There was once a time, not that long ago, when the size of the national debt.
Dominated political conversation.
In 1992, when Ross Perot ran for president on that issue alone,
the debt was about $4 trillion.
It has now surpassed $35 trillion.
It hit that number for the first time on Monday and equates to over $104,000 per person.
The financial hole is mounting quicker than most economists had predicted.
That's because the money spent
on federal programs recently has gone over their initial projections.
Music.
Welcome in to episode 21 of This Week in Bitcoin.
My name is Chris. Glad you're here. It's been a really great week for Bitcoin.
You know, quite a privilege to
watch the Overton window shift on the wider conversation around Bitcoin.
So let's actually start with the world that Bitcoin finds itself in this week.
It was a bad one for tech stocks.
The Magnificent Seven tech companies have now erased a combined $2.6 trillion
of market cap in just the last 20 days.
So that's around $125 billion of market cap per day for 20 days straight.
Wrap your noodle around that one. NVIDIA alone has erased $1 trillion in market
cap since its high seen just one month ago.
So in other words, the Magnificent Seven, the big seven tech companies,
have lost as much value as NVIDIA's entire market cap in 20 days.
That's $200 billion more than every stock in Germany's entire stock market combined.
And that means the Meg 7 have lost triple the value of Brazil's entire stock market in just 20 days.
That's what's going on. And since the last episode, we saw the end of a 356
trading day streak without a 2% decline.
Charlie Bailillo comes in with a little more detail. tail.
While small caps have rallied higher, the S&P 500 has pulled back a few percent.
I think we got close to a 5% pullback this week, but we had that trading day
where we had finally that 2% decline.
It was the biggest decline we saw since December, 2022 during the 2022 difficulties in the market.
And so what we actually ended was this, one of the longest periods we've seen
without a 2% decline in market history, 356 straight trading days.
That was the longest period without a 2% down day since 2007.
The last longest period, which
was a staggering 949 days, was right before the 2008 financial crisis.
That's really great. And so while the AI bubble is clearly no longer bubbling,
it's deflating, the money is transitioning to what they call small caps,
We have hit a new milestone here in the United States of America.
We are the greatest nation. We are number one.
In debt 35 trillion guess when we hit it we should be very very excited and proud of ourselves,
we did something that so many economists said we would never get to this quick
my math says this coming friday 3 p.m the united states gross debt will cross
over 35 trillion now understand that's It's not the way Europeans calculate our debt,
which they calculate our debt dramatically higher because of our obligated unfunded liabilities.
But you're going to watch the Treasury Friday about 3 p.m. post up a number.
Thirty five trillion dollars. We did it.
Congratulations. Yes, everybody.
Arizona congressman there. So the total U.S. federal debt has officially hit
thirty five trillion dollars for the first time in history this week.
Since 2020 the u.s has added 12
trillion in federal debt since 2020
12 trillion so that means the u.s now
has around 105 000 depending on how you do the
math i actually think the math works out a little bit worse because i went and
did a little research and according to my numbers we have somewhere around 164
000 current 164 million i'm sorry current taxpayers the irs processed 164 million
tax returns the last time they gave us a number.
So that would actually mean every US taxpayer owns $212,125 by my count.
This is all just staggering numbers. It's almost ludicrous to even talk about this.
And while all this is happening, this deficit spending, its percentage of GDP
has reached, well, World War II levels, as if we're fighting Hitler.
It's really just the level of indulgence of just funding every little program, every little idea.
It means that we're putting on about a trillion in debt every six months at this current rate.
So to put that in perspective, a trillion seconds ago was 30,000 BC.
It took us 215 years to get to $7 trillion in debt.
And we added $7 trillion just between March 2020 and June 2022.
We're adding debt faster. The rate is growing like an accelerated hockey stick chart.
So you have to wonder, where does that leave us when it comes to actual dollars
and cents? Well, the Arizona congressman had a thought or a commentary on that as well.
So let's walk through another little factoid. All right.
My math basically says this year, 45.68% of all the income tax collections,
receipts, your government takes in just cover the cost of interest.
I'd been coming behind the microphone and saying, a interest in 2024,
this fiscal year, would be somewhere around a little less than $1.2 trillion.
I apparently have that wrong. It's probably going to come in about $1,140,000,000 to $60,000,000,000.
Either way, I'm off a fraction.
But 45.68% of every dime we're collecting in your income tax now just pays interest.
Yeah, so essentially half of every dollar collected on income tax is going to just pay interest now.
And we're adding all this debt while the rates are high.
This week, the U.S. Treasury announced it's increasing its liquidity buyback
total to $30 billion from $15 billion of Treasury.
So that means they're going to do more short-term borrowing at a higher interest rate.
And when they borrow too much in short-term bills, they sometimes have to refinance more frequently.
And if they do that, they have to refinance at higher and higher rates.
It pushes prices up throughout the economy.
The only thing that's really going to stop that train is a Fed rate cut in September.
And it's leading to a serious problem because you have the Treasury that's essentially pumping.
The supply of dollar bills has increased around $2.2 trillion since the start
of last year, while the Fed's trying to cool.
The Fed's trying to bring down inflation. So you have the left hand,
the Fed, trying to cool and maybe even get people out of work and try to get inflation down.
And then you've got the Treasury literally expanding the supply of dollars at the same time.
The right hand is literally increasing the supply of dollars,
while the left hand is trying to calm things down.
This led to a very uncomfortable interaction for Treasury Secretary Yellen on
June 4th, when she testified before the Senate Appropriations Committee and
got asked a few hard questions.
You announced last November, I can show you the press release,
where you said that we have decided to start issuing an inordinately large amount
of short-term debt, didn't you?
We did make an announcement about that. And because of the inverted yield curve,
that means that you're going to pay more in interest on short-term debt than,
say, 10-year debt. Only for a short time. Now, that's a fact, okay?
You can go check the numbers of treasuries yesterday.
That is, first, that costs taxpayers a lot more money and interest.
And number two, you're working at cross purposes with the Federal Reserve,
because what you're doing is stimulating the market. You're pumping money into the economy.
And Jay Powell is over here beavering away, trying to reduce inflation.
And you're beavering away, trying to increase it.
You wondered where this AI bubble came from? Well, you can thank the Biden administration
and Treasury Secretary Yellen.
By paying an interest rate that is 100 basis points higher than you would have to pay.
And the only reason I can figure that y'all are doing that is.
Is to try to give the economy a sugar high five months before an election.
Why else would anybody want to borrow at 5% when you can borrow at 4%?
Well, there is a good reason that investors are willing to accept just over
4% on a 10-year treasury bond when they can earn 5.4% on a one-year treasury
bill. I'm not worried about the investor.
I'm not worried about the investor. I'm worried about the taxpayer.
It's the same logic. And let me ask you again, because I'm going to run out of time.
And look, you're smarter than me. I know that.
But I can grasp this concept. You're borrowing at 5% when you could borrow at 4% to deficit spend.
If I borrow it— And it makes absolutely no sense to me why you would do that.
I'm sorry. If I borrow— Other than to try to artificially stimulate the economy
and help Joe Biden get free of that.
If I borrow at 4%, if I borrow at 4.5%, I'm locking in that cost over 10 years.
But you just said you weren't trying to time the market.
You are trying to time the market. It isn't trying to time the market because
this is something that is a regular part of our policy.
When short-term rates are high and long-term rates are lower,
the reason for that is that market participants expect short rates to go down,
and they expect them to decline over 10 years to substantially under 4.5 percent.
So even if we pay more this year than it would cost to borrow at a 10-year rate of 4.5%,
the expected cost over the 10-year life of that borrowing can be the same or
less than it would be if we issued a 10-year note.
Now, we're not trying to time the market. we have a policy that we want to hold
the issuance of short-term bills in line with recommendations of the Treasury
Borrowing Advisory Committee.
Can I say something now? Madam Secretary, I'm going to say it again.
You're a lot smarter than me.
But my mama didn't raise a fool, and if she did, it was one of my brothers.
And what you're doing, you know it and I know it, And all those people sitting behind you know it.
You're paying 5% to borrow money when you could pay 4% to borrow money.
You announced you were going to do that back in November 2023.
You're working cross-purposes with Jay Powell. You're not working.
And the reason you're doing this, the reason you're doing this is to try to
give the economy a sugar high five months before an election.
Now, you know that, and I know that. I think it's actually very likely that
that is the case, or at least try to get a great economy.
They're running a $2 trillion deficit per year, which means they're paying more
than 1%. They're paying 1% more in interest than they need to be.
And just that, because of the amount of the debt, and just that little bit of
difference in timing the market, taxpayers are going to get stuck with an additional
$20 billion per year in payments.
Per year. $20 billion per year. So it's, you know, that's a bit of an anchor.
And you're not getting anything. You're not getting any services for that additional $20 billion per year.
So it's going to have to take another bit off of that per dollar for every tax dollar they bring in.
And they're just getting started. These numbers are only going up.
These expenses are only going up. The deficit spending only continues to increase.
And Yellen is a great example of this.
She's out there pretending like they have like reasonable fiscal policy,
talking out one side of her mouth.
But then an event just shortly before she was testifying, she's shilling a crazy
low carbon spending package.
Being so close to the magnificent Amazon is also a reminder that the transition
to a lower carbon global economy is also the single greatest opportunity of the 21st century.
The transition will require no less than $3 trillion in new capital from many
sources each year between now and 2050.
Music.
Don't we talk about the debt more? Because it does seem like it's a pretty big deal.
And David Wessel was on CBS.
He's from the Brookings Institute. And he took a shot at explaining why we don't
seem to talk about it as much.
It's kind of like everybody cried wolf for too long. And so people stopped believing it.
Now, one reason that people aren't talking about this as much as they did in
the 90s, John, you may remember in the 90s, the crisis was always said to be just around the corner.
Bob Rubin, the Treasury Secretary for Bill Clinton, said that.
The Simpson-Bowles Commission says just any day now we're going to have a crisis.
People won't buy our bonds. Well, the crisis never arrived.
And so that sort of defanged the notion that if we don't do something,
it's going to be catastrophic.
The bigger problem, it seems to me, is eventually two things will happen.
One is more and more of our federal spending will be eaten up by interest,
half of which goes to foreigners, which means less money for everything else.
And eventually it will crowd out private borrowing.
That will slow economic growth, productivity growth, and that'll mean lower
living standards in the future. We might not ever have a crisis.
This might be like just smoking one more cigarette. The next cigarette won't
kill you, but eventually if you keep smoking, it will. This is my general hypothesis as well.
The crash already begun. The crash begun in 2008.
Maybe it began in 1971, to tell you the truth. But in my lifetime,
it seems like things accelerated in 2008.
And it's a slow slide. It's like smoking.
Not one particular cigarette kills you. That's such a great analogy.
It's just we're taking on more and more cigarettes. We're smoking more.
We're smoking more packs per day. The doctor's telling us our lung capacity
is down. We're still smoking more.
And so we'll just slowly run out of air. And the quality of life continues to
slide downwards while that happens.
And then things like the reserve currency status get challenged. More conflict happens.
And the U.S. consumer keeps waiting for this supposed huge crash.
This supposed moment where everything changes and now, now, now things are bad. No, no.
No, no. It just is a continuing degrading slide, unfortunately.
And maybe that's why maybe that's why some of these politicians are trying to
address the Bitcoiner crowd like we saw at the Bitcoin conference last week.
Maybe that's why some of these individuals in government seem to be trying to
understand the concerns of Bitcoiners.
Shortly after trump was on stage senator lummis
comes out i sometimes don't get that right senator cynthia lummis
comes out and announces a proposal to quote enhance the u.s dollar by creating
a strategic bitcoin reserve you know before you all leave have we got a present
for President Donald Trump. Here it is.
This is the Bitcoin Reserve Bill.
I'm reading from the text in the Senate of the United States to establish a
Bitcoin Strategic Reserve,
a network of secure storage vaults, purchase program, and other programs to
ensure the transparent management of Bitcoin holdings of the federal government.
I'd love to know what these secure distributed vaults look like. Is that a multi-sig?
Are they Like a certain amount that are on a cold card that goes stored in different...
Banks around the country. Like, what does what does she mean by that?
But I have to admit, I do love how a U.S.
Senator seems to be getting more and more into the way of Bitcoin thinking.
And once they slip into the way of Bitcoin thinking, which I think happens to
a lot of us, you start to really understand what's wrong with the dollar.
My name is Cynthia Lamas and I'm the Bitcoin senator.
I mean, that branding, right? I'm the Bitcoin senator.
How about that? I mean, just that alone, it's just, it's, the Overton window
has shifted so significantly.
The importance of Bitcoin has never been stronger in the broader culture of the United States.
And hopefully this influences the rest of the world. And for a U.S., sitting U.S.
Senator to call herself the Bitcoin senator, I just don't think me of even three
years ago, when we were all extremely excited about McKellie, could have seen a U.S.
Senator trying to align themselves so strongly with the Bitcoin community.
My name is Cynthia Lamas, and I'm the Bitcoin senator. Senator.
When Satoshi Nakamoto, in January of 2009, mined the first Bitcoin,
He brought about an asset that will change the world.
And this is our Louisiana Purchase Moment.
I wonder if she got that from Saylor. That's a good line, Louisiana Purchase Moment.
And Lummis goes into some detail around how the initial asset acquisition would
happen and a little bit more on how the storage would work.
This Bitcoin reserve that we're
going to create will start with the 210,000 Bitcoin that President Trump just
mentioned and pull it into a reserve stored in geographically diverse vaults,
and that's only the beginning.
Over five years, the United States will assemble one million Bitcoin,
five percent of the world's supply.
That's not chump change. You know, five percent is a significant number.
And she has details on how long that Bitcoin would be held and the limits of
what it could be used for.
And it will be held for a minimum of 20 years and can be used for one purpose.
Reduce our debt.
Okay, interesting. I'd like to hear more details on that.
This Bitcoin is going to be transformative for this country.
As President Trump just said, we are printing too much money.
We are spending too much money.
We printed in 22 months during COVID the same amount of money that had ever
been printed in the history of the United States. Well, no more.
With a strategic Bitcoin reserve, we will have an asset that in that period
of time before 2045 can cut our debt in half.
And as Michael Saylor said yesterday,
If we put $3.3 million in a Bitcoin reserve, we will eliminate the United States debt.
We will be debt free because of Bitcoin.
Now, how would you pay for that? Where does that money come from?
Well, she says you don't even have to raise taxes.
Somehow the funds are already there. And you know what? We don't have to raise taxes to do it.
We have the funds now. This bill provides that not only will the asset forfeiture
money be transferred into this reserve,
fulfilling President Trump's promise that he won't sell any Bitcoin,
but we will We will convert excess reserves at our 12 federal reserve banks
into Bitcoin over five years.
We have the money now.
OK, that's kind of a compelling argument, but I remain skeptical because I think
you have to remember sometimes there is unintended consequences from government
interaction with things like this.
Senator Loomis also has a pretty, you know, strong motivation to support the dollar.
She's a U.S. senator, so she's talking to Bitcoiners, but ultimately I suspect
she's probably a U.S. dollar maxi, as she probably should be as an elected official.
Here's part of her quote in the announcement.
Quote, establishing a strategic Bitcoin reserve would firmly secure the dollar's
position as the world's reserve currency into the 21st century and ensure that
we remain the world leader in financial innovation. Thank you.
So, you know, she's very much saying Americans diversifying into Bitcoin is
good for the U.S. dollar.
And she has a stablecoin legislation, too, that suggests that stablecoins should
be backed one-to-one to U.S. dollars, which would be great for the dollar.
That'd create a lot of demand for U.S. dollars.
So there's sometimes unintended consequences. There's sometimes secondary motives.
But to see this conversation happening, to see the senator hitting on these
points about inflation, about money printing, that part I feel good about.
But I have a question for you.
Please boost in how you feel about the U.S. creating a Bitcoin reserve from
seized coins, first of all, because I think that could maybe potentially possibly
incentivize the U.S. government just to seize more coins.
And how do you feel about the U.S. government owning at least 5% of the supply out there?
Let me know how you feel about those things. Boost in. We'll have a conversation about it.
Well, this was interesting to see. It seems like we've had a lot of on again,
then off again headlines out of Russia when it comes to Bitcoin and mining.
But this week, two laws were passed and they go into effect just later this year.
Russia's lower house of the Federal Assembly, also known as the state Duma,
has passed two crypto-related laws on Tuesday.
That's according to a Russia-based policy expert.
The first law fully legalizes cryptocurrency mining in Russia from November
1st of this year, and oversight over mining activities will be spread between
different institutions, with the Bank of Russia seemingly having overriding powers.
The second law, which comes into effect on September 1st, is a special experimental
regime that allows the central bank to authorize selected companies to conduct
cross-border settlements and exchange trading in digital currency. Huh!
How about that? I'll keep my eye on that.
Interesting to see. All right. Coming up, your boosts, I have some hands-on
experience with the new Albi Hub that I want to tell you about,
and details on a nasty-looking digital assets bill that just passed the House,
and some big project updates.
Music.
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So check it out. All of that is in the show notes.
Thank you everybody who supports the show through one of those means.
And thank you everyone who supports with a booze.
Open source accountant comes in with 5,000 sats. Make it so.
My bet is that Satoshi is Tim Berners-Lee.
Oh, I don't know if you're joking or not open source, but I like throwing this out there.
I'm going to say disagree. I think I'm going to say hard disagree,
actually, but now I'm not sure who I would like to throw out there as a possible Satoshi.
Because, like, Adam Bach seems really obvious. Like, all the ones I want to
go with are pretty boring.
If anybody else has any guesses, let me know in an open source account,
and thank you for that boost.
Anonymous comes in with 4,444 sats.
Things are looking up for old McDuck. You know, on a light news week,
you could try to bank some special coverage of software or wallets or how-tos.
Ah, thank you. And Anonymous also sent a row of ducks for the music.
Thank you. You know, I have some thoughts on that. I'll tell you after the boost segment.
Jazz Paratza Ajani comes in with 6,666 ads. Fun will now commence.
Your response about TCP IP is exactly why the other blockchains will win out.
A protocol is only useful if it can be built upon.
The only thing you can do with Bitcoin is hodl it, whereas ETH and Sol are focused
on hosting innovative services.
Okay. He goes on, for Bitcoiners, a hard fork is a dirty word,
but ETH has hard forks routinely because the community is focused on development.
Moment, you have got to be kidding me.
That is some serious cope, my friend. Again, I love this boost because this
gets me talking, but to spin routine hard forks as a good thing feels like some
sort of statism or something. I don't know.
He goes on to say, you do realize that Ethereum and Solana are also open source,
and you can self-host nodes in those ecosystems as well.
In Ethereum, there are various options for both execution and consensus clients
developed in a a variety of languages by various open source teams,
and they can be mixed and matched.
The newest execution client is written in Rust, except ETH block time is 12
seconds rather than 10 minutes.
You know, here's where I think I agree with you, Jasper. I agree with you that
there is going to be demand one day for a smart contracts blockchain,
and there's going to be more of that as we get real world assets.
I just saw a headline that over 40 million drivers records, I don't know,
title, that's what it was, car titles from the DMV of California have been added
to the Avalanche blockchain, right? They're not going to do that on Bitcoin.
And I think we're always going to see some kind of experiment with that,
at least for the next decade. I don't know if much of it will be successful, but.
What California claims the benefit is, is that title transfers,
when you sell a vehicle, go from a week to a couple of minutes.
And that you can do it through the web now or whatever. I don't know why they
couldn't do it with the SQL database, but that's what they say.
But let's back up here a little bit. The only thing you can do with Bitcoin
is hodl it. Well, first of all, that's a pretty great thing.
Storing your energy for something in the future that gives you greater returns
is pretty awesome. And having something that's been as democratized as Bitcoin,
it's available in a fraction, is an incredible new utility, extremely useful
to the entire world, rich and poor.
And even if it only was good for that, that would be an incredible innovation for humanity.
And because Bitcoin is transparent, because you can account for every coin,
unlike you can with ETH, and because it's been going for 15 years strong with
an incredible network effect now, as evident by the ETFs and as evidenced by
all the politicians pandering to Bitcoin,
that's all of that.
The network effect, all of that, is part of Bitcoin's value.
And even if it was only that, what we have right now, I think that'd be worth it.
And I still think it would make Bitcoin special above all the other cryptocurrencies
because they are not that.
But what you are shortchanging, and I think this happens a lot in the Bitcoin,
anti-Bitcoin arguments, is you're skipping over the store of value part of an
asset, which is a critical phase of an asset's development.
Medium of exchange really needs store of value first because store of value
is where you get price discovery. You cannot agree on how much we should sell
a bag of apples for if we don't agree on what the Bitcoin's worth.
We're getting there, but we need price discovery, and we have a long ways to go.
You get price discovery through the store of value process of an asset.
And you're trying to just bypass that with things like Solana.
Now, Solana, sure, is it great to have decentralized applications and smart contracts?
Probably. You know, I think it's weird. I got married in one state,
and now I live in a different state, and I have to go back to that original
state to get my marriage records.
That's crazy. It seems like that should be fixed.
And I don't think that's probably going to be fixed on top of Bitcoin.
But I think you are fooling yourself if you think that Solana or Ethereum are
equivalent to Bitcoin in terms of a store of value and is something that will
eventually be a very trusted medium of exchange.
Because Sol and ETH are, you know, they're really useful inside their own ecosystems.
There's unlimited supply. And the insiders got a pre-mine.
All of that diminishes its store of value. And you're not going to get to a
successful medium exchange unless you have a store of value.
What you're going to get is a bunch of stable coins running on top of those networks.
You know, you'd be making fees indirectly. Well, congratulations.
You know, and that'll become a battle of the technology platform.
That's what that's going to be, right?
Bitcoin is a monetary asset that's fighting things like gold and silver.
Solana and Ethereum are going to fight amongst each other as the best smart
contracts platform. And they're going to fight on price.
They're going to fight on speed and features.
And Bitcoin's just not even going to play that game.
So it's silly to sit here and say the only thing Bitcoin's good for is HODLing.
Good. Let's keep it that way for a while. And yeah, I know they're open source. I think that's great.
I don't know what your point is about that, but I think that is great.
No what's bit, no waste, okay, here we go.
I got this. I got it this time. No waste, BTC signs. Ha!
You supposed. 5,000 sats. And they wrote to say the great reset and the rise
of Bitcoin is a great documentary.
Okay, thank you. I'm looking for some documentaries. The great reset and the
rise of Bitcoin, huh? All right. I'll take your word for that.
Our next boost comes in from Ace Ackerman. And he comes in with 4,444 sats.
No great Bitcoin documentaries come to mind, but I got hooked after reading
The Internet of Money and The American Kingpin.
And some value for value, 33 minutes of great analysis. USD stablecoin creation
for Bitcoin as a reserve asset is a fair trade, I think.
USD will eventually be digitized regardless. Probably does mean Bitcoin remains
an asset and not a currency.
Self-custody must be defended. I agree. B-O-O-S-T.
Thank you.
Halleck comes in with 10,000 sats. Yes, sir. Sir, sir, sir, sir.
Welcome back, Chris. Feels like wild news is coming and I am here for it. I agree, Halleck.
I have been hustling. The show has been on quite a bit of work the last couple
of weeks, but I feel like we're capturing some really important times for Bitcoin.
So I'm here for it. Thank you for the boost.
Gene Bean comes in with 8,505 sats. Put some macaroni and cheese on there, too.
Thank you, Gene Bean. He says, that banking association report you covered literally
makes me sick to my stomach.
I'm sorry, dude. I didn't mean for that. For newbie stuff, he says,
maybe give an introduction to UTXOs and the like.
And yes, I am on the electric car bandwagon. My wife and I both got ones from
Kia, the EVE 6 and the EVE 9.
We saw a ton of fuel. And yeah, I know we saw the price of fuel.
You save a ton on the price. Yeah, I get you on that.
He says, also appreciated the special targeted episode. Oh, good. I'm glad.
I wasn't sure if people would like that or not, if I should have just included
it this week, but it felt like we had enough to make it its own episode and
kind of put it all in there.
If people are interested in the Bitcoin conference, they can go listen to 20.
And if they're not, I guess they could skip it, I suppose.
Hopefully not though. Hopefully, hopefully you found it useful.
Thank you for the boost, Gene Bean. I really appreciate it. The golden dragon
comes in with 6,666 cents.
I don't think the Trump, I don't think the Trump really gets Bitcoin.
His campaign donation site shows he accepts a bunch of altcoins. Yeah.
Which doesn't make a ton of sense to me if he's trying to get the Bitcoiners.
But RFK does seem to get it. There will always be more bubbles in nonsense politically.
Yeah, that looked to wreck our wallets.
Yeah, they're just trying to, they want your donations, they want your coins.
Yeah, I mean, more power to you if you want to donate your Bitcoin to a politician,
but that is never going to be my thing.
I suppose if I was really into it, I would, you know, and maybe I'd throw dirty
fiat at them. What do they care, right?
Next comes in with 5,000 sats, a Jar Jar Boost. You supposed!
A beautifully straightforward breakdown of the RFK Trump and Saylor speech.
Thank you. Thank you for the value back mix. I really appreciate that.
Monty33 comes in with 2,222 sats. That's a row of ducks.
I sent some noob questions your way on Matrix. I appreciate any knowledge you
can pass along on the basics.
Yes, you did, Monty. Stay tuned to After the Boost, which is right now,
actually. Turns out that is the boost right there.
So send in your noob questions. I have a great batch that did get sent in by Monty33.
And so I've saved them up. I was going to cover them, but I think we just have
plenty of news this week.
But I'm going to try to work them into next week's episode, maybe the episode
after, if you boost in and we get enough.
So if you'd like to get your questions, your newbie Bitcoin questions answered,
I'm going to do a batch of them for next week's episode and the week after.
Now this week, this week we had a pretty good amount of boosters.
We had 15 boosters across 24 boost total. It's a good number.
Sat-wise, though, we only stacked 62,264 sats.
I figure, you know, that's probably about $3.45 an hour for the around 12 hours
I worked on this episode.
Might not be your fault, though, actually, so don't feel too bad.
I think that might have been on me, possibly. I admit it.
I was having some note issues. Yeah, yep, I was having some node issues,
and I got a brand new node this week. I got a brand new fancy node.
Very excited about it. I want to tell you all about it.
So if you boost in, you'll be helping me test my new lightning node this week,
and hopefully I won't miss those stats.
And I'd love it if we could rally it up. Last few episodes have been quite a
bit of work, and I'm for it. I'm all here for it, but it's got to make sense financially, too.
Thank you, everybody who does boost in it really means a lot especially this
week you can boost with a new podcast app fountain is fantastic
integrates with strike which is available now in 100 countries including the
EU and the UK I think also customatic is such a winner integrates with Albie
and podverse does as well there's so many great options at podcastapps.com go check all of those out,
or you can boost from the web go to fountain.fm and just search for this week
in bitcoin and you can actually just boost from their website too you don't
even have to be signed in music.
Music.
Been introduced and I had a chance
to try it out this week in fact I got on a call with co-founder
lead support and lead developer and
asked all kinds of questions and if you are not
familiar with Albi it's a browser extension and
a service that is both a lightning wallet on-chain and also a key signer for
Nostra apps and anything that use Nostra wallet connect very very handy application
and some podcasting 2.0 apps use it as their back-end and they've We've recently
been working on a system that is full self-custody,
and this is Albi Hub.
It features on-chain and lightning deposits and withdrawals.
It has an app marketplace, which is essentially the different Nostra and Bitcoin
apps that you can do key management for.
You can buy Bitcoin inside of Albi as well.
The browser extension continues to work with your Albi Hub.
The developer APIs continue to work, which is incredible because we use that tooling.
Here to pull all the boosts and generate our show docs.
You can host it with their cloud version. You can run it on desktop if you want,
or you can connect it to six different lightning backends, which is incredible.
LDK, LND, Greenlight, PhoenixD, Breeze SDK, and Cashew Mints.
I think the Cashew Mints one is probably for the braver ones of you.
And so I did a migration from the traditional hosted original Albi wallet service,
whatever you want to call that, I guess for the purposes of this,
I'll just say the original custodial service. It was a seamless migration.
They migrate your funds into the hub as well.
You can transfer your balance, which means, so yeah, and the reason why you
might want to do that is because it's kind of nice to start with a little bit
of a balance in there to open up channels.
They have a selection of liquidity providers, so they make that really easy.
To open some inbound and outbound. And if you need to, you can move funds via
on-chain as well, and we'll generate like a QR code or give you an address.
You get a new node address.
You're using a new node. You're no longer on Albi anymore. And it works with the same Nostra apps.
And so you could also go get the Albi Hub software, the actual back-end software,
which is available as a Docker Compose, or you can run it manually.
You could run that on Linux as well.
Or you could point this Albi Hub to your own existing node.
So like something that we'll probably do is use our next Bitcoin node,
and then we'll use Albi Hub in front of that to manage it.
So we can manage the liquidity in the channels potentially, or at least get
a UI. We'll see. I don't know how that's going to work.
I haven't done that yet, but that would be nice.
However, if you're looking for something that is a little more turnkey,
they're also offering the Albi Cloud.
And I decided to look into this because this is where I had the most questions
is how does the Albi cloud work? And why do you want?
Albi hub cloud versus Albi hub and what's the distinction?
Well, I'll be hub cloud They're actually spinning up a node in a VM for you
a dedicated node for yourself.
But all of the contents are encrypted, and you decrypt the contents of that
VM with your Albi Hub password.
So when you log into Albi Hub, it decrypts the VM, and then it's accessible.
The Albi folks themselves cannot even access your Lightning node.
The reason why you might want a cloud
node is because to receive Lightning payments, you need to be online.
So you need to be online 24-7, especially if you're doing, like,
podcasting and you're receiving boosts. You need to be on 24-7.
So if you're hosting at home, you need to have a really good internet,
you need to have a really good power.
And so my option was either I host another node here at the studio,
and then when the studio goes out, multiple nodes are down. Or I look at something like Albi Cloud.
And they give you essentially a hosted lightning service for 21,000 sats per month.
Now, depending on when you sign up, if you help them beta test,
you might be able to get that for 10,000 sats or so for the first three months.
But ultimately, the price of the program is 21,000 sats per month.
Now, right now, that's a pretty fair price because this is a full-fledged lightning
node with a nice UI to manage your channels and liquidity and your on-chain wallet.
It's all encrypted to your password.
It's non-KYC, which is incredibly amazing that they managed to pull this off without KYC.
But the cost is 21,000 sats per month. That seems fair for what you're getting
because if you go look at something like Voltage and their pricing.
I believe it's much less than that.
And then it's integrated in with the Albi extension and the overall Albi ecosystem.
So now you can still use it for your Nostra payments, your podcasting 2.0 payments
or receiving money, but it goes into your own custodial wallet,
your own custodial Lightning node, either using Albi Hub with your own node
that you bring or using Albi Hub Cloud.
I know that's a lot, and some of you might not even know what I'm talking about,
but Albi is a very important piece of the Lightning and Nostra ecosystem and
the podcasting ecosystem.
So I wanted to dig in there and ask them some of these questions about the no
KYC and how the VMs are encrypted, and I was pretty satisfied with the answers that I got.
So I went ahead and signed up, and now I'm using the Albi Hub Cloud.
I'll be trying it for a while. I've got my basic inbound liquidity solved,
I believe. So if you boost this week, you help me test the new node,
and I'll give a report back on how it went.
Music.
Thank you for watching. I mentioned a new bill that just passed the House that seems kind of nasty.
It's actually been brewing since April of 2023. And I don't know why I just went through now.
It's the bill to establish an independent fintech working group that features the CIA,
the DHS, the NSA to bring them all in and wrap their head around digital asset
technology and how it could be used to avoid sanctions or money launder or crime. right?
And there's not a lot of news coverage about this, I think because it's kind of been a sleepy bill.
But it did pass the House this week, as The Rage is reporting.
They write that the bill is meant to establish this independent financial technology
working group to combat terrorism and illicit financing.
So it's known as the Financial Technology Protection Act of 2023.
Well, guess what? I have a clip from early 2023 when this bill was first introduced.
Thank you. And I move to strike the last word. Thank you to both the members
on the majority and the minority for your incredible help in both leading this
effort, as well as that of addressing the Financial Technology Protection Act of 2023.
Blockchain technology and the digital assets are here to stay and need an environment
where they can grow in the United States, but not be taken advantage of by our adversaries.
Through the transparency of, though the transparency of cryptocurrency,
law enforcement now has a unique insight into the movement of illicit funds
that help them track down and ultimately reclaim illegal profits and stop those
from going to those who pose a direct threat to the United States.
For instance, the Department of Justice seized a million dollars of Bitcoin
that was funding Al-Qaeda. Bitcoin.
This guy, and you know, Now, this guy's coming in with clear 2023 energy, too, right?
So this, it just was just a couple of weeks ago where most of the federal government
was anti-crypto and anti-Bitcoin.
And you can feel this energy back in April of 2023.
Al Qaeda getting funded by Bitcoin. To those who pose a direct threat to the United States.
For instance, the Department of Justice seized a million dollars of Bitcoin
that was funding Al-Qaeda.
As a nearly 20-year veteran of the United States Air Force myself,
I've flown intelligence operations over both Russia and China and deployed three
times in the Middle East, with combat hours serving in both Iraq and Afghanistan.
In other words, he was a spook. There we have seen firsthand the threat stem to the United States.
Later, I served as the director of cybersecurity at the White House National Security Council.
Totally a spook. And I've seen the direct need to further explore and leverage
blockchain technology as a countermeasure to combat illicit financing by terrorist
groups, while also maintaining America's freedom to utilize this new technology.
Utilize blockchain technology to stop terrorism. I think that just means surveillance.
I think that's what that means. I mean, my primary concerns here really are
not so much about money laundering or tax evasion, but it's just integrating
intel agencies more into the process.
You know, this is chaired by the undersecretary for terrorism,
financial intelligence.
Guy seems to be really in on it. He's implicitly trying to get the IRS,
OFAC, FBI, DEA and the Department of Homeland Security,
Secret Service, the state department and the CIA all working on this council.
So, you know, blockchain experts, right?
Everybody knows how the State Department and the Secret Service are all blockchain experts.
According to the bill, the group would report on the, quote,
potential use cases of digital assets and other related emerging technologies by states,
non-state actors, and foreign terrorist organizations and other terrorist groups,
which could be US citizens, to evade sanctions,
finance terrorism, or launder money.
Of course, anything that threatens the, quote, national security of the United States.
So the group is going to make some legislative proposals to prevent the evasion of sanctions.
So they're going to come out with a bunch of different proposals, essentially.
But this really is some nasty people working together with a lot of 2023 energy.
I just don't like it. So I'm going to keep my eye on this and I'll report more,
see if something like this starts brewing up in the Senate.
All right, how about some project updates? Would you like that?
Music.
One of the neat things that was going on at the Bitcoin conference was Strike
was piloting a new payment backend via a plug-in to the BTC Pay server.
Maybe I think I'm just looking for an excuse to talk about BTC Pay server,
which is just absolutely a cool project for anybody that's looking to do like
a self-hosted point of sale system.
But the neat thing that's happened is the community, I think.
I think it's from the BTC pay side, wrote a Strike plugin using their new API,
and it worked incredible.
767 Lightning payments were processed, over 50 million sats, a 100% success rate.
And I think this is probably Jack, whoever runs the Strike account, adds a fun fact.
A little over 75% of the payments came from wallets on the open network,
and then Strike was used for the rest.
That is really, really cool. It's really cool to see that just strike.
I think has a lot of potential They've navigated the last few years and remained a Bitcoin company.
You know when others have been tempted by the sweet song of tether and got a
lot of tether money or others got involved with crap coins,
Jack remain focus on Bitcoin and he's built a solid little company over there
with good services so it's good to see strike kind of,
don't know, reaching sort of this utility level, I suppose, for payments.
I like what I see and I hope they keep going. I'm a big fan.
I want to do a little follow up on God Bless Bitcoin, the documentary I played
a trailer for not too long ago.
I watched it and I think it was better than I expected.
It is very stylized. So I know that'll bother some of you.
And I personally think it could have done with some fresh faces.
It's a lot of the same people you always see in kind of the Bitcoin media class
out there, but I also grok that this is really meant for a new segment.
But it touched on a lot of economic principles and ideas that I think people
need to grok to appreciate Bitcoin. They did that well.
And they also appealed to multiple religions, not just one. I think I was expecting
them to focus on Christianity.
And they kind of made the appeal for how Bitcoin kind of fits in with various popular religions.
So it was multi-religious. And they kind of did that all at the end.
And there was little hints of it here and there throughout the documentary,
but leading up to it, it was mostly fundamentals.
And then they kind of did at the end kind of that, well, if you're Hindu,
if you're Christian, you know, if you're Jewish, they just kind of did all the
different pitches for the different popular religions. I thought that was interesting.
I will put a link to the full documentary in the show notes. It is up on YouTube.
And then this week they posted like a little excerpt or something that didn't
get included in the documentary.
And it's called Busting FUD. And I'll put a link to busting.
No, it's not called busting FUD. It's called the biggest Bitcoin myth debunked.
And I will also put a link to that in the show notes. But they did have a good
FUD busting segment that I wanted to pull for you.
They cover like the biggest FUD that Bitcoin's under from like,
you know, questions about Satoshi to questions about what if Bitcoin disappears?
It's just a mirage. It's a digital thing.
But of course, they did a great one on energy. And I just I love the future
of Bitcoin and energy the two things together I think is so promising and this clip really nails it,
Okay, but a lot of people think Bitcoin is ruining the environment because it
uses way too much energy. So let's explore that.
The percentage of renewables operating in the Bitcoin network for mining is
actually shockingly high.
Most power that's used for Bitcoin mining is green energy. It's renewable energy,
it's waste energy, and so it's actually not adding to the carbon footprint of the planet.
According to the Bitcoin Mining Council, which makes up over half of the global
Bitcoin mining network, approximately 58% of Bitcoin mining operations utilize
green and renewable energy.
This means that Bitcoin mining has the highest renewable fuel mix makeup of
any other industry in the world.
And the great thing about Bitcoin is that Bitcoin mining is instantaneous and
it's mobile. So you can chase cheap energy.
The most successful Bitcoin miners are those who find the cheapest energy and
the cheapest energy is the energy that does the least damage to the environment.
Bitcoin mining, proof-of-work mining is leading the transition to renewables.
So for those who care about a transition to clean and green energy sources,
they really should be embracing Bitcoin mining because this is how we are going to get there.
It uses so much, it uses as much energy as these small countries.
Okay, you mean different than the banking industry? I mean, branches,
do you drive by on your way home to work?
Have you ever been in a bank? Why do we have these big buildings being heated
and cooled and people sitting around doing nothing?
We all use our ATM cards. We wire money to each other.
So there's a lot of electricity that's used in a lot of things.
Gold mining uses six times the amount of electricity as Bitcoin.
Everything we do, all of us, every day, is take energy and convert it to value.
Bitcoin actually is the perfect conversion of energy to value.
You ever seen the picture of the United States at night? It's totally black
except for North Dakota and West Texas.
Because they're flaring gas, right? They produce oil and there's some gas that comes out.
They don't have any pipelines, so they literally put it up in the air and they light it on fire.
Really bad for the environment, you know, cool light show, but that's a negative.
So what could we do? We could take that gas, we could attach a micro turbine
to it, and we could turn electricity into Bitcoin.
Could attach a miner to it. Now, we don't need a pipeline to send that value.
All we need is an internet connection.
We don't need to get right-of-ways. We don't need to kill any birds with windmills and wind farms.
And that is a perfect conversion of energy to value.
It's actually a net positive for the environment. If you're taking the carbon out from the flared gas,
that's a huge positive, but no one talks about that because the incumbents don't
want, the banks don't want this migration to a better form of money.
The entire debunk video is about 17 minutes long. I think it's worth watching.
That's one of my favorite things about where Bitcoin is going to be in the future
is to help capture those methane off gas where they just burn them right now.
Every time I see a flare going off, I think, you fools, you fools could be earning
Bitcoin right now. You fools.
Hey, if you made it this far, please do consider boosting into the show.
I really do appreciate the support. and you can also go to thisweekinbitcoin.show
and get all the links to the stuff we talked about today.
Lots of extra stuff in the show notes this week. I'd also love to boost in with
what you'd like to hear. If there's a story I missed, let me know and tell me about it.
Now, I am gonna leave you with a value for value track.
It's one of my absolute favorites.
It's 4AM Forever by Curtis Drums.
Music.