Citadel Dispatch

Share on social media:

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

streamed live every tuesday:  

https://citadeldispatch.com

twitch: https://twitch.tv/citadeldispatch​

bitcointv: https://bitcointv.com/video-channels/citadeldispatch/videos

podcast: https://anchor.fm/citadeldispatch​  

telegram: https://t.me/citadeldispatch​ 

support the show: https://tippin.me/@odell

stream sats to the show: https://www.fountain.fm/

join the chat: http://citadel.chat/

[00:00:00] Unknown:

You may know that I've long thought about trying to use the financial system to deal with all sorts of issues that,   that we're confronting in society.   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,   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,   that decided they were going to effectively stop making loans,   to gun manufacturers,   and that became a huge political issue,   with several, and, republicans effectively saying that they were going to make it very difficult   for those companies,   effectively,   in terms of how they're gonna be regulated and the like. And so I'm curious about how you think about   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?  



[00:01:03] Unknown:

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   that the financial system, which makes so much of our economy work and society function, has a role to play.   Now in the current environment in which we're living, where everything is politicized,   people seem so polarized. You're right that there is some risk here. But let's be clear. There's nothing political   about pummeling police officers on the steps of the Capitol. Right? There's nothing partisan   about beating up people because they're wearing yarmulkes   or defacing   black churches or some of the other activity that we've seen. And I think people on both sides of the aisle can agree   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.  

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   purposes. Some systems you guys were talking about Bitcoin a bit earlier. Things like Bitcoin are very ripe to be and vulnerable   to be used by extremists because of the way those technologies work. But the mainstream   banking institutions and financial systems,   they have a kind they're required to behave with the kind of transparency,   and they owe it to their shareholders to make sure they're not allowing extremists to exploit their services. Jonathan, one one of the  

[00:03:17] Unknown:

Happy Bitcoin Tuesday, freaks. It's your boy, Matt O'Dell, here for another Citadel Dispatch.   The interactive live show about Bitcoin distributed systems privacy and open source software.   If you're tuning in from the audio stream,   that was the Anti Defamation League CEO   on CNBC   essentially assinuating   that Nazis are using Bitcoin. I expect that to be a continued narrative,   especially among,   especially targeted at sovereign Bitcoiners, Bitcoiners that use Bitcoin without third parties,   in a relatively private way.   I'm pretty excited about this show.  

Before we get started, I just wanna give a really quick shout out to all the freaks who support it.   Without your support for dispatch, the show would not exist.   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.   That includes   all the freaks who join us in the live chat and participate with the discussion. You make this show unique, but it also includes   all the freaks who support the show, whether that's your podcasting 2 point o. If you go to new podcast apps.com,   you can download   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   just watching the sats stream in after it gets uploaded to the podcast feeds. It's as simple as just installing the podcast app,   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,   at citadel dispatch.com.  

I also have my pay NIM there. Big thank you to the samurai team. They gave me plus Odell.   All pay NIM start with plus, so I got the Odell pay NIM.   So you can go to sidledispatch.com   if you want to scan that QR code to add me to your samurai wallet.   I got my first few, pay nim donations, which was pretty fucking cool.   Or you can go to ciddle dispatch.com/stack   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   if you wanna buy a hat, the only way you can do it is either through PayNimz or Lightning.   So there's a bunch of freaks that made their first Lightning payments,   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.  

So, anyway, guys, with all that said, appreciate you all. You guys make this special every Tuesday, every Bitcoin Tuesday.   I think this is gonna be a very special one.   We have,   Rafael Yacobbe joining us. This is serial dispatch 32.   He's a friend. He's become a close friend, and he's a Bitcoin lawyer.   On Twitter, his handle is the Liberator with an 8 instead of an a.   How's it going, Raff?  

[00:06:10] Unknown:

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   appreciate you inviting me. Excited for this.  

[00:06:27] Unknown:

Yeah. Absolutely, man. It has been a long time coming.   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,  

[00:06:38] Unknown:

I mean, I don't know how it was for you, but I tried to, like   well, I basically got an email or a text message from everyone that I've met in the last 5 years   saying something   like, can't wait to hang out in in Miami   at the Bitcoin conference.   And, like, it would it was physically impossible   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,   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,   maybe the move is just like, say, hey. I'm gonna be here   at this time.  

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   and   could not do them.  

[00:07:25] Unknown:

Yeah. It was just for me, it was just like a straight,   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.   Yeah. Pretty much. But those we have big corners everywhere. It's pretty cool,   that we have big corners in so many different professions. You know? They,   they pigeonhole us and call us, you know, scary supercoaters,   shadowy supercoaters, but,   you know, we have big corner plumbers, we have carpenters, we have lawyers,   we have,   I don't know, meter maids probably. We're just all over the place.  



[00:08:04] Unknown:

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.   Sorry to offend anyone out there who does that.  

[00:08:19] Unknown:

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.   Yeah. Because I I just had to park my car. So, anyway,   let's get to the good stuff. I mean, I think,   it's pretty timely to have you on.   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.   But,   with everything going on right now in society with this encroachment of our rights, feels like on every single landscape,   but, obviously, this is a Bitcoin show, specifically to Bitcoin, especially.  

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.   So, I mean, to start, the the main question I see all the time, I mean, we'll just dive right into it,   Is   is privacy criminal? Is is trying to seek privacy   in your everyday life,   a criminal act? Is it something that people should be ashamed of? Is it something that other people should be suspicious of?   How do you frame that when you talk when you think about it yourself?  

[00:09:38] Unknown:

Sure.   Well,   I don't think that privacy is criminal. I mean, I that's not a controversial position in the Bitcoin space, obviously.   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,   certainly not criminal. I mean, I feel like   it's not necessarily a legal take, but for me,   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   at a very, very basic level, you need to have privacy in order to have security, and security is a pretty fundamental,   you know, human right,   that human right natural right that everyone should be able to recognize.  



[00:10:39] Unknown:

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.   You wanna tell us a little about yourself? I mean, you're you're based in America,   So the we do have a global audience here, but most of it a lot of it will be American focused, I guess.   You wanna just tell the freaks a little bit about yourself?  

[00:11:03] Unknown:

Sure. So   well, I'm a lawyer. I live in Miami, grew up in New York, Long Island, Long Island,   and,   you know, lived in California for a while, moved out to Miami a couple of months ago.   And I've been working, you know, in the Bitcoin   crypto space   since end of 2017,   early 2018, and, you know, that's that's a 100% of the work that I do.   A lot of it is   a lot of it is regulatory work, a big part of it. And so, you know, that's   working with a lot of exchanges and   helping them deal with the Bank Secrecy Act and money transmitter laws and then, you know, various DeFi things,   all all varieties of hopefully censorship resistant   decentralized technology.  



[00:11:51] Unknown:

Cool. Cool. Yeah. So if if Freaks want to learn more about him, I get what's your website? Thecryptolawyers.com?  

[00:11:59] Unknown:

That's right. Thecryptolawyers.com.  

[00:12:02] Unknown:

He did tell me before the show   that, he has more clients than he can handle. So,  

[00:12:11] Unknown:

I guess, I I I I don't wanna turn I don't wanna turn anybody down, but, I mean, I'm happily   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.   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.  

[00:12:36] Unknown:

That's what that's what we love about you.   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,   it's weird. I just feel like I'm living in a world where I feel like   war is brewing,   and everyone else, there's so many people that are just completely blissfully ignorant to it. Do you feel like   do you feel like we passed the worst of regulatory hurdles in America in terms of Bitcoin, or do you think it   it gets, you know, more anti privacy, more anti sovereign from here?  

[00:13:12] Unknown:

Yeah. So this is something that I've, you know, been talking about with friends.   I was   in I was in Colombia for the last 5 days   with KYC enthusiast,   friend of the pod.   I think you met him at the, at Big Mike 2021. Yeah. Great nimb. He's not actually a KYC enthusiast.   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?   But we were we were   we were brainstorming,   you know,   where things are going   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   on one side of it, there's this risk that they create the, you know, walled garden. Right? And and and and and,   you know, there's the KYC Bitcoin world and non KYC Bitcoin. And the other side of it is, like,   the more these big institutions get into Bitcoin,   the more lobbying power we have.  

And   from my point of view,   like, big corporations,   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.   Yeah. And so, you know, as as big institutions get involved in Bitcoin in one way or another, even if it's, you know,   k y   c Bitcoin,   they still have some kind of financial interest   in Bitcoin continuing   and people being able to use it.   And   I think that decreases the chances of some kind of, you know, drastic, like, widespread ban. Right? Because if, like,   there's, I don't know, a couple   $1,000,000,000,000   in companies that don't want that to happen and are actively profiting from it now,   even if they're kind of functioning as an arm of the surveillance state a little bit,   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  

[00:15:30] Unknown:

Bitcoin ban or outright Bitcoin hostility in America.   And and and to be clear,   up until   probably late 2017,   I was operating under the assumption that we would see that.   So   I would agree that,   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,   So it's not a prediction   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,   but   I do feel   I I've I feel like so we passed that point,   but just because   their incentives are aligned with us   in   the overarching picture of   outright Bitcoin bans   doesn't mean that their incentives are aligned with us   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   the pressure of   these institutions   to try and   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,   in America,   and then they made   it really difficult for competitors to come into the space.  

Right.   We   basically, what happens is they they use regulations to basically create government like, de facto government monopolies.   So I'm really mostly concerned about   this   them using their influence and their power to try and   try and   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,   to withdraw your Bitcoin from these services,   in 5 years. Do you think that that is a   do you think I'm wrong on that that assumption or that expectation?  



[00:17:51] Unknown:

Well, if you   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   is worth nothing   as far as I'm concerned. It's worth nothing.   I mean,   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.   I guess they can't print more Bitcoin, but if it's all locked up on an exchange  

[00:18:23] Unknown:

But say that to GBTC holders or say that to,   you know, the Michael Sailors of the world who are just withdrawing from Coinbase and then sending it to a regulated custodian.  

[00:18:33] Unknown:

Right. Well, for for GBDC,   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   the value prop being very strong at all.   And   if the value prop's not very strong,   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,   it it it's gonna take these businesses are just not gonna be as popular,   like, at  

[00:19:10] Unknown:

all. Right? But people love using Robinhood,   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  

[00:19:24] Unknown:

Bitcoin   is valuable   because real Bitcoin exists in the wild.   Right? But if you if if real Bitcoin didn't exist in the wild, then Robinhood Bitcoin and GBDC, they're worth nothing   or, you know, a lot less.   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  

[00:19:45] Unknown:

I don't know if the powers that be agree with us,   and   they could still be wrong,   and they can, you know, hurt the value prop of Bitcoin. They could hurt the value of Bitcoin,   and just   the the the effects of that are it's a it's a lagging effect. It's not something   you know, to to a lot to a lot of the the powers that be in those in that arena,   they see   regulatory acceptance as a positive price factor,   and it might be a positive price factor in the short term. I mean, it definitely reduces the supply of Bitcoin.  

[00:20:22] Unknown:

Mhmm.  

[00:20:24] Unknown:

So   so I could see custodial bans not custodial bans. So   I have to be very careful in my wording here. It's because it's it's restrictions   that make it practically impossible to pull out your Bitcoin.   Mhmm.   That would reduce the supply. I could see in the short term that increasing the price of Bitcoin,   But long term,   obviously,   it it it it dampens the possibility of a healthy, you know,   Bitcoin ecosystem.  

[00:20:54] Unknown:

Mhmm.   Well, I'm certainly not counting on them agreeing with our position on things for ideological reasons, just counting on   them, hopefully,   agreeing for their own financial gain.   I mean Right. Like I said, you you you get rid of self custody.   Now Bitcoin is way less valuable because it's way less useful for a large majority of people,   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.   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  

[00:21:31] Unknown:

Right.  

[00:21:32] Unknown:

I don't know. I don't see there also has to be somebody   who's, like, really motivated to get that done, right, to get those restrictions done. And, like, in in in Europe,   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,   and, like, somebody has to be the person, like, demanding that we have get rid of whatever freedom you have remaining.   And, you know, there are some complainers in in congress, right, like Elizabeth Warren and people like that, but   I don't know. I feel like they're  

[00:22:06] Unknown:

I mean, we had a professor from Cornell. I mean, the one of the things I think we have to our advantage   is that you have so many different jurisdictions. Right? Bitcoin is global,   and   these politicians tend to you know,   it's it's very hard for them to collaborate with each other. They have difficulty coming to agreements.   So   our our greatest advantage is that if   there's restrictions in one place of the world, maybe there won't be restrictions in another place of the world,   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,   people will compel their politicians to, you know, improve their   regulation or their laws on Bitcoin,   basically, as an incentive to seek out tax revenue and,   you know, just a better better GDP, you know, just better economic growth in their jurisdiction.  

But recently, I mean, we had a professor from Cornell. I think he posted in The Hill,   basically calling for g 20 nations to come together   and go after Bitcoin. Right?  

[00:23:14] Unknown:

Mhmm.  

[00:23:15] Unknown:

And that would be   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?  

[00:23:25] Unknown:

Yeah. I mean,   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   most likely to be involved in that process.   And   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,   and have been relatively   consistent   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,   right, who who's, like, all over the place   and   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.  

So, you know, we did have that that issue at the end of the last presidency with   Mnuchin or whatever.   Right.   And I think he,   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   so dramatically   so dramatically now. So I'm hoping that FinCEN   being thoughtful   doesn't become so radical. That's just not been their style so far.  

[00:25:01] Unknown:

Well, that's a very optimistic take. I   I appreciate it. I hope you're right. I hope so too.   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   the chat. We will try and get to them as much as best as possible.   To those who are not aware, the live show is broadcast via Twitter, Twitch, and YouTube. All the links are at sildispatch.com.   And that live that live stream, any of those platforms, if you participate in the live chat, it gets streamed directly into the broadcast,   for all eternity, which then you could download the video stream on bitcoin tv.com, which is a very novel aspect of dispatch   that I've grown to love.  

So we will try to get to as many questions as possible if you put them in the chat.   And, if we don't get to them right away, I am writing them down. So don't,   get,  

[00:25:56] Unknown:

yeah. I've I've been patient,   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  

[00:26:09] Unknown:

I have moderator privileges.   Anyway,   the   so so okay.   Where do we wanna go from here? So we got we have FinCEN.   We have FATFA. Right? The big news is FATFA with their travel rule,   the Financial Action Task Force,   which is a group of unelected bureaucrats   that basically decide on guidance that a bunch of member countries, including the US and the European countries,   then take and implement into their own law. So we have,   basically, travel rule implementations happening in America   and Europe and the UK separately because they are technically not Europe now.   And it's all they're   they're all basing their implementations off of FATFA, and FATFA has been pretty   focused, I think, on on Bitcoin and crypto at large.  

Do you consider that an existential threat to Bitcoiners, or do you think that   are you optimistic about that as well?  

[00:27:12] Unknown:

Sure. So, yeah, like you said, you know, unelected   bureaucrats, and up up till recently, I think the director   of the FATF was,   from China,   obviously, where we shouldn't be taking any lessons about, like,   financial privacy or surveillance, and it's ridiculous that they would even be in that position to be making   proposed rules for anybody else.   But,   I mean, the the last piece of proposed guidance, which they're now in the process of   revising,   was, like,   totally unreasonable.   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.   And   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,   unilateral power to enforce,   you know,   what they the way things they want things to be in the US.  

And what I'm   the silver lining that I'm hoping to get out of this is that the more unreasonable their recommendations   are,   the easier it is to say no to them. You know what I mean? If they were really, like,   slowly one step at a time   creeping in the wrong direction,   then, you know,   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,   you know, so quickly with it that,   like, it's really, really easy to make a defense to their proposed changes   and to be able to kind of embarrass them. And if we can, you know, get a couple of the right people   in congress or working with FinCEN to show why, you know,   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   I'm trying to be optimistic on that too.  



[00:29:22] Unknown:

Yeah. I mean, I think in general,   when it comes to the traditional finance world, kind of where America lands is where we go.  

[00:29:32] Unknown:

Right. So  

[00:29:33] Unknown:

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   who ends up on on on blacklists and, like, which member banks end up on blacklists and stuff compared to the United States.   Yeah. Okay.  

[00:29:51] Unknown:

Definitely worse.  

[00:29:53] Unknown:

We do. As as you said earlier, we do have,   but, anyway, so   the the trend the overwhelming trend with FATFA   stuff   hap it seems to be   we don't want   people transacting   in a private way   on these networks.   They have shown a   lack of understanding of how Bitcoin works,   for sure,   in terms of what they're requesting,   But the main gist of their argument and the main,   you   know, goals that they seem to have,   I think most regulators   tend to agree with,   which is this idea that   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,   if   if we believe that they're breaking laws or they're doing something that we disagree with.  

With the travel rule, the idea is   that if 2 regulated parties are transacting between each other for their customers, their users,   They need to be able to handle information between each other on who's sending and who's receiving.   I haven't really seen much pushback on that as a concept. Have you seen pushback on your side?  

[00:31:17] Unknown:

Well, pushback from who?  

[00:31:20] Unknown:

I mean, I from   a regulated,   you know, regulated  

[00:31:25] Unknown:

companies Oh, I see what you mean. Yeah.   The the politicians in the different countries. So as it applies to Bitcoin, I mean,   there are various, you know, organizations or companies that are, like, trying to create systems to make this doable, but   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.   Right. So   I think, ultimately, it's not it's not really the biggest issue because it's so easy to circumvent.  

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,   you know,   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   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.   I mean, that's what that's what a lot of it is. Right?  

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   for for crypto or Bitcoin.  

[00:32:50] Unknown:

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,   and then you start trying to basically put restrictions   on people withdrawing to their own sovereign wallets.   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  

[00:33:10] Unknown:

certainly incrementally worse than it not existing,   right, if they just   you know, if you could just   withdraw   and the Bitcoin goes where it's gonna go, that would be more ideal than them   collecting information and sending it back and forth and all that, but we should all be trying to get off of   KYC exchanges when possible anyway.   I mean, it should be a last resort.  

[00:33:34] Unknown:

I feel like in the short term,   the optimistic take is   that it actually kind of encourages best practices. Right? Because,   from an exchange or a regulated provider's point of view,   it's   they prefer now, under a travel rule regime, they prefer if you just   withdraw constantly to your own wallet instead of using their wallet as, like, a wall a proper wallet and paying people from it. Right.   My my my concern is more long term.   I I just yeah. I I I feel like   like maybe, like, that's the opening salvo, and it's just   it just gets worse from here. It gets worse before it gets better.  



[00:34:20] Unknown:

Well, long term, we have to make them obsolete.   Right. Right? So maybe we're talking about the medium term.  

[00:34:27] Unknown:

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,   regulations   will will make these   companies,   you know, uncompetitive   against   projects that are   that are, you know, sovereignty focused and privacy focused, and and users will seek out those   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   and I and to be clear, like, I don't really think it's a threat to Bitcoin,   the network,   or Bitcoin, the protocol. I think it's a threat to individual Bitcoiners   who are not, you   know, doing best practices today   that maybe have their funds on a KYC exchange. Maybe they have them on even Robinhood.  

I don't think there's many listeners   of this show that have their funds on Robinhood,   but I think,   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.   When you get that text, because they just get tricked into it, and they don't even realize.   And then you have other, you know, you have other platform you have platforms like Cash App, where   they don't give you for for friction purposes,   they don't give you the brunt of your KYC till it comes time to withdraw.  

So, like, you think you're all set up and you got everything ready to go,   and then when you comes time to withdraw, you either fail the KYC check   or   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   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  

[00:36:25] Unknown:

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.   And I guess,   well, I guess the thing to do is just sell it.  

[00:36:36] Unknown:

Well, like, obviously, you can't use Cash App without KYC because   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   they're just gonna they're there's gonna be a point of pain depending on their jurisdiction at different times. And   Right. And, you know, they'll learn no lesson, but they're gonna learn it by burning the fuck out of themselves, not because   you know, not in a positive way.  



[00:37:10] Unknown:

Well, everyone that's been in Bitcoin for a while has learned all kinds of lessons.   Right. Lots of burning. I mean,   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?   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   and, you know, downloading some virus and losing all your Bitcoin,   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,   but   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   financial privacy   laws in the US, and and one of the main ones is,   the Gramm Leach Bliley Act, GLBA,   and that requires that financial institutions have to safeguard,   you know, private, nonpersonal financial information.  

And,   you know,   there there are good arguments to be made there that, like,   CoinJoin, which I'm sure we're gonna talk about,   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   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.   Straight to jail.  

[00:38:49] Unknown:

I mean, this is an argument that, I love that comes out of Francis Pouillet.   Right. Sorry if I butchered your name, Francis,   and Canada with Bold Bitcoin because they coin join all user deposits.   It that doesn't necessarily help the individual user's privacy, but his argument is basically   if we're supposed to safeguard financial privacy of all of our users as a total,   the only way to responsibly do that is CoinJoin. If you don't use CoinJoin, you're not complying,   with Canadian privacy law.   I do think that most operators in the space of regulated   businesses do not have the balls that Bold Bitcoin has,   and most of them just tend to roll over and overcomply.  

You   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   makes Bitcoin more robust.   But we can't ignore the incentives on the short term. That means that these regulated businesses are gonna do   what is best for them, and,   they're gonna do things that you know, I mean, we saw a perfect example is Eric Voorhees, who is very vocally anti state,   completely bent the knee on ShapeShift,   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,   and they put him in jail. And he wanted to look out for himself, and that that's the incentive that did that.  

Since then, there's been all these different   strategies he's made to try and remove the KYC, and he has removed the KYC rest recently. We'll see,   you know, how that works out,   on a on a long term. A lot of it, I think, is just decentralization   theater. But in general, it's good to see, you know, regulated operators kinda stand up and and try and fight for their users,   and fight for Bitcoin. I I just think that's   it's kind of rare.  

[00:40:51] Unknown:

Right. One thing to keep in mind is that,   you know, many of them probably don't wanna talk about it. They don't wanna talk about it publicly,   and there's this kind of, like,   you know, game theory of which exchanges are gonna take what position on on CoinJoin.   And,   you know, if it that's gonna push the industry standard in one direction or another. But something else to consider is that   the more   even if they're gonna be KYC exchanges, the more the more businesses there are, the harder they are to   to regulate   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   they can have really high standards. They create the regulatory moat. They make it difficult for competitors   that are that are small,   and ideally doing smaller volume,   then   there's just more   flexibility   there, I think.  

And,   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   10,000 corner corner   businesses than it is to, like, just log in to Coinbase's   cloud, right, and see all the data, see everything they're doing, and monitor it in real time.   Right. So to the extent that KYC businesses are gonna continue to grow   and   and and thrive, which they basically are whether we like it or not,   it's for me, I prefer that there be more of them and that they'd be smaller.   But,   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.  



[00:42:43] Unknown:

Right. But, I mean, we have,   I mean, we have companies, large companies, well funded companies,   like BlockFi   and   Bottlepay   that   seem to over comply in a lot of ways,   where regulations don't necessarily say they have to. I mean,   BlockFi is probably one of the darlings of the industry from a lot of people's perspectives. I mean, obviously, not mine.   They're raising a shit ton of money. They're constantly on CNBC.   They have these high interest rates that attract, you know,   new Bitcoiners into depositing their funds.   And then, you know, they they pay podcasters for the ad model. You know, they pay for their sponsorships. They get the mid rolls.  

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   companies that are the ones that'll pay the big dollars to,   for the ad deals. But I have so on the screen right now, I have,   from BlockFi,   this is their prohibited uses page.   You can't withdraw   or deposit from any mixing services, which attempt to   obfuscate the source of funds, which includes CoinJoin even though they call it mixing. CoinJoin isn't mixing.   Peer to peer exchanges,   which do not do KYC,   gambling sites, or   funds known to belong to darknet marketplaces.  

So if you   if you fall under any of those baskets, whether that's on the deposit or withdrawal side,   they'll close your account. So they   they direct directly prohibit they're basically  

[00:44:27] Unknown:

hourly attacking Bitcoin fungibility. You know? Yeah. Yeah. Agreed. I mean, it's really disappointing that they're, like, explicitly   explicitly   not even hiding their   hostility towards, you know,   basic best practices   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.  

[00:44:51] Unknown:

I mean, they even had a hack. Right? They had a hack where private data was taken, and, literally, they just   their all their users are are naked on the blockchain,   because they're not allowed to use CoinJoin.   And, I mean, you mentioned earlier, you mentioned, you know, a lot of these I I think we should give   regulated operators a break in some regard because I understand if they don't they don't wanna come out specifically pro privacy,   publicly.   Maybe they're doing things in back channels,   but to do the opposite and come out publicly   against privacy best practices when using Bitcoin,   seems unforgivable to me. It is unforgivable.  



[00:45:34] Unknown:

Hashtag delete BlockFi.  

[00:45:36] Unknown:

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,   I I want to be absolutely clear here that, you know, we just were discussing BlockFi, and BlockFi puts CoinJoin under mixing services.   To me, a mixing service is a custodial service that you send Bitcoin to, and they send you someone else's Bitcoin.   A coin join transaction is a   is a is a standard Bitcoin send transaction,   that's collaborative. You have multiple parties in the send,   and it incorporates privacy best practices in that send,   so that your transaction isn't immediately obvious on chain whether or not ownership changed hands and where it changed.  

It is something that I like to see become more common in the space.   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   products in the future, whether that's BlockFi or something else,   that it is an illegal   thing to do, that that that it's not legal in America to use CoinJoin.   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.   But I'm sure if you go to stephanlovera.com   and search, you can pull it up. And we talked about this topic specifically at length.  

But for the freaks here now,   do you believe CoinJoin   is legal in the United States using CoinJoin?  

[00:47:18] Unknown:

I do. I mean, it is, and   the regulations that are relevant don't apply to individual users. So it's not like   there's rules about how you can use your Bitcoin assuming it's a noncriminal   you know, you're not doing something that's criminal. Right? So the rules are on the financial institutions   that would,   you   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   reasonable measures to   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.   You   know, there's CoinJoin is not written into the law. There's no statute that says it's legal legal or illegal,   but FinCEN   described   CoinJoin,   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,   don't have to report anything. Right? They're just software.  

And if they wanted to   if they wanted to point out that they think that   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   that's a good sign. I mean, they're   it's ridiculous that that BlockFi takes a more conservative position than than than FinCEN itself.   You know, when when BlockFi is trying to make 1,000,000,000 of dollars off of of Bitcoin and Bitcoiners.   One last thing to mention about BlockFi, because it just   particularly annoyed me, is that if you deposit stable coins to BlockFi,   they will send you a 10.99   even if you don't have a taxable event.  

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   spontaneously.   That also goes to the IRS,   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.   Right. Supposed to be most of the time, it usually is. You know? And so   the result of that is that if you deposit stable coins to BlockFi, BlockFi   is going to   make it look to the IRS   like you have whatever that that amount of money in, like, undeclared income. Like, they're turning you into a criminal.  

You know? And then you have   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.  

[00:50:03] Unknown:

So that's just, like, insult. And then what? You have to show, like, proof.   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?  

[00:50:13] Unknown:

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.   And,   like, you're now in a compromised position where   you have to correct their perception  

[00:50:36] Unknown:

of you. And even in, like, a best case scenario, your your time is extremely wasted, and time is valuable.  

[00:50:42] Unknown:

Yep. So   it's really, like I I don't know what their problem is.  

[00:50:48] Unknown:

Do you think that is,   do you think that's over compliance, or do you think that is   just, poor execution   laziness on their part?  

[00:50:57] Unknown:

Well, their their anti coin joint position is definitely over compliance.   And the 1099   issue, I think,   is because they've   they might be registered as a broker dealer.   And so because they have a securities registration,   broker dealers always do the automatic 10.90 nines.   Whereas, like, other businesses that are just dealing in commodities and not securities   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,   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,   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.  



[00:51:45] Unknown:

Is that what you're saying? Because, like, the shitcoins can be classified as securities, but Bitcoin is not a security.  

[00:51:51] Unknown:

I don't I don't think they're taking the position that the shitcoins that they support are securities.   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   that they're giving   is an offering of securities. Like, if you Yeah. The actual product itself is the security. Yeah.   Yeah.   But and they and they have probably some kind of federal registration, but they didn't deal with the state issue.   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   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   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   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.  



[00:52:59] Unknown:

It is a live show, so there's no edits.   Uh-huh.   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.   Okay. So, I mean, let's go back a little bit. You said CoinJoin is completely legal in the United States, it seems like.   Do you   think that that could change in the future? Do you have concerns that in the future,   it could be considered   a   a criminal act.  



[00:53:37] Unknown:

I mean, that seems pretty   that seems pretty unlikely.   What's   pretty unlikely because it's probably not   probably not constitutional. I mean, I'm not a con law expert, but   what's a a greater risk is that   BlockFi leads the way and other exchanges copy them and all take this position   because   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.   Right? So you can say, well, it's reasonable because everyone's doing it.  

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.   Right? You know, you could see this happening with Chainalysis or companies like that that   the incentives are just in the wrong direction. The incentives are towards over compliance or greater and greater compliance and greater and greater costs,   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   and you wanna create, you know, a reasonable   privacy   respecting   compliance program to the extent such a thing is possible, which I try to do when I work with clients,   you you might just get forced into doing things you don't wanna do if you wanna get a bank account.  

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,   and Coinbase wants these requirements to be as high as possible  

[00:55:15] Unknown:

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,   they literally brought the chain surveillance in house. Right? They bought   I forget the firm, but it was, like, former hacking team guys who had the chain surveillance company. Right. They hired them.   They they aqua hired them,   and then they fired an undisclosed amount of them because they got shit about it.   But now they have their own chain surveillance   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.  

But, specifically, they've been selling it to the US government for, you know, pennies. They had to cover their costs.   Yeah. They had to cover their costs. Right? They need that extra 100 k or whatever.   They make 100 of 1,000,000 of dollars. Yeah. But, they needed the 100 k from the US government and the DEA.  

[00:56:11] Unknown:

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.   Before it was totally clear that they were really gonna be necessary.   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   those make sense   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   also creates a regulatory moat. So Coinbase went and got all the licenses.  

They went to the big banks.   They got their bank account, and then if you wanna get a bank account where they get a bank account,   right, then you need to do, you know, all the things that they're doing. So   they're they're they're not acting in  

[00:57:07] Unknown:

Bitcoin's best interest despite But they're following their own incentives.   Right?  

[00:57:12] Unknown:

Yep.   Yep.  

[00:57:13] Unknown:

Like, no one should be surprised. I I think they're following their own incentives   at least on a short to medium term.  

[00:57:21] Unknown:

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,  

[00:57:30] Unknown:

at least on a short to medium term. I mean Yeah. Specifically, Brian Armstrong doesn't seem to understand long term Bitcoin. So   anyone who expects his incentives to align with with Bitcoin,   on a long term basis, I think, would be   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,   to create this regulatory moat and make it as hard as possible for competitors to come in.  

[00:58:01] Unknown:

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   flexible set of regulations.   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  

[00:58:22] Unknown:

Right. And the incentives of the chain surveillance companies is to try and make the chain surveillance companies relevant. Right?  

[00:58:29] Unknown:

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   to make themselves more valuable. And then, of course,   it's just a one-sided assessment. Right? Like, we don't know   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   what they're saying is happening.  

[00:58:55] Unknown:

Right. And Garrett said it was called and proprietary. We have no idea what they're doing. Yeah.   But they're they're   you know, you you mentioned this on when when we did Stephan's pod together in, like, 2019,   that they, like, kind of create the problem so that they could be the solution to the problem. But since then, they've been   they they've been, you know,   they've been operating under a tight line. It's kind of weird. Like, during the b word,   initiative, I guess they're calling it, but the that virtual conference that   ARK Invest and Square put on,   for institutional investors that are thinking about Bitcoin, they have one the Chainalysis guy's on.  

And his his argument is basically   that there is criminal activity,   among Bitcoin users, and that's why you need them. But the criminal activity is minimal,   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   advocate for their need,   but at the same time,  

[01:00:05] Unknown:

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   to sustain   while also feeding from the host as much as possible.  

[01:00:21] Unknown:

Right? I I believe we call them parasites. That's right.  

[01:00:25] Unknown:

I mean, that's you know,   the the   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.  

[01:00:36] Unknown:

Yeah. This is why you're one of my favorite lawyers.   So back to CoinJoin,   you don't think CoinJoin will be made   specifically illegal?   You think that our constitutional protections do help us to a degree.   I tend to agree with you.   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.  

[01:01:07] Unknown:

Right. Agreed.   I mean,   everyone's just gotta do what they need to do, you know, regardless of what the pieces of paper say.  

[01:01:17] Unknown:

So   yeah. I mean, I   relatively, provocatively   I mean, intentionally   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.   Mhmm.   But, I'm glad we have it. I'm glad we're not, you know, in some of these other countries   but I'm I'm I'm concern I'm channeling the freaks. I'm concerned   that   I won't be able to sell it at a regulated institution in the future.   What do you say to them?  

[01:01:58] Unknown:

Mhmm.   I mean, there's there's not   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?   So   that's a risk, but having all of your   data and all of your   financial history   relatively public and easy   to   be investigated is   is at least as great of a risk or a greater risk, or maybe you don't think it's a risk at all.   So then, like, don't do it. But   I would I'll I would rather take   I would rather take the risk that I can't sell any Bitcoin on Coinbase.  



[01:02:46] Unknown:

You know what I mean?   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,  

[01:02:57] Unknown:

like, if you're a believer in Bitcoin and Bitcoin's future,   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   and, you know, having our own network of people that can do what they want and do what they need to do. I mean   so   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  

[01:03:28] Unknown:

first of all, you know, this is   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.   If you're, you know, if you're a trader and you're just trying to trade for Fiat,   and you're just trying to short term, you know, buy and sell Bitcoin for,   more US dollars,   then by all means, I think you should still self custody.   But by all means, you know, you just send it from 1 you just send it right out to your,   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.  

But if   if you're in this long term, to me,   if a if a company doesn't   accept your   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.  

[01:04:32] Unknown:

Right.  

[01:04:33] Unknown:

Yeah. And and if if we're talking about long term Bitcoin value, like you were talking about earlier in terms of   restrictions on   sovereign usage of Bitcoin,   I think if you can't use Bitcoin in a sovereign way, you know, to buy something   or to sell something,   then we have way bigger problems than you not being able to   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?  

[01:05:12] Unknown:

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   I mean, look.   Without giving recommendations about software, do your own research. I'm not a software developer, but it'd be better to use, you know,   something more noncustodial like HODL HODL to be able to put your Bitcoin in, you know, and and borrow against it,   rather than use a KYC exchange to sell it.   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   on Bitcoin where people will be able to, for example,   you know, trade,   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,  

[01:05:58] Unknown:

and without custody you know, custodial trusted third parties. I mean Like a bit mix where the founders can't get arrested or something.  

[01:06:06] Unknown:

Yeah.   Or, like,   a lot of the stuff that currently exists on Ethereum just on Bitcoin.   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,   like, you can you can, you know, use wrapped Bitcoin and, like, borrow against your Bitcoin today, like, they're cheap.   You know, obviously, you have to trust Ethereum, and there's trade offs and decentralized and AWS and all that, but,   well, there's options.  



[01:06:45] Unknown:

But you don't think, like, a lot of that is just decentralization   theater that they actually if you have   got Anthony in the chat just trolling us.   You don't you don't think a lot of that is just decentralized theater where   there really are people that they can   crush on, you know, and and force to comply. I mean, like, we're watching, basically, Uniswap right now. Yeah.   Trying to turn corporate to to to suit their investors   and and their own incentives, and they're just hiding under the veneer of decentralization when it's not really decentralized.  

[01:07:18] Unknown:

I agree.   They absolutely are. I mean, fortunately,   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   decentralization   goes, they're literally  

[01:07:38] Unknown:

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?  

[01:07:50] Unknown:

That's true, but I don't think that they pretend as hard as Uniswap does.   Uniswap is the lead pretender.   Do you know what I mean?  

[01:07:58] Unknown:

So, I mean, if you're gonna borrow against your Bitcoin, you can use HODL HODL right now. Right. I mean, it's not,   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   multisig,   without KYC.   I don't I honestly, I don't   love the idea of borrowing against Bitcoin, period.   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.   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,   situations,   if you're gonna do it in a non KYC fashion, I mean, you're then you have so called stable coins risk.  

Right? And stable coins are all pretty much centralized. There's no,   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.  

[01:08:59] Unknown:

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,   spend it. Right? They're gonna, like, convert the USDC to dollars and then pay for real world not real world, fiat world liabilities.   And so they're not, like, holding it. But I guess if you were just   yeah. I I I don't see why you would borrow against Bitcoin and then just hold the stable coins. Right? Right. What because   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,   the obvious risk or one of the obvious risks   is that   there's a risk of collusion.  

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   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.   I don't know. That's that's harder harder to tell. I mean, Uniswap,   like,   Uniswap just did such a bad job with their with their token, which is intended to be a governance token because   long story short,   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   1,000,000 of dollars worth of tokens that they're gonna dump on token holders   to be able to,   you know,   do various things that they themselves were basically unilaterally approved.  

Right? So, like, let let's award ourselves $10,000,000   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.   But   I think if they if they had if they had never done a token,   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  

[01:11:24] Unknown:

it kind of not Ethereum risk is pretty high.  

[01:11:28] Unknown:

I don't know. I'm not qualified enough to know exactly how high it is.   I mean, you probably know better than me, but, like, the centralization risk, like, with AWS,  

[01:11:39] Unknown:

how come nobody showed it down yet? I know. I'd I I wrestle with that all the time.   I wrestle with that all the time, but maybe we just expect things to happen quicker. Maybe it just hasn't happened yet.   Maybe. I literally have no idea. It could be enough. I mean, one of the things we always talk about on the on   about this show and rabbit hole recap is, like, you don't really know how much,   you know, security or decentralization is enough until it's not enough, and then it's too late.   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.   That might be a good case study for us.  



[01:12:23] Unknown:

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,   well,   I think Binance,   the Hong Kong multi version still has the 2 Bitcoin limit for withdrawals. No. He lowered it today.   To what?  

[01:12:45] Unknown:

Point 06 Bitcoin.  

[01:12:47] Unknown:

Oh, that's disappointing.  

[01:12:49] Unknown:

But it was already lower anyway because I know so many people, and you probably have clients that got shotgun KYC'd underneath   the 2 Bitcoin limit anyway.   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.  

[01:13:06] Unknown:

Yeah. I haven't had that many people contact me about that. I mean,   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.   Like, I literally got, like, a 1,000 emails of people complaining about Coinbase over the last,  

[01:13:22] Unknown:

I don't know, 3 or 4 years. I think that's just because they have the they have probably the most users?  

[01:13:29] Unknown:

No. It's not proportional to the amount of users they have. I mean,   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.   They just have   99 a half percent of shitty customer service, I think.   That's interesting.   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,  

[01:14:02] Unknown:

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.   And I think they believed it in the beginning when they said don't be evil, and then they they grew out of it.   They grew out of their ethics.   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,   or or most will. There's a, like, there's a few that have unwound,   in a relatively,   ethical manner. I mean, I I'm pretty proud that, like, Bottlepay when Bottlepay was no KYC,   and when AMLD 5 forced them to add KYC, they let everyone withdraw before   they launch their KYC product.  

I'm trying to think of who else has   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,   are either gonna bend the knee   to regulators because they got big enough and they became a target, a la Binance, Bittrex, Poloniex,   or they're gonna exit scam in a which we've seen in the darknet markets a lot,   and one last money grab because they realized that the,   you know, that that that the walls are pushing in on them and they have no choice. Would you agree?  

[01:15:31] Unknown:

I I think so. Yeah. I mean, that covers a lot of potential   a lot of potential companies, but that seems like   that seems like the way things are going unless,   well, unless things change radically, which they probably won't.   Not in the right not in the right direction, so it's really up to individual people to, you know, emancipate themselves   from trusted third parties.  

[01:15:54] Unknown:

Right. Trusted third parties are a security hole. I thought we all   understood this.   In Lightningland, we see this a lot. Like, there's there's a bunch of popular custodial wallets   that I just at any moment,   they could either   I I don't I the the 2 most popular ones, I don't expect to exit scam, but they could just implement KYC   and not allow you to withdraw unless you comply.   And,   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,   then   you might be liable for that. Right? Like, I even in Binance's case today,   that wasn't, like, a slow rollout. It was just boom.  

You can't you can't withdraw more than 0.06. They didn't give people a window.  

[01:16:45] Unknown:

Yeah.   I don't   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.  

[01:16:57] Unknown:

Right. So But they overcomply, and they just do it anyway because they're scared.  

[01:17:01] Unknown:

Yeah. Well, I mean, as far as Giant exchanges go,   they're not on the overcompliant   side.  

[01:17:08] Unknown:

Binance.  

[01:17:09] Unknown:

Right.   So we we we appreciate that, I think.   I mean, the fact that they had the 2 Bitcoin limit while the vast majority of exchanges didn't have anything like that   is like they were they were they were holding out for a long, long time considering their size.  

[01:17:26] Unknown:

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.   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   verifying,   and and then they hit you with it anyway. And and with them, it's, you know, it's a full facial scan.   And and a bunch of those facial scans got leaked when they got hacked.  

[01:17:51] Unknown:

Right.   I guess   I mean, it's a   It's a low bar. Well, it's a yeah. It is a low bar, and it's all relative. I mean, like,   US exchanges just do KYC the entire time from the very beginning. So, like,   I don't and what percentage of people are getting shocked on KYC'd.   I don't know. I don't know how many users they have. I only hear about the ones that do.   Right. So I'm guessing that the amount of people that got shot on KYC was, like,   sub 1%.  

[01:18:19] Unknown:

Alright. Sub 1%. The worst part is is when they say they're doing it they're doing it for your own protection,   which is what they usually say. Like, when BlockFi got hacked, they they actually added KYC,   additional KYC, and they said they were doing it for your protection.  

[01:18:32] Unknown:

Uh-huh.  

[01:18:33] Unknown:

Yeah. I agree.   Which is very common.   So   when we're talking about 3rd parties, I wanted to have, like, a brief,   quick discussion. You know, the 4th amendment of the constitution,   protects us from   unreasonable searches and seizures.   Specifically,   if you wanna search someone's home, for instance,   you need a warrant for that. And, you know, it could be argued, you know, whether or not that warrant process   is sufficiently adequate,   but at least they need to go in front of a judge and get a warrant to search your house.   We have something called the third party doctrine   in the United States, which is precedence that says that   if you voluntarily give your information to a third party,   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.  

Do you think   there's   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   if we remove third parties from the equation, if we   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,   that at least that   they're you they would need a warrant. A warrant would be needed,   to get our personal information rather than just, you know, these John Doe style subpoenas that they hit,   Coinbase with and they hit Gemini with, I believe, and they hit Kraken with,   where they're just asking for a large amount of information on a large amount of users without any   reasonable suspicion of guilt.  



[01:20:29] Unknown:

Mhmm.   Well,   if you're not using third parties, then there's no third party to send the subpoena to.   So   you know? Or, you know,   that's a start. Right? They'd have to get the information   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   you. So   certainly preferable to not trust third parties. But,   unfortunately, the third party doctrine   is basically one of those things that was created before the digital age   that has worked out really, really badly in the digital age.  

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   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,   you know, get their shit together on.   Right? Revisit that a little bit.  

[01:21:39] Unknown:

A 100%. I mean, I don't really have much faith. But Yeah.  

[01:21:43] Unknown:

And as  

[01:21:45] Unknown:

you had mentioned I'd love to see you in the Supreme Court arguing for it.  

[01:21:49] Unknown:

Unlikely, but who knows? We'll we'll we'll see.   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   by a group of,   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,   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.   They challenged that on 4th amendment grounds,   but the lawyers   forgot to allege on behalf of the clients   that their clients actually   did deposit or withdraw a 10 k.  

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   ridiculous technicality. And then, of course, they never brought it up again. So   certain components of the Bank Secrecy Act had never been ruled on by the Supreme Court.   So, like, that if they had if they had pleaded it properly,  

[01:23:09] Unknown:

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,   companies   to try and push back against us because it adds so much friction,   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.   I think PayPal would like to offer every single person account with as little friction as possible.   So I'm surprised that we don't see more pushback. I I guess, just they're scared maybe,   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,   more lenient regs in that regard.  



[01:23:54] Unknown:

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   to build software, make your software faster and easier to use than it is to, like,   lobby politicians.   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,   make the buttons bigger   rather than, like, you know,   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.  

[01:24:29] Unknown:

Right.   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,   I,   like,   Kraken   Jesse Powell of Kraken, the CEO of Kraken, has been very outspoken pro privacy,   But at the same time, his organization is a custodian. It's a regulated custodian.   And so I'm gonna pull up on the screen their transparency   report   Mhmm. Of law enforcement requests,   and I'm pretty sure none of these had warrants. I don't I don't think they had warrants.   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.  



[01:25:20] Unknown:

I wanna see 2020. Did they release 1 for 2020?   I'm not sure if they did. Oh, brilliant. I mean, I'm gonna use DuckDuckGo.  

[01:25:28] Unknown:

If they if if you find it, put it in put it in our chat, and then I can pull it up.   They might not have because they're trying to IPO right now.  

[01:25:38] Unknown:

And just everyone It would have been it would have been released in the beginning of 2021.   Right?  

[01:25:44] Unknown:

Yeah.  

[01:25:45] Unknown:

I don't see it. I mean, I just looked it up real quick. Look at this. The majority are the US.  

[01:25:51] Unknown:

They break it down by law enforcement agencies.   The FBI had a 116 requests. The DEA had 73 requests.   Total 432   requests from the US, number 2 was Great Britain at 86 requests,   total 710   requests,   but it has over 1200 impacted accounts, whatever that means. There's more impacted accounts than requests. I don't know how that works.  

[01:26:17] Unknown:

I'm I'm guessing that they're asking about, like,   you know,   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,   you know,   I'm guessing that   many of them   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.  

[01:26:41] Unknown:

Yeah. I mean, I think Coinbase just, like,   has, like, a special portal where they just give you give give law enforcement all the information.  

[01:26:49] Unknown:

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   lost. Well, they came fought anything since then. Yeah. They came to a settlement that wasn't the worst possible outcome. I mean, definitely  

[01:27:09] Unknown:

It was anyone who transacted more than $20,000   in a 3 month period, whether that was send, receive, buy, or sell.   They handed over all other information. I I remember it being  

[01:27:20] Unknown:

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   in sales.   So, like, you could make one   yeah. It basically just screwed all the day traders for sure. But if you were just somebody who made a couple of transactions,   even if they were large amounts, then there is no 10.99 for you.  

[01:27:47] Unknown:

So   there's a foghorn going on in the background right now, Freaks. If you hear that, I apologize.   Yeah. So just to go back,   we got custodians. So we had UTXO,   rider die freak UTXO in the comments asking,   if,   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?  

[01:28:18] Unknown:

I think it would be great. It would be great because   not all you know, assuming that some   custodians or regulated entities, you know, treat them as suspicious,   it it's kind of hard to argue that that's something that everyone is doing is suspicious. It's just not suspicious anymore.   Right? If everyone's doing it, if it's just Right. If all the transactions are like that, then it's obviously not 100%   suspicious transactions,   and so   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,   you know,   a bigger part of the total number of transactions, and it starts to, like, materially   depart from the amount of transactions that we know are actually criminal. Right. We want, like, 10,000,000 people doing coin join rather   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.  

You know? Like, you they get caught all the time.  

[01:29:19] Unknown:

Well, the ones we hear about didn't use CoinJoin.  

[01:29:23] Unknown:

Or used it badly or used it incorrectly.  

[01:29:25] Unknown:

Right? Or used a shitty implementation.  

[01:29:27] Unknown:

Yeah.   So   the more people do it, the you know, we we gotta try   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,   not to reject those transactions and not to discriminate against more users for   for just doing basic security stuff like that.  

[01:29:51] Unknown:

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.   Right? Like, the the normalization of Tor usage in and specifically   in America has been fantastic. I mean, you don't see someone   getting,   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,   burdensome regulation.   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.   Right. Okay. I hope I'm not giving that. We'll we'll change the subject. I don't wanna give ideas.  



[01:30:35] Unknown:

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.  

[01:30:46] Unknown:

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,   which harkens back to the superpredators of Clinton's era.   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.   From BTC Pins,   who by the way,   one of the cool aspects of dispatch is   I have been selling hats to support the show,   but, also,   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.   And BTC Pins is one of them. So I do really appreciate him and his support of dispatch,   and just his support of Bitcoin in general.  

So he's asking so he's a merchant,   and he's asking if there's any legal concerns,   I guess, specifically in America,   regarding him deleting customer info after he's processed their order.  

[01:31:53] Unknown:

I don't I don't think so. I mean,   seems like   companies probably wanna keep the data so they can sell it, and they can monetize it, and they can study it. Right?   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.  

[01:32:15] Unknown:

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.  

[01:32:34] Unknown:

Yeah. But nothing that I know of. You know? Obviously,   I don't know, not legal advice.   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   well, anyway, lawyers are just neurotic. You know?  

[01:32:58] Unknown:

Yeah. I I feel that. I mean, in general, I I wanna see, you know, more merchants   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   optimizing for as little knowledge of their customers as possible. Right? It just becomes an overbearing liability on them   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?  

[01:33:27] Unknown:

Yep.   I've still been pacing, so I haven't been keeping up with the questions. I apologize.  

[01:33:34] Unknown:

Yeah. I mean, the freaks haven't really given us any more questions.   I'm I'm a little bit disappointed, Freaks. I expected more questions from you guys.   What else do we have here?   Privacy. I mean,   while we're waiting for them,   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?  

[01:34:07] Unknown:

Okay. They're   they're all paragraphs long. Very tough questions. Very good questions.   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,   this is too hard for me. I didn't get enough sleep for this.   Okay. Let me see. Oh, we appreciate you. Thank you.   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.   Let's see.  

Okay. So the first question was about home home mining Bitcoin and taxes,   and   he had said people seem to think that they should voluntarily claim their mining rewards as income.   But if you DCA Bitcoin,   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?  

[01:35:06] Unknown:

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?  

[01:35:13] Unknown:

And then and then he said,   interested in the argument that a Bitcoin is text, if that would hold any water in a lawsuit against the IRS.  

[01:35:24] Unknown:

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.  

[01:35:35] Unknown:

Yep.   So that's a great question. It's too hard for me. I don't know the answer. I mean, I just like  

[01:35:43] Unknown:

It's an optimistic constitution poll is what it is. I think so. I think so.  

[01:35:49] Unknown:

And,   yeah, mining rewards, you're you're considered to be doing work, so it's like income rather than   capital expenditure, but it's really it's really similar to just DC ing into Bitcoin.  

[01:36:01] Unknown:

I mean, you're just paying the electric bill. Well, I mean, the answer is   also not legal advice.   The answer is your income tax   on on mining is,   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.   And with DCA, that's not the case. I mean, there's no income there. It's you're literally trading whatever fiat for   KYC Bitcoin. Right? Right.   But if if your electric cost   exceeds   the amount of Bitcoin you bring in, you're actually taking a loss. I mean, I'm not saying that Bitcoiners should   try and get that loss. Like, you'll probably just get fucked if you try,   but, technically,   you could, I guess. But we need the rest of our tax lawyers.  



[01:36:53] Unknown:

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.   I'm gonna copy one of his his other questions into our chat   so you can see it.   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.  

[01:37:18] Unknown:

Yep. I think  

[01:37:20] Unknown:

Wait. It doesn't?   Okay. The chat doesn't let me post the entire question.   There's a there's a character limit.  

[01:37:28] Unknown:

Classic.   Yep. They're trying to censor us.  

[01:37:32] Unknown:

So he was saying people might be confused about the FATF travel rule and whether it only applies to exchanges,   about it only applying to exchanges sending Bitcoin across the US border,   and people might believe that it applies to private users needing to comply with suspicious activity reports.   Happy to clear that up. The travel rule doesn't apply to individuals. It only applies to   financial institutions,   so   you don't have to report your friends for suspicious activity,   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?   It just doesn't make sense unless it's unless there's a third party involved.  



[01:38:15] Unknown:

Right. I mean, we discussed this earlier. Right? It's it's specifically between 2 regulated parties. I do think that it could,   it could just be the, you know, the first shot. It could be the setup shot.   But right now, it's just,   it's just one regulated institution to another. I mean,   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   yeah.  

[01:38:43] Unknown:

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   from the rest of their stack.   I mean, if you're trading with your whole stack, you got a problem.  

[01:38:58] Unknown:

Right.   Yeah. I mean, the overwhelming majority of people who trade are just gonna lose money.  

[01:39:06] Unknown:

Yeah. I agree.   And,  

[01:39:08] Unknown:

Learned learned that lesson already. Have a huge data and tax burden on top.   So, I mean, while we're waiting for more questions from the freaks, if they ever come,  

[01:39:22] Unknown:

let's bring up some hot topics. Hot topics shit, the edgy shit.  

[01:39:26] Unknown:

It's, well, I'm sure right?   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,   tends to get a little bit more,   frisky.   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.   Yeah.   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,   a censorship resistant,   spot for Bitcoin content including so they'll dispatch.  

Right.   But, yeah, I expect that I expect that more I expect that to happen more.   You know, we already saw we saw   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,   which is, like, a really dangerous framing to hear come from the administration.   So I'm, like, curious. You know, we have, like, all this,   recent developments along vaccine passports in a lot of different areas of the world.   Do you see   are are do you do you feel like there's an encroachment on privacy   that that do you think do you feel like obviously, there's an encroachment on privacy.  

Do you feel like it's increasing?   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?  

[01:41:08] Unknown:

In terms of the vaccine passports and all that?  

[01:41:11] Unknown:

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.  

[01:41:18] Unknown:

Yeah.  

[01:41:20] Unknown:

It's bigger than Bitcoin. Right? Like, it's it's just everywhere. Everywhere around us is just getting worse.  

[01:41:26] Unknown:

Yeah. I mean,   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   I wanna be optimistic, but,   you know,   Bitcoin and and things like it   that   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   of pessimistic or not that optimistic about.   I mean,   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   partially because of the lockdowns, obviously, because of the taxes too, but   there's some there's some counter movements.  

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.   Not sure what to make of all that. I mean, look. Plenty of people have   said all there is that that needs to be said about it. It's obviously unfair   and bordering on totally ridiculous   or or they seem to be ridiculous. They seem to protest more, though.  

[01:42:40] Unknown:

So that's the optimistic take.   The your the Europeans, you mean? Yeah. Do you think they're gonna take it?  

[01:42:46] Unknown:

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.   I mean, we did have some we did have some lockdown protests   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.  

[01:43:11] Unknown:

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.   From Quinn Solo, I've been stacking and coin joining for a few years now.   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   to prove that?  

[01:43:39] Unknown:

Okay. I'm reading the question again on the screen while I think about the answer.   So the KYC exchange says that you bought Bitcoin.  

[01:43:50] Unknown:

You withdrew to CoinJoin.  

[01:43:52] Unknown:

Right.   I think the burden is on them to   demonstrate   why you have gains that you didn't declare.   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?   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.   So if you're not if you're not actually selling, then then,   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.   Right. But   I think the burden is on them to prove it. And   as absurd as this sounds, all the tax lawyers I talk to tell me that, like, there's nobody working with the IRS.  

Like like, they're not nearly as active as they could be, which is   for most of us in the Bitcoin world,   myself included,   like, I spend, you know,   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,   they're, like, way, way, way behind.   Like Right. There's so much stuff that's happened in Bitcoin and crypto in general that, like, they they   they haven't even scratched the surface of it.  



[01:45:22] Unknown:

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.   I I would urge the freaks to pay their taxes. Pay your taxes.   Early. I pay them early. And, yeah, pay them early. And,   yeah,   but but my biggest fear my biggest fear is yeah.   Or not my biggest fear, but one of my fears is,   you know, if we're right about Bitcoin,   the chain is gonna last forever.   It's always gonna be there. Anyone can look at it in the   future. The data the external data that links to the chain, including KYC data, but also other data,   is only going to increase from here.  

So   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.  

[01:46:19] Unknown:

Right.  

[01:46:20] Unknown:

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,   we commonly hear in the Bitcoin world,   I got into a boating accident, I lost my Bitcoin.   Is this a real   is this a is this a real defense,   in, like, a 61 02 type situation where there's government seizure or maybe,   you know, in there I I could see, like, a a a soft government seizure being   unrealized capital gains tax. Basically, you have to pay cap gains even if you haven't sold.   Is is a boating accident a reasonable strategy, or is that just a meme?  



[01:47:05] Unknown:

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   on this particular issue.   I think   mostly a meme, but there's kinda some truth to it because a lot of people have lost a lot of Bitcoin,   like, legitimately lost a lot of Bitcoin in, like, all kinds of ways.   And   this is one of those things that the IRS is, like, so, so far behind on.   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   they haven't even started to figure out how to categorize properly.  

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   we've got enough bad stuff going on. It doesn't have to all be bad. You know what I mean?   I don't know. Yeah. I mean, but once again, that's just all on saying. About the   yeah. Yeah. I'm not sure about the boating accident thing. I think by the time   by the time we have unrealized capital gains taxes and potential confiscation,   like, we gotta be out. Do you know what I mean?  

Yeah. Like, people should have already emancipated themselves as much as possible.   Like, you know,   whatever that means to you. For me,   obviously, Bitcoin is a part of that. Guns are a part of that. Being self employed is a part of that. You know? Becoming   becoming   hard to cancel. You know?   Right. Becoming self reliant and having a network and   theoretically, having a game plan.   Although long term game plans are kinda challenging,   you know, considering, like, where things have gone from, like, 2 years ago to now. Right? Prelockdowns to postlockdowns, like,   you know,   that's a that's a big one. Big big change   in terms of, like, being able to just go.  



[01:49:14] Unknown:

Right? Right. So   yeah. I mean, 2020 was the year we're just   I mean, if if you live through 2020 and you think that these things can happen fast   and that the majority of people will just   roll over and take them.   I don't know where you've been living. Like, you're just under a rock or some shit.  

[01:49:37] Unknown:

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   to how unpredictable things can be in general. Like, you know, I guess I guess people could have predicted it, but, like, the   the excessive money printing and the lockdowns and and, you know, potential, like,   resistance to that,   Like,   we might be 1,   you   know, active money printer session away from, like,   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.  

Right. I was just there, and, like, you know, the prices on everything   are are oftentimes taped over because they need to keep adjusting them, and they're already in, like, some phase of hyper not hyperbickerization,   hyperinflation.   Hopefully, hyperbickerization.   And,   well,   I we you know, I don't know when it's gonna happen here, but   it's obviously a possibility to consider that it's going to happen at some point. Probably will happen everywhere else first.   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.  

[01:51:00] Unknown:

Well, that's one of the fucked up parts about these laws is that they're based on a world where   inflation doesn't exist. Right? Like, you were talked earlier about the $10,000   CTR requirement. Yeah. I mean, $10,000   in   in 1970   is way different than $10,000 today, but it's never been increased. I mean, the other thing is, like, in a hyper inflationary   environment,   you're liable for the hyperinflationary   gains.   I mean, I it helps people that are in debt more than it does if you're holding real assets,   which is a reverse incentive than it should be if you actually cared about your citizens.  

[01:51:38] Unknown:

Yeah. Well, the there's gonna be all kinds of totally absurd incentives   if inflation continues and hyperinflation   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.   Right. You know what I mean? Cars and watches and real estate and stock and Bitcoin. Bitcoin. Right?   Like, everything. Every anything besides dollars   is is going up in value.   And,   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,   I've talked to them about monetary policy before. It's not something that everyone's parents are interested in, but   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.  

There's weird stuff going on.  

[01:52:39] Unknown:

Yeah. But when you sell that used car for the increased   price, you gotta pay   you gotta pay up.  

[01:52:47] Unknown:

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?  

[01:52:57] Unknown:

Not yet.   If if your car is if your car is younger than Bitcoin, then you're you're short Bitcoin in my book.  

[01:53:05] Unknown:

What if what if what if you got a huge Fiat loan for the car?  

[01:53:09] Unknown:

Then you're I then you're not short.   I don't know. It's just,   I just say that because my car is older than Bitcoin. So No. My 2   2002 Honda s 2000 classic. Yes. So we get to flex on everybody.   They're all short. Yep.   So, I mean, freaks. There's a lot of questions on taxes here.   He's not a tax lawyer. I'm not a tax lawyer. Like, if you have other questions,   specifically,   you   know, our civil rights, stuff like that, privacy rights,   Those are probably better questions.   What's the latest on the other? Turn into, like, a tax AMA.  

[01:53:48] Unknown:

What what's the latest on whether Monero is a shitcoin?  

[01:53:52] Unknown:

You wanna talk about this?  

[01:53:54] Unknown:

I don't think it's a shitcoin.  

[01:53:56] Unknown:

I do I do think it's a shitcoin.  

[01:53:58] Unknown:

Wow. Okay.   Good talk. So  

[01:54:01] Unknown:

so   there's an influencer on Twitter that I'm not gonna say his name,   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,   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.   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.  

[01:54:37] Unknown:

That should be a problem.  

[01:54:39] Unknown:

Yeah. Well, you know, time is also money and life is short, so don't be,   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,   but,   I think that long term,   the Monero token will go down in value   compared to Bitcoin.   So to me, that puts it in the shitcoin basket.   I also think, you know, like, the Chrysler building's a shitcoin. I think Apple stock's a shitcoin.  

[01:55:15] Unknown:

I think our cars are shitcoin. Under under that definition,   well,   I have no idea.   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.   The the the token is the use is the useful product of the protocol. And I'm not trying to say, like, I think,  

[01:55:49] Unknown:

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   will   decrease compared to it. Like, Bitcoin will outperform everything.   It's just it's it's an it's it's it's a thesis. It's an expectation more so than,  

[01:56:11] Unknown:

a declaration.   What about as a tool for privacy?  

[01:56:14] Unknown:

As a tool for privacy, I think it's extremely useful today. Yep.   And I've said that in the past.   You know, I I I and I think   I think, in general, the community is very focused on a very noble cause, which is very accessible   transactional privacy.   I just question whether or not   it can accrue value long term against Bitcoin, and I don't think it will.  

[01:56:41] Unknown:

Well, I mean, seems reason reasonable that there would be, like, a   extra privacy premium.   Like,   it maybe Bitcoin can get privacy on chain usable, a coin join. Right? But   to the extent that it doesn't get adopted and there's a need for a greater degree of privacy,   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.   Right. I guess you could hold it speculating that other people are gonna need privacy,   which is a reasonable speculation.  



[01:57:19] Unknown:

So my my thesis is my thesis is for a chain like Monero to   their short term incentives   are set up in a way that they want to have easy swaps   that are censorship resistant with Bitcoin. And that makes sense because Bitcoin's the most liquid   market, and they they want if if if they get   delisted from a bunch of exchanges, they want to have easy access,   swaps between Bitcoin and Monero. Right? Mhmm.   But long term, that hurts them as well. Because if you have   censorship resistant swaps   between the two chains,   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.  

Right? So it's like, damned if you do, damned if you don't. And if they don't do it, then some other,   you know, fork of Monero or some other privacy focused chain would do it instead. So they're they have to do it.   But if they do it, then why would you hold it?  

[01:58:25] Unknown:

I agree.   It's a concern. I mean, we'll see,   yeah.  

[01:58:31] Unknown:

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?   And that's what I'm saying. Like, I I think, like, if you're, like, a ransomware person or something,   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.   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.   100%. I'm well aware. They're always in my mentions.  



[01:59:02] Unknown:

Yeah.   Yeah.  

[01:59:08] Unknown:

Well, I'm glad we had that conversation. Are you happy you brought it up? I'm sure why not.   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,   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.   Yeah. I think maybe I'm just   patting myself on the back.   But, it's in it it does seem like the chain that big corners are most insecure about.   At least certain influencers are most insecure about.  

And I would say to them, well, let's improve Bitcoin privacy guarantees.   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.  

[01:59:56] Unknown:

I mean, it's the same thing with with Ethereum and smart contracts and Bitcoin.   Like, I that's the way it comes off to me. Maybe that's that's a that's a hotter take than   than was expected, but, like,   you know, sometimes   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.   Right.   Like, I remember from 2017 when, like, the value prop for Cardano   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.   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?  



[02:00:49] Unknown:

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,   You'd use it, and you but you don't hold the token. You hold Bitcoin.  

[02:01:09] Unknown:

Right. Well, I I think I I feel like wrapped Bitcoin is useful   on Ethereum,  

[02:01:15] Unknown:

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   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,  

[02:01:40] Unknown:

admin power to be able to freeze specific transactions? Like Yes.  

[02:01:44] Unknown:

Addresses. They can freeze the whole address.   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,  

[02:02:13] Unknown:

what stuff you're doing,   which which kinds of things you might do that   require   maximum censorship resistance.   Do you know what I mean?  

[02:02:24] Unknown:

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.  

[02:02:39] Unknown:

Right.   Because, like, what it let's say you needed to take a collateralized loan and the choices were BlockFi,   right,   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,   and you can and you could borrow against the Bitcoin there.   Like,   I I guess it's a subjective determination for for each person,   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.  

[02:03:16] Unknown:

Right. No one has the conversation.  

[02:03:19] Unknown:

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.  

[02:03:28] Unknown:

Me too. But I just wouldn't hold   I also I couldn't take I I refuse to take the risk of holding long term any of these things.   Yeah. But maybe it's just not you know, it's Well, the KYC is forever. For me. Right?  

[02:03:43] Unknown:

Whereas the risk of using wrapped Bitcoin  

[02:03:46] Unknown:

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.  

[02:03:55] Unknown:

What what are you gonna do? You gotta take a loan   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,   predict the the morally correct  

[02:04:13] Unknown:

Bitcoin purest answer. There are, like, challenges.   We have Anthony coming in with the Bitcoin purest answer to use Liquid instead of Ethereum,   and I would argue that I'm confronted with the same exact situation. Like, I wouldn't wanna be in liquid long term.   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.  

[02:04:41] Unknown:

Do do they have a platform for collateralized   lending on liquid?  

[02:04:46] Unknown:

So HODL HODL offers that. They they support liquid tether.   Right. But also, I mean, I know there's a But, like, natively natively on chain. Yeah. There was just   just recently, there was a there's an there's a new,   project out called TrueDEX, which is trying to offer   a so called decentralized exchange with atomic swaps on liquid.   And in the most cringe way possible, they're calling it LiFi,   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?   Liquid finance instead of Oh. DeFi.  



[02:05:26] Unknown:

Okay.   Well, yep.   I didn't get that initially.  

[02:05:32] Unknown:

Yeah. Well, exactly. Horrible term. Doesn't make any sense to me.   I mean, you don't have price risk in terms of of being exposed to the individual token, but you don't if you use WBTC either. But you do have third party risk,   Whatever stable coin you're using or and also Ethereum or whatever platform you're using on Ethereum.   Oh, Anthony Anthony is telling me that supposedly Elizabeth Stark tried to make Li Fi work first for Lightning Finance, but I guess they poached it from her.   I don't know. Like, it's become, like, a shit coin narrative lately to, like, call, like, the shit coin chain side chains of Bitcoin   with, like, a worthless utility token. Well, they don't say worthless utility token.  

But, to be clear, like, I've that's been my thesis for a while. Like, all of these chains are essentially side chains for Bitcoin with a with a token that will decrease in value long term.   So Bitcoiners can take advantage of those options if they if they would like to,   but to it's foolhardy to to hold the token, the the underlying token   compared to Bitcoin,   in my opinion.   Does that make sense?  

[02:06:45] Unknown:

Yeah. I mean,   it does. Like, there's   I don't know how one explains, like,   Ethereum's performance   since it came out.   I guess it's long term. Right?   Long term, everything  

[02:07:01] Unknown:

goes where it's supposed to go, but, like Right. There'll be short term pumps and shit, especially if the things are liquid.   Yeah. But, you know, long term in 10 years, when when we when we sit down in 10 years and we go back and listen to this conversation,   I don't think any of these tokens will be worth more than Bitcoin.  

[02:07:20] Unknown:

Yeah. Agreed. Certainly not.  

[02:07:23] Unknown:

That's kind of where I'm coming from it as. Yeah. Yep.  

[02:07:28] Unknown:

I'm just trying to think of,   I'm trying to think of the the hot takes here. Okay. I'm just gonna bring it up just because I feel like it and Hit us with the hot takes. We're 2 hours in. Only the ride or die are here now. This the sat stacking   channel, that's j_tc,   says I have a heavy ETH bag. Yeah. Clearly.   Well, a little bit. But   but I feel like   when people talk about Bitcoin and Ethereum,   like,   in total performance,   Bitcoin obviously has exceeded Ethereum,   but,   like, Bitcoiners could have, like, 100 x their Bitcoin by buying Ethereum when it came out. 100%.   I do not know. Because I because I always see people on Twitter saying   that that's not true when, like, it's just math.  



[02:08:13] Unknown:

Right. If I had bought into the ICO, I would have done very well. Right.   Instead, I I wrote an article that said it was a bad investment   at the time of the ICO. Mhmm. I was wrong about that, but that's a short term liquidity thing.  

[02:08:29] Unknown:

Yep.   I don't think anyone could have predicted   how great the demand for absolute garbage vaporware shit coins really is.   There's a massive demand for it. And Ethereum is just the best possible platform for creating  

[02:08:42] Unknown:

garbage vaporware shit points. Well, they started it, but they're kinda getting outcompeted. No?  

[02:08:49] Unknown:

I mean, they have network effects. You know what I mean? Like, if you're gonna create a new token, you could do it on some other ecosystem that's theoretically faster and more efficient. But And cheaper fees. All the people that you want to dump your bags on are still on Ethereum. Right? All the customers are there. So if you're a developer and you wanna make money, which is what people wanna do, then you have to go where the people with money are.   Right? So it's kind of like, I I don't know, some kind of a catch 22. Right? People wanna go to a new platform,   but nobody wants to build applications there, and nobody wants to build applications there because everyone's still on Ethereum.  



[02:09:22] Unknown:

I mean, I think it's like a race it's a race to 0 because, ultimately, at the end of the day, when you're talking about, like, the retail masses, degenerate masses, gambling on this shit,   Like, it's it's you're gonna have to try and optimize for low fees. And if you optimize for low fees, then you're   forsaking decentralization.   And if you don't do it, someone else will do it. I mean, we saw Binance, you know, they basically aped completely   they they completely copied Ethereum. They called it the Binance   Smart Chain, I think, BSC.  

And all the existing tooling for Ethereum worked on it, but the fees were a fraction of the cost because they didn't care about even pretending to be decentralized.   Right. And that's just gonna keep happening, and and it's just, you know, short term high time preference bullshit. And long term, it it hurts your chain, and it hurts the censorship resistant of your chain. And it's like, what's the value prop?  

[02:10:14] Unknown:

But it's kind of amazing that Ethereum remains   centralized to whatever degree it does and yet fees are really, really high.   Do you know what I mean? Like, e ease fees right today, they're not that bad. But, like,   you were mentioning how normally you're optimizing for fees. You're sacrificing decentralization,   but Ethereum has managed to stay   centralized and also have really high fees as well. But I guess that's just the network effects thing. But they keep increasing their block sizes  

[02:10:40] Unknown:

to reduce the fees as they happen.   I think it just gets worse from here. I mean, the the tendency is to just centralize further. I mean, the proof of stake is a massive centralization. They wanna switch to that.   Right. Yeah. It just it just it just it's short term games. It's it's all high time preference bullshit.  

[02:11:00] Unknown:

Yep.  

[02:11:04] Unknown:

Yeah. So, I mean, we're talking about shitcoins too much. Do you have any hot takes that don't involve that?   We had we had a question about section 230. Have, do you have any opinion on section 230?   Do you know what section 230 is?  

[02:11:20] Unknown:

Of the,  

[02:11:21] Unknown:

section 230? Oh, right. Communication and Decency Act? It's like the it's like the the carve out that means, like publisher thing. Yeah. Like, Twitter does isn't liable for what gets published on their platform.  

[02:11:33] Unknown:

Right. No. I have no opinion on it. I mean, like,   it's just   as a lawyer, there's so many   areas of work that you can do,   and   lawyers just don't know about everything. They don't practice in every area, and   nobody ever calls me to be like, hey. Let's have a section 2 30 lawsuit, or let's study this part of the law because it just doesn't matter for for for most people. But I'm just a tiny subsection of the law. Right? Like, I just don't know anything about family law or real estate or or any of these other areas that don't don't particularly concern me.   I mean Right. I I care about free speech,   you know, a lot and what the platforms are able to do and not to, but   I wish I had the time to study at all. You know?  



[02:12:20] Unknown:

Yeah. I mean, none of us have at the time. Yeah.   I mean, my semi educated opinion on section 230 is that it's it's a net good.   I don't want platforms to be liable for speech because I want platforms to allow all speech,   period.   I think repealing section 230 kind of goes against that. I I think it hurts us more than it helps even if on the surface it seems   a lot of proponents make it seem like, oh, well, if they're not protecting our speech, then we should get rid of their protection.   But I think you just make it worse. But maybe   you remove that protection, and we end up with more distributed alternatives where they can't censor speech by by design.  

That's what I'm Which is ultimately what we want. Right? Like, I I don't I don't want large companies to be able to be even in the position. It's the same thing with the exchanges. Right? Like, you don't even want them to be in the position to censor you   so that they there's no possibility that they that they feel either inclined to,   based on their shareholders or, you know,   widespread opinion, or because of regulatory pressure, they shouldn't even have capability of doing it. And if someone's doing something illegal, then you hit them with good old fashioned police work. You don't need to censor them.  

[02:13:34] Unknown:

Right. Did you ever use the center?  

[02:13:38] Unknown:

No. That was, like, the plug in, right, for,   gab. Chrome extension where you could comment on you could comment on any page. I had I'd hoped that would take off. No. But, see, like, that's a perfect example to me. Right? Like, that doesn't really solve anything. That's just another you're just picking a different centralized company to,   to choose   that that you're just hoping doesn't fuck you over. And even with Gab, like, I mean,   my cohost,   Marty on on Rabbit Hole Recap, like, hates porn, so does Gab. Gab won't let you post porn.   It's like, so so okay. So you're just picking a different sensor over another sensor.  



[02:14:15] Unknown:

Right. Makes sense. I for some reason, I had thought that there was, like, an open source that it was, like, an open source thing that anyone could install, but I just realized that it's actually   like, if you have a Chrome extension Super centralized. It's just their, like, forum plug in. So can they just unilaterally shut down the Chrome extension?   Yeah.   Oh, bullshit.  

[02:14:34] Unknown:

Yeah. It's just,   it's just more bullshit. It's it's not really a it's not really a   solution. It's not a long term long term, we want platforms that are distributed and hard to censor by design. Mhmm. So I have mempool.spaceopen.   I will bring this back to Bitcoin.   I have mempool.spaceopen   showing a live look at mempools everywhere,   or at least their mempool, but it your mempool should be similar, and you can run it on your own node if you want to compare.   Bitcoin dumped under 30   and pumped   over 40,   and, usually, that results in more chain usage.   We don't see that happening.  

What,   are you do you have any views on this? Look at how empty this mempool is. It's completely   it's a complete ghost town. It's one separate bite gets you into the next next block. Is this something   do you have any opinions on this? Is this something we should be concerned about?  

[02:15:34] Unknown:

Me? On whether we have enough mempool usage?  

[02:15:38] Unknown:

No. I mean, to okay. I I guess it's just a leading question, but to me to me, what I see is I see   I think this is, like, proof that people are using   centralized exchanges, and they're not withdrawing and and holding their own Bitcoin. They're just keeping it all on centralized exchanges and trading that way.   Would you agree?  

[02:15:57] Unknown:

I would agree that the most recent price action   probably has more to do with derivatives   on centralized exchanges than anything else.   Right? Like, this particular,   you know, dump and then and then pump and the short squeeze or whatever it was. Right? Seems like it happened on a couple of centralized exchanges, but I haven't looked at, like, the on chain data   at all recently to know if it's actually indicative of anything in the bigger picture.  

[02:16:23] Unknown:

Yeah. I mean, I think the mempools are a perfect example that it really isn't. I mean, I don't think there's much usage of the chain right now. I clearly, there isn't much usage of the chain. Look at it. It's just empty block after empty block. It's another block just came through.   Mhmm. I mean, part of it is because hash is coming back online. So when yeah. And fairly cheap. When you have when you have hash coming back online,   the blocks get   produced quicker. I mean, right now, they're projecting a 4% increase in the difficulty. So blocks do come out quicker, so you should have lower fee pressure. But still, I mean, it's a ghost town.   Yeah. So we have   future Paul in the comments.  

I think he's been on the show multiple times, but he's a good friend, and he he thinks that   we should abolish section 230, speech to speech, publishing is publishing, carve out screw things up, and he thinks 230 incentivized centralization.   I don't expect you to have an opinion on his opinion. I was just stating it because it's the opposite of what I said. So Right. Felt like it should be voiced to the people on the audio feeds.   I don't know. I I think regulation in general encourages centralization, and we've seen we've seen the arguments,   from   Facebook saying   that if that they're able to handle moderation   on a large scale stronger than small independent companies because they're able to combine all the data they have to do the moderation,  

[02:17:54] Unknown:

which is, you know, obviously What that's their argument in favor of what exactly?  

[02:18:00] Unknown:

I don't know. In in favor of not really breaking that suppressing speech. We're very clear. Yeah. Yeah. Not breaking them up. They're like, don't break us up because we can stop hate speech better if you don't break us up.  

[02:18:11] Unknown:

I mean, that's a legitimate argument for them to make considering who they're appealing to.   Right? They're appealing to, like, primarily   well,   I guess you could call them that.  

[02:18:25] Unknown:

Do you see Anthony's question? Do you wanna answer this question or no? I like how well you dodge politics. It's very impressive.  

[02:18:31] Unknown:

So nonpartisan.   So stoic.   It's the libtards, Matt. It's the Libtards.   Anyway,   let's see Anthony's question here.  

[02:18:43] Unknown:

I don't I don't wanna I don't know if if you're  

[02:18:47] Unknown:

inclined to answer it. Would you advocate seeking privacy? I'll read it. I don't care. Would you advocate seeking privacy as a sort of right even if it means breaking the law?   Advocated as a sort of right. I don't really know what that means.   Even if it means breaking the law.   I mean, people should   do whatever they need to do to protect themselves.   You know?   Fuck the law.   Not legal advice.   But, you know, do what you gotta do. Right? I slept for, like, 3 hours. I told Matt, I'm bringing out the cranky tics.  

[02:19:26] Unknown:

Do you think porn is free speech?  

[02:19:30] Unknown:

Yes.   Okay. Don't you?  

[02:19:33] Unknown:

Yeah. I I do. But that that we we had Bitchio asked if we could get back on the porn talk, so I was just curious.  

[02:19:41] Unknown:

But I I want Anthony's question was good. Right? I don't know if I'm doing justice, but, I mean   You should fight for your rights. Right? That's the answer. Right. I mean, if the law is unjust, then you shouldn't follow  

[02:19:52] Unknown:

it. And Right. And advocate for more just laws.   Right. Yes.  

[02:19:59] Unknown:

I mean, the only thing I would consider is what are the consequences for doing   what I want to do, what I know is right. Do you know what I mean? Like,   what's legal or illegal is is irrelevant. I'll decide what's right and wrong for me, And the only question is, like, what can I get away with,   and what will happen to me if I do this thing that I think is right that potentially has consequences? So   just my personal take that   it's irrelevant,   what what the law is. You know what I mean? Like, the consequences are the relevant part.  

[02:20:32] Unknown:

Yeah. Yeah. I mean, the consequences are highly relevant to your decision.  

[02:20:37] Unknown:

The the only thing relevant.   Right. Like, it literally means nothing to me that's that congress   said that things should be a certain way. What what difference would it make to me? Why do I care what they have to say? You know, I don't delegate my   critical thinking or my decision making   to them.   I don't know. I don't know what I'm curious to know what other people think about that.   Like, do you look at what the law says   irrespective of the consequences to be like, I don't know what to do. Maybe I should look at what the law says.  

[02:21:07] Unknown:

I mean, I  

[02:21:12] Unknown:

I I It's really just a question about decision making. As in, like,   do you make your own decisions, or do you delegate   decisions to other people? And I don't I've never even considered delegating them to other people.   Right.  

[02:21:27] Unknown:

Yeah. I mean, I believe that that   that we should build support and run tools that empower individuals.   And,   if you have individuals that are empowered, then unjust laws are harder to enforce.   Right.   I think that,   people should you know,   none of this is legal advice, and they should just,   everyone has to educate themselves and make their own decisions that are best for their situation.   But I I I overwhelmingly   believe that people need to stand up for your rights because   freedom is never just given to people.   It is taken and defended. Like, you can't   you if you expect authoritarians,   I think this is bigger than America. Like, if you expect authoritarians   to just give people freedom,   you're gonna have a very bad time, and history shows that. I see.  

So so people need to stand up for themselves. Otherwise, no one else will stand up for you.  

[02:22:27] Unknown:

Would you would you say or would you agree with that that   that freedom is basically what you could protect?   Like Yeah. Pretty much. Right? If you can if if you can protect something, then you have freedom with respect to that thing. I don't know if that's the right way of framing it, but you get the idea.  

[02:22:44] Unknown:

Yeah. That's a that's a good framing.  

[02:22:47] Unknown:

Yeah. So something that I've been thinking about kind of related to this topic is, like,   how Bitcoin   provides us each this our own little individual bubble of   from, like, you know, external coercion at least with respect to some financial stuff.   Right? And   that's kind of the early stages where each individual who has Bitcoin has some kind of,   you know,   circle of defense around them from   unwarranted intrusion, but   I'm curious what the next stage of that is. Like, if enough people have that,   what how that how can we make that bubble bigger,   that bubble of protection?  



[02:23:28] Unknown:

More than just your money.  

[02:23:30] Unknown:

Well, more not more than just your money, but more than just you as an individual.   Like, if you if you have Bitcoin, then you're protected   using the protections that Bitcoin offers, but   how can any how can we extend that to more than, like, the sum of me and you both have Bitcoin, so me and you are both protected and make that   a   make the bubble bigger.   So it's like a societal protection.   Maybe it just takes time. I don't know. Do do you get where I'm going with that?  

[02:24:00] Unknown:

Yeah. I mean I mean, we need we need   we need people to stand up. Like, if you just it's,  

[02:24:09] Unknown:

I don't mean politically. I mean, like, how do we expand our emancipation from the state   in a material way,   like,   to the greatest number of people possible. I guess the best thing that each individual person could do is just acquire Bitcoin. Right? That's one way to do it, I guess. And use it in a self sovereign way. Yeah. I think I I'm pretty sure the way that the bubble expands is just   hyper Bitcoinization,   Right? That this individual protection that we have now eventually   makes fiat currencies useless   and gets rid of them, which reduces the state's power over individuals, and then   now the bubble is everywhere.  



[02:24:48] Unknown:

But there's a messy period in between.  

[02:24:50] Unknown:

There is.  

[02:24:52] Unknown:

There is. The messy period is what I'm worried about,   especially as a we're public Bitcoiners. So  

[02:25:01] Unknown:

Yeah. It's a problem.   It's a problem.  

[02:25:04] Unknown:

I mean, like, a protest with just 10 people doesn't do anything. Right?   Right. Right. You you need you need the masses.   You need for for the individual to have protection   to for the individual to have real protection to see real change, you need the masses to buy in.   Not necessarily buy into Bitcoin, but buy into self sovereignty.   Like like, a a a good example is is,   encrypted messaging   versus, like, text messages.  

[02:25:40] Unknown:

Right.  

[02:25:42] Unknown:

Agreed. And, like, a positive example would be something like signal. While not ideal and definitely has centralized elements, and it doesn't it's not great that it uses a phone number.   It's not great that a lot of people have auto updates enabled on their iPhone or their Android device,   but   it's still,   like, a growing   group of people that are using encrypted messaging to communicate with each other. Mhmm.   But if you just had, like, 10 people doing that, that doesn't really help us much on a big scheme.  

[02:26:12] Unknown:

Right.   Okay. That makes sense. Basically, power numbers and and it's happening. I mean, more and more people are getting or at least well, probably using signal too and accumulating Bitcoin.  

[02:26:23] Unknown:

Right.  

[02:26:24] Unknown:

I'm looking at the chat. We got some questions here.   Or did you already review them? Do you have a good question? Let's see.   Okay.  

[02:26:37] Unknown:

I didn't see anything that was  

[02:26:42] Unknown:

Okay. So   some some person. Right? They had 2 questions. The first one   didn't seem that important.   The question was, does that mean they shouldn't be allowed to help write regulations lobby testify?   Well, now it disappeared from the chat. But, anyway, I don't think anything Meermat said has anything to do with   removing people's ability to participate in politics. It's just that politics is kinda depressing and not that useful.   Man, I don't really understand the second question.  

[02:27:13] Unknown:

I do wanna do a shout that I like that he his name is some person, so I sound like an asshole every time that when I quote him. Oh, right. Yeah. Like I'm just not   remembering his name.  

[02:27:25] Unknown:

Yeah. Mister Person, if you wanna restate the question, make it clearer for us, we will do our best to answer it. I just I, you know, I think that our  

[02:27:34] Unknown:

political process is owned by large,   corporations,   and   it's extremely disheartening.   And I think for real change, you need to just use tools   that empower individuals. And I know I'm just repeating my book over and over again, but I really do believe it,   because I just don't see any real progress being made. Even when you're, like, like, privacy is a perfect example. Right?   Like, fuck,   the the GDPR.   Like, that didn't you know, Europe passed a widespread privacy regulation.   If anything, it hurt privacy.   Right. Now we all have a list of  

[02:28:17] Unknown:

stupid pop ups Yeah. On every single website.  

[02:28:20] Unknown:

Like, that's not a real privacy improvement. That was and that was years of political infighting before that happened.  

[02:28:27] Unknown:

Right.   What's the out of curiosity, question for you. I don't I don't know if you are you used to people asking you questions, or do you just ask the questions? Yeah. Ask me a question. So the question is, what's what's the latest on citadels and geographic   relocation?   Should it become necessary?  

[02:28:44] Unknown:

Is it something that people, like, brainstorm privately because they don't wanna give up their OPSEC? Or is it something I mean, I don't think people wanna say where they're going. I mean, I definitely don't. If you hear me talking about locations, they're not my first choice.  

[02:28:56] Unknown:

Well, shit.  

[02:28:57] Unknown:

I guess we can't talk about it. No. I mean, I think I think that's a real thing. Right? Or what what are the what are the criteria to consider? I mean, without giving it away  

[02:29:06] Unknown:

directly, which it should probably. It's not like it's obvious.  

[02:29:09] Unknown:

I think ultimately,   right,   I think I think local governance tends to be less corrupt and more for the   constituents   than larger government.   So I think   if if you wanna talk about decentralization,   distribution, censorship resistance,   and you wanna apply that on a human scale,   then you're talking about   small sovereign communities.   We can call them citadels if you want. Right.   And those communities will tend to be more aligned with their constituents   than larger,   unwieldy jurisdictions. And I think they will outcompete   long term,   because the major negative   that that concept has had is   lack of global trade connections   and global   communications, but   the Internet   and Bitcoin together kind of solve that.  

So it it should enable more sovereign small   communities.  

[02:30:20] Unknown:

Yeah.   There's still there for physical goods, there's still potential   you know, like, if if a big country wants to just exclude a small country, that's that's a challenge for the small country. But as far as communications go, the Internet and Bitcoin help in a meaningful way.   But I guess second question related to that is, like,   how how how can people best coordinate these kinds of things? I mean, I guess you could just talk with your close group of friends. Right? That's what you have to do. It's like small communities, small group chats  

[02:30:52] Unknown:

Yeah. Sitting by the bar with no phones on. Right. Phones in the microwave.   Yeah.   And that's what one of the the issues with 2020 to me is that,   these governments locked down people, and then all the all these intimate conversations that you usually have that were, like, the last bastion on a privacy, which is, like, the conversations,   like,   you have in a bar at 2 in the morning with your boys,   they all moved to centralized surveillance   apps.   You know, Zoom is a perfect example. Right? Yeah. Where, like, every single conversation is recorded and saved   and can be used against you in the future   by keyword search. They're all recorded?  

I'm assuming   that they do what   a lot that we've heard in the past with the Snowden leaks, which is they everything gets transcribed to Word,   to text because text is a very small file. It's very easy to keep a text file,   and then you can search it after the fact. Oh, I see. And then there's probably mixed in with active surveillance where if if they see a a particular group of people because, you know, Zoom, you know, requires, like, soft k y c, basically.   If if you see a certain group of people having a conversation, then you can actively   either listen in or record that   properly, but most of it is probably saved as   as text that can be searched in the future.  



[02:32:28] Unknown:

Right. Well,   how many interesting conversations even happen on Zoom anyway?   Yeah. I mean, like, I've yeah. Too many. Like the LinkedIn of,  

[02:32:38] Unknown:

LinkedIn of communications. You know what I mean? It's boomer shit. Dude, a lot of people are having conversation on it. And, look, I just like, this is this is I I the the reason I say that is because that's what, like, AT and T was doing and stuff. Right? And then I think they save it in, like, a they have, like, a server farm that that the NSA has in in, like, Utah or Nevada or some shit where they just save all the text.  

[02:32:58] Unknown:

Mhmm.  

[02:33:00] Unknown:

But, like, all of our calls that we make on   on on the major telecom providers are probably saved in a similar way. It was just that, like, the last bastion, that that private conversation you had with friends or family was kinda moved into that surveillance panopticon.   And, like, don't even get me started, obviously, with the the Google Homes and the Alexas and   the Ring cameras.   Right. Right. You know, like, go over to a friend's house and you realize, oh, you just entered on a camera,   and then you walk in and there's live microphones everywhere.  

[02:33:34] Unknown:

Yeah. Yeah. It's ridiculous.   What we mister person   reframed their question. I think I understand it. I can try to answer it.   Should I should I take a shot at it? Yeah. Go for it. So   the revised version of the question is a lot of people say that Facebook, Twitter, etcetera   have the right to censor because they're private companies, but are they really private companies given their heavy influence and regulations well?   That's like the $1,000,000,000,000,000,000,000   question. You know what I mean? Like,   they certainly   have outsized power,   and many of them are just as powerful,   maybe not as the US government, just them versus the government, but they're certainly more powerful than   the overwhelming majority of governments.  

Right? Most small countries have a government nobody cares about, has almost no power,   and,   well, I don't know what the hell we're gonna do about that.   What are we gonna do about that?   Make them obsolete.   What else is there to do? Be able to Use open free open source software,  

[02:34:39] Unknown:

distributed protocols, you know, censorship resistant distributed networks. That's what it's all about. That's the mission. That's why I'm here. Yep. And I you know, a side effect is I   hope to make a lot of money   on my Bitcoin holdings at the same time, but,   I'm not shy about that. But,   ultimately, I think that's what gives me hope. Right? What gives me hope is this idea of   free open source software,   making them obsolete, and and I think regulations help in our favor in that regard because they become so big and they have to comply with all this shit   that, like, people don't realize. Like, a perfect example is Twitter. Like, one of the reasons Twitter was beautiful, the one of the reasons Reddit at its heyday was beautiful   was because it had,   you know, relative you could use it relatively privately. You could use it in a way that you could speak your mind   without it being linked to your identity.  

And as as as these services go more and more   dystopian and and require real names and whatnot,   the conversation that happens on those platforms becomes less authentic, and I think people will move to the more authentic platforms that are truly censorship resistant. So I I think it kind of helps in our favor,   the increasing censorship,   because if we were, like, in a middle ground, which we have been in the past,   it's frogs boiling in water. Like, people don't really see the pain. They don't see the issue.   But as it gets worse, then, hopefully, that becomes   motivation enough to move people onto,   like, we have them already. Like, you can use Matrix instead of Telegram. Right?  

It's just most people don't because they don't feel the need to yet, but they will as it gets worse.  

[02:36:26] Unknown:

Yeah. Yeah. I'm   I I I want I want people to do that stuff   too, and I wanna do it myself. It's just it's a network effects problem with, like   like, I still have a Facebook account. It's an embarrassment, but I wanna stay in touch with people. Look. I don't wanna  

[02:36:42] Unknown:

give up friends Yeah. I got rid of my Facebook, like, 8 years ago, and there was, like, 90% of friends I lost.  

[02:36:49] Unknown:

Yeah. That sucks. I just don't communicate with them. I know. You shouldn't have to give that up, but I guess it's just that's just how it is. And I don't know.   I'm much more optimistic about Bitcoin taking increasing market share from fiat currency than I am from   most other   free and open source   products taking market share from centralized competitors   Right. Because we can get rich off Bitcoin.   And, like, it's got this just amazing   game theory and incentives that, like,   you know,   incentivize people to shield it mercilessly.   Yeah. I mean, I sent Like, what's the for Matrix as an example as a competitor to Telegram,   it's just like you should use Matrix because it's for your own good and it's for our good.  

And that's, like, to me reminds me of people, like, trying to persuade people that they should vote libertarian.  

[02:37:40] Unknown:

Right. But I mean for your own good. It's just not that effective as a pitch. But maybe my bias is here. Right? But there's conversations that I can only be a part of if I use Matrix. Right.  

[02:37:53] Unknown:

That's a benefit for people that are interested in having  

[02:37:57] Unknown:

interesting conversations like you. If people want me to respond,   if my normie friends want me to respond   to a text question, they have to ask me on signal. Otherwise, I will not respond.   And I feel like that's kinda how the network starts.   Mhmm. Right? Is you have these   you have these certain people in different end groups   that draw the line somewhere.   Right. And they   pull everyone else in. Yeah. There's, like, an intolerant minority that pulls everyone else in. And I do agree that Bitcoin's   incentive structure is way stronger.   And maybe, you know, maybe   it I, you know, I kind of expect it to be   like the flag bearer almost. Right? And I on and on, like, a medium term,   you know, if   if a lot of these governments are corrupt and money talks, right, and Bitcoiners have more money and they have these certain principles that they wanna with they wanna hold,   maybe these independent Bitcoiners that have that money will put that money to work and will shape   these other aspects of our lives.  

Right. You know, we had,   you know, Signal has literally no business model. They compete against firms that have very strong, easy monetization   schemes that involve   sacrificing user privacy.  

[02:39:17] Unknown:

But how do they make money?  

[02:39:19] Unknown:

They they   they are they run they have a nonprofit that runs it. They got a massive donation from Moxie Marlinspike,   who is the project lead, and they got a massive donation from   the WhatsApp cofounder after he's he sold out to Facebook   and then felt extreme guilt, and then he gave   Signal a shit ton of money.  

[02:39:43] Unknown:

Nice of him.  

[02:39:44] Unknown:

Yeah. Right? So,   that could happen   tangentially with other things because Bitcoiners get more money. Right?  

[02:39:53] Unknown:

And Telegram too. Right? Telegram run by that Russian guy?  

[02:39:57] Unknown:

Yeah. Telegram has no business model whatsoever. He just he sold the Russian Facebook because he was forced by the Russian government, and then he took that money, and he's just been running Telegram at a loss with his own money.  

[02:40:09] Unknown:

It's a Chad move.  

[02:40:11] Unknown:

Yeah. It's either chat move or he's a massive spook,   but, we would like Telegram. I hope Telegram can get high.   Hope Telegram can get their shit together on encryption and things like that. Yeah. Me too. Me too, man. Yeah. So I know you only got 3 hours of sleep. I think this has been a great conversation. It doesn't seem like we have many good questions left,   if any.   I guess we should just, like, wrap this up. I think it I think it was a very important chat for the freaks. I think they enjoyed it. I hope they enjoyed it. I hope they find it useful. I I hope to have you back on soon. I hope to see you in person again soon. Do you have any final thoughts before we wrap this up?  

[02:40:48] Unknown:

Well, I think we covered we covered a ton of topics. I mean, you know, the game plan is kind of clear.   So it's it can be frustrating, I think, how long things can take or how long it feels like they could take. You know what I mean? Like, we all know where this is going.   I at least I feel like we know where this is going, where it should go, where where it must go,   and,   well, we are gonna get there.   We're gonna get there sooner or later.  

[02:41:17] Unknown:

I hope so. I'm with you, Rafael.   Thank you thank you for taking the time to join us. Thank you for everything you do in the space.   Big thanks to the freaks for joining us for another Bitcoin Tuesday,   especially the ride or die in the live chat, but also everyone who supports the show so we can keep it ad free, sponsor free,   properly align those incentives. So reminder that you can donate via sidlodispatch.com.   Thank you, Rafael. Thank you, Freaks. Yeah. Thanks, man.   I spent a whole   day in my hair   doing a little spring cleaning.   I'm always too busy dreaming.  

Well,   maybe I should wake up instead.   A lot of things I regret, but I just say I forget.   Cheers to Mac Miller. We lost a good one way too young. Love you all, freaks.   I'll see you on Thursday for rapid all recap, and I'll see you next Tuesday for another serial dispatch. Stay humble, Stack.