As I said before, keep your eye on one thing and one thing only,
how much government is spending.
Because that's the true tax. Every budget is balanced.
There is no such thing as an unbalanced federal budget.
You're paying for it. If you're not paying for it through it in the form of
explicit taxes, you're paying for it indirectly in the form of inflation or
in the form of borrowing.
The thing you should keep your eye on is what government spends.
And the real problem is to hold down government spending as a fraction of our income.
And if you do that, you can stop worrying about the debt.
Music.
Welcome in to This Week in Bitcoin, episode 41.
My name is Chris, chrisles.com, jupiterbroadcasting.com. That was the famous
Milton Friedman in the intro right there, and we'll come back to him later.
But I'm kicking 2025 off with a packed episode. What a fascinating time to be back.
And we're going to get a little wonky right off the top here,
I apologize. But I think you're going to find some value in this.
Because I think looking back, retrospectively, it's clear that 2024 was really
about Bitcoin becoming a macro asset.
But with the companies that are putting on the balance sheet,
the ETFs, all the talk about Bitcoin reserves, it's just incredible that we're here in 16 years.
I mean, it's amazing. It's like
time warp. It's truly bonkers that Bitcoin can be called a macro asset.
In just 16 years. And I think that was one of the big lessons of 2024.
So what do I mean when I say it's a macro asset? Like, what am I talking about?
I think to explain it, I think we can use the lens of volatility.
The traders love the vol.
You've probably noticed, or maybe even you yourself think that Bitcoin's volatility,
its price movement, is completely random.
I think note coiners think it goes down or it goes up, just totally random.
There's no expecting it. There's no describing it. There's no understanding it.
And that makes it scary. And that's why the volatility is so scary.
It's not really the reality, though.
Some of it is, but it's more in the middle. The reality is Bitcoin is the only
free market that runs 24-7 around the whole world.
So that means Bitcoin moves fast, both in reaction and in recovery time.
But as time goes on and the bigger and the bigger whales get into the market,
we see Bitcoin respond to more and more global macro conditions.
So you'll see it spike or you'll see it drop when war breaks out,
or you'll see it jump after an election, or you'll see it dip after a lockdown.
The markets are always forward looking and Bitcoin is going to represent that
forward looking price action first, as fast as possible, either as fast as possible
before it happens or right after it happened.
You buy the rumor and sell the news. It is a real thing.
So in my opinion, if you want to understand where Bitcoin is going,
you need to understand what is going on with the global financial system,
which of course the U.S. plays a major role in.
But I mean, that's central banks, finance markets, regulatory bodies,
international financial institutions, of course, the policies,
the events, The people that drive those.
And this week, I'm going to try to make the case that the Fed's no longer at
the wheel, maybe never was at the wheel.
And the tantrums and the market reactions and the price volatility,
that's what we're seeing play out right now as this shift is setting in.
The real power that the Fed's always had is their jawboning,
their forward guidance.
That had more impact than any of the rate changes or employment or unemployment.
And now that even the Fed admits inflation's here for years,
I think some of the market's eyes have been opened.
They realized they thought JPOW was their hero, and he's really just a jawboning villain.
So we're seeing a period of time where people are trying to figure this out
and understanding that something else is actually driving the market here.
Something much, much more volatile is actually driving the market.
I don't often say this, but I agree with the analysis from Goldman Sachs.
Robert Kaplan was on CNBC and he probably says it better than I can.
It is wonky, but I think he's nailing it.
What is the most important thing to markets right now? Is it this week's jobs
report? Maybe the Fed's rate cut potential. Well, what if it's neither?
That's the take today from former Dallas Fed President Robert Kaplan,
now vice chairman at Goldman Sachs. And he joins us live. Happy New Year. Welcome back.
Happy New Year, Scott. So you make that case, right, that that is singularly
the most important thing right now, the Trump administration and its policies. Why?
I think monetary policy, it will take a little bit of a seat offstage,
and fiscal policy and other structural shifts are now center stage.
That includes what we do on fiscal policy, what we do on tariffs,
immigration, regulatory review, energy transition.
And the rate, ironically, as we head in approaching January 20th,
I'm much more interested in where the 10-year Treasury rate is than I am the Fed funds rate.
And the people haven't focused as much on this.
The 10-year Treasury since mid-December has backed up from about 415 to now 462, 463.
And I think that has a lot more to do with concerns about fiscal policy and
supply demand of treasuries than it does about inflation or what the Fed's going to do.
And so I think we just have to be aware of that.
How much more do you think the 10 year could back up?
I don't know. I don't know. I think what the 10-year backup says to me is the
bond market and bond buyers are taking a wait-and-see approach and are showing
reluctance to buy duration.
So what's shifting now is every little bit of policy, every trade policy,
debate about tariffs, any major changes via Doge, if there are any,
are going to be met with market analysis and analysis paralysis.
Likely some of it will be positive reaction, but undoubtedly some of it's going
to be negative. So ultimately, that means there's going to be uncertainty.
We're going to go into, I think, a little bit more volatile 2025 than people
were expecting. Although some people expected it.
Lynn alden has a brand new piece out and it's a banger all aboard the fiscal
dominance the lever you have pulled breaks is not in service so it's a research
piece that lynn and another individual named Sam Callahan put together, and it's great.
And it looks at fiscal dominance in the United States.
And the analysis explores how the U.S. economy has shifted into what Lin says
is an era of fiscal dominance.
That means structural deficits have surpassed private sector lending and monetary
policy as the key driver, i.e. Fed policy rates are not the key driver.
But the fiscal situation in the United States, rising national debt,
persistent deficits, inflationary pressures, monetary tools have been rendered essentially useless.
That's why we don't see like the Fed lowering the rate, actually lowering the
rate you pay on a mortgage.
Mortgage rates have gone up despite the Fed lowering the rates by 100 basis points now.
Fiscal dominance is marked by government spending, the entitlements they have
to spend, interest payments that are increasing, inflation that is increasing.
The core argument is that structural deficits driven by aging populations,
health care costs, compounding debt interests.
We've entered into this no-go zone that essentially is now going to be the dominating
factor, and the policy that tries to address that is going to be what people react to.
I could explain it more, but allow me to summon a better explanation via the computer.
Here's the high-level overview. Structural fiscal deficits have surpassed private
sector lending and monetary policy as the primary drivers of economic activity
and inflation, marking a fundamental shift in the economy's liquidity dynamics.
This is a key point to understand. The Department of Government Efficiency is
unlikely to make meaningful cuts to federal spending,
as only 14% of the budget is non-defense discretionary, while 87% of nominal
spending growth over the next
decade is projected to come from mandatory programs and interest expense.
Stabilizing factors such as the global demand for U.S.
Dollars and debt, denominated in its own currency, suggest an era of fiscal dominance in the U.S.
That's less dramatic than alarmists predict, but more persistent and intractable
than optimists hope. Here's the main takeaway.
The deficit problem is unlikely to be resolved this decade, running structurally
hot with steady nominal growth and ongoing currency debasement.
Persistent deficits and inflation
will likely erode purchasing power and drive asset price inflation.
Strategies include holding scarce assets, real estate, gold,
Bitcoin, as hedges against currency debasement.
However, without reforms to entitlement programs and spending,
fiscal dominance will remain a defining economic force.
So here's where we're at. The Federal Reserve, Jerome Powell,
the chair himself, tells you inflation is going to be here for several years.
The bond market is telling you inflation is going to be here for a long time.
And Lynn Alden, who is an absolute genius at this stuff, is telling us that
inflation is likely to persist for a decade.
Your purchasing power is likely to erode for a decade, which is going to deepen
wealth disparities. It's going to create all kinds of issues.
I mean, this is brutal stuff.
And I think we could zoom out here for a moment. This shift I'm talking about,
about other forces driving this, and the Fed never admitting they're wrong,
and they just jawbone, it's not new.
I hate to say it. I hate to say it. Because I don't like to be one of these
guys that's, oh, it's all the Fed, it's all the Fed. Because it's not, actually.
In fact, I'm going to play a clip from Milton Friedman, who opened our show
today. I was going to say this morning, because it's morning for me.
And it's an extended clip. I don't usually play them this long.
But I think it really encapsulates the core point that I'm trying to make in
this episode. And I couldn't couldn't track down the exact date of this speech.
I suspect it's like late 70s. So if anyone knows, please do boost in.
He's talking to a room full of bankers, I believe.
And it's incredible how relevant this is in 2025. There is hardly any view that
is more widespread than the view that somehow or other the Great Depression
was produced by a failure of private business.
That view is held not only by those who are in favor of greater role of government.
It is held by almost everybody.
I venture to suggest that if you go to any bankers, the people who are here
today at this banking conference, And if you talk to them, I venture to say
nine out of ten of them, if they hadn't heard what I'm going to say.
That nine out of ten of them would say, well, of course the Great Depression
was a failure of private business.
It was due to an overextension, over-speculation in the 1920s,
or it was due to an excessive concentration of wealth in the hands of the wealthy
at the expense of the poor in the 1920s,
or it was due to speculative investment abroad, or whatnot.
But it was a failure of private business, and government had to step in in order
to rescue private business from its own failure.
Nothing could be farther from the truth.
The Great Depression was produced, in my opinion, and I may say this is not a random opinion.
I will be glad to refer you to a several hundred page book in which it is documented.
I won't tell you who the author is.
Mr. Eccles did that. It was produced, the Great Depression was produced by a
failure of government, by a failure of monetary policy.
It was produced by a failure of the Federal Reserve System to act in accordance
with the intentions of those who established it.
It was produced by a failure of the Federal Reserve System despite the presence
of knowledge on the part of many of the people in the system about the right course of action.
It's interesting to speculate for a moment about why this myth is so widespread.
The answer is really very simple in this case. Private enterprise has no press agents.
The free market has no press agents.
The government has a great many press agents.
The Federal Reserve has a great many press agents.
And the Federal Reserve, of course, would never admit, never proclaim,
that it produced the Great Depression. On the contrary.
And again, I don't mean to be criticizing individuals.
We're talking about the way institutions operate. You and I are the same as
all the rest of us. We're all the same.
The hardest thing in the world is for anybody to admit that he made a mistake.
If any one of us makes a mistake, we can always find somebody else to blame.
And if you read, as I have for my sins had to read, the annual reports of the
Federal Reserve System over a 50-year period, there's only one element of humor
that lightens that test,
and that is the cyclical fluctuation in the powers of the Federal Reserve.
In a good year, when things are good, when the economy is booming,
you will read that the Federal Reserve, by its wise policy, by its efficacious
management of money, has produced this fine situation.
However, let things get bad, and all of a sudden the tone of the annual report is different.
Then you discover that despite the best efforts of the Federal Reserve,
outside forces combine to produce difficulties.
Even at the depth of the Depression in 1933, when in the spring of that year
the Federal Reserve System, which had been established in order to prevent banking
panics and keep banks from closing,
when the Federal Reserve System itself closed its doors and you had banking
holiday for seven days and when, over the previous three years,
a third of the banks of this country closed their doors and went broke because,
in my opinion, of the poor policy followed by the Federal Reserve System.
Even in 1933, if you read the annual report, you will discover how much worse
things would have been if the Federal Reserve hadn't behaved so well.
Now, as I say, I don't blame the members of the Federal Reserve for that.
Any one of us would do the same thing. we have to find somebody to blame.
But as an objective scholar, I can tell you what the facts are. The facts were,
that from 1929 to 1933, the total quantity of money in the United States,
the amount of currency, the amount of bank deposits, what Mr.
Eccles referred to as M2, that total amount of money declined by one-third.
The total number of banks went down by one-third. And why did the quantity of money decline?
It declined because the Federal Reserve System fail to prevent the decline.
The Federal Reserve system could have prevented the decline at all times.
There never was a moment during that period when the Federal Reserve did not
have the power to prevent the decline in the quantity of money.
If it had prevented the decline in the quantity of money, you might still have had a recession.
But it would have been a garden-variety recession. It would have been over in
the middle of 1930 or early in 1931 at the latest, it would not have been the
major catastrophe not only for this country but throughout the rest of the world.
Moreover, this is not only hindsight. At all times, the people at the Federal
Reserve Bank of New York and at a number of other banks were pleading with the
Federal Reserve Board in Washington to do the right thing.
At all times, there were people in Congress who were arguing that the Federal
Reserve System should take a different course.
At all times, there were outside commentators,
One of the Canadian banks was particularly prescient, but there were other commentators
who were pointing out the disastrous effects on the American economy of the
restrictive policies that the Federal Reserve System was following,
and which was causing, was permitting and facilitating a whole series of bank runs.
So the Great Depression was not produced by a failure of business.
On the contrary, it was produced by a failure of government,
and a failure of government in an area in which responsibility had been assigned
to government since the founding of this country.
The Constitution of the United States gives Congress the power to coin money
and set the value thereof.
And it was in the management of this fundamental function of government that
government failed and produced the Great Depression.
We have learned from that failure the Federal Reserve will not fail in the same
way again. This time it will fail in a different way.
This time it has been failing, not by producing a Great Depression,
but by producing an inflation.
Because just as you will hear the story that it was business that was responsible
for the Depression, so you will today hear the story that it is labor and management
that are responsible for inflation.
It is the same kind of a myth.
Inflation is made in one place and one place only, Washington, D.C.
And in Washington, D.C., the chief source, immediate source of inflation,
is a Greek temple on Constitution Avenue in which houses the Federal Reserve Board.
An accomplice, and a major accomplice, of course, sits in the halls of Congress in Washington.
They are a major accomplice because you tell them to be.
The American people have been telling Congress for many years,
Spend more money on us, please.
But they've been telling us don't raise our taxes.
Congress has been listening. It's been spending more money on you.
But on the other hand, it's been very unwilling to raise taxes.
As a result, it has imposed inflation as a tax.
That's one tax that you don't have to vote for, but you have to pay.
Music.
So my overall takeaway is this. The Federal Reserve was never really in control
of the direction of inflation.
It was always going to come down to money printing. We knew this,
but the market has always been buying and selling on the word of the Fed and the Fed's numbers.
I think they're starting to realize that's not the play, but they're not sure
what the long-term play is.
And I suspect many of them are going to settle on an inflation hedge position,
something Bitcoiners have known for 16 years.
And I think as people figure this out, assets like Bitcoin and like gold and
others are going to benefit dramatically all over the world.
I think it's going to be huge for Bitcoin once people settle into this inflation
hedge play. So I have a question for you.
And I'd like you to boost in if you would, because after all.
Banks are Ponzi schemes run by morons.
Boost! Are you planning to make any changes now that it seems inflation is here for the long term?
Are you going to change your Bitcoin buying strategy? What about credit card debt?
And I don't think higher inflation for longer is a fully negative thing.
There were several positive outcomes so far for my family as inflation has gone
up. But I do think you have to be prepared.
So how are you preparing for inflation that could last for years?
And if Lynn Alden is right, and she typically is, the rest of this decade.
Banks are Ponzi schemes run by Moritz. So what are you going to do?
Are you planning for it? Boost in and tell me.
Music.
Well, I just want to take a moment and say I always appreciate it when you support
the show by doing what you do.
You can stack sats on River, one of the best ways to do it in the U.S.
They have full proof of reserve, they support the Lightning Network,
and they have an interesting savings plan where you can stack some cash on there,
earn a good interest rate in sats, and then strike by the Bitcoin when the price is right.
I'm going to be telling you more about the Bitcoin Well in a moment.
Amazing self-hosting, self-custody solution. They don't host your wallet.
You buy and sell sats directly from your self-custody wallet.
I'm going to tell you more about it in a moment. The Bitcoin wallet,
I have a link in the show notes.
Really cool platform. Now you want to spend your sats? That's thebitcoincompany.com.
Promo code Jupiter, link in the show notes.
All kinds of different gift cards. You can go from lightning to a gift card
and just like, well, faster than it took me to say that.
Stack sats by paying your bills with the fold card. I love that.
Also buying gas, buying groceries with their debit card, you stack sats.
And then if you want to get access to your Bitcoin value without selling,
that's where Salt Lending comes in.
These are all services I use. No official relationship with them. No contract.
Nobody asked me to say any of this. These are all companies I use and recommend to you.
And you can use the link in the show notes to support the show while checking them out.
Music.
And we do have some boosts to get into. And SatSquatch is our baller booster
this week with 88,000 sats.
He's using Breeze and he says, here's hoping Twib goes to the moon in 2025.
Best Bitcoin podcast ever. And I listen to Odell and all the others. You're a pro.
Well, thank you, SatSquatch. Also, I like how you managed to fit all that in
there using Breeze's character limit. Very impressive. Breeze,
of course, self-hosted Lightning Note in your pocket.
Don't even have to switch podcast apps. It's nice to hear from you too, Squanch.
Or Squatch. You know, I like Squanch. I have to be honest. It's just my Northwestern in me.
He also went on to say, can't wait for the next episode. Hope to see you at
scale this year. Stay healthy, salty, and frosty.
Oh, that's great. I am going to be at scale. The Southern California Linux Expo.
Also at Planet Nix there. And then at Linux Fest up here in the Pacific Northwest in April.
If anybody's going to make it to those events, It's going to be pretty cool
to hang out and meet some Twibbers out there.
And I also am focusing on the health. I am trying to stay healthy because,
you know, I got kids. They're in school.
And I want to be able to go out and do things and keep doing the shows.
Thank you very much. Nice to hear from you, Squanch.
Anonymous came in with 57,777 sats. I hoard that which your kind covets.
Oh, Anonymous, huh? Hmm. All right. Fan of the Lunduk days here to say this
is the best Bitcoin podcast in the universe. Go podcasting.
Oh, you guys are great. Boost! Thank you. And wow. I mean, so the Lunduk days is...
See, that would be, I mean, mid-aughts, right? I mean, early 2014 era? Wow.
I have a JB Party membership, but I miss boosting, so I set up my self-hosted
AlbiHub and connected my old Albi account into Podverse.
This Week in Bitcoin is one of my favorite shows. I never miss an episode.
You rock socks, Chris. Also, shout out to the Bitcoin dad.
The whole run taught me so much. I'd love if he could ever guest with you,
magic numbers, and luck for prosperity. Pew, pew, pew. Oh, yeah.
I see the threes in there. Thank you. Because I'm the wind.
You know, I haven't approached the idea to dad, but I have thought it would be pretty great.
Like that Lynn Alden piece, I just miss going through those with him.
And I think it'd be pretty neat. Like if I could, you know, record a little
thing with him and then play it in the show or something. Wouldn't have to do it live or anything.
Because he's just, oh, he's brilliant. He goes on to say, what I don't like
about River is their partner played, which they use to connect to your bank
account. The way they work, they want way too much information about my accounts,
my transaction histories, and balances.
So I read the so-called privacy policy, and, well, no can do.
Yeah, I do hear complaints about plate, and I admit that I have not read the privacy policy.
Multiple services started using it before I realized it's probably a problem.
So I'm kind of already in. You know, they got me.
I don't know if I make it worse by continuing to use it or not.
He goes on to say, I use Strike to get a portion of my paycheck direct deposited
to Bitcoin. I DCA all the way.
River might be a destination for some of those sets, but I have to look more
into what they have to offer before I do the KYC process. I think that's a fair assessment.
He does have a follow-up. He says, River's partner played wants the login credentials
to my bank account. That gives them total control and visibility. It's far too much trust.
Why can't River do wire transfers or link via your account and routing number?
I see no excuse for having to use a played direct login credentials to my bank
or online portal. It really upsets me that they presume that this is going to be okay.
Disappointed in River and played. And that's P-L-A-I-D. Yeah,
I think what would be nice is if they offered both.
They obviously consider it to be a better user experience. You know,
you put your online banking credentials in and then it figures out the rest. Pretty creepy.
And I agree. So I would prefer to just copy and paste my routing and account number.
It's really not a big deal. It's bonkers to me that they go through all that
other trouble and that security risk. Thank you for all those ducks.
Adversary 17 comes in with 25,000 sats. He's a good guy. He's a real good guy. No, he's a great guy.
Great episode. I do like the quote, here are the facts, idiots.
It's Chris. It gets me fired up too.
The liquid swap flow sounds like a good one. I'm going to start using that one.
My Albi Hub, I'm going to use my Albi Hub for boosting an Aqua Wallet as the
middleman between sending to cold storage or topping off my Albi Hub.
I think that would work really well.
He also sent 5,000 sets to our artist.
You're so boosted. Thank you for boosting the song. Appreciate that, adversaries.
You know, adversaries, I think you've got it. But I really like liquid for a
temporary spot where I can, if my Albi hub needs some liquidity,
I can put it there real quick, you know, and it's just using both side exchange.
It's a super quick swap. I'm never doing anything on chain.
I don't know. I just really, really like that workflow.
Producer Jeff comes in with 11,010 sats. The first half of this episode made
my stomach spin. Thanks for being more emotionally stable than myself to dig through all that.
I love the FUD busting. Oh, thanks, Jeff.
Yeah, you know, I think you're probably talking about some of those MSNBC clips.
Those were the roughest part for me to get through just because they're so ignorant
and, you know, they're paid good money.
They're paid good money. I don't know. There's just something about it that
just gets under my skin and sounds like yours too.
Gene Everett comes in with 10,101 sats. You're doing a good job. Make it so.
Walking it back? How so? Boost from buying the dip. I don't...
I don't remember. I don't remember. Since I don't know what you're talking about.
That's not possible. Nothing can do that. I'll give you a little Scotty there.
But you know, it's probably just because you boosted it, let's see,
on the 20th of December. And the show's been on hiatus since the holiday.
And I am an old man with a short memory and three young kids.
But thank you for the boost. Appreciate it. Vault Byte comes in with Rodux.
The ultimate goal of Bitcoin is to bring greater rationality to the world's financial system.
Then it inherently implies that central banks will print less money and liquidity will tighten.
As a result, fiat currencies will become stronger, allowing you to buy some
Bitcoin with fewer units of fiat.
So when you see a drawdown, take it as a positive indicator.
It means Bitcoin is successfully helping turn off the money printers.
You know, speaking of the Bitcoin dad, dad and I used to kind of joke, but it's serious too.
The only real threat to Bitcoin, probably outside of just a lack of user adoption,
which doesn't seem to be a problem, would be a sane fiscal policy.
Sound monetary policy around the world, responsible handling of the policy would
actually be the greatest threat to Bitcoin.
Thankfully, human nature, as Milton Friedman kind of pointed out,
probably means that ain't happening, you know?
It is what it is. Orange Bill Lawyer25 is here with 2,121 sats. This is the way.
I agree it's a cover your ass disclaimer, and I don't think they can feasibly
modify the supply cap. Oh, we're talking about BlackRock, right,
and their 21 million cap.
Unfortunately, you can't explain Bitcoin in a three-minute video.
You got to put in the work. I also don't think most ETF buyers would appreciate
the nuance of that disclaimer, since all their made-up money is on a system
designed to dilute equity.
Solid, dude. That's very good. Thank you, Orange Pill Lawyer. Nice to hear from you.
Wine Eagle's here with 9,096 sats. It's over 9,000!
Well, I got a Nix Bitcoin node up and running on a $75 eBay 1-liter PC.
Oh, God, that's awesome. Well done.
Every episode seems better than the last. Thank you for the show.
You and I agree on most things.
That's why I never miss news for work. Oh, that's great.
And congrats, Wine, on the Nix Bitcoin node. I think,
you know, I've tempted with the idea of basically starting a Bitcoin consulting
business where part of it would be helping people build really reliable Bitcoin
and Lightning nodes that use NixBitcoin to accomplish that.
I really believe it could be a business.
And part of me says that because I've witnessed it happen in El Salvador.
And the great thing there is they tried everything first. They tried Ubuntu. They tried Arch.
They tried like a bunch of different distributions and they ultimately landed
on nix to deliver the most reliable nodes they could at point of sale it's a
fascinating story i think i probably told it on the bitcoin dad and i i'm really
i'm really impressed with the project now multiple you know almost six months
in really liking it thank you for the boost.
Ready, take one, four, something like that. Ready, one, take four. There we go.
I got it, I got it. Came in with 7,500 sats. Boy, they are doing a lot with
mayo these days. Clearing out the Albi wallet.
I'll be back on Fountain, or whenever I get the time to set up Albi Hub.
Thanks for the great content, as always.
I hope so, ready one. I hope so. I'm a little scared that the boosts are going
to drop off with the Albi Hub stuff.
Speaking of being paranoid, Paranoid Coder comes in with 2,100 sats.
With a curious to know your thoughts on the new BillPay feature and how it might
compare to your Fold experience.
I think he's linking me to Strike, which I've been following.
So I think we're getting really, really, really spoiled now.
Strike is a fantastic option, which is going to offer lending soon as well.
And Fold is a great option because they have, well, A, years of doing this with
the BillPay system, but they also offer the debit card.
And so, like, grocery purchases you get little sats back on.
You know gas purchases you get some sats back on and then
they also have something called merchant boosts which is kind of kind
of nice right like costco is one percent
boosted others are up to like five percent some are three percent and then fold
offers a whole range of other services too for buying and selling sats at good
prices if you like that workflow and they offer some interesting features as
well as auto deposit into bitcoin and doing like a percentage there but they're
both really good services,
and if it's something people would like a further analysis of, I could do it.
I do have all of them right now, but it's a good time.
And stay tuned because Bitcoin Whale has some really interesting capabilities
in this area as well. Thanks, Paranoid.
Appreciate the boost. Ace Ackerman's here with the Rodux.
He's got a peak price prediction for 2025, and I like it. It's a nice round one.
We'll see. He says the top price for 2025 is going to be $333,333.
Never tell me the odds.
$333,000. Woo dog.
The real question then, I guess,
is, Ace, what does it crash down to after that? What do I got a brace for?
Should include that prediction as well. Might not make it spicy.
I don't know. I think it's, we'll see. We'll see. Hey, Gene Bean's here with.
4,270 sats. Well, I'll be dipped.
You got me excited talking about what Nixbitcoin is, and I forgot to answer
my own question. Oh, and forgot to answer my question.
What app or service on Nixbitcoin should I run? It seems like I have to run
a bunch of different options.
There's lots of different aspects. I don't really know much about it.
I know L&D is mentioned a lot on podcasts. Oh, well.
You know, Gene, you might consider starting with Start9 or Umbral and getting
a sense of the system and then going with NixBitcoin.
I think that was beneficial for me because there's no GUI with NixBitcoin.
And there's no curation, really. Like you have noticed, you have to do the curation.
But you could just install BitcoinD, L&D.
And AlbiHub and really probably be set on NixBitcoin. So I'd like to know what
your thoughts are on that because you really could do a very minimal.
If you're pretty much relying on AlbiHub to do a lot of your lift,
then you could just do a real basic Nix, BitcoinD, LND, or CLN,
or whatever. You've got a couple of different Lightning Demon options.
And that would be very functional. I bet you that'd work really good.
I'd love to know what you end up with. Army guys here with 15,000 sets.
He writes, just a test because I've been trying to boost the show for the past
few weeks with no success using the Fountain app. It keeps going through.
If this goes through, there will be two more boosts that have my message split
between them. Yep, I see them here.
Oh, I am sorry to hear, Army guy, that you've been having problems.
I haven't got any other reports.
He says, short-time listener, first-time zapper. Thank you very much. Appreciate that.
Love the show and hope to hear many more episodes in the future.
A few things about the Bitcoin-backed loans was sold to note.
Oh, first, the rates are as high as non-collateralized personal loans,
even though you give one or two times the amount in Bitcoin to be held as collateral.
That is true. Like, I think my interest rate is like 8% or something,
which is kind of a deal because I think they have their regular rate was 12,
but I got it. I got like a special 8% interest rate. You're right.
With something as a pure, verifiable, scarce asset like Bitcoin backing a loan,
it should be like a 2% interest loan, right? It should be super low.
And I think it will be one day.
Second, there seems to be no risk on the side of salt.
Your best bet would be to take a personal loan getting just as good of a rate
from a bank or better with none of the risk.
Or wait until the space becomes more competitive and you can get rates like 2% or 3%.
Unless, of course, you have issues with your credit score, in which case you
might not be the best person to take out a loan in the first place.
But maybe there is an example where this is beneficial. Again,
love the content and keep up the good work. I actually think you raise a good point.
Should someone consider just if you want to get a loan, take out a loan with the bank?
I, first of all, I will admit I am biased against going to the bank.
If I have the ability with my own financial tools to get access to that liquidity,
I'm likely to take on a little more risk and maybe even pay a little bit more
just because of the amazing capability of taking my magic internet money and
getting a loan from it and not having to go to a bank and, you know, ask like a bitch.
But that's, so that's probably an element to my bias to this.
But also, I do like the idea of getting access to liquidity without a credit check.
I think there are so many people out there.
I mean, geez, if you looked at credit cards, debt and interest payments right now and defaults, man.
Man, there's so many people that have got them trapped in like multiple credit
cards or houses or whatever, or they're going through a divorce and their credit gets wrecked.
So to have something that is separate of the credit system that is just based
on a hard asset that you own, well, it's the tooling that the rich get.
And now it's available to us plebs.
So I'm excited to kind of explore it, even though you're right.
It is early. The rates are too high. There's additional risk.
And eventually this will be institutionalized. Eventually, I think you're right, 2%, 3%.
It's what I would expect it to get to. And if you can wait, you probably should
wait. But there's also the flip side of there's some OGs that have been around
for a while that have have a stash.
And they've been sitting on that stash for a decade plus. And they still don't
want to sell it, but they like to get a little access to that liquidity because
that's where they've put all of their money.
And, you know, maybe the banks don't like the balance of their bank accounts
or something like that. I mean, there's a lot of these scenarios.
And I think you're going to see strike come out with something very compelling
in this space, probably within Q1, Q2. We'll see.
Sorry about the Troubles Army guy, but really appreciate that boost.
Very thoughtful. Thank you for that. I really appreciate it and hope to hear
from you soon. And any thoughts you have on my response?
Zachelys is here with 4000Sats. Analysis mode, password 80085.
For the IRA discussion, I agree that I don't want to lock most of my savings up in an IRA.
I'll continue buying on River and then transferring to a cold wallet.
In my case, I already have money in my employer's 401k.
So I'm looking to roll that over in a Bitcoin-friendly IRA to invest a portion
of it, Maybe like 50% in Bitcoin and the rest in traditional stocks and ETFs.
Very sensible, Zach.
Look very carefully at the stocks and ETFs you pick.
And I'm not a financial advisor, but I would challenge you and boost in when
you find it. Because I don't think you will.
Find me a single stock or an ETF that's performed even half as good as Bitcoin.
Bitcoin has been the number one performing asset 11 of the last 14 years now.
I don't know anything else that does that,
Maybe MSTR is it, but that seems like a pretty big risk for a retirement savings investment.
Of course, I'm telling you to do Bitcoin, so I'm a jackass. Anyways,
I'd just love to know your thoughts on that if you'd like to reply.
And thank you for that, Busek. It's good to hear from you.
Nakamoto's 6102 is here with 4,000 sats. I don't see BlackRock's video about
the, quote, number of Bitcoin can be changed being that bad.
Sure, it's a legal disclaimer about the supply cap, and it's wrong.
But it's an easy video to share with friends and family.
Yeah, you're right. There is some value in that. Just an easy video that is, yeah, that's true.
He goes on to say, also coming from a name like BlackRock, most folks will not
think we're as crazy anymore.
It's easy to touch point. It's an easy touch point to get people thinking about
money generally and Bitcoin specifically.
Are there short videos out there you would prefer to share?
It's a good point. There probably are a couple of actual shorts,
like literal shorts, which I call tinies.
But I think you make a really solid point in that there's brand there and wait behind that brand.
And that brand is endorsing Bitcoin. And that brand is saying,
hey, you should probably think about the value of money.
And that's probably more valuable than that stupid little disclaimer they put
on there. That really is not a worry at all.
So yeah, solid boost. Thanks, Nakamoto6102. It is nice to hear from you.
User 8857 is coming in hot with a boost. Coming in hot with a boost.
9,444 sets. I don't think Bitcoin is mainstream enough for it to have affected the 2024 election.
I think the real issue are the socioeconomic issues that most people are dealing
with that have unheard or ignored by politicians altogether.
That's what allowed Trump to be elected twice, even though these problems haven't
really been addressed or actioned on, at least in the last decade.
I think that's a little pessimistic because if the Bitcoiners didn't have an
impact, then why did they bend the knees so much?
And why are we seeing continued discussion about how they're going to cater
them? And then why also have so many Bitcoiners and Bitcoin friendly folks been
implicitly selected for Trump's cabinet?
I don't know. Maybe the maybe it's the Trumps that are Bitcoiners. I don't think so.
I think they're shitcoiners. But I agree as well that, you know.
It probably wasn't as big as some of the other issues.
He goes on to say, my 2020, my 2020, my 2025, I'm having a hard time saying that.
My 2025 prediction is that Bitcoin will end at 70,000 for the year.
Yeah, you might be right, especially if things get a little wonky.
He says, I basis on nothing but feeling the hype around Trump and the likely
crashing down as broken promises that spoil the market.
Oh, also very pessimistic. We shall see.
You know, the one thing I think you could really say pretty solidly about the
previous Trump administration is that he really used the market as a barometer for his success.
You may recall that during the original Trump administration,
there were even end-of-day Fridays where Trump would print out the stock market
price action for the day and sign it and send it out to some of the bankers. Do you remember this?
Like he really gauges the success of the market as part of his presidency.
And I think that's the one true break on some of these more wild policy ideas.
Is if the market freaks out too hard, Trump's probably going to course correct.
Although I could be wrong. But that's my optimistic take on your kind of pessimistic
taste there, 88. But thanks for the boost. Things to think about, at least.
Atone comes in with 2,222 sats. That's a road, Ducks.
I think the unfortunate part about the El Salvador news, that is that they are
making some changes to the Bitcoin policy, isn't so much the changes themselves
as the fact that the IMF is twisting their arm into making these changes.
The IMF is a predatory institution designed to exploit countries like El Salvador.
I recommend people read Hidden Repression by Alex Gladstein to learn more about
how the IMF operates. The book even has a Bitcoin angle.
Yes, just go look up Alex Gladstein.
Although, since you sent this boost on December 22nd, there's a lot of boosts
this week because I've been gone for a couple weeks.
Bitcoin, El Salvador just had their
credit rating improved because of this additional funding. So we'll see.
I'm going to definitely keep my eye on it. I fantasize about that country really
turning things around over the next decade and having a tiny vacation cabin
and then maybe just retiring there one day. It's a very, very, very beautiful place.
So I hope they don't get it wrong. But I'm going to keep my eye on it.
It's important that they get it right. Thank you for the boost.
Chatty Mike's here with a boost, and it's a row of ducks.
Merry Christmas and plus one for the longer shows. I really appreciate the effort.
Well, I appreciate the value. Thank you, Chatty Mike. It's always nice to hear from you.
Nico the Geek is here with 10,000 sets. Oh, my God. This drawer is filled with Froot Loops.
Happy New Year, Boos. 2024 was all about ramping or revamping my cold storage
security measures. Oh, and finally running a node. Hey, yeah.
He says start nine is a beast. this year I'll be attempting to convert from
exchanges to fully peer-to-peer and setting up some sort of mining rig,
looking at BitEx I dig Gene Bean's idea of this week in Bitcoin mining pool,
I'd definitely be interested in one, if we get one going, let me know, let's go,
alright, so let me know how the peer-to-peer stuff goes like are you thinking
of RoboSats I do find liquidity over there is a little tight,
sometimes there's just no buy when I want to buy and there's no sell when I
want to sell, I don't sell much.
Speaking of the buy angle, I do find that to be a bit. So I'm curious what route
you go. Maybe you want to boost in and let us know.
Thank you for the boost. And Jin from Mateek comes in with 4,035 sats. Well, I'll be dipped.
Hi, Chris. I'm in Europe. So I thought about what the Liz Warren Anti-Crypto
Army does. And, you know, I just don't care about them.
I DCA my Bitcoin anyway, and I have it in self-custody.
I found another alternative to the Reli, or whatever it is.
It does require KYC, but it's called Biddy.com. B-I-T-Y dot com and get bitter.
Get B-I-T-R-R dot com. Web-based ways to buy Bitcoin.
On running a node, currently I wait for StartOS version 0.3.6 to come out.
Yeah, I was looking into that. It does look like a really good release.
He says, in 2025, I'm definitely going to run one in the meantime.
I had to learn how to run a node another way.
Well, there you go. He says you could check out Ritzvall.com.
Well, look at you. You got all the links. Thank you very much.
Appreciate the boost, Jen. It's nice to hear from you. Mix is here with 5,000
sats. That's a Jar Jar boost. Use a boost.
I'm not concerned about BlackRock at all. I'm glad this growing concern is out
there, though, because people need to not buy ETFs. They should hold the real thing.
Well said. Well said. That's the whole point of Bitcoin. Thanks,
Chris. I get my information on the show that I don't see anywhere else.
And it's great to see that we're adding to those node runners.
I noticed that. Isn't that?
Isn't that great to see? Thanks, Mix. Appreciate the boost. Okay.
Amorphous age. Nah? No?
Amorphous age. Well, uh... I think I got it.
I think I got it. Thank you. Thank you. And they sent 4,444 sats.
That's a big duck. Ah, fight!
He didn't have a boost go through last time, so he sent it again.
While I do understand your saltiness on the FUD episode, I appreciate you standing up.
I think there's a downside to fighting and arguing. when it gives too much publicity
to haters and fosters aggressive environment around Bitcoin.
Expanding this energy on explaining onboarding Bitcoin interested people is more useful.
Just ignore the haters. That being said, I appreciate your explanations in setting
up the context for newcomers. Yeah, I think that's the balance right there.
And, you know, helping people kind of mentally fortify themselves against the
onslaught of things that people repeat over and over again until,
you know, you just, you hope they hope it becomes true.
On the topic of gifting Bitcoin, I would not force Bitcoin onto people this way.
When I talk to people about Bitcoin, they seem semi-interested. And then I just shut up.
We shouldn't force our interest on other people. However, if people are interested, I'm happy to share.
Yeah, I think I pretty much follow that. I generally don't bring it up.
I've once or twice brought it up to family members recently, and it wasn't great.
So, you know, I'm kind of with you on that one. Thank you for the boost.
I saw there's a bunch of other ones on the below 2,000 sat cutoff that we do
for time, including a couple of new ones in there.
Thank you, everybody, who boosted them below the 2,000 sat cutoff as well.
And I do read all of them, and I keep them in the notes. Also,
shout out to all of you who stream sats. 52 of you streamed sats this week.
And collectively, you helped the show stack 123,484 sats.
And you combine that with all the boosters that we had. the grand total for
the show this week, which represents a couple of weeks of shows,
or no, there was no show in there. So it's a couple of weeks since the last show.
The total is 410,643 sats.
This is a value for value podcast. So if you got some value from the analysis,
or the community, please consider supporting the show with a boost.
The easiest way is Fountain, but there's lots of options out there from all
the way to a self-hosted sovereign stack.
You can find a list of apps at podcastapps.com and of course you can breeze
and not switch apps that's B-R-E-E-Z just make it breezy and you don't have
to switch podcast apps you can just boost with breeze which is a lightning node in your pocket,
there you have it thank you everybody who boosted in,
really appreciate it it's so nice to be back and it's nice to be greeted with
a bunch of great boosts let's get back into it.
Music.
I had a call with the Bitcoin well, and I want to tell you a bit about it because
I didn't know a lot about them. This is not an ad.
I learned about the Bitcoin well from the audience, actually.
During a meetup in Toronto, I was talking to a couple of different listeners,
and they said, you know, we don't really get access to River or this and that,
you know, but we do have a company you should check out. It's a great way to
stack sats, and it's called the Bitcoin well.
And it turns out, of course, the Bitcoin well is a Canadian company that have
been around for a bit, and they have features for the Canadian users I never
thought were possible and we'll probably never see from a United States exchange,
except for maybe the Bitcoin well one day.
I'll tell you about some of those in a moment. But it turns out they have been
rolling out features to the US going on for a couple of years now.
And from a high level, what I like about what the Bitcoin well is doing and
why I think it's worth talking about on this show is they don't host a wallet at all.
It's straight to your self-custody wallet. Every buy and sell.
And this is so brilliant because you just go self-custody from the start.
You never have to like transfer later on and figure that out.
When you buy the Bitcoin, you
either put in your Lightning wallet or your on-chain wallet and it goes.
And their on-chain can be batched if you want, which means you do have to wait,
but then it means there's no fees.
And of course the Lightning is instant. You can have multiple wallets in there.
So I have, for example, my AlbiHub, LNURL address in there, and I have my fountain.
And so if I just want to put 100,000 sats on my fountain wallet,
it's just, it's in the dropdown.
Buy the sats, dropdown, send. It never stays on their systems.
You really can't appreciate this until you see it.
And in Canada, they have features like, if you have sats, say in your AlbiHub,
you can zap them to your checking account from your lightning wallet.
You can zap them to your checking account. Boom, they're just right there.
You know, I love that. I love that they have like just lightning integrated
for me because it means when I withdraw, I just go right over to Bolts,
swap it to Liquid, never leave an on-chain footprint, never pay an on-chain fee.
In both the U.S. and in Canada, they have bill pay, which I have yet to use.
But if you've got a stash of Bitcoin and you've got some bills you got to pay,
or if you're doing what I think is going to be a more and more common trend
in 2025, you're taking your whole paycheck in Bitcoin.
And then you're putting your day-to-day expenses on a credit card.
And then you're paying that whole credit card off at the end of the month,
you could use your Bitcoin stash for that.
But with the Bitcoin well, what's unique about their bill pay is you can do
it from your Lightning wallet.
Right? That's just crazy. And they also offer like a direct deposit that auto
converts. You set the percent you want in Bitcoin.
Your check comes in. They convert whatever amount you set into Bitcoin and immediately
send it to your Lightning wallet or your on-chain address.
And then the rest goes to cash and you just put it out in your bank account.
They make it really smooth to move between the bank account too.
Of course, here in the States, you know, ACH is only as fast as it is.
But you just, the idea is brilliant because you don't ever have to worry about their security.
You don't have to worry about their proof of reserve.
You are the custody. I just think that's really great.
So I had a call with Conrad Fitzpatrick from the Bitcoin well.
Conrad's been a Bitcoin analyst since like 2018.
I think he comes with an economics background. I will link to one of his pieces
he's written introducing a sovereignty guide for Bitcoiners and using the Bitcoin
well. I'll put a link in the show notes if you're interested.
But I was impressed by both Conrad and the Bitcoin Well. I feel like they're a pretty solid company.
They've focused on a lot of features around Bitcoin and Lightning,
and they don't have to worry about the Bitcoin storage infrastructure.
So they can really build services, and they take advantage of the programmability of Bitcoin.
So it's a lot of the upside of custodial services, but you're the custodian
because you have a way to buy and sell and move between accounts, but it's your wallet.
That you have a 1.2% spread. I'll say that again, a 1.2% spread.
So that's how they make their money, which seems like a pretty reasonable rate.
And it's a super smooth path to go cash to sats or sats to cash,
especially in Canada, but even here in the States.
And I think the bottom line is your keys are always under your control because
you're doing the custody, whatever setup you want.
And you can have multiple wallets. So like me, like I said, I've got multiple
Lightning wallets in there.
It's really cool i like it a lot and i
like the people behind it so that's the bitcoin well i do have an affiliate
link in the show notes they have like a a bitcoin
wishing well i think you also you also get extra points and sats it's a system
and really not the main reason i'm talking about this but i do have that availability
it's probably how i'm going to be stacking my sats going forward i like river
a lot and i could see you know maybe one day having a small cash position in the river
savings account where you get 3.8% interest in sats.
And then, like I said, I would smash buy if, say, we had a big dip.
I could see that strategy. But for a DCA strategy or my day-to-day,
hey, I want to top off my fountain wallet.
I want to add some sats to AlbiHub so I can go around and zap some folks.
Oh, man, Bitcoin will is great for that. And then if you want to do a serious
buy, they do have an over-the-counter service for big purchases.
You're going to make you know a big investment they've got like a white glove
service for that too but the still kind of same custody setup it's really a
good idea I really think it's a good idea and I want to see more Bitcoin services.
Built like this there's really no reason they can't do this and so I'm,
Probably how I'm going to recommend most people stack sats is the Bitcoin well,
just because that focus on self-custody and making it so damn smooth and the
top tier lightning support.
Love it all. And if you do want to use on chain, you can batch it.
So you don't have to pay fees, even though right now fees are pretty low.
So that's my call to Bitcoin well. I walked away really impressed.
It's nice to see another really great company in this space.
I want to take a moment now and review the Jade and BitKey.
So Blockstream makes the Jade and they just announced the Jade Plus.
And of course, Block makes BitKey.
Now, they're both pretty advanced self-custody solutions when you compare it
to, say, leaving your coins on Coinbase.
But they're not as complicated, perhaps, as, say, something like a cold card.
They're kind of in the middle there. And the BitKey really is the closest to
noob-friendly you could probably possibly get with the state of technology right
now. I'm not going to call this a comprehensive review.
I've only had a limited time experience with both these. Over the holidays,
I bought these for family members and set these up for a few family members.
But I will follow up on the show if there's any notable developments after long-term
use. But here, let's start with the BitKey.
So here's some things I like about the BitKey.
The app is actually really great. The wallet app, the setup,
it's very smooth. The way you use NFC is very clever.
The device itself feels excellent. It has no screen. I don't like that,
but the device itself feels excellent.
You do an NFC tap to talk from the wallet to the device. It's brilliant.
The recovery contact is really straightforward. I was able to set myself up as a recovery contact.
So if they ever, you know, lost the phone or lost the bit key or lost both,
there is actually a recovery route. There is no seed phrase though.
There's no seed phrase. That's not how you recover this. Block is involved here.
It's very much a product for people who like a company behind this kind of device,
maybe even a support email.
And it does require block servers to be online to operate fully functionally.
There are ways to get your keys out.
And, you know, if block were to go out of business or their servers were offline
or something, you could basically break glass and move to a new wallet.
You can't use the setup anymore.
That's just an inherent aspect of this. Block's a pretty solid company.
It's got Jack Dorsey behind it. This is a really solid device.
I think they've got a multi-year plan here. So I don't think that's a big threat.
When I am looking at hardware wallets, I'm looking at stuff that,
you know, I want to last for a decade.
And so with that in mind, I'm not a big fan of the fact that this thing has a built-in battery.
It is what it is, but it's got a built-in battery. That battery is probably
going to last three years, right?
I think for a BitKey, that's probably okay. You know, this is great for,
say, a kid who's young, but their, you know, their life revolves around mobile.
You want something where they can safely self-custody their Bitcoin,
where if they lose either device, they're not screwed, and maybe they can move
to something else five years later.
It does require either iOS cloud storage on iOS or Google Drive storage on Android.
That's how it does some of its backups.
It encrypts the key locally and then backs it up to the cloud storage.
So something to consider is you have to have iCloud services or you have to
have Google services for that. I think that's another thing that I put in the
don't like column for me.
But, you know, it's a very smooth device that is almost impossible to screw
up and almost impossible to lose your Bitcoin.
So for that, that's a huge benchmark for self-custody.
But I don't think it's for people that probably listen to this show for the
most part. Now, the Jade, let me talk about the Jade wallet.
Now, the Jade Plus just came out, but the OG Jade is still great and cheaper.
I think the Jade Plus is like 130 U.S. greenbacks or something like that.
And the OG Jade, the old Jade now, like 80 bucks now.
The old Jade definitely has the worst camera and a smaller screen.
But in my opinion, that doesn't really matter.
It is a more traditional wallet experience than the BitKey. You can do air-gapped. You can do via USB.
You can do via Bluetooth if you're on a mobile device. And the Jade wallet is
compatible with Spectre, Sparrow, Nunchuck, Blue Wallet, Electrum, Keeper.
But Jade really sings with the green wallet from Blockstream.
And green is a really good wallet.
I've been kind of sleeping on green. It's got a nice UI. It's open source.
They got mobile versions. They got Win, Mac, Linux desktop versions.
Supports on-chain. Supports Liquid all in one app. You can secure both with Jade.
The mobile app supports Lightning. The desktop will eventually.
You can create the wallet on one device, and then you can have the green wallet
with a watch wallet where it can't do anything but receive and view the balance.
It can't spend at all, but you can have multiple watch wallets.
And then, even if you don't have the Jade, they still offer a lot of great ways,
including just using two-factor authentication apps to secure your stack.
I've really started to like the green wallet.
I think people should not sleep on the green wallet. And Jade itself is open source.
Everything about it, really. But including the firmware, it's fully open source.
The hardware design, fully open source.
The software associated with the Jade wallet, including the green app, open source.
The build process for the Jade wallet itself is deterministic,
which means any developer can audit the code and verify that the final software
doesn't contain any hidden features or patches or vulnerabilities.
And it uses, and this is the part you need to know about, it uses a PIN lockout
server, which is kind of part of their main security premise.
It is all open source, and users should eventually have the option to run their
own lockout server in the future.
And the device can work without this PIN server. But this PIN server,
which is run by a distributed set of Blockstream servers, is sort of central
for the signing process when you use a PIN.
But it makes the device itself more resilient to compromise and manipulation
because not all the credentials are there.
It's part of their overall security design.
It allows the device to remain fully open source, but still prevent people from
learning how to do physical key extraction.
Can you see the catch-22 there?
So the private keys, my understanding, please boost in if I'm wrong,
but my understanding is the private keys on the Jade wallet are not stored on the device itself,
but they're securely generated and then stored on a blind Oracle server accessible
only through your PIN and a special QR code scanning during transactions if you use the QR workflow.
So it's a decentralized set of servers, they say, for the signing process.
They claim it makes it more resilient to server compromise or manipulation compared
to like a single server solution.
You don't have to use it but it does make things a lot smoother you do have
offline key storage the Jade doesn't require the internet there are ways to use it fully air gapped,
but because it is all open source this was their solution they've also made
it possible for users to verify the device was produced by Blockstream there's ways you can,
essentially authenticate and verify the device I think collectively it does
make the Jade a pretty secure option and it's nice it's really easy to use especially with green.
But there are a couple of things I don't like. It has a battery again.
My research confirms the device can still work off of USB-C,
even with a totally dead battery.
And they expect the battery to last three-ish years.
But my concern here is, could this battery swell one day?
I would just prefer a battery-free version of this device.
I want something where I can be a good little hodler and it sits somewhere securely for a decade.
Right? Because green makes that possible with the watch wallets.
Where you can still generate new receiving addresses.
You can still view your balance. You just can't withdraw.
So I want to be a good little hodler and I want to put this thing away for 10 years.
Well, what happens when I come back and like the battery is swollen up and exploded?
Is that a possibility? I just don't know. I guess that's something I'll find
out with my long-term usage of the Jade.
I'll check back in with the BitKey user and the Jade user. And I'm going to,
I think I'm going to buy myself a Jade Pro eventually and, you know,
get a little more hands-on, a little bit more experience with it.
But I really was impressed with the BitKey for new users and people that are,
you know, looking for a real safe way to get off of an exchange or something
like that, but they're very intimidated by cold storage.
I think the Jade sits in very nicely between the BitKey and the cold card.
Cold card's still a great champ because the cold card doesn't require any kind
of key signing servers, doesn't have a battery built into it,
right? Like the cold card still is sort of, in my opinion, a serious contender.
But I've heard from some people that it's a little intimidating to use.
I don't find the Jade at all intimidating. I sat down and started to understand it immediately.
I think people will really like it. And I think the Jade Plus,
or I think maybe they're calling it the Plus. I don't know. Yeah,
the Jade Plus, not the Pro.
It looks like an even better device. So there you go. That's my take on the big key and the Jade.
Music.
I got some updates for you. We'll start with the bad news and then we'll end
with the good news. Coinbase...
Has apparently given up all the goods on one of their users.
And this user has been sentenced to two years for Bitcoin tax fraud.
An early Bitcoin investor and Coinbase user named Frank Richard was sentenced
for two years in prison last month for falsely underreporting capital gains
linked to $3.7 million worth of Bitcoin sales.
He's been ordered to hand over his private keys and to allow U.S.
Officials to access all of his digital assets currently valued at $124 million.
Frank began investing in Bitcoin in 2011. He reportedly acquired 1,366 Bitcoin through Coinbase.
In 2015, when Bitcoin peaked at approximately $495, he then used some of the
proceeds to purchase a park, or I mean a home in Park City, Utah.
Frank then concealed some of his profits from his sales between 2017 and 2019
by providing false information to his accountant, claiming he had purchased
the Bitcoins at a higher price than he actually did.
He now owes the government around $1 million in restitution from the criminal
case and must provide any physical devices, along with any public keys,
private keys, seed phrases, or passphrases used to store his coins.
This is by the ruling of the U.S. District Judge Robert Pittman on Monday of
this week in a federal court in Austin, Texas.
Prosecutors have requested the judge to force Frank to reveal the location of at least 1,287 Bitcoin.
He moved in a 2020 mixing service, which are now worth over $124 million after
more than doubling in value last year.
I mean, the thing that really jumps out to me in this story is,
first of all, I feel really bad for this guy.
I mean, you have to appreciate that when this guy was balling in and buying
1,366 Bitcoin in 2011, the entire world was telling him he was an idiot.
His government was telling him it was magic internet money that wasn't worth
anything, right? There wasn't the clarity that we have now.
So I think we have to keep that context in mind when we talk about this case.
But we know all of this. We know the amounts. We know where he transferred.
We know we transferred it to a mixing address because Coinbase has all of that information.
And that's the other thing I take away from this. What I don't understand is
why he can't just pay restitution.
I don't understand why they then get to seize all of his Bitcoin.
Don't like that. And you got to wonder that if we make a strategic reserve out
of our seized Bitcoin, if that doesn't incentivize law agencies to seize more
Bitcoin. Okay, one last bad story.
There is a Bitcoin policy in the UK that has been released.
The crypto asset service providers' due diligence and reporting requirements for 2025.
What is being proposed? Under the crypto asset reporting framework,
or CARF, it is proposed that tax authorities' world,
Worldwide will gather and have access to information on cryptocurrency transactions,
allegedly to combat tax evasion and ensure compliance with tax laws.
Worldwide. Worldwide tax laws. So that's a stinker. I'll have links to that, more information.
Man, talk about a bad idea. Talk about a bad idea. And then here's some good
news for you to wrap up the updates.
AlbiHub 1.13.0 is out. It's got some new apps, some nice new features.
Check out the App Store. an auto-unlock feature for self-hosted hubs,
extra information about pending closed channels, and some security improvements
for isolated apps and budgeting.
Very nice to see AlbiHub 1.13.0. And then last but not least in our update,
we have news about a new 45-megawatt Bitcoin mine that is opening in Memphis.
Aum, a cryptocurrency mining facility, is now under construction on South Mendenhall near Shelby Drive.
It all sounds great, but with that construction comes questions about MLG&W's
agreement to provide energy for a process that requires large amounts of power to run.
WRG's Mike Sirianni spoke with a city council member about those concerns.
There is that concern. It is definitely that concern and that worry because
it takes a lot of power. Memphis City Councilman Dr.
Jeff Warren sounding off after Merkle Standard, a California-based digital mining
group, gets the go-ahead to build a crypto mining facility in southeast Memphis.
The issue with all of these data centers, whether they be Bitcoin mining or
AI centers, is what do they do to the local power grid?
Warren referring to Elon Musk's supercomputer in southwest Memphis and the massive
amounts of power required for operation, concerns expressed during a public meeting in August.
We had too many times of blackouts and, you know, boil your water kind of things last year.
MLGW has reportedly signed a five-year contract with Merkle Standard,
providing 45 megawatts during low demand times, cutting that supply back to
five megawatts during high energy demand.
And that's the key thing. And that's something that Elon's AI data center cannot do.
The Bitcoin miners can buy that power when it's available and they can taper.
And you will not even notice as a Bitcoin user.
You would notice as an XAI user if all of a sudden your time to get an answer went way up.
Or you would notice as a Netflix user if all of a sudden you had to pull from
a data center further away and your video had to buffer a lot more.
But you don't notice on the Bitcoin network if this facility in Memphis has
to spin down a little bit.
This is a key thing to understand about Bitcoin mining that is going to be a
huge differentiator between AI data centers.
MLGW has reportedly signed a five-year contract with Merkle Standard providing
45 megawatts during low-demand times, cutting that supply back to 5 megawatts
during high-energy demand.
And I think they'll be the first to go out of the system to make sure that we
don't gray out or have other people have to have rolling blackouts.
Construction on South Mendenhall is mostly shrouded from view with a number
of metal container buildings to house data processing systems.
While Councilman Morin wants to see these data centers using solar power and
renewable energy, he also wants zoning changes that allow for more oversight.
So you don't necessarily, I mean you can, but you don't necessarily want to
add the solar or other renewable energy at the data center site.
What you want to do is have the power grid invest in renewable energies.
You want to have the power operators of that local area invest and take the
revenue that they're getting from the Bitcoin mining to build that out.
And then it's part of the overall mix for the entire grid. So that way,
when Bob and Jill choose to charge their EV at 4 p.m.
When everybody's getting home, the grid has the supply for that and it can actually
charge that EV with renewable energy.
So you can put it at the data center, but you benefit immensely,
and everyone benefits, if the investment is used wisely by the power company.
Solar power and renewable energy. He also wants zoning changes that allow for more oversight.
And we don't have those yet. We don't have them on a local level.
We don't have them on a state level. And we don't have them on a national level.
For your news leader in Southeast Memphis, Mike Suriani, WREG News Channel 3. Thanks, Mike.
You know, I just, yeah, just more rules. That's what they need.
If we just had more rules. Yeah.
Music.
This is the final clip of the week. It comes from the folks over at Simply Bitcoin
on their X account. And it is the former finance professor, Tad Smith.
It's a brilliant clip because he had a massive realization. He says,
you know, after 25 years of teaching finance, it took me this long at the age
of 58 to really appreciate how the money printer impacts all of us.
And I think I want to play this clip because we all should have a little grace for these individuals.
These folks that are finance experts that have
lived in a system that has always been this way
basically their entire adult life and it
is so hard to understand bitcoin in from with inside that
system it's like the deeper you are the harder it
is to see the cracks i suppose and well tad
here kind of makes it clear and i think we should all use this as a
moment to kind of reflect on that i didn't
realize that if
the average year the money printer goes call it eight to ten percent even in
the western countries even in the oecd nations and the average return on the
s p 500 is call it nine ish percent including dividends maybe nine point seven maybe a little less.
That it means that all of the work of the S&P 500, all of the value created
there is actually the money printer. That to me was startling.
I mean, to think about that, the fundamental notion that in a closed system
or even an open system, when you're printing money at the rate of eight to 10%
a year, everything is losing value.
And the things that appear to be gaining value are not gaining value.
They're just keeping you even. So you can put all your money in the S&P 500
and you're not gaining any relative wealth at all.
That's a startling insight. I mean, when you really think about the entire value
of the S&P 500 on average over a long period of time, not even a long period
of time, is equivalent to the money printer.
That's to me a shock. And it was a shock that said, oh my goodness, I'm not going to,
How do you think about creating wealth that is relatively greater in this economy?
And you have to look hard.
The other thing you can imagine is I could tell you about sharp ratios and diversification.
I could tell you all these different things.
And it's interesting. You can take a concept like diversification of risk,
and at a top level, it can be a very powerful and useful tool.
But if you are so focused on the mechanistic aspect of that,
you can step back and miss the forest, which is in a highly diversified portfolio,
it's unbelievably hard to pick up relative amounts of wealth.
It is diversifying your portfolio. However, you do it is by and large going
to reduce your incremental gain in wealth, irrespective of the Sharpe ratio.
It's concentration of capital in specific bets that outperform the money printer
where you actually create wealth.
That was a shock to me. I just didn't get it.
I didn't understand it. Even though I taught finance for 20 plus years,
I'm still a professor at NYU Stern at Stern Business School.
I've taught strategy and finance for technology and media entertainment companies.
I'm on a two-year hiatus, but I'll be presumably going back in the spring.
For 25 years, I have I have almost actually more than 1,000 former students.
And I still didn't get it until I'm age 58. That's the Bitcoin journey.
Music.
Of the network. Before we wrap up, this episode is finishing at block height 878,382.
The price is currently 94,350 U.S. greenbacks.
My favorite statistic, sats per dollar, sitting at 1,060 sats to one U.S. greenback.
There are 20,564 reachable Bitcoin nodes.
Great to see that crack 21,000. in the next month or so.
But we are not at an all-time high. In fact, we are down 12.8% from our all-time
high 22 days ago on December 17th, 2024.
However, I'm not complaining about 90-something Bitcoin. I'm just not going to do it, guys.
The state of the Bitcoin network is really strong, and 90,000 Bitcoin is A-OK by me.
Thank you so much for listening to This Week in Bitcoin. links at thisweekinbitcoin.show,
I'd love to have you boost in to see what else you'd like to hear from the show
what I missed or any takes on what I talked about and also if you're planning
and how you're planning for inflation to last for a long time,
please consider sharing the show with somebody I don't know maybe you got a
friend that's Bitcoin curious or a family member or somebody else that,
wants to follow the Bitcoin news and understand it at a macro level please consider
sending them this show now I am going to wrap it up with a value for value track,
that means if you boost during the song, you support the artist.
90% of your sats go directly to the artist.
And I got a good one for you. I think this is perhaps the number one song in
the value verse right now.
It's You Sure Did by June and the Jets. See you next week.
Music.