#142 — The Bitcoin Group #142 - Bitcoin $1900 - Alza - Congress vs. IRS - Dogecoin Tipbot

The Bitcoin Group, the American original. For over the last 10 seconds, the sharpest Satoshi's, the best bitcoins, the hardest cryptocurrency talk. We'd like to welcome our panelists, Blake Anderson, cryptographic economist. Hi everybody, thanks for having me on the show. Tone Vays from Liberty Life Trail. Hey everyone, coming to you from Hong Kong, 6am here, shout out to Larry Salibra because he went down to consensus in New York and allowed me to stay at his place while he's away. So thanks man. Very cool and I'm Thomas Hunt from the World Crypto Network, moving on to issue one. Issue one, Bitcoin 1900. Bitcoin has reached the earliest 20th century with yet another bull run, driving the price above the century mark. The move raised the market cap in additional for billion dollars and the price of Bitcoin is nearly doubled in the year 2017 alone. Blake Anderson, your thoughts on the dramatic rise in Bitcoin's price? The rise and rise of Bitcoin, it's an interesting thing. It's like the Wild West mixed with technology, mixed with the 1920s run up. So there's all kinds of stuff going on and also kind of like the dot com boom. I think that the price of Bitcoin and the total crypto market cap is just, it's doing really well. But I do worry a little bit about in the dot com boom, all kinds of stuff collapsed really, really, really quickly all together. So I hope that a lot of these gains are going to be, you know, permanent and staked in and stuff. I'm not quite as worried about the Bitcoin pullback as I am about the pullback and some of these projects that function differently than Bitcoin. I made some money in Ripple and a lot of people that I know have made some money in Ripple. But now I am starting to fear the dial back. I made a little bit of money in Ripple affirmally by just saying, you know, let's just play the rumor mill. There's about a billion Ripple coin out there and they're held by certain people and stuff. So you can really kind of game how that goes up and down. But now it's starting to get a little bit scary. I hope that people are going to take some profits and not lose everything if there's a correction. It also may not be a correction because they continue to, you know, actually shape the way that their offerings are out there pretty well. So I think that this is all good. Anytime the price spikes, you know, do a security audit, secure your stuff, maybe unload some things from exchanges, do things that are going to help make your profits more real even if it's not turning them into your Fiat currency. And I guess that's my strongest recommendation to remind people of when we're hitting all time highs. When there's all, you know, when there's huge corrections down and there's blood in the gutter, it's time to buy. And when things are really, really high, it's time to take some profits and time to secure things up. That being said, I'm not going to predict that this is going to slow down anytime soon. I just want people that are investing in the space to be able to make good money and continue to have those people that are doing that be well funded and then continue to go and tell other people to invest in that way. So that's my kind of big M.O. here. Excellent points, Blake. And thanks to our 106 live viewers, everyone give us a thumbs up and a share and a like and maybe a comment and a chat. Thanks to everyone who's active during the chat too. We're going to look at that after the show. And I just wanted to follow up on Blake's point and notice this incredible chart that I found recently. This is the chart of Isaac Newton and his investments in one of the very first stock market bubbles. It was called the South Sea stock. And between December of 1718 and December of 1721, Isaac Newton lost his entire fortune. And this is a very smart guy. None of us are as smart as Isaac Newton. But as you can see with the chart, here Newton invests a bit. Here Newton exits happy. He's got his returns. Things are good. He just eats the hold. Then Newton's friends get rich and he feels bad. And everyone knows what that is like, the FOMO. Then Newton reenters with a lot. This is the big bad move. He goes back in. It goes up over the bubble and down here, Newton exits broke. So disastrous turn for Isaac Newton. Let's go to tone waves. Your thoughts on the Bitcoin price. Oh, man. So that's a great chart, actually. I'm going to probably utilize that. I forgot all about that. How Newton lost everything in the South Sea bubble. It's no different than the tool of Mania. It's the same thing. And that's how I see all, like this entire ICO bubble, the old coin bubble, the Ethereum, the Ripple, the NAMS, all of the ICOs is going to end so badly. But I do think that Bitcoin would be the safety net for all that insanity when it implodes. Everyone always thinks they're going to get out of the top, but nobody ever does. A few people do. But let's just get real quick to the Bitcoin price. Those that watch my show and know that I was talking about this symmetric triangle that I expected to break to the upside. I had this previous high resistance on BitFinex. We actually hit exactly $2,000. We've now pulled back a little bit. Would have been nicer to pull all the way back to 1900, but we didn't even fall that far. And my immediate target is about 2020 on BitFinex. And then all the way up to 2150 for a more bullish target. And we're busting out of all the channels on Bitcoin, which is not good. I would have liked to have seen us stay in this sub green channel. This is BitStamp. Now, when BitFinex hit $2,000, BitStamp was only at 1950. However, about an hour ago, the difference in price between BitStamp and BitFinex was only $10. Like an hour ago, I saw BitStamp at 1940, and BitFinex at 1950. So the two exchanges are new parity, and we can now somewhat use them interchangeably. I don't see a huge bubble in Bitcoin yet, because I'm comparing it to the repuls and the names and the Ethereum and the Dash, and that's just insanity on that side. And yeah, I think Bitcoin's going to slow down a little bit, but I'm not seeing a big pullback anytime soon. Now, how can Bitcoiners deal with this? The price is truly astronomical. You're saying things like a pullback to 1900. You're saying things like an advance to 2150. How can someone who got into Bitcoin maybe around 300 or 500, 700 these days? What should they do differently now that the price is up? It depends why they get into Bitcoin. I got into Bitcoin because I really think that Bitcoin is going to change the world. So I'm not selling. I'm not selling unless I see, let's say if Bitcoin went up to about $5,000 to $7,000 this summer, I would then consider selling, because then I would consider Bitcoin in a bubble. But as long as it's going up somewhat steady, and I would say we're pushing the boundary of whether the price of Bitcoin is going up slow and steady, or exponential bubble land, or right on that line. I still think Bitcoin is the cream of the crop, and nothing even comes close. As long as I think that, I'm going to stay with Bitcoin. I am, here's what worries me, recent tweets by Luke Dash Jr. Talking good things about Litecoin, and that Litecoin will be innovating with Segwit and Bitcoin can't adopt Segwit. So if our core developers are starting to doubt that Bitcoin can be innovative going forward without Segwit, that would worry me a little bit, but I'm not there yet. Those doubts are very slowly starting to creep in, but I still believe that we will get Segwit by end of summer either activated or guaranteed to activate this year. And that would solve a lot. So a couple of follow-ups. First, it's a problem if Bitcoin goes up too fast because then it has to go down. That's the first thing for everyone at home. Just basic refresher. Right. And then the second thing is that I'm worried that because of the, basically, we have this influx of new Bitcoiners, probably from Japan, maybe from other countries, Australia, other countries have had positive Bitcoin regulation, I think we've kind of detached from the technical situation. I know we were, a lot of people were fearful around 9, 1200. We were seeing a possible pullback to 400 because of a four-course split. And it seems like now we've just brushed aside these potential technical problems and moved on with the hype of a bunch of newbies. Is that the problem, Tom? No, I don't think that's the problem. I just think that if Bitcoin, like right now, the blocks are pretty full. Now they're pretty full. I would say 70% of the blocks are like spam from bad actors. Like it doesn't belong there. But the blocks are still full. And as the price of Bitcoin goes up, your transaction fee goes up by default because transaction fees are calculated in Satoshi's per byte. And if one Satoshi is four times the price that it was three months ago, you were default fee automatically goes up four times. A lot of people don't realize this. And this is another reason why we need segred and we need to start to scale off chain. Bigger blocks do not solve the problem of fees being calculated in Satoshi's per byte. And if a Bitcoin is $20,000, once a Satoshi is pretty damn expensive at that point. And people need to think about that. We need segred on multiple levels. So if Bitcoin goes up in price, it will become very difficult to use Bitcoin. A lot more difficult than now. And we're just going to hit a point where people get frustrated and start to sell, take their profits. I mean, if they're, and also keep in mind, the way markets work, and this is how they work during the South Sea bubble. This is how they work during the tulip mania. Markets are designed so that the maximum amount of people lose the maximum amount of money. So I would not be surprised if Bitcoin did go to like five to seven thousand this summer. The scaling problem is not solved. Everyone, like it gets frustrated with Bitcoin, dumps Bitcoin, puts all that money into altcoins, creating the biggest altcoin bubble the world has ever seen, bigger than the South Sea bubble. Then all of that goes to zero, and then Bitcoin slowly rises from the dead. But at that point, so many people would have lost money. It would be like the South Sea bubble. And then that's the thing about Bitcoin, is we forget how new this is, how quickly the money can flow back and forth, and how relatively small these markets are. Things like tones describing can happen in almost an instant with no real regulation or anything to stop it or slow it. There's no circuit breakers, nothing like that. One-lark regulation certainly does slow recovery. One last question. One last point. Those that are trading, ICOs and altcoins, if you were not trading during the dotcom bubble, I strongly recommend you to go and Google the stories from the dotcom bubble. I was learning how to trade in 2004, 2005, and the people that were teaching me how to trade were all part of the dotcom bubble. And the stories they told us back then were unbelievable. Pets.com is just what you hear. That that wasn't even like in the top 100 of the crazy stupid shit. People came up with and got tens of millions of dollars if not hundreds of millions of dollars in funding. Please go and Google it. I strongly recommend it. We're also joined by Mr. Chris Ellis. Chris, how's it going? What are your thoughts on the recent rise in Bitcoin price? The short was a wrecked. And when I say the short was, I mean, anyone not currently holding Bitcoin, because those are the people that are currently shorting it. It's anybody who is ignoring this space who isn't paying attention, who isn't woke right now. And I'm talking about the SEC, and I'm talking about any of the people that are really, I don't attribute much of this to Japan. I attribute some of it to Japan. Those of us who on the kind of the whale pool chat room, or the Bitcoin mumble chat room, who awake many of the trading hours and looking at all the different things or all the different trading platforms in the charts, will notice that Japan is very bullish, even when many of the other exchanges are just going sideways, the Japanese exchanges like coin, etc. are mostly going up. That is true, but also they've, like many of the exchanges during their early years, they've got zero trading fees, right? So it's cheap to trade on there. It's free to trade on there. So you don't know how much of that volume is real, or whether it's the same trader just trading into themselves backwards and forwards, because it doesn't cost them anything. I attribute a lot of it. I think a lot of it was down to Phoenix, because of the banking problems and because of the ARB, and because people wanted to get their money off of the exchange, and so they were converting into Bitcoin, and they were using like coin and other different methods, and then people started to ARB, because some customers were able to get domestic transfers out of Taiwan, and then get it over into coin base or crack, or wherever. And then of course, once the spread narrowed, other customers would take advantage buying up coins on the exchange, that would then drive the price up on Phoenix, because it's a retail market, not sophisticated one, or the other exchanges would follow suit, and so it would just create this self-perch rating cycle. And I think other factors, like the fact that early on in this rally, Bitmain seemed to be out of the running, like we had the Ampli, Fiasco, we had various other things. And I think that when the SEC ruling initially didn't seem to, when that support level held, I think it just signaled a very kind of, a very bullish sentiment within the market more generally, and we'd had like two or three years of a bearish run. And those coins are pretty scarce. We've already had a harbing event, and so there are very many of those Bitcoins left, and it takes more from a lot of electricity to generate them. And so I think that's really what's kind of propelling this, and the word on the street is that what's really driving this is the spot. It's the OTC market, is the fact that nowadays, you know, where it's used to be the average person would spend $500 on a coin. Now they're only getting a fraction of a coin for $500. Right? And so these OTC, people on local Bitcoins, they don't have enough coins to keep up with the demand. People are coming to them, and the price on local Bitcoins far exceeds the price of their paying on the exchange, usually 10 to 15%, or in cases when it places like India, often they're paying $1,000 over the price that you would get on a Western exchange. So I don't know exactly how much I attribute it. And I think also, finally, it's also because of the rumours about the ETF, the second round, you know, the second slice of the pie. I think all of this, you know, put together, just create the perfect storm. And people were cooking this narrative. And of course you've got the ICO, the people are talking about the ICO season. And we already had the other day, Aragon, which raised 25 million in less than 10 minutes, I believe. I saw it. I didn't count it, but it felt like less than 10 minutes on the count. I tried to buy some myself, but I couldn't get my, my masterminds call it, ready in time. And I think we had storage as well, raise some money as the other day or today. And we've got some more coming up in Ethereum, of course, has been, has been pumping ahead of consensus. And then of course you've got the, the ripple as well. Ripple's had a huge boost. I think it's slightly a bit of manipulation of that cap table. It's not blockchain, per se. It's a centralized and three dates Bitcoin, but they've seen a massive rise in market cap, just because it's a pre-mind coin. And they, they own all of them. They, they mind them all. But because they've done some trickery with the accounting and they've said, OK, we're going to actually lock up these funds in an, in an escrow with an Ethereum smart contract. And we're going to have this emission rate of like a billion per month. That's kind of signal to the market that, therefore, these coins are not going to just be dumped at will by the founders. And that therefore these coins will somehow now be scarce. I'm not quite sure on what the connection is between the XRP and the value of the company and the offices therein. But apparently, if you look a lot of trust in a trust list, basically, yeah, well, no, no, I mean, there is a smart contract like I don't think we have to trust. I mean, of course, I don't know if they can just produce more of them. Because it's not blockchain. It's not true. You're going to produce more. But I do think that the trust of them being locked up or deciding to lock more up in the amount that were mind initially versus the amount. There's certain wheels have. I mean, it just feels like a lot of trust to me in terms of this. I think I think what we have to trust is, for instance, like how many of them do exchange owners have, for example, like, you know, I believe I believe that we can trust to the cryptographic. How many of the actual assets are going to be controlled by these banking institutions they've done deals with. I trust that because that's controlled by the cryptographics that they're doing the cryptography that they're doing with the Ethereum smart contract that they're rumored to be doing a demonstration of consensus next week. I think that what's more concerning is that for a long time now, the XRP that's been traded on Poloniex and Bitstamp, etc. has only been a small subset about a third of the overall XRP in supply. And it's traded at times less than a penny on, you know, because of all the XRP in existence is so many of them. So abundant now because they now said, well, first there were just rumors. And this is part of what concerns me about poll enterprises that there were just rumors and speculation and they've got XRP tip on Twitter. I didn't like the way it was handled. And I felt a little bit like this was a game, you know, Bitcoin's going up great. How do we capture some of this attention? How do we get in on this? You know, how do we get the slice of the pie? We can't have Bitcoin just, you know, capture all of this market share. And I just felt a little bit like everyone. Well, there was the SegWit thing. Remember that. So everyone was going after the SegWit thing and Litecoin and Charlie Lee were went after it and DigiBite went after it. DigiBite got SegWit activated. And of course, it's dead easy if you order some shipcoin to get SegWit activated because they're probably like, you know, 5 or 6 miners that are mining your shipcoin. And it's dead easy to get consensus, right? So you get SegWit activated and every speculator in their mom goes mad over the SegWit and everyone buys your shipcoin. So DigiBite goes viral and those bad holders that have been holding it for three years, well, they can't believe that luck because they probably lost like 10 bitcoins on that shit, you know, three years to get. So they're like, they're loving it. And it's fantastic. And there were lots of coins that went up massively, but Ripple went up more than anything else because there were literally Ripple millionaires, people that own millions and millions of these things because they were less than a penny. So more for me, it's a concern of like, you know, how many do the exchange owners have, how many do the certain people have friends of the company, that kind of thing. And I don't know, it's been added to a bit for next today and you can see from my new low third disclaimer, I do work for Phoenix, there are a client of mine. It was added today. I do mind about it. Let's see how it happens. It can't be, it was added today because it can't be ignored any longer. It does have a huge market cap because of events over the last couple of weeks. And it was in demand. You know, people were coming to Phoenix and saying, look, you know, the Poloniex is is suffering some some problems. It's in high demand. They put out a press release saying, look, you know, huge numbers of users are coming to us. We are also suffering lots of attacks. And so, you know, people wanted to to a place that they could trade the this currency that's now in huge demand and also, you know, shareholders will also asking for XRP to be traded on Phoenix. So it was added today. And I think that's, I don't know how I feel about it because I just sort of think that this price is very bubbly. And why it also about the ICO trend and why that Ethereum just suddenly shot up today by one sixth, you know, if it's value just suddenly just went, you know, added. How does that happen by the way? How does the currency just do that the day before on on a weekday that the weekend before consensus event. It just feel this all feels very contrived. It doesn't feel very natural. It doesn't feel like a market event. It feels like remember we do have very small markets that are moved by press events. Things like ripple locking up a lot of their currency, like 14 billion or something. Things like stellar producing a platform for their currency. They've gone up 100% end over end. These insane gains. How can we explain them? Well, it's because there are, yeah, because there aren't many people in it and they're up the low liquidity on the exchange. But also if you go to the exop forum, you know, Joel Katz is in there and he's, you know, people are posting up DMs that he's had with other people or messages that he's had on group chats, you know, on these labs. And they're sort of asking leading questions like, you know, what are you going to say about this or that in consensus thing? He's like, oh, you guys you're going to get me into trouble. You know, if I say too much and it's like, yeah, you kind of say that. But you know, Joel, you could just say nothing. Like literally nothing. You could just choose not to respond. You could turn off the phone. You could choose not to talk on the forum. Like just media blackout. But instead you choose to say something which just gets the speculators rolled up. But the price goes up. Sorry. Who are you talking about? Who is that? Joel, the chat from Joel Katz, the chat from REPL. The old. Yes. On the exo key chat.com forum. Can I just can I just comment on this? Yeah. A lot of these guys, a lot of these guys, all of these I see all guys, all these are theory and guys, they all know they're breaking the freaking law. They all know they're breaking SEC laws. So you ask them a serious question and they're going to. They're going to like moonwalk away from it because they're afraid to answer the goddamn question because they know it's a freaking security in their company. It's totally useless as an actual token. They know it's a security in their company. And you put them on the spot. They will not answer the question because they know that the SEC is going to nail their ass the moment they answer it. And this is the double-edged sword that they chose. They chose to be public people that made up this quasi currency quasi security. And they the only way they can pump this thing is if they're public people, Satoshi couldn't do that. He was anonymous and it was an anonymous currency for Bitcoin. And these guys are trying to have the best of both worlds. They're trying to be public. They're trying to pump their scam. And at the same time, they're trying not to say too much, not to get arrested. And their luck is going to run out. And I would say I'm most of them. Their luck is going to run out. Can I jump in really quick? I think this is just a very big coincidentally. Simon Dixon was on the Bitcoin minorshow earlier and he was talking about a lot of these, you know, gains that are being made and these all and stuff like that. When there's a correction, a lot of people that got burned are going to demand regulation. They're going to demand regulation. And he said that, and he said that his fear was that all of these are going to be regulated as securities except for Bitcoin because you can't because there's nobody that's in actual control over it. And when I was talking to him, I was like, do you think that there's anything that can be done to avoid that eventuality and his response was kind of, you know, well, maybe eventually they'll get put into the new category. But, but something that's going to happen with this stuff. So I mean, I agree with Tony in terms of like if somebody was like, hey, I have this company that I'm going to gift to you and make you the CEO and make you liable of it. We're going to do all this kind of, you know, securities, ask shenanigans. I'd be like, no, that's a level of liability that is a family man like, no, I'm not going to do that. Now, I do want to propose a counter argument to what tones been saying there is a possibility that the rabbits out of the hat here that too many people are doing it for too much and it's too widespread. So the way to solve this is to regulate it as an existing industry. That means to tones horror, they'll bring in the Ethereum guys, they'll bring in the altcoins, the ripples, all these other people. They'll have a big conference, they'll agree on some basic rules, probably things that libertarians won't like, know your customer, other things. And then for either a fine like ripple has already paid. Remember, ripples already paid their legit in this game now allegedly. But for a fine or for a shrug of the shoulders, there'll be a brand new industry here. Tone, what do you think? Is that going to happen? It's a possibility. It's a possibility. And then people are going to do all it will do. I agree. It's horrifying. Like these people are going to keep the millions that they've made. We don't know why they made them. They caught them. They have them. You know, it's exciting. They won't get to trust me. They won't get to keep it. None of these people know what the hell they're doing. They got lucky with that money and they're all going to lose their money. This is no different than a lottery ticket winner. 10 years after winning the lottery, most people are in a worse financial position than they were before winning the lottery. This is the same thing. None of these projects have any technical soundness whatsoever. None of these tokens are useful in any way, shape or form. If the regulations do pull these guys in and allow them to regulate themselves, that's fine. All they're going to do is they're going to extend this bubble in other three to four years. And then it'll just be a bigger crash. When people realize that the emperor has no clothes with these developers. Let's go to Chris Ellis. Seems like you've got something. Yeah, I'm just pointing to the forum that I was talking about earlier. Yeah, so this was all the speculation. And also there were rumors about it being added to Coinbase. I mean, the next sort of company that likes to keep things very close to their chest. So that wasn't what was driving the price up. But the rumors about it being added to various different exchanges. And of course, rumors that they were going to do a demonstration and this sort of a screen grab from xrpchat.com about, you know, whether or not he was going to get into trouble. For revealing about something about demonstrating something at the consensus conference next week in New York. That will be recorded and he says, well, you know, I can't, you know, I can't say anything without getting into trouble. And then of course, he comes into the forum and starts talking about things. And then you've got the xrp dot tips, which says confirmed ripple will demonstrate something at consensus, not demonstrated before buckle up xrp. And it's just this kind of pump language. And you know, there was somebody from the store, some marketing guy who told me to cease and desist the other day on Twitter because I jokingly said, you know, I was poking fun at the marketing which is trying their website. And I said, you know, the first 50 customers get 50% off this unregistered security right low. And they said, cease and desist using this kind of language in the future. And first of all, the guys not a lawyer. Second of all, there's no fucking way, dude. You want to start this conversation with me. There's no way you want to start getting legal with me, a guy who has nothing to lose against somebody who clearly does have something to lose a lot more than I do in a courtroom in a bringing up a topic you don't want to get into you don't want the PR pocket pull out over this. And I love the litigious language opener like you see this. Yeah, you work in marketing, not in law, okay. And I didn't want to dignify. I actually don't even have anything against or I actually think it's quite a sweet little project. So actually I was only joking and I don't welcome regulation either. But the point is that I just felt like it was a bit of an impotent rage comment that some like what marks in guy brings up because he's like angry because like you see almost like a little scared cat who like stands up with all his like hairs on end because he wants to make himself look bigger than he is. And I was like I was just like shaking my head again. Oh, that's really pathetic and sad. I should I say something no, probably not. And so it's just this idea that we all know why you're doing this. You're doing you're doing these ICOs because you want to make money and you're using the land this kind of language like by now, you know, this thing is going to be in high demand. You know, first, you know, invest more than 50 grand and you know, you will get 20% off and lock in six months and the all these kind of deals all this kind of marketing language times running out. You know, that was the headline story, James running out now all these kinds of language is designed for FOMO, the fear of missing out is designed to induce people into buying and they're not buying out of charity. They're not sophisticated investors. Okay, they're buying because they're expecting at least 10 times return. They're expecting to get rich so rich that they never have to work again. And I know because I hang out in a trading platform, I hang out in chat rooms and I see the expectations on these people, the greediest fuck man. They think they're going to put in one Bitcoin like Pepecash. This thing was insane. People thought this thing was like once to choose to choose to choose. They thought they could put in one Bitcoin and they would never have to work again. They were expecting like 1500 Bitcoin return. I'm like, are you kidding me? It's like, yeah, this is like like the next doge. Like this things are mean. You're kidding me. They're doing like hit the means. They're doing all kinds of memes over this fucking thing. This thing's going to go viral. I'm like fuck your nuts. Do you think that the Joe Rogan quote comes into play here? When you look at all this stuff and people seem to be unaware of it and what Joe Rogan would say is, you know, I'm not that smart. I'm really not. And yet somehow nearly everywhere I go, I'm way, way, way smarter than everybody else, which is very, very, very unsettling. I think maybe tone has that going on too. Not that you're trying to like yell facts at people, but just like your critical thinking skills. And you think about a proposition. You're like, well, that doesn't seem right. Do you think that that fits here? Yeah, I think what the point I'm just trying to make though is that there are people that are pushing this. And there are people that are on the receiving end of this that are falling for this. But there are certainly a sophisticated tier of investors that are playing this game and are winning it very successfully. But I'm really passing comment on the people that are running these schemes and the middlemen. Because it's a negative some game remember it's not a zero some game because you got the middlemen. The people that are running the schemes selling the tokens right that are really in control the people that know all the information. And I think it's some is negative some because the the exchanges and the brokers take the feet. You see, and the people that that that actually perform the ICO. They of course know the timing if the market cap is hidden. They know how long it's going on. The person taking part doesn't know. So that's a hit piece of hidden information. You have information asymmetry. So the people with the information have an advantage over the people that don't. So that's the thing and like with the Pepe cash, you know certain people had information that other people didn't have. Certain people had access to certain you know, Pepe's that other people didn't have. But there isn't always going to be perfect information. If you control the information, you control the beliefs and the system. You control the beliefs. You control the people that are actions and so forth. So it's really it the people that are in that control system have have the leverage have the edge have the house edge. This was the being a casino really. So people so people demand fair access to their Pepe's like to thank our 300 live viewers and move on to the exit question. The price of Bitcoin next week higher or lower Blake Anderson. Let's go higher, but be ready for a correction again. Long horizons hold a long term, but I feel like if I just you know, I feel like it's going to be higher next week. I've been saying higher for months, if not a year now. So I'm going to keep going with higher one last comment. I want to take this opportunity since we were talking about ripple that joe well cat sky that you were shown in the chat. I've had an interaction with him. I personally don't find them all that bright. And I'm just going to call him a straight up scammer right now. What he's been doing in programming ripple and the way he's been you know pitching. Damn Chris Ellis. Yeah, I'm going to go with higher. And I always go with higher moving on to issue two issue two European retail giant Alza to accept Bitcoin. The company plans to install Bitcoin ATMs and accept Bitcoin in its stores throughout Prague, Bratislava, Austria, Germany, and even the UK. Ton Vaze is now the time for Bitcoin retail. Did we try it too early before has the market matured? No. We need to say we need lightning. This is this shit is only going to make things worse. Like I've been against like retailers accepting Bitcoin and forever. This is the these stories like they're not like I don't care for them. Here's what I want to hear from this company. We have decided that this year at Christmas, we will offer every one of our employees one Bitcoin as a bonus. That's what I want to hear. I don't want to hear them accepting Bitcoin. I want to hear them actually you know creating demand for Bitcoin not contributing to the supply. So this story doesn't interest me if segwit had already been adopted or if they had come out and did a little bit of research and they said the moment segwit is adopted and lightning network looking promising. We will then open up our retail side to people spending Bitcoin at all of our locations doing it right now. At our current Bitcoin environment, I think is only going to make things more complicated, not better. So Ton how much did it cost you to send a dollar the other when I sent you a dollar before it cost like a dollar 25 to send you a dollar and Bitcoin now the time for retail. And I asked you not to do it right because people are like oh god you know what I'm not even going to say it because it's only going to make it worse. Like let me let me stop myself there like when people send me like one dollar each it becomes it basically that Bitcoin is now locked up in my wallet until segwit comes in because it's too expensive. I had to buy the bribe you want to our side like Roger here. I mean like like anybody. I do think it's worth noting that this story has two sides to it as they're taking Bitcoin in the retail environment and they're also offering the Bitcoin ATMs. It's a bit of a mixed bag. I think it's a little more interesting than the traditional retail play. What do you think Ton? Yeah, I mean if they're going to be selling that Bitcoin at the ATMs, it helps a little bit but I would rather you know hear these companies announce how they're going to try and get employees to accept it as you know. As a salary, I would try to get the suppliers to accept it for their goods and services. Like straight up accepting Bitcoin and immediately converting it to cash on the open market. Through a company like BitPay, which is now on my shit list and probably everybody else's who's ever been on this channel. Well, like I don't want to give BitPay more business at this point. I do. They might email your money to somebody they shouldn't. The suppliers is an interesting avenue because all the containerships imagine paying instantly for the container with Bitcoin having a trackable payment method you could go back to maybe even link it to the bill of lading. A lot of potential there, but let's go to Chris Ellis your thoughts on Bitcoin retail in Europe. Is it too early? Was that the question? Is it too early? Will it work this time? It is a bit too earlier and I think we've got way too much discord going on right now in the community. I'm I really resent what's going on right now with the miners and I think a lot of us just want the shit to be over. But the scientists in me just wishes that the trolling would stop and I actually I also resent a lot of not just it's not just ghan and who's Roger anyway. I don't even I don't even know this guy is and when everyone anyone brings to the map I just ask who he is. But it's also people colleagues and people I admire who lower themselves to this kind of trolling on on social media. And I think partly the format is the problem the medium is the problem and I certainly see it in other communities online communities too. And I said this the other day on on on whale pool as well that there are lots of communities that fall apart on the internet. And as you're missing 70% of all the non verbal communication you have face to face right there's a reason why you know internet brings about drama is because you have to work so hard on text to get across your feelings and your emotions that you can do a lot better in a face to face dialogue right. And I think that micro syntax like Twitter micro blocking just makes that 10 times worse and I think the China resolve these issues and 100 for a character of time just is not the right way to do things. And what it tends to do is it tends to resolve into or dissolve or degenerate into means and people just tend to communicate their feelings through these fucking images. And all that tends to descend into is immaturity and people just like you know posting up images of you know other members of the community and you know vilifying them and mocking them. And this isn't science and it's not helpful and I don't really yes maybe I found it funny at first but now I don't find it funny anymore because my transactions are expensive and they're taking a day or longer to go through. And they're gaining the fee someone is gaining the fees. Persons unknown a gaining the fees on the treasor wallets and on the ledger wallets so that now you're spending you know $500 to send a transaction and the only way of fixing it is to take the private key off of the wallet and to importance with another wallet or to try it that way which not everyone might have the technical ability to do. And so now I'm looking into you know diversifying into Litecoin and I've been looking into someone even like said am I being a scammer because I asked about an alternative cryptocurrency other smaller market cap right no I'm not a scammer I'm just asking you I'm just looking for alternatives that are not scams that yes may have smaller market caps because obviously I don't want to go into one that is already overpriced but. Yeah I'm looking for alternatives to Bitcoin right now because I don't see this situation resolving itself in the next six months you know to nine months I really don't see this being resolved by the end of the year. So interesting staff you said about Twitter I see a lot of people writing on Twitter and it's a real talent to write small to write. Conclusion is really really difficult so rare talent and I tell you what else is going on here that there's a problem of people who like drama who like shit stirring okay they enjoy it they like back channeling they like going behind people's back and they like stirring up shit they like talking to one person they enjoy seeing the interaction in a public space and it gives them a sense of self importance and I've seen it happen in this industry I witnessed it happen first hand and the problem is they like to feel like they can walk into the public forum and they've got something that they that is important to you the only they know and they want to walk in they want to say I've got something for you and you need me and I'm important to you and it's that feeling of importance and the feeling of being needed by your community members and that they are not going to be able to do that. They've got something they've got the gossip they've got the scoop that they're going to give you or did you know this about so and so and he's got this and this is what's happening and that's what I really don't like and you know it's what journalism is is one thing and good solid journalism is is fine but when it when it's just about gossip and name calling and and finger pointing and that's when for me it just descends into on professionalism and name calling and and I don't think that that's very helpful we're not talking about the data we're not talking about the science and we're certainly not talking about any kind of progress in this space right now. It's like Oscar Wilde said brevity is the soul of wit but not everyone is witty Blake Anderson. I don't know I think that's a lot of the desires that Chris talked about are latent in a lot of people that a lot of people have the capacity for good and for bad within them none of us are you know pure beings of light and dark and that we all have those impulses to want to be you know included and to be you know relevant and to not do our research and have it automatically handed to us and we have to resist those urges within ourselves and within the community and stuff but with the trolling and stuff like that like I don't know I might have a weird kind of personality but I think it's really great. I think it's really really really really funny and I get a lot of kick out of it but when people are being really directly hurt and uncouth like not in a not clever way then I have to like mute your block people because it's not fun anymore it's like it takes up and it was really really fun and it's like I don't know like you're having a tickle fight with something they start punching you in the face you're like well that really took a turn like I really don't enjoy that but back to the topic of our strange but we have no choice but to go with South Park for this idea of trolling it's something that started out as kind of fun you're on the internet you're anonymous you can make fun of people haha and then it became this kind of organized crusade in this campaign and they talk about I forget the the the theorem but there's a theorem where you know someone pisses someone else off and they get pissed off and they piss off two people in this whole tree of pissed off people that South Park exposed us to and that's a that's an actual network problem that's a like Chris is saying science that's a science problem but it's something being used against us it's like all these sales tactics all these advertising the phomo that Chris is talking about these are all psychological tools that are crafted and and much more enhanced than we think things like if you've ever looked at a supermarket wondered why things are uncertain shelves that's all psychological that's all payment the things that are at eye level they pay more the things that are higher or lower they're paying less the the shelf space in the beer aisle is a highly controlled and fought for market where Budweiser will come out with different size cans so that they can take up more space you'll see now there's about four different sizes of beer can that's not for the convenience of the beer drinker that's to take up more space and knock out these independent small brewers that's just one small example of sure there's lots of other ones but sorry like I interrupt you we're actually going to go back to the topic of Bitcoin or retail I was kidding I was going to say that you know um any time you have an impulse to try to I don't know to to make a conclusion about a large group of people you probably are right you're probably on the stuff but you also want to try to see if there's anything within yourself that maybe you could contribute on an individual level to helping to fix that situation on both sides maybe I could be you know less sensitive or more aggressive or whatever would and then maybe they could be nicer too but I think that there's always you have better luck when you try to identify a change that needs to be in the world and then also try to bring your truth to it and try to react from both directions and any way shape or form uh that is Bitcoin great and ready for retail is it better now than it was before I don't know if it's better now than it was before because it's more expensive now uh for me for example like using my visa card works really really well like I use my visa card uh all the time and I'll have a problem with it but bank wire transfers those are a huge pain in my ass and they're expensive and they're slow and they don't work well Bitcoin works fantastically for that and it's a very important tool that I need to use when I need to you know move money quickly so for me uh Bitcoin kind of is like this super bank transfer technology and that doesn't mean that I want to like push everybody out of using it as a currency but um for me the big value proposition of Bitcoin is that I can move my funds around what I want to and it doesn't take 72 hours and then also big funds uh funds amounts being moved like Thomas was saying if there's like a shipping crater something like that if there's going to be a big amount of value that needs to be moved or registered I think that's a good idea um everybody using it at an individual level I don't know maybe maybe Litecoin would be better maybe BitPaket at some point start taking Litecoin and help to alleviate something with some kind of a system that they could invent instead of just you know demanding that we storm the cockpit and make Bitcoin go faster regardless of consequences I think that there's a lot more thought that can go into this than just people saying you know we want what we want and we want it now but I do think that it's also important for people to tell the truth and if somebody's form of truth is in a meme that uh is is is really like it's really cutting I don't know that we should try to be friendly to the extent that we don't you know publish cutting memes so I think that what you said has a lot of truth to it but I think that we have to take all this stuff into the full scope of how people communicate and make sure that we don't you know nerf the wild west here it's a strange irony that Bitcoin may be useful to send to someone overseas than to send to someone sitting across from you at this point in time let's move on to the exit question which is a curve ball what about Litecoin Litecoin's got a faster blocks Litecoin's got segwit Litecoin's got a creator you can track him down the price of Litecoin's going up and the guys from yours just said that they're abandoning Bitcoin and going to Litecoin for their uh medium with a paywall service that they're now describing can I just use a magic wand and transform everything into Litecoin tone base no I'll make it quick Litecoin it's magical and it's got segwit and Lightning Lightning runs with Litecoin Litecoin is way behind the ball it's not being used as a store of value that's still Bitcoin and the retail side of things isn't all that great 90% of retail still takes place through Bitcoin ATM machines and I haven't seen Litecoin ATM machines come around yet most 90% of the time people are picking up Litecoin they're doing it because they already have Bitcoin most of the people are still expecting segwit to end up on Bitcoin and do everything that Litecoin promises to do it'll still happen on Bitcoin and like I always said if Bitcoin cannot get segwit and Litecoin does then Litecoin does become what Bitcoin was supposed to become it's not going to be just Litecoin it's going to be Litecoin and it doesn't other competitors and then no cryptocurrency will ever be considered a store of value it'll just be a transient currency because if people can switch from Bitcoin to Litecoin they can just as easily switch from Litecoin to something else to something else to something else it'll basically be the music download space after after naps there went down it was a complete free for all filled with a bunch of scams and a bunch of viruses this is going to be the space we end up in if Bitcoin does not get it shit together and get segwit in now that was the original idea for Bitcoin you'd put your money in you transfer it to someone they take the money out it wasn't until later this kind of store of value idea bubbled up around it as the price kept going up and up to the much to the surprise of the early adopters I think tone still there no muted yeah no I I yes I don't I'm not disputing that right so it's I have nothing word to add but I let others speak let's go to Chris Ellis and Litecoin and yeah it's sort of value tone sort of tone put it perfectly exactly that like it's called induced demand like you don't ease congestion on the road by just building more lanes that just gets more cars on the road that'll just get you more congestion and that's not solving the problem longer term and did you buy did the same thing added segwit and we can play the scale over and over again and more and more all coins can add segwit and lightning and more and more people can just keep on switching between all these different shit coins but it ultimately doesn't solve the problem of scaling right because these coins are not currently intolerable so I agree with everything that I said that that is absolutely perfect analogy after Napster you had a whole bunch of viruses and a whole bunch of different competitors but yes that that exactly will happen here excellent point on the lanes I can tell you in California they've been building lanes my whole life and we still have tons of traffic Blake Anderson your thoughts on Litecoin I like Charles Lee I don't have any huge problem with Litecoin one of the big differences between Litecoin and Bitcoin is script versus Shaw and one of the ways that manifested was early on a lot of people said that Litecoin was async proof which is like the dumbest thing you can possibly say if you want people to think that you know anything about computer science so basically what eventually happened was they did make you know application specific integrated circuits that could you know it's hash script with these memory intensive areas where they could get enough memory to do it what ended up happening was 25% of Litecoin's hashing power was in one room I think it was in Indonesia and that's not good but now that it's you know a lot past that that's like five years ago I would have to look at the mining centralization issues to see if there's still a problem and then look at the other differences in terms of the long-term conclusions about the difference between script and Shaw but I don't have any major problems with Litecoin I don't think it's you know an unapologetic shit coin like like some of them are so hey Blake Blake in light of what you said it goes back to my constant argument there is no freaking competency in development of any of these old coins all of the competencies in the in the development of Bitcoin with Bitcoin core that is why people trust Bitcoin there is zero competency in any of these coins are maybe fluffy pony but I'm kind of biased because I like him and he's a friend of mine I have no idea how good his competency in programming is because I don't know if he's being challenged in it right personally I would like to see him be part of Bitcoin core instead of programming on an old coin so with him maybe being an exception I can't I wouldn't trust anyone else from any other project in development that I'm not even sure I can't be involved with him because I don't have the ability to measure a person's coding technical competency but what I can do is I can trust a group of a hundred decentralized core developers many of whom I've met and many of whom are think are smart as hell there some of them are on the level of developers that I've personally worked with on Wall Street and I know everyone likes to make fun and talk shit about Wall Street when was the last time you met someone that worked at Goldman Sachs one was the last time you met a PhD quantitative researcher I said next to these guys I work with these guys they are some of the smartest people when it comes to programming financial software these are the people that Goldman Sachs hires and some of our core developers are at that level and I like these people like it bearers me from their IQ standard and this is why no other old coin will ever be trusted unless like five of our top core developers switch to Litecoin and I don't see that happening because then they would break the promise to people like me and others so I don't see that happening I think those guys would quit before they go and program for Litecoin well there's lots of unpack there and I think that a lot of what you said is very very true I worked for example for Fortune 25 bank in math based security information technology project management so definitely that was a position where I was exposed to a lot of people who are just frighteningly smart and then you go over into the Bitcoin space and there are several people like that but then for the most part everybody's trying to like hang out like that the exact same as those people when that's just not the case and I think that's when Litecoin adopted segwit and the development complexity of Litecoin necessarily went up a lot higher than it was before there was some concern in the Litecoin and even the Litecoin development community that development complexity is going to get hard now because now we have this segwit implemented with this version of our stuff and Bitcoin doesn't so we're not going to be able to take notes from the really really tried and true systems of Bitcoin improvement plans and that posed a little bit of a problem and if there was any single factor that prevented Litecoin from just exploring past Bitcoin I think that that may have had something to do with it hopefully on a deeply kind of a technical level I'm a little bit more technical than most people so with the Dunning Kruger effect I fall asleep that other people are going to see this type of thing but I hope that hopefully that information got out there and that that's why can I add one thing there's nothing wrong with redundancy in computer science right so I have no objection philosophically so Litecoin existing and it having segwit and lightning as a backup plan in case things go wrong I just what I suppose I'm objecting to is this idea that that it could be a viable solution and a replacement for Bitcoin let's not kid ourselves into thinking that this was not a contrived plan first of all the activation was 75% on Litecoin and it was 95% for Bitcoin it was much easier to get segwit activated on Litecoin than it was for Bitcoin and that was intentional and you know Charlie Lee is a great guy like him a lot but he was on the Bitcoin core slack channel he was in the Dragon's Den he is in discussions with Bitcoin you know Posse as it were the Bitcoin core Posse and it was to some extent contrived like it was to some extent you know talked about and discussed and I think it was there to put pressure on the Bitcoin miners to also put segwit through to demonstrate to the industry at large that segwit can work and all of these rumors about segwit being you know problematic and it could you know these rumors that it won't work and there'll be a disaster they could say look here is a live demonstration that it's not just something that works in the lab that actually works in the wild and there's nothing to worry about and to relay those spheres and so look there's nothing wrong with redundancy and I don't think anyone is suggesting that Litecoin is a complete waste of time it is absolutely a worthwhile enterprise that should exist absolutely it's now on Coinbase so maybe we can say LTC on Gox when well finally it got its Gox moment it can now legitimately be called a player in the industry it will probably persist because now it's on a on a okay you know it doesn't like Coinbase I don't much care for them either but it is at least on an exchange that does have you know retail people coming in and buying coins and so it's hard to imagine that Litecoin will ever again go back down to those levels you know like four dollars or whatever it will be buoyant in terms of buying pressure because it will be in demand and people will like it and they will continue developing on it and so forth and I think it's worth remembering the phrase that Steve Jobs stole from Picasso good artist copy great artist steel moving on to issue three issue three congress versus the IRS one senator and two congressmen sent us strongly worded letter to the IRS questioning their blanket request for all of Coinbase's records claiming that many of the people are not doing enough volume to require IRS reporting Chris Ellis are the IRS's regulations too strong and providing an owner's burden on cryptocurrency's users and attempting to halt its growth you're asking a guy who thinks taxation is theft if the IRS is a we're also asking you guy in the UK first yeah I think there was way over reaching and they were going on a fishing expedition this all sounds like someone's had a word with someone who's like got a mate in Congress to like you know have a mate with his friend and you know I I don't know what's been going on but it sounds like it sounds like words were had to me when I was reading that article it almost sounded like surely the IRS can do what they want right like they're there to investigate matters of tax I thought they could do what they want certainly in this country HMR so you can do what they want and I fully expect the tax authorities in the UK to certainly go on fishing expeditions and to to challenge bit stamp and coin floor and all the European exchanges and to tell them to give them the data like give us all the data like give us the names and the rest of everyone I don't see why any exchange would have would not comply even if the customers complain I don't even know why they would tell their customers quite frankly maybe a warrant canary but then why would they put up the warrant why would they even give themselves the grief of the warrant canary I don't even know why they would put themselves through that because then that would again will be bad for that PR they would have to explain why the warrant canary went down and and everything I think if I was a lawyer working for a for an exchange I wouldn't even advise going through put my put in my client through all of that crap so I'm kind of surprised America's obviously a lot more free than the new guys do libertards in quotes make it out you know maybe Blake maybe you can answer I thought I thought you guys were oppressed this sounds pretty impressive to me it does seem like coin bases protesting too much as we've said before on the show the reason to collect those records is to give up those records that's kind of the whole point of the the KYC the bank the all the things we talked about with coin base but I think there's a large fear within coin base that their libertarian audience would rebel and revolt if they give over these records as we expect about that because I worked on the bit for next hack that there's a reason why you KYC some of it but it's on a case by case basis it's not so that an agency can go on a pitching expedition right the the the the reasons why one KYC's it's so that in an event where a law has been broken there is a trail of evidence that can be you know gained upon by a law enforcement agent not so that a three-letter agency can just scoop up all the data so that on the off-chance in some future date they can just go rifling through and say right let's see who's broken the law because that would be a police state and well there's the IRS is a part of the department of treasury they are kind of law enforcement agency defined to collect taxes there is probably if you think about this from a manpower issue they could probably script this they could probably send out the letters automatically the amount of manpower you'd have to do to get this tax would be pretty small right so yes but that's yes but that's that's enforcement by surveillance and that that brings up for the soft police you I think welcome to 1984 yeah well yeah but there are there is such a thing as the bill of rights right I mean the constitution tells the government what it can do the bill of right tells the way it can't do I know by no means you know an expert on the constitution but I do believe that the bill of rights does protect you against that kind of enforcement because imagine a scenario where everyone went around with dash cams and the dash cams were uploading the data you know uploading the video streaming data to some central computer and it was recording the license plates at all times and it recorded every single in March and every single you know thing that you ever did and was handing out tickets for every parking thing every violation ever I mean can you imagine like every single thing I mean it would just be absurdity and it's almost like we should have been more conservative with the penal code it also sounds like you just I think it's a comfort to dream I think you've been reading the circle maybe seeing the movie this is this is there was a word for this there was a country in the 20th century I can't remember what it was called but there was a country that tried this and it didn't work out too well I think it went up and flames and they tried to take on two fronts in Europe it just didn't work out but all right let's let's go quickly to tone based your thoughts on the IRS okay so I'm actually going to go the other way on this and I'm about to get a lot of people very very pissed now I hate the IRS as much as the next guy but this may go to Blake's point where tone do you sometimes feel you smarter than the people around you and I'm not saying that I'm smart I'm just saying that I maybe think about things a little more critically and a little bit further ahead than 20 minutes and from the moment coin base came into existence the the first one of two of the first three articles I ever wrote on my website Liberty Life Trail were about the IRS and how no one should ever use coin base now here's the thing I think the three congressmen that to actually curious what their names are I will come up honestly I think they are wasting my taxpayer dollars by defending the people you know in this case because here's the deal I'm a trader I trade traditional markets my broker reports everything I do to the IRS if I make one trade a year and I made ten dollars on that trade that trade will be reported to the IRS if I do not file that ten dollars as profit in a few years I will get a letter from the IRS with the penalty okay this is normal this is standard procedure okay I don't understand why anyone is pissed that the IRS decided to have a blanket request for all the info because it's no different than securities law it's no different than currency trading the coin base is supposed to report every dollar that you that circles through it to the IRS because people are using Bitcoin to trade and we and the US government has laws in place for this now we can argue the laws we can argue whether those laws should exist we can argue whether the IRS should exist we can argue whether capital gains taxes should exist and I will be with you in that argument but in this case people that are using coin has apps have absolutely no legal basis to deny the IRS this blanket request for information and the more they fight it the more tax dollars they will waste because they have the right to this data don't use coin base that's what I said that's why I said at the top of the conversation I'm surprised that they got I'm surprised that this is happening I'm gonna take the opposite stance on this the government has certain anti money laundering rules in terms of like I think the last time that I checked was a while ago was like $3,200 of either you know broken apart deposits or deposits all at once in one day you can try to like laundromat by depositing in a different teller windows but they'll notice that amount of activity hitting your account and they're required to generate a report that goes to the IRS not saying I'm a fan of that or anything but if the IRS is asking for stuff beyond that from coin base then there would be a reason that their local legislators and something like that would write a letter and they'd be like hey you you can't just do that I think though that what the government they put all of this money laundering in in the 1970s in an effort to fight the war on drugs so if the war on drugs is over why don't we end the money laundering war as well when they keep they keep adjusting the amount that you can deposit without triggering this thing so it might be a lot lower than 30 to 100 don't go out there and think that you're safe with my quoted thing but also what they might say the legislators might say well yeah but people are gaining money in terms of either like gold or measured in dollars and stuff like that in these accounts so various activity that maybe wouldn't have triggered it swells and then triggers it retroactively the day after the day before and stuff like that so it might be a nightmare for these people to try to argue on behalf of coin base you know you are only owed these different accounts which are exceeding the amount of movement that you can take but I can definitely appreciate them being like hey we don't owe you this stuff I know it's you know a police state and taxation is theft and all that kind of stuff but I think that you know them trying to establish their rights isn't the worst thing I don't know that you know if there is such a thing as even more wasted taxpayer money that this would qualify as that and while it may be a nightmare for those attorneys we know they'll be paid very well and just for the record the names of the people on the letter were Senator Orrin Hatch along with Representative Kevin Brady and Vern Buchanan or in Hatch a very famous Senator kind of questionable so it's interesting to be on the side of this let's move on to the exit question coin base will give up all of the records yes or no Chris Ellis I think I've written now tone veys Jeff Blake Anderson oh man uh I don't know I think that the government will harass them until they're going to be like final and it's giving them but I hope it doesn't I think the Charles Lee is going to be against it and I think that everybody else at the company is going to be like yeah we're going to do it anyway the answer is yes despite the impassioned defenses of Mr. Charles Lee moving on to issue four dogecoin tip bot robbery the creator of the dogecoin tip bot went out of business in a spectacular and potentially criminal fashion after burning the little venture capital they have the creator of the tip bot Josh Mullen according to his own reddit post made the decision to steal the user's funds caching out the cold storage wallets in a desperate attempt to keep his business alive tone veys did Mullen do the right thing to attempt to save his business compare and contrast the doge bot dogecoin tip bot situation without a mount gox or bitfinex both of whom had similar problems but with wildly different outcomes well it's not up to me to decide whether it was right or not like I would not have done it but I also would never have built a tip bot for doge right so I mean what do you expect so far in this space from what I've seen almost everyone takes the money and run and the people that do not take the money and run wish they took the money and run because now they end up in court without being able to pay for an attorney and probably going to prison now now Mark or Palace might actually get lucky because the 200,000 bitcoin that was found due to incompetence on top of incompetence might actually over time be worth the amount of money in fiat the day mount gox collapse so if Carpellus is able to pay back this money before his trial he might not even have trial which is great for him but I bet even Carpellus wishes he took the money and ran everyone will take the money and run this is why you do not keep your private keys with middleman hold on to your own damn coins and if your shit coin is so down the list that it doesn't have a good wallet it should tell you something about holding that shit coin Blake Anderson was the topic again doge coin tip bot oh yeah the doge coin tips why you have the doge you have the doge that's how I got the doge and the doge distracted me too much yeah anytime almost any business collapses there's a uh in impulse that people can start to like not tell the truth and like hold uh the world of people's eyes and start to you know combingle funds and stuff like that and that's not a good idea it's really not a good idea a very large percentage of white collar and business crime happen when people give them to a tough spot and they decide to break the law instead of uh doing a uh controlled dismantling of uh of what they built so uh it happens a lot don't don't run a big business and then uh have it go tits up and think that you're gonna you know bend reality to make it work in the long run because a lot of people get hurt by doing that Chris Ellis a lot of people that work in this industry are not you know professional they're just like uh you know people that wanted to get into it and they were like you know enthusiastic at first and they thought it was exciting and then they got into it and they realized it was real responsibility and then something goes wrong and they don't realize they've got a leaky cold wallet that's leaking into the hot wallet for several years and then funds are kind of leaking out and sometimes there is real dishonesty and i've said that the Bitcoin will expose you if you deep down in your heart you're a scammer it will reveal you Bitcoin will extract that out of your soul and it will expose you as the scammer you are but i think how we read the article that you linked to um for this show what i sense is this guy just didn't see it coming right like he was just hemorrhaging cash he was a bad businessman and he was putting his own money to cover up for the fact that he was was not solvent and he was trading whilst in solvent but his dishonesty was not speaking up sooner and then when it when he couldn't cope with it any longer he then started taking the funds out in order to survive and that was of course when the when when it tits up and then since then people have actually been offering to say well how much to the server cost so i'll chip in for the server cost i don't think it doesn't sound to me based on some of the comments but people have more for a lot of money and i don't think we're talking about an empty box the situation and it sounds like people you know just have pocket change in there thankfully i mean correct me if i'm wrong please in the comments i hope i'm not speaking out of turn but from look i don't i think that there are cases in this industry where people have lost money through clear mouthheeson, since indisonesty and fraud and then there are cases where people have lost money through genuine mistake and you know this is a very complicated and esoteric technology that is very new and there are very few reference implementations and so it is very difficult to get right but i think that a lot of people that that do try to set up these kinds of businesses just don't do not understand the risks and they're enthusiasm outweighs that that foresight if you will i want to say something really really quick i won't i won't go too long but i have to say that what you were saying about bitcoin will bring the scammer out of you so i said in chat bitcoin is to scamming as bath salts are to cannibalism hey i just i gotta i i have to say goodbye i gotta go to a two-hour event here in hankang i am back in new york on monday night i'll try and attend one of the after parties after the first day of consensus i might combine the second day of consensus but um yeah if you're in new york you might see me out there next week on Tuesday and Wednesday for the events all right bye bye everyone bye town thanks so much and i just wanted to add to what kris was saying we don't have the final numbers on how much money was in the tip bot but dogecoin is one of those currencies like pretty much every other currency on the list that has been pumped so the value of dogecoin is almost i'd say 80% of its peak so there has been a lot of return to value so a lot of people who had pocket change have real money again and now have lost it again so i will say and it's worth it's worth noting that the other major tipping bot company changed it also went out of business but to their credit they did not break into the cold wallets and spend user funds uh they announced publicly that their users should withdraw their funds and they've done so several times since then so to their credit far as i know to their credit i don't think that they sold to anybody and that i don't think that any of those connections to a really really old addresses and people's uh social profiles with that i don't think that any of that got sold to anybody as far as i know so that's actually really honorable of them too that was an additional possibility that the dogecoin tip bot creator could have cashed out his users by selling their user data which according to the article it doesn't seem like he did but again who knows the value of dogecoin data also somebody it's something it's willing to do what he did i i don't want to give him that idea either so yes one must always be careful when you tangle with centralized institutions and you put your bitcoin in especially if you're duplicating the features of bitcoin unfortunately now we do have a situation where the high fees uh may justify some of these off chain tipping bots uh etc etc at least until we see the real like lightning network not just on lightcoin let's move on uh exit question i don't have one so are you guys ready with a story of the week or a prediction i'm ready i was just gonna really quickly just say you know shape shift you can turn bitcoin into lightcoin and back and forth it's pretty easy if you want to you know spend something but you know actually convert enough bitcoin like coin back and forth i mean the fee is still gonna be there but you know the fees are the worst when you're consolidating a lot to chop up stuff and all that so i guess just you know the story of the week is uh you know whatever things go up like i said before diversify and increase your security Chris Ellis okay so actually i'm gonna hand over to Johnny she's gonna be on the mic but i'm gonna screen share because atu we've got two stories of the week um what we've been tweaking about the world crypto network on the twitter and the first is the freedom of Chelsea Manning so Johnny you've been researching this more than me take it away yeah so um Chelsea Manning has been in prison um uh ever she let's see it's been uh seven years now that she's been in prison and she just got released uh two days ago now it's three days ago and it was confirmed by the confirmed by the courage foundation who's financially supporting her right now um i'm not gonna say too much on it we did do a show on this before which gets into more of the details of why she received a commutation from Obama and all that the one thing i did want to point out is that she's not completely out of the clear because um uh there was one article i found that it actually turns out that she's still considered an active duty soldier in the US army so she's not being paid a salary but she is technically still a soldier which means that if she commits any if or she does anything that is considered a crime um by the US military then she would be subject to um the military justice court and that could when i say crime that could be like writing a piece that uh says things that the US military does not want her to say you know it's a wide range of things even if she gets into uh the article i found about it um was even if she gets into it gets into a fistfight or something she would be putting into a military court. Do you know where her service military is? The reason that they're doing is this is mostly because they probably still want to be able to control her even though she's out of prison. I can't hear what's being. Yeah i'm sorry i was gonna jump in and add that it could be something as innocuous as her being filmed in public in any kind of military garb or not any kind of i guess her own um you know uniform so there's a lot of different stipulations that apply that yeah i mean there's there's cost-reconcline. Yeah absolutely like thanks yeah and the next one was uh Julian Assange. Swedish prosecutors have dropped the rape uh probe against wiki leaks pounder Julian Assange. Yeah so this story just happened today um it was kind of funny because the way the scheduling worked um the Swedish prosecution was actually supposed to announce this on the 17th which just happened to be the same day that Chelsea Manning was getting released from prison um but it took them until today to make a statement and their statement was now there's been some contention about this today because the um obviously the original statement is in Swedish um but the translation of the statement was that they have discontinued the investigation and there was some debate on Twitter what discontinue means so discontinue um based on the press release from uh the Swedish public prosecutor discontinue does not mean they have like he he's like he's completely in the clear either um what it means is that the European arrest warrant has expired so Sweden is no longer trying to actively get him extradited to Sweden so what when they say discontinue what that means is that you know no European arrest warrant but if he does happen to ever go to Sweden between now and 2020 when the um uh what's the word um so there's a certain time period in which uh because the accusation at the original allegation by the Swedish prosecution was made in 2010 because this case started August 2010 um and so there's a certain amount of time that uh you know they're able to actually you know pursue an investigation and after that certain amount of time then the they can no longer you know actively pursue him because the the uh basically the charge it well there was no charge but um the time in which they can pursue expires and that expires in 2020 so if he goes to Sweden before 2020 he could still be arrested and they could basically restart the because this wasn't even the official investigation it was the preliminary investigation so they could restart preliminary investigation and they could arrest him at that point um and then he's he's not exactly going anywhere either the UK and the US government still are seeking him if he goes outside from the Ecuadorian embassy uh he will be captured pretty much immediately so this doesn't exactly change his status very much and what do they say Tom? They said that he uh sought asylum and that they don't like that even though it's alright that everybody in that jurisdictional area has so even though the charges have been dropped they're still going to arrest him if he leaves. As the well charges haven't been dropped because technically there never were any charges because that's correct um and you know I'm I'm not going to get in too much detail but um the thing that I've noticed is that whenever they've been whenever the news media have been talking about this case recently they've been saying um they've been highlighting that there's one woman who is making allegations like there's one allegation of sexual misconduct which is interesting because originally in 2010 they were talking about how there was two women the reason why there's no longer two women is because well both of them initially they didn't even want to um they didn't even want to pursue charges against him and the reason that this case is mainly coming like the press statements and everything I come from the Swedish prosecutor Maryanne is because under Swedish law I will actually read uh because she gave an interview uh let's see she gave an interview in September 2016 so this is the woman that she's the Swedish public director of Swedish um prosecute public prosecution I don't remember the official title but um she gave an interview in September 2016 where she was asked who actually made the accusation of sexual misconduct because the alleged victim said the police had railroaded her didn't sign the police statement and in fact the first prosecutor on the case in 2010 dropped it saying that no crime had been committed and so that was the prosecutor in Stockholm and Maryanne's response was I am her superior I am the senior prosecutor I can in fact reverse the decision of one of my subordinates I came to the conclusion that her decision was erroneous when it comes to the question of who made the accusation I've already said this rape is subject to a obligatory prosecution in Sweden you don't need a complainant to sign a complaint or make a charge the reason she says that is because um initially neither one of the women wanted to participate and it sounds like um I've heard something about because I mean I know their names I'm not going to say them live on air but you can find their names very easily um one of the women I heard she actually left the country um some period after this all um started happening because she didn't want to participate the other woman who is still in Sweden um she I can't remember her lawyer's name but um you know I I can't no one's been able to really find whether she's still participating in this case or not but she has a lawyer who's supposedly representing her and so um they've been pushing for this and yeah the statement from I think Chris yeah you put so there was a statement from Scotland yard yeah saying um so this is a really interesting circumstance because like if if everyone remembers the whole reason that Assange is even at the Ecuadorian embassy right now is because there was a European arrest warrant um uh for him when he left Sweden after Sweden had already told him you were free to leave he left and then Sweden uh reopened the case after he had already left so there was a European arrest warrant out for him and so then the uh the UK decided to put him under house arrest because he wanted to contest the ex the their their decision to extradite him to Sweden when the Supreme Court um agreed with the extradition that's when Assange went to the Ecuadorian embassy so the whole reason he's in the Ecuadorian embassy is because he wanted to avoid being extradited to Sweden after he had already been released and so you know the whole reason the reason Scotland erred is still going after him is because they say he broke bail while the reason he broke bail was because you know he was in the UK because of the the uh European arrest warrant that has now expired so I don't know how much longer they can um you know claim that they have a legitimate reason to keep them um in the Ecuadorian embassy well we certainly know from a from a larger point of view here that uh Assange picked a powerful opponent to fight again when he lost against when he launched wiki leagues he's been embarrassing the Emperor saying that the Emperor has no clothes and you have to expect something like this to happen to you look at a similar case of uh Ross Ulbrecht who uh embarrassed the FBI and the DEA and the drug fighting culture here in the US and has been punished severely for embarrassing them so not that it's a surprise not that it's a great thing as uh assaultson it's and said you can tell a lot about a society from the way they treat their criminals uh but I think we're running out of time and I don't really have a story or a week or a prediction so if there's anything else from the panelists they're shaking their heads they're saying they're ready to go and read the chat and see all the exciting things that you guys have been saying I saw Paul Krugman was in there that's exciting I've read some of his books love his columns uh I think Roger Vero is in there we had a whole cast of characters if you will and that's always fun actually really mad at me too he started he started really uh hammering into me when I mentioned Litecoin he was like like I hate Litecoin only Bitcoin and I was like oh Krugman's mad at me that makes me feel happy so it was a good show for him. Krugman of course has mentioned Bitcoin several times in his real columns and he's very critical of it but it's fun to have him in the chat so I look forward to reading it thanks so much to everyone who left us a thumbs up or a like or a comment and participate in the chat we appreciate you guys but we're out of time until next time