean, freaks. There's a lot of questions on taxes here.
1476
01:53:30.405 --> 01:53:33.900
He's not a tax lawyer. I'm not a tax lawyer. Like, if you have other questions,
1477
01:53:34.280 --> 01:53:34.780
specifically,
1478
01:53:35.160 --> 01:53:35.660
you
1479
01:53:36.680 --> 01:53:39.820
know, our civil rights, stuff like that, privacy rights,
1480
01:53:40.685 --> 01:53:42.305
Those are probably better questions.
1481
01:53:44.365 --> 01:53:47.665
What's the latest on the other? Turn into, like, a tax AMA.
1482
01:53:48.080 --> 01:53:50.980
1483
01:53:52.480 --> 01:53:53.699
1484
01:53:54.080 --> 01:53:55.300
1485
01:53:55.655 --> 01:53:57.755
1486
01:53:58.215 --> 01:53:59.435
1487
01:53:59.815 --> 01:54:00.875
Good talk. So
1488
01:54:01.255 --> 01:54:01.755
1489
01:54:02.510 --> 01:54:06.210
there's an influencer on Twitter that I'm not gonna say his name,
1490
01:54:06.510 --> 01:54:12.474
wanted me to answer that question for him on Twitter, and I would not answer it for him on Twitter. But I've talked about it many times,
1491
01:54:15.094 --> 01:54:22.570
and, you know, he just operates in bad faith and makes up bullshit, so I'm not gonna engage in him engage with him in good faith anymore. That's not gonna happen.
1492
01:54:23.270 --> 01:54:34.635
But my argument would be it I mean, it depends on your definitions of a shit coin. I'm laughing at the chat. Sorry. I'm not not laughing. No. Laugh at the chat. That's that's how you should do. If you if you own a car, Matt, you're short Bitcoin.
1493
01:54:36.710 --> 01:54:38.010
1494
01:54:38.550 --> 01:54:42.230
1495
01:54:42.790 --> 01:54:52.655
2 crazy freaks. So I mean, it depends what your argument what what your definition of a shit coin is. And, I mean, obviously, the definition of a shit coin is not necessarily hard to find,
1496
01:54:53.380 --> 01:54:53.880
but,
1497
01:54:55.540 --> 01:54:57.480
I think that long term,
1498
01:54:58.260 --> 01:55:01.080
the Monero token will go down in value
1499
01:55:01.865 --> 01:55:02.925
compared to Bitcoin.
1500
01:55:03.865 --> 01:55:07.165
So to me, that puts it in the shitcoin basket.
1501
01:55:09.210 --> 01:55:13.389
I also think, you know, like, the Chrysler building's a shitcoin. I think Apple stock's a shitcoin.
1502
01:55:15.050 --> 01:55:18.110
1503
01:55:18.489 --> 01:55:18.945
well,
1504
01:55:20.545 --> 01:55:21.605
I have no idea.
1505
01:55:22.465 --> 01:55:39.445
I have no idea. But if that's the definition, then, like, that's you know, there's I thought it I I thought it would be based on, like, it's, you know, long term scalability or auditability or things like that, how decentralized it is. Well, so that should be great. So then you're talking about the protocol. You're not talking about the token. Yeah. I see.
1506
01:55:41.264 --> 01:55:47.364
The the the token is the use is the useful product of the protocol. And I'm not trying to say, like, I think,
1507
01:55:49.290 --> 01:55:59.295
1508
01:55:59.835 --> 01:56:00.335
will
1509
01:56:00.715 --> 01:56:04.014
decrease compared to it. Like, Bitcoin will outperform everything.
1510
01:56:05.650 --> 01:56:10.050
It's just it's it's an it's it's it's a thesis. It's an expectation more so than,
1511
01:56:10.770 --> 01:56:11.430
1512
01:56:11.890 --> 01:56:13.750
What about as a tool for privacy?
1513
01:56:14.095 --> 01:56:17.715
1514
01:56:18.815 --> 01:56:20.435
And I've said that in the past.
1515
01:56:22.690 --> 01:56:25.110
You know, I I I and I think
1516
01:56:25.730 --> 01:56:31.315
I think, in general, the community is very focused on a very noble cause, which is very accessible
1517
01:56:31.695 --> 01:56:32.835
transactional privacy.
1518
01:56:34.175 --> 01:56:36.275
I just question whether or not
1519
01:56:36.735 --> 01:56:40.050
it can accrue value long term against Bitcoin, and I don't think it will.
1520
01:56:41.170 --> 01:56:45.349
1521
01:56:46.050 --> 01:56:47.429
extra privacy premium.
1522
01:56:48.965 --> 01:56:49.465
Like,
1523
01:56:49.765 --> 01:56:55.945
it maybe Bitcoin can get privacy on chain usable, a coin join. Right? But
1524
01:56:56.800 --> 01:57:00.580
to the extent that it doesn't get adopted and there's a need for a greater degree of privacy,
1525
01:57:00.880 --> 01:57:11.715
there's always gonna be some need for that, and people will be willing to pay for that. But it is a question of, like, why would anyone hold it for longer than they actually need it? And somebody has to hold it for it to accrue value.
1526
01:57:13.090 --> 01:57:16.949
Right. I guess you could hold it speculating that other people are gonna need privacy,
1527
01:57:17.409 --> 01:57:18.790
which is a reasonable speculation.
1528
01:57:19.489 --> 01:57:24.315
1529
01:57:25.915 --> 01:57:27.215
their short term incentives
1530
01:57:27.675 --> 01:57:31.614
are set up in a way that they want to have easy swaps
1531
01:57:32.220 --> 01:57:36.560
that are censorship resistant with Bitcoin. And that makes sense because Bitcoin's the most liquid
1532
01:57:37.260 --> 01:57:40.960
market, and they they want if if if they get
1533
01:57:41.275 --> 01:57:44.655
delisted from a bunch of exchanges, they want to have easy access,
1534
01:57:46.315 --> 01:57:49.375
swaps between Bitcoin and Monero. Right? Mhmm.
1535
01:57:50.230 --> 01:57:53.850
But long term, that hurts them as well. Because if you have
1536
01:57:54.390 --> 01:57:55.850
censorship resistant swaps
1537
01:57:56.550 --> 01:57:57.850
between the two chains,
1538
01:57:58.445 --> 01:58:09.040
then that means you can easily move between the two chains. So if it gives you any kind of you can any kind of privacy benefit Monero gives you, you take advantage of as a Bitcoiner without holding the token long term.
1539
01:58:09.820 --> 01:58:15.440
Right? So it's like, damned if you do, damned if you don't. And if they don't do it, then some other,
1540
01:58:15.795 --> 01:58:21.414
you know, fork of Monero or some other privacy focused chain would do it instead. So they're they have to do it.
1541
01:58:21.715 --> 01:58:24.054
But if they do it, then why would you hold it?
1542
01:58:25.000 --> 01:58:25.740
1543
01:58:26.840 --> 01:58:28.680
It's a concern. I mean, we'll see,
1544
01:58:29.400 --> 01:58:29.900
yeah.
1545
01:58:31.320 --> 01:58:37.715
1546
01:58:38.095 --> 01:58:42.349
And that's what I'm saying. Like, I I think, like, if you're, like, a ransomware person or something,
1547
01:58:42.969 --> 01:58:51.065
like, it makes sense to to receive your ransom in Monero. There's a lot less ways for you to fuck it up, But, like, then you hold it in Bitcoin.
1548
01:58:52.005 --> 01:58:58.560
You use you use the swap to go back to Bitcoin, and you hold the Bitcoin instead. There's definitely some Monero Maxis that disagree.
1549
01:58:59.020 --> 01:59:02.159
100%. I'm well aware. They're always in my mentions.
1550
01:59:02.460 --> 01:59:02.960
1551
01:59:03.420 --> 01:59:03.920
Yeah.
1552
01:59:08.135 --> 01:59:12.395
1553
01:59:13.860 --> 01:59:22.280
We get it's we got some we got some questions out of it. That's good. I think it's inter it's just it's really interesting dynamic, just, the whole discussion around it,
1554
01:59:23.915 --> 01:59:29.695
because I get shit on from both sides whenever I talk about it, which is, you know, you're doing something right when that's what happens.
1555
01:59:30.155 --> 01:59:32.690
Yeah. I think maybe I'm just
1556
01:59:33.170 --> 01:59:34.630
patting myself on the back.
1557
01:59:36.449 --> 01:59:41.110
But, it's in it it does seem like the chain that big corners are most insecure about.
1558
01:59:42.094 --> 01:59:44.835
At least certain influencers are most insecure about.
1559
01:59:45.775 --> 01:59:49.395
And I would say to them, well, let's improve Bitcoin privacy guarantees.
1560
01:59:50.250 --> 01:59:55.710
I don't expect it on the protocol layer, but let's do it on the app layer, and let's do it on the education layer.
1561
01:59:56.010 --> 02:00:00.425
1562
02:00:01.445 --> 02:00:06.090
Like, I that's the way it comes off to me. Maybe that's that's a that's a hotter take than
1563
02:00:06.409 --> 02:00:08.190
than was expected, but, like,
1564
02:00:09.290 --> 02:00:10.429
you know, sometimes
1565
02:00:11.449 --> 02:00:17.775
sometimes okay. You know how Cardano has been, like, proclaiming that they're gonna have smart contracts for, like, 5 years. Right? The smart contracts are coming.
1566
02:00:18.155 --> 02:00:18.655
Right.
1567
02:00:19.115 --> 02:00:22.575
Like, I remember from 2017 when, like, the value prop for Cardano
1568
02:00:23.500 --> 02:00:34.284
was, like, Charles Hoskinson is smart and smart contracts are coming. And then 5 years later Mhmm. Literally no progress made on that. And it's still the same narrative. It's exactly the same. It's, hey, smart, and they're coming.
1569
02:00:35.225 --> 02:00:47.700
And I and I and I hope, you know, that as far as Bitcoin goes, that that the smart contracts are coming, and it's not like smart Bitcoin developers are working on it. The smart contracts are coming kinda thing. You know what I mean?
1570
02:00:48.795 --> 02:01:04.139
1571
02:01:04.645 --> 02:01:08.264
You'd use it, and you but you don't hold the token. You hold Bitcoin.
1572
02:01:08.565 --> 02:01:12.344
1573
02:01:13.045 --> 02:01:13.864
on Ethereum,
1574
02:01:14.630 --> 02:01:27.505
1575
02:01:28.045 --> 02:01:39.480
circle is worth, you know, way too many 1,000,000,000 of dollars, and they'll just blacklist you at will and then make you prove that you're not a criminal after the fact. Do they It's they have all over again. Do they have the admin key,
1576
02:01:39.835 --> 02:01:43.295
1577
02:01:43.755 --> 02:01:45.695
1578
02:01:46.929 --> 02:02:12.025
Alright. There you go. You heard it here first. But the question is, like, if they get forced to do it, and if I'm just I could just be wrong that they just never get forced to do it. I just think they will eventually, but maybe they don't. But I think that's a low low hanging fruit. If they can definitely do if they can do it, then that's a problem. It doesn't matter whether or not they're forced to do it. That's my point. Yeah. Yeah. I guess then the the the corollary question is, like,
1579
02:02:12.885 --> 02:02:14.185
1580
02:02:15.685 --> 02:02:18.345
which which kinds of things you might do that
1581
02:02:18.725 --> 02:02:19.225
require
1582
02:02:20.310 --> 02:02:22.010
maximum censorship resistance.
1583
02:02:22.390 --> 02:02:23.450
Do you know what I mean?
1584
02:02:23.910 --> 02:02:38.580
1585
02:02:38.960 --> 02:02:39.460
1586
02:02:39.920 --> 02:02:45.615
Because, like, what it let's say you needed to take a collateralized loan and the choices were BlockFi,
1587
02:02:46.235 --> 02:02:46.735
right,
1588
02:02:47.355 --> 02:02:58.039
where you have to give them your Bitcoin and take a loan against it and then the 10.90 nines and the KYC and the custody and all that, or compound where you have to trust wrapped Bitcoin, but you don't have to do KYC,
1589
02:02:59.780 --> 02:03:02.840
and you can and you could borrow against the Bitcoin there.
1590
02:03:03.300 --> 02:03:03.765
Like,
1591
02:03:04.725 --> 02:03:08.185
I I guess it's a subjective determination for for each person,
1592
02:03:08.645 --> 02:03:15.739
but one of those seems more attractive than the other. Or I don't know. Maybe not. I mean, look. But I feel like you can't even have people can't even have these conversations.
1593
02:03:16.280 --> 02:03:17.820
1594
02:03:18.679 --> 02:03:27.135
1595
02:03:28.235 --> 02:03:29.435
1596
02:03:30.450 --> 02:03:35.510
I also I couldn't take I I refuse to take the risk of holding long term any of these things.
1597
02:03:36.770 --> 02:03:42.445
Yeah. But maybe it's just not you know, it's Well, the KYC is forever. For me. Right?
1598
02:03:43.224 --> 02:03:45.645
1599
02:03:46.500 --> 02:03:52.360
1600
02:03:55.085 --> 02:03:57.185
1601
02:03:58.045 --> 02:04:10.050
besides huddle huddle, which is the third option, or things like it. I mean, these are real dilemmas that people have. Right. And, like, there's, like, not obvious easy answers where, like, you know, you can just, like,
1602
02:04:10.805 --> 02:04:12.585
predict the the morally correct
1603
02:04:12.965 --> 02:04:15.864
1604
02:04:16.245 --> 02:04:20.810
We have Anthony coming in with the Bitcoin purest answer to use Liquid instead of Ethereum,
1605
02:04:22.950 --> 02:04:29.085
and I would argue that I'm confronted with the same exact situation. Like, I wouldn't wanna be in liquid long term.
1606
02:04:30.025 --> 02:04:40.409
I would I would be trying to hold as much Bitcoin as possible, real Bitcoin as possible rather than being in the liquid ecosystem. I if I was gonna use something in liquid ecosystem, I would do it the bare minimum.
1607
02:04:41.325 --> 02:04:43.585
1608
02:04:44.045 --> 02:04:45.265
lending on liquid?
1609
02:04:46.125 --> 02:04:50.385
1610
02:04:52.280 --> 02:04:58.280
Right. But also, I mean, I know there's a But, like, natively natively on chain. Yeah. There was just
1611
02:04:59.095 --> 02:05:02.155
just recently, there was a there's an there's a new,
1612
02:05:02.855 --> 02:05:05.675
project out called TrueDEX, which is trying to offer
1613
02:05:06.909 --> 02:05:10.369
a so called decentralized exchange with atomic swaps on liquid.
1614
02:05:10.909 --> 02:05:13.889
And in the most cringe way possible, they're calling it LiFi,
1615
02:05:15.035 --> 02:05:22.655
which is just like, come on, guys. Like, you didn't hire a single marketing person. Like, what the fuck are you talking about? What what was its what is that supposed to stand for?
1616
02:05:23.219 --> 02:05:25.639
Liquid finance instead of Oh. DeFi.
1617
02:05:26.020 --> 02:05:26.520