The Bitcoin Group, the American original. For over the last 10 seconds, the sharpest Satoshi's, the best Bitcoin's, the hardest cryptocurrency talk. We'd like to welcome our panelists, Andy Hoffman from Crypto Gold Central. Still muted. Alright, thanks for having me again as we watch the battle for 6500. The battle is live. Gabriel D. Vaan from Future Rant. Hello, everyone. Hello, Bitcoin. Hello, posterity. Thank you so much for having me Thomas. Max Hillabrand from towardsliberty.com. Are you doing guys pleasure to be on here again? Is it, is it ETF time again? Is that still news? What? Every week is ETF time. Giving you to give us a thumbs up and a share so that more people will find this show. Moving on to issue one. Changing screens is difficult. Here we go. Issue one. Bitmain IPO. Bitmain, the world's largest producer of Bitcoin mining chips, announced an IPO this week, attempting to raise $3 billion. While previously, Bitmain was in a strong, perhaps unstoppable position in the Bitcoin mining world, they now face many competitors, and have yet to design a miner to surpass their ant miner S9. Additionally, as part of the IPO process, Bitmain was forced to open their books, revealing that they sold more than 50,000 Bitcoin in exchange for 1 million Bitcoin cash. So far taking a 50% loss on the deal. Andy Hoffman, is the IPO just the beginning for Bitmain? Or is it the beginning of the end? Oh boy, where do we start? First of all, I think it's funny that Bloomberg is calling them the world's biggest producer of mining chips as opposed to the biggest miner because if that's the best they could do, is trying to compete in manufacturing chips against the world's largest chip companies like Samsung. They have no chance. And as I was talking about with Francis this morning on our art talk, the only thing to me that they ever did right was just be a first mover in the mining space, helped out by the electricity subsidy by the Chinese government, which they are losing, and they've lost out, they've wasted pretty much everything that they've done with this B Cash Ponzi scheme. And we can talk forever about why they did that. If they thought they actually can control Bitcoin or take over Bitcoin, but they failed on all fronts and wound up with a billion dollars of worthless, I shouldn't say worthless, a billion dollars of heavily overvalued liquid B Cash that no one wants. And will they have this IPO? I mean, will there be enough dumb money out there to just literally bail them out? Because that's what the equivalent is. If they don't do this IPO, they're out of business. Unless of course the Chinese government takes them over, which is another story. So I think BitMain is done as a force in the mining business and in the mining chip business. It's just a matter of will the street bail them out? Or will someone else do what they were doing before? Gabriel, divine. Wow, Andy, those are some strong words. I'd love to know, why do you think that this IPO is a desperation move? Do you think that they're bleeding from supporting B Cash? And they've destroyed their ability to compete in the market? What's your reasoning behind that? Yes, well again, we were talking about the businesses they're in. Their best business was mining Bitcoin. And if they just stuck to mining Bitcoin, they'd be doing just fine right now. But they went into this B Cash scheme because it was humorous. It was like Shakespeare couldn't have written it better. They thought they were so powerful they can control Bitcoin. And when they lost the Segwood battle, they said, we're going to do it anyway by creating our own coin. And instead of letting market forces determine how that coin did, they said, we're going to, we're going to double down and triple down and quadruple down and support this coin and hope that things go our way. And it didn't. And as a result, they have this monstrous position in B Cash that no one wants except for them. And so they could say when they're trying to go public that we have all these assets, but the fact is they have an illiquid asset that no one wants. And the only way that they're going to be able to cover the losses they'd have from trying to sell it is with this money that Wall Street gives them. And so I think that they're in very, very big trouble unless they can get this IPO done. Or there's a massive crypto bull market that saves them. That's one of the things. Yeah, it's funny. The rising tide lifts all the boats. And then when the tide goes out, you see who really actually is floating on the water and who's actually grounded. And I think you may be right about that. It's very difficult to tell what will happen in the future like you said. There's surge in Bitcoin in response to, for example, volatile or crashing markets around the world, emerging market currencies are currently in turmoil. That increases the demand for safe haven assets, which Bitcoin has obviously already become. Even though it's naysayers like to say that it's too volatile to be a store value, well, it's golds below 1300 and Bitcoin has been surging on a lot of traditional market to volatility lately. So, yeah, I think it sounds very plausible what you've, the theory that you've outlined. Obviously, we can't know for sure because of, you know, we don't have access to really their books. Well, but we do have access to their books now. That's the whole point. And they published their first quarter numbers. If they published the second quarter numbers, it's going to look really ugly because of what becaches. And the Bitcoin. Yeah, you know, I completely agree with you that they've made a huge error, but it was clear last year. I mean, everyone was saying, I was saying this last summer, you know, Bitcoin is putting their business giant dominant business that they worked really hard. I mean, and you said, I think you kind of gave them short shrift actually a little bit by saying that they're only, you know, they're only sort of, or I want to say, they're only advantage was, you know, their first, the first mover, but that's a big deal, you know, to have invested that type of money in 2013. That was, that was pretty cool. And they deserved the success that they've gotten in the mining space in general. But this hubris was really stupid and it actually shows just how you can as a business person. And this is on Silicon Valley side too, where they're more on the consumer side, you know, Bitcoin base, blockchain.info. They also failed to understand the game theory behind Bitcoin, which is so vital to, in order to grok at a deep level, what kind of a system Bitcoin is. These people lacked the, you know, they had enough where with all the setup business to get funding in BitMains case to turn a lot of profit, which is very commendable. But then to take that too far and to attempt this corporate takeover last year, that was, it was so obvious that it was going to fail. And in my opinion, so it's really a very, you know, I mean, I've been calling for, you know, two digit cents for, as the price for the B cash unit, you know, within a couple of years. And so we're heading below 8% now, which is, you know, was very predictable. And you can tell by the chart, it's a classic altcoin chart of pumps and gradual sell-offs as everyone gets around to splitting off their coins and selling them on the other chain. So I, that's really interesting. You know, I, you're probably right. I think, I think you're right. I think, I think that they're upshit creek. And if they can give them some bunch of idiots to give them their money though, that could be a bailout and that could help them survive over the long term. And then, you know, of course, a crypto surge. Well, put this way from its strategy standpoint. Look, they still have this huge position in mining. So someone could offer them a lot of money just to gain access to the mining and say, look, we'll bail out this whole B cash thing. But we want to be, you know, have 10 or 20% of the hash rate in the world. So they have a very valuable asset. So I shouldn't, I shouldn't overstate this, the situation there. And now if we had a major crypto bear market now where everything fell apart, well, then no one would want to throw money at anything. But they do have a valuable asset and it's very possible that there's going to be some new sheriff in town, which may be the Chinese government for all we know that that's running the ship at the Bitmain. It would be interesting to see if the new person who takes over Bitmain or the number of one shareholder wants to continue holding so much Bitcoin cash or whether they're ready to sell. I agree with you guys. They certainly squandered their first mover advantage. Usually you can go really far on a first mover. They seem to have burned it out really quick with this B cash decision. And I definitely agree with what Andy said on Twitter a while ago, they traded digital gold, like something really valuable for yellow trinkets or something like that. They just got nothing. And it's very much a experience and the fault lies not in our stars, but in ourselves. Let's go to Max Hillbrand, your thoughts on Bitmain's IPO. I always ask myself the question, why is it that these giant mining companies, number one, got so big and number two, why they continue messing up? And I think the answer to this question is an economic one. How do they finance themselves? Well, they get the mining reward, right? This is newly created Bitcoin. This is inflated Bitcoin. This is money printed out of, well, nothing. It's added out of nothing. There is no input in this Coinbase transaction. It's inflated money. What does Austrian economics teach us about inflation? Well, on the consumer side, because your money loses it and that's transformed your money into a real good that you can consume or produce with much sooner rather than later. So you're going to spend more or you're going to consume more. It's called overconsumption. It leads to all bad kinds of cultural problems as well. But on the entrepreneur side, it leads to malinvestments. Why? Because you have to allocate your resources as efficiently as possible. And you do that with prices, right? If something is really expensive, you're going to use less of it. If something is really cheap, you might use a bit more of it. This is how we allocate resources. And what inflation does, it messes with the natural price level. We no longer know how much the stuff should actually be worth because the prices fluctuate because the money supplies being messed with, right? The measuring stick, so to say, of the economy is being messed with. And this means that the entrepreneurs don't invest prudently. They just give away money into whatever and they don't rationalize what they want to invest in. And this means that all the money goes well to the biggest guy and he will put the money into useless ventures and really inefficiently. Because it is such a huge enterprise, they do not have trade within the enterprise. It's all eventually controlled by G-HUN, right? It all starts from the top. And therefore, because everything is under this one company, they cannot have free trade within the company, which means that they do not have prices that they can allocate their internal resources. It's the calculation problem that Mises specified in his book Socialism. This applies to big governments, but it also in lesser degree applies to big companies, especially companies like BitMade. All right, moving on to the exit question. Will the BitMade IPO succeed? Yes or no? Andy Hoffman. I muted again. Got you twice. I tweeted this morning, I absolutely believe that it's going to get done because I believe that just seeing the fact that B-Cash is only down to 0.08 for Bitcoin shows that the street doesn't really worry about this as much as we may be worried about it. And if indeed, we are headed into a more bullish phase, which I believe I think there's going to be a lot of people after BitMade's market share. And yes, they will get their money. Gabriel, D-Vine. So over the last year and a half, we've seen billions of dollars of wealth flowing into huge, easily determined scams. And I love what Max, you broke it down. The economic side there is so beautifully. And malinvestment is absolutely endemic because we're still the world economy and people's mindsets. Hardly anybody understands economics like you do and Bitcoiners do with Austrian theories. And so you have huge amounts of dumb money out there, just insane. And we're still, we're at kind of like peak. I feel like now and next year is peak dumb money. And we're going to see a lot of contraction over the coming decade, you know, as they call it, I think, I think, Misha Popescu. Or he borrowed this term, somebody back formulated bezel from embezzlement. The idea of the amount of malinvestment in the economy as a whole is the bezel. So this idea, the bezel of the bezel, finally, you know, devaluing is going to happen. But we're not there yet. And three billion is a drop in the bucket of malinvestment in today's economy. So I think I agree with Andy that they're going to raise this dumb money and all those suckers are going to be caught out in the cold, just like B cash idiots. Max Hillbrand. Bitcoin is in the business of printing money. Absolutely, they're going to get as much funding as they want because they can print a lot of money. But they cannot print as much money as they want. Why? Because of the difficulty adjustment and because of the having mechanism of the Coinbase reward, right? Bitcoin supply is limited and bit main have the enormous pleasure of being an early adopter in Bitcoin and mining up to this point as many Bitcoin as they can. But right now we have already mined 17 and a half million Bitcoin out of the 21 million Bitcoin. So over the next 130 years, we have to mine the next 3.5 million Bitcoin. That is almost nothing. So all those malinvestments that have accumulated over the last of almost 10 years now, they will slowly be uncovered. We will slowly realize that those in malinvestments that that bit main mate, especially in, you know, bad asic chips or something that's not as efficient or maybe too much research and development, we don't know that yet. We will see. We kind of predict that. But we will realize eventually where those malinvestments are and those will go bust. And because in Bitcoin, you cannot print money, there will not be a bailout. So if we have a huge massive drop in the hash rate, for example, because we uncover all this malinvestment and bit main completely loses all its wealth, well, nobody can print more money to save bit main. No bailouts. What was it? The governor on the brink of second bailout for banks, not happening in Bitcoin. This is the entire point. So there might be big trouble coming for the big mining companies and the big cash mining pools. Because of those malinvestments, let's see how they take it. But absolutely, Bitmain will take on this IPO round. The answer is yes, regardless of all the excited talk on Twitter about B cash losses and quarter two missing, there's more than enough dumb money out there for Wall Street to buy bit main. The only question is like Andy Hoffman said, will they have the hubris to believe that they should have their own Bitcoin? Will they continue to hold the B cash or will they begin to sell it, selling it off slowly as a loss? Moving on to issue two, Bitcoin ETF. Why is the Bitcoin market so desperate for an ETF? Fame commenters like Andreas Antonopoulos, friend of the World Crypto Network, claims that Bitcoin doesn't need an ETF, saying that the ETF fundamentally undermines the underlying principle of peer-to-peer money, because the ETF holders will not hold their own keys. Gabriel D. Vine is Antonopoulos right, or does the possibility of millions of new buyers and one large holder, improving the price and reach of cryptocurrency outweigh any potential negative? I'm going to take a bit of a middle road on this one. I mean, Bitcoin is a decentralized system. And like the internet, you can build centralized things on top of it. The reverse is not true. You cannot build a decentralized system on a centralized base. And that was what a lot of people who understood networking engineers and infrastructure architects understood about the internet in the early 90s, and they fought tooth and nail against the adoption of privatized protocols and patented centralized systems. And that's to our benefit. Now the internet is a bit of a thin protocol and the sort of .com boom people, it got overheated, but they were correct in their assumption that there would be a huge amount of commercial enterprise value built on top of the internet. That may not be the case with Bitcoin, which is a quote unquote fat protocol, which is value in itself. In other words, you couldn't buy shares in the internet, but Bitcoin does have a price and does suck up a lot of value. So in that sense, an ETF is a centralized service on top of Bitcoin. It's very much in their asses correct and that it's very much against the philosophy of Bitcoin. On the other hand, in my opinion, I don't think that's really a problem in a sense that it can't hurt Bitcoin. So I'm really into Bitcoin. I'm like a Bitcoin supporter, right? And a Bitcoin obsessive and like, pundit. So for me, I don't really care because any effect that ETF will have on Bitcoin is temporary. You could have a temporary inflow of funds where a lot of fiat is freed up to enter into this centralized fund and thereby grasp drastically increased the demand for Bitcoin temporarily. But as I pointed out, I believe it was last week, or sorry, the week, I think it was last week, I specifically made the very clear prediction that no ETF around the world would survive longer than four years without being hacked or drained without permission. So I think it's going to be kind of like a popcorn situation where the ETFs will be a lot of noise and then there might be if they get, I think we're going to see ETFs come online next year. So there might be a lot of fiat suddenly flowing in causing a lot of volatility up down whatever. On the other end, it's going to be serious popcorn because a lot of the people that didn't bother to do their homework and find proper solutions and become first class citizens of Bitcoin will lose all of the money that they put into these ETFs which then get stolen. So that's going to be a popcorn situation. But you know, Bitcoin don't care. Honey, badger don't care really. And in the medium term. Max, ill-abrand. Go ahead. The question is what is Bitcoin, right? And Bitcoin is both the money unit and the network protocol, right? But you can take away the money unit and put it onto a separate network payment system. And you can do this in second layer solutions, for example. They're countless of them. One of the earliest ones was centralized exchanges. You know, Mount Gocks, they have their own what SQL database. Were they store how many Bitcoin are with whom customer was super secure, really worked out great. But there are other solutions as well. To this day, many centralized exchanges also interact between the exchanges without doing the Bitcoin transactions themselves. Of course, there's cool second layer stuff that is actually useful like the lightning network, which is amazing. There's something like side change, which is potentially interesting or drive chains. So there are many, many different ways that you can use Bitcoin other than on-chain transactions. And ETF is just another second layer solution. And it's going to be tried. Just like any other interesting solution will be tried and tested. And it will be tested rigorously. And with probably the biggest amount of rigor that you could ever imagine, just how methodical and slow and steady is the Bitcoin development process. And that will continue in that rigor, hopefully. And we will have to see and verify if ETF is really a good money substitute, if it is really a good second layer. I would say no, because it's not Bitcoin. You do not control the keys. You have no possibility of verifying the entire second layer. You don't have a full node in that aspect. So no keys, not your Bitcoin, not running a full node, not your Bitcoin. So this is fundamentally inherently a flawed thing. And of course, a huge honey pop, as Gabriel said, though all of these custodial keys, those honey pots of money will be taken out of eventually. Sooner or later. I will be. This point. Quite those ETFs is the good idea. I don't think so. I use Bitcoin. I don't use any of that other stuff. Andy Hoffman. Still muted. You really got to give me a quarter. So is the question, will there be an ETF? That's what we're asking. Generally, is it a good thing? Is it a bad thing? And Dres has come out against the popular narrative and said that it's actually bad. So. Right. Oh, right. The question was, do we need a one? And of course, we don't need one. I mean, if you're talking about just from an investment perspective, we got to 20,000 without one. In fact, we got from 1,000 to 20,000 after the winch of us ETF was denied. So I don't think it's a matter of need or one. And again, this conversation is turning very philosophical here. But we're not talking about whether it's a good thing or a bad thing. It's a matter of, is it going to happen? Yeah, of course, it's going to happen. Wall Street will demand it. And the government can't stop it mostly because if they don't do it, other countries are going to do it. Other countries will do it because they like Bitcoin because they are trying to establish themselves in the digital age because they want to get back at the dollar. So it's going to happen. Whether it's a good thing or a bad thing is immaterial because it will be a financial instrument. I would bet that a large majority, I shouldn't say a large majority. I would bet that at least half of the Bitcoin in the world will one day be owned by third parties through investment vehicles. So yeah, I believe it's going to happen whether it's needed or not. And those people would figure out a way to buy it one way, shape, or form. This is just going to speed the adoption that's inevitable. And I think Andreas has forgotten part of the plan. In order to get the Trojan horse inside the walls, we have to wheel it in. We can't just say it's such a nice Trojan horse. Everyone look at the Trojan horse. We have to put it inside. So once again, the Bitcoin ETF Wall Street, all of the finance people now getting into Bitcoin, realizing they can't change Bitcoin. They can't change the rules of Bitcoin. They can build companies around it and they can build silos of Bitcoin where they control the rules and they can do callbacks and these kind of things. But they just can't change Bitcoin. And exactly Thomas, once people own it, whether they own it through an ETF or through a Trasor, they're going to start studying it, especially if it's going up, that's just how it works. They own it. Then they start to see how it works. And then eventually they'll say, I'd like to put some, I'd like to own some of my own private keys. And again, it's a way, it is. The Trojan horse is a perfect example because there's so many people that don't get it. And once they haven't an avenue to easily own it, then they will study and learn it. And all of a sudden the mainstream will give them all kinds of ways to learn how to use it. So the beauty of it is that the government can't stop it because we always were sitting at where it all the SEC and I'm laughing. I'm like, does anyone really think that the regulatory agency of this one little country can stop Bitcoin? And again, this is the country. You see all these emerging market currencies, not just emerging. It's like China, India, crashing and everyone knows it's because of the abuse of the Federal Reserve. So I think the rest of the monetary world wants to bring the dollar down and this is going to be the easiest way to do it. Well, I'd like to address Blake Anderson's comments in the chat right now. I believe it was Caitlin Long who was on Trace Mayer's Bitcoin Knowledge Podcast recently and made some waves on there. I have not heard that particular episode, but Blake brought up a rehab pathication as well as the soft fork risk, which is the soft fork thing is something I believe Trace brought up. I don't know that much about it, but the rehab pathication thing, I think Caitlin was, if I remember incorrectly, was lamenting that Bitcoin might experience a similar fate that gold has. Now, Andy knows a lot about the paper gold, basically, fractional reserve ETF situation over there. I mean, it's pretty clear that that's what they're doing. I mean, all the stocks are off stock markets in the US are fractional reserve through the DTCC as well. So that was an issue with gold, in my opinion, because it's extremely difficult, oh, not difficult, but very expensive and convenient to settle physically. Bitcoin was created as a natively scarce digital asset, the first one ever. Because of, you know, and one of the reasons why it was created is because of this situation where we had these systems that were set up with paper representations of assets that lent themselves toward this fractional reserve, totally fraudulent system that is just a wash in fraudulent fake assets and multiple issued assets, bezel, right? Bitcoin is settled very quickly anywhere in the world in minutes. And final settlement that you would, you know, you could put millions of dollars behind in an hour. So this is a very different situation, highly liquid in the sense of, you know, highly, let's say, not liquid, because it might be very illiquid to try to find enough Bitcoin. But if the Bitcoin is there, the velocity of moving it from point to point is extremely fast. The settlement time is extremely short. This is a completely different situation than gold. So if anybody tries to pull, you know, a GLD or an SLD and hold a million ounces but sell 26 million paper ounces and pretend like it's all cool until everything crashes down, that window of opportunity where you can run fractional reserve fraud is going to be so much more narrow with Bitcoin. Somebody could come along and be like, hey, I want to settle or hey, why didn't you publish your proof of reserves this week? I noticed that it's been nine days and you haven't, you haven't, you know, sent out your proof with the message signed with your private keys that you control these 162,000 Bitcoin, where is it? Because if I don't get that in 24 hours, all of my clients are going to pull their $16 billion with the Bitcoin out of your fricking fund and you better settle in Bitcoin right away or you are done. So this is a very different situation. I don't see the rehab authentication risk, but I'd love to hear what Andy has to say about that. That's fine. That's kind of you gave to wait nine days to ask on your money. That's what everyone said about sheet marketplace. They said the customer service was really great until that weekend where they ran away with all the money. But go ahead, Andy. I'll come back in a minute. Well, first of all, on this issue, yes, Kay, the long was on trace mayors show. By the way, trace was on my show last week. He was absolutely amazing. And this this topic of gold hype, high publication in Bitcoin, it was addressed amazingly on last week's Adam Meister this week in Bitcoin. He had Josh and his family. Mike Krieger and Blake Anderson. So if you want to hear the best explanations of this topic, you need to listen to that show. And what they were saying in many ways, for one, like you're saying, the settlement, like in gold, it's almost impossible to get delivery, even if you want it, and it's so opaque, whereas in Bitcoin, you can get it instantaneously. So if you sense that there's some paper shenanigans, an institution could literally buy a billion dollars of Bitcoin and have it on their quote, Trezo are within minutes. I mean, it's just a different game. Gold, that collusion went back 40 years. I mean, the cables are out there showing the US and the UK government saying, we need to create the comics so that we can get people to buy paper gold instead of real gold. I mean, the comics, by the way, went online, January 1st, 1975, one day after gold was made legal to own by US citizens. And that was, you had all the central banks in the world were on the same page to control gold prices here. Central banks around the world, they're not on the same page. First of all, none of them own any Bitcoin, so you can't even play fractional reserve games. Everyone knows that the US government, the UK, Switzerland, Japan, well, Japan probably has some, but they're not talking about it. They don't have any, and they have different goals. So this is a completely different game. I don't worry about that at all, about a Bitcoin ETF. I don't even think the government or the SEC has any clue how Bitcoin even works, let alone to figure out how to try to control it. Right now is just a matter of, you know, they're scared to let the ETF be approved, because they just don't want to see all this money swarming and it'd become a big deal like it was last year, but inevitably it will happen. It's just a matter of time. I just like to emphasize again, not only is the, is the speed of transfer extremely fast compared to traditional physical assets like gold, and it's much cheaper, it's a little bit cheaper security, probably for Bitcoin, or maybe a lot cheaper. It's complex, but it's not necessarily expensive. Eventually it'll become less complex and easier and much cheaper too. You don't have to have guards with firearms standing in front of the entrance to your vault. The other thing is, and this is even possibly more important, proof of reserves, right? Proving gold reserves is a very challenging security measure. You have to let people in, you have to let them see what your security setup is, and then so basically everybody else has to trust the whatever company or individual or a team of three independent, whatever, there is so much, it's so easy to fraudulently bring in some fake gold, pay off the people doing the check on it. That is possibly even a more important issue about making it harder to fraudulently hold Bitcoin. Now, on the other hand, I mean, yes, it's, you can prove reserve, you can prove that you control private keys by signing some sort of message with it. On the other hand, it is possible that somebody who does have a lot of Bitcoin, you can pay them, you can bribe them, you don't need to actually control the Bitcoin to get this message out. You could say to somebody who does hold a lot of Bitcoin, hey, we'll kick you down 100 Bitcoin just to sign this message for us and pretend so that we can pretend like we've got it there. So there are, it is possible, but it's a lot harder and it's really easy to show that you control the private keys by signing one of these messages. It's a lot harder to pull off, I think, fraud in Bitcoin in that way. By the way, does anyone know when the last time the US Gold Reserve was audited, I bet you do Gabe. The last time it was at Fort Knox, right? I wasn't in the late 50s, 50s or something? Yes, 1950s. So if anyone believes the US is 8,134 tons, I have a bridge to sell you. I would have guessed 80s, I would have been way off, which is a, still I think a long time ago, but that's even further. I agree with Gabriel that the ETF could publish their public key, they could let everyone see that they actually have the 100 Bitcoin or whatever's in their fund. And I want to push back on Andre and John Dress on this. I think we need Wall Street to market Bitcoin. We need these people to make a nice brochure with a cool logo on there that they can give to all the rich people so that they can all get in line behind me and will help pull this Trojan horse inside of the walls. Yes, it's got wheels on it. Sure, it should be easy to pull, but I think we need a couple more people. And if they've got full marketing departments and huge budgets to set this ETF and the Wall Street world on fire, I'm not buying any magazine ads. These guys can buy full page cover print ads in the Wall Street Journal, so on and so forth. I don't know where else we're going to get that kind of firepower unless, of course, they pointed at themselves. But let's move on to the exit question. We've got to get going. Force prediction. Will there be an ETF hacked in the next five years? And we're starting with Gabriel Devon because we were inspired by his answer before. But Gabriel, yes or no, easy question. Thank you. I will repeat myself. I've said it on this show a couple times and on Twitter a couple of times. I think it's going to be, well, within the next five years, I do, I'm forced to predict that, yes, because I do think an ETF will be, will start up in under a year. And I'm giving a maximum of four years before, well, I don't know about complete dissolution, but certainly hacked for at least part within four years, all of them, not just anyone given ETF. Expanding the bet, Max Hillabrand. Well, the thing is that, of course, we will get hacked, because it's a custodial honeypot. And that will get hacked sooner or later. No question. It's a question of time, not of whether or not. It definitely will get hacked. And why? Well, because it's not the real thing, it's not Bitcoin. It is fundamentally different. And we all, it always come up with this argument that we need the institutional investors. They can come in. They are welcome in Bitcoin. They can hold a private key and make one else. Nobody is stopping them from our side. They can come in anytime and make a Bitcoin transaction. And how do they become? They can, no issue. Where they have issues is in the old Fiat government world. Because there they build up their stoned and their walled off gardens of the intranets with a bunch of regulation to hurt the consumer and a small entrepreneur. And now they are complaining that they have too much regulation and which assets they can hold. Yeah, that's their own damn fault. They are accepted here anytime. If they want to use Bitcoin, come here and use Bitcoin. That's how it works. But we will not bow down to your regulation and to your nonsensical demands of know your customer and anti-money laundering and that nonsensical stuff. Because we do not need it. If you want to use Bitcoin, use Bitcoin. Although I still kind of think for a very rich person, the idea of telling them to hold their Bitcoin in a treasurer or a ledger is akin to saying, we're going to build a special vault in your house for your gold. I'm just not sure they want to do it. They like this custodian system. It works for them. Andy Hoffman will the ETF be hacked? Well, for one, I believe that these wealthy individuals are going to get very versed in storing their own product. One, because they're going to realize the risks of hack. And two, because for tax purposes, it's going to be amazing. It's going to be the best way of hiding wealth ever. So I think billionaires and a lot of institutions that are not beholden to public financial accounting are going to get very good at storing their own keys over time. But will there be an ETF hacked? I mean, this is going to be a lot of ETFs. Someone will be careless. But I have a feeling that security is going to get a lot stronger in the coming years, especially as Bitcoin becomes more valuable. So I don't really have a strong answer to that question. I don't think there's going to be the biggest scandal in history because it's very possible. You never know. I mean, this is the risk of giving someone else access to your private case. And that's why we don't do it. It's an interesting idea that you can trust your assistant with a palette full of gold bars, but you can't trust your assistant with a treasurer. Because those gold bars fit in your pocket. Gabriel, Devine, another comment on this? Just wanted to say that this opinion piece on Forbes is so poorly written. It's just a total piece of crap. It's just amazing to me that Forbes, of all websites, they've got plenty of ad revenue. You think they could afford a sub editor, 11 bucks an hour, to proofread these contributor pieces and then the sloppy-ass pros. It's just retarded. This is a horrible piece. And I also wanted to just quickly mention that regarding BitMain, the article there, I believe it was on Bloomberg. Is that right? Yes. They went to this company called Amphal Capital Limited, which does IPO service for the Hong Kong Stock Exchange and they asked some do Alex Long. And his comment was like, you know, I was really dumb. It was like, as soon as people stopped buying Bitcoin, then BitMain's business will crash. And it made me think I bet you anything, they're butthurt because they wanted this gig. They wanted to do the paperwork for BitMain and Gihon is like, fuck you guys. And I don't like whatever, you know, the deal didn't work out. I bet you anything. That's why he's butthurt on that quote. Is it just me or is like watching Forbes? It is really fascinating to see. I don't think there's a side from like coin desk. I don't think there's a publication in the planet that does more articles about Bitcoin and crypto. It's like non-stop all day long. And some of the things they publish are brilliant. And then some of the things they publish are the most moronic things I've ever seen. So I can't tell what their motive is for putting so much effort into a putting out so much content and be putting out as much horrible content as good content. I'll tell you right now. I've been involved in, I've been involved in, his headlines go both ways. He'll be like, Bitcoin is going to die in six months. And then a week later he'll be like, Bitcoin is the hottest thing in the world right now. And you check that byline, it's the same author. But go ahead. Yeah, I have some view into this subject. I've been involved in the digital publishing industry. And the reason why that happens, Andy, is because of ad revenue. Good articles and bad articles. The information quality is not really reflected in the ad revenue. It's more just clicks, right? So the advertisers don't care as long as eyeballs are seeing their ads. And people don't click ads on good articles anymore than they do on bad articles. So from a business standpoint, it makes a lot of sense for magazines to just put out as much content as they can can possibly manage regardless of quality. Yeah, I think nobody at the helm is what I'm trying to say. I think they obviously understand that this is a place they want to get market share, or a share of their mind share, because I think they understand that this is going to be a big deal. And that's why good, bad, whatever. They just want constantly people to say, forbs, cryptocurrency. And it's working. Yes, go ahead, Andy. The current market revenue is paper, credit, right? Look, the more clicks you have, the more revenue ad revenue you can make. But as it just matters if you get the clicks, and that's why we have all this high plus work being global share going on, especially in Bitcoin, especially in blockchain, religions. It's really, really bad. The question is, will lightning network or micro payments in general, will they solve this issue by paying for a article, by paying for unique content that is written or condensed in an interesting way? And if there's more of a free direct market, with direct exchange between the reader and the author, might we have a more sustainable, a more thorough, or the idea coverage? We don't know. This role takes us, but I'm really interested in how donation-based and pay if you like and growing this new market. Excellent points, Max. And we've got to move on to the exit question. Will a Bitcoin ETF be hacked? The answer is yes. There's simply too much Bitcoin sitting there. Someone will try to take it. The real question is, will it be an inside job? The World Crypto Network has a podcast on Apple iTunes and wherever podcasts start downloaded and listen to. Check it out on iTunes today. You can subscribe and even give us a rating. Check that out. Four stars, pretty good. Thanks so much for your support. And thanks for giving us a thumbs up and a share. We last had around 50 live viewers. Now we have 172 with your help and more thumbs up. We just might get to 200. Moving on to issue three, Bitcoin Mining. As the price of Bitcoin continues to decline, one thing remains constant. The hash rate is always rising. But why? Why do Bitcoin miners keep mining? Some claim that at $6,000 of Bitcoin, smaller miners may be underwater, while larger miners may be able to continue. But the question still remains, Max Hillabrand. Why do the Bitcoin miners keep mining? Well, Bitcoin mining is a fascinating topic, right? Because it doesn't stop. Regardless of the price, regardless of how many people are mining, it just continues. No, if not that much hashing power is available, the difficulty to solve the problem is really easy. So we'll find the blocks relatively after, that of guess this hashes. And if many, many hashing power, the lot of hashing power is in the, then the difficulty will rise. And you have hashes before you find a value value. And it's a prophecy, whatever the difference. Because for example, if you have gold and it increases in value, more and more miners, 3D miners will go out and mine for gold and produce new gold coins or new gold, well, atoms in general. And this will cost them a lot of electricity, a lot of energy, but eventually they will have the gold coin. And this will be new money that is introduced to the economy. And of course, this will inflate the money supply, starting the boom and bust side, right? In Bitcoin, however, the interesting thing is that if the value of Bitcoin increases and more miners are incentivized to turn on their mining hardware to mine Bitcoin, due to the difficulty adjustment, they will not produce any additional Bitcoin. The inflation rate will stay steady at 12.5 Bitcoin every block. Because of the difficulty adjustment, it becomes more difficult to find the same amount of Bitcoin. And that is unique to Bitcoin itself, because this means that with additional value, no additional coins are being produced, which will not artificially lower the value of the money. So this positive feedback loop is immensely strong and it will continue. However, as I said previously, there are many male investments in this market. So will we see a crash in the hash rate eventually? I actually think it might be very likely. Andy Hoffman. Right. Again, the person to ask is Francis on this topic. He's just, I didn't get around to today. We spent so much time talking about Bitcoin. But the fact is these are big, big money decisions that big time and money. And so it's kind of like I remember Abby Cohen and Goldman Sachs would say the economy is like a super tanker that's very hard to turn around. So once the hash rate starts coming on from all these big investments, it's not like it just goes off if the price falls. Now if the price fell pick a number. If the price fell to our favorite King TA Fudster to $1,300 and stayed there for a while, yeah, the hash rate would fall. But at this price, people argue what is the cost of mining? It's probably somewhere around here. All this money was invested in time by people who believe in it. I don't think the hash rate's going anywhere. And frankly, all the hash rate that's being lost on competing cryptocurrencies is only going to come to Bitcoin. It's not just going to go away. It's going to go to Bitcoin. So I think that the network is just going to, stay status quo for a while. And we have another surge. It's going to be more people that come into compete for mining because it's just going to become more valuable. So I don't see why the hash rate at $6,500 is all of a sudden in danger. I think we're going to be just fine. And I think it's just going to continually grow up for a long time. Gabriel, D. Vine. Yeah, wow. It's really slow today, man. I can't even get the things to come up. All right. So it's just so amazing to look at the hash rate. I think what happened was the price rose extremely fast last year. It did 14x in 2017. But increasing your hash rate is not nearly like that. I mean, if you want to 14x your hash rate, you've got to come up with a lot of capital. You've got to buy a bunch of hardware. You've got to set it up, figure out where you're going to get all the power for that, work out your deals with power companies, or with wherever it's going to go. Then you've got to have the expertise, got to have the personnel in order to actually service this stuff and manage it. It's a serious thing. And I think that's one of the reasons why, even though we've been in a price bear market, the hash rate has been surging crazily. I mean, we're talking, you know, up to 10% every difficulty adjustment. That's freaking like 24% a month. It's insane. It's really, really fast. And you know, it shows that in the price set, I think at the beginning of the year, the, I mean, some of the miners were just absolutely raking it in because their cost was still only about $2,500 or $2,000, $2,500. And they're selling them, or they were, you know, at that time, they were worth 10 grand. So, I mean, there was a really big spread between the cost and the marginal spread for mining. And now it's finally started to even out. We could see things kind of bumble along and then stay a little bit more flat in the hash rate. But once again, you know, a lot of orders were put in as the price was rising last year. And I have a feeling that not all that capacity has actually even come online. So we might have a situation where some of the capacity is actually kept offline temporarily and waiting for a price surge. You know, it depends on, you know, every given operations marginal cost. But, you know, it's just amazing to see this economy and the incredible game theory at play between the free market and the way that the code works with the difficulty adjustments is so clever. And unlike in my last comment about the articles on Forbes, this Bloomberg article is really excellent. And I think that's probably down to the input from Todd White, who's kind of a bit of a veteran in the space. He's done a lot of reporting on basically Bitcoin news over the years. So this author had some help from a veteran here and that really shows, because it's an excellent article. Talks about most of the issues that play, you know, from an investor standpoint. It's, you know, there's obviously tons more detail, but it's just amazing to see this hash rate exploding like this. And I mean, Bitcoin is ridiculously robust right now and so incredibly secure. And just to see that, you know, even though a lot of this capacity was probably bought before, or it is only coming online, now I'm sure a decent percentage of it is actually new and there's still a lot of interest in mining. So it's a really good situation right now in my opinion. Plus I do think it's decentralizing more away from these larger mining pools, which is a great development. And the funny thing is a lot of these big players that are going to the mining business and they'll realize how hard it is and how competitive it is. And at some point, a lot of them, and we're talking about big players, they're just going to say what we've said all along, just by Bitcoin. You don't have to worry about the mining. You'll do just fine without the risks and the worries. And they're going to do it at some point. But no one can resist the desire for their computers to print money. Everyone hears you can plug in this machine and it will print money and that's where their money has to go. I agree with the panel. The money invested into Bitcoin mining is sunk. You're going to mine for five years, then you're going to see what the price is and you're probably going to hold for those five years and you've got money already set aside for electricity, already set aside for the mining and the factory and so forth. So I think that money sunk. That's why we don't see it move. Let's move to the exit question. Will the price rise to match the hash rate max hill brand? Well, good question. Does the price follow hash rate or does hash rate follow price? Well, I would say both. It's a symbiosis. It's not one thing or the other. Of course, as Thomas said, it's a sunk cost. Kind of. Of course, sunk costs are a fallacy. But if you buy mining equipment, you will use it. And because otherwise, you know, you will be stupid. And even if you make a loss at the time of mining, because Bitcoin is so volatile and it might hit $1 billion per Bitcoin, you might be profitable in the long run. That is what sound money does to you. I tweeted out on the 8th of August, that was nine days ago, that it took Bitcoin nine years to reach six ex-hashes per second. And it took Bitcoin not even nine months to reach 42 ex-hashes per second. So that is seven ex of the time that Bitcoin, the first nine years in Bitcoin, seven ex in nine months. And already, we have exceeded 43 ex-hashes and are just scratching at 44 ex-hashes per second in the entire network. That is insane. This growth is insane. And although the price of Bitcoin is not hyper-political, mining absolutely is. And again, why? I really am kind of afraid, because there is a lot of malinvestment inherent in inflation. It's an economic law. You cannot change that. And because we had so much inflation for such a long time, I'm really curious how this is going to bring to you to come about. Will we see a immense crash in the security of Bitcoin when the hash rate declines? I don't know. It's interesting. I don't think so. I think the Honey Badger will just continue. But it's going to be super interesting how the inflation on the voluntary and free market in such a private and complex currency, such as Bitcoin, will play out. It's fascinating. He's got all the facts in the figures, but it's still both. It's a push. The worst possible answer. Andy Hoffman, can you give us a yes or a no? Well, put this way. I put out an article. Hold on, am I muted? I'm good. I put out an article yesterday called Bitcoin price will inevitably follow hash rate. So I absolutely believe that the price will go up. I also don't believe that the hash rate is going to go down anytime soon and probably never will. Aside from the normal just, you know, back and forth, I think the hash rate in Bitcoin is going up for as long as, as for decades to come. And I think that the price is going to follow. You'll very strongly. That's a strong yes with an article. Gabriel D. Vine, can you break the tie? Rise to match. I mean, how do you even measure that? You know, is it due to match the price of production? Is it to match the marginal cost? Because right now that's where we are according to one of the people in this article. You know, I think Max brings up a great point, which is this is a dynamical system. It's what they call a complex system. That essentially one of the definitions of that is that the relationships between the parts are more important than the definition of, you know, the participants or nodes in the system. So it's all about these complex relationships. And certainly price and hash rate have a symbiotic relationship where they affect each other in lots of different ways. And it's a complex ecosystem. It's complex landscape out there. Like this article points out. And it's going to be really interesting. I'm kind of in the middle here where I'm not afraid of a crash. But I think it's conceivable that we could have a relatively flat hash rate, especially if the price goes sideways. But if the hash rate really is like a genuinely lagging indicator to some huge, you know, percentage of the ecosystem, we could totally see like, for example, another price massive price spike like last year. But the hash rate might only like rise like a little bit or steadily or stay flat because it thinks because there's a lag. So that that'll be really interesting to see the next divergence. I think it's going to be in the positive direction again where the price will outstrip the hash rate because it's so much easier to throw a bunch of fiat into Bitcoin than it is to actually set up real physical infrastructure. The answer is yes, the price will rise to match the hash rate. How could I go against Max Kaiser? Max Kaiser has always said that the price will rise to match the hash rate and he just keeps saying it. He must be right. Moving on to issue four, international roundup. The Turkish lira plummeted 20% percent of the price. The Turkish plummeted 20% and Turkey's largest Bitcoin exchange reported a 63% increase. Turkey's president has requested that as people use all available funds to prop up the lira. Meanwhile, Vietnam has banned the import of cryptocurrency miners after their citizens were conned out of an estimated $660 million from ICO fraud. And in Saudi Arabia, Bitcoin trading remains wholly illegal with potential negative consequences and high risks to anyone caught trading Bitcoins within the kingdom. Andy Hoffman, will these governments be successful in restricting Bitcoin activity inside their countries? It's Saudi Arabia and Vietnam. Oh, I'm really worried about that. Well, look, Saudi Arabia is one of the most backward countries in the world. They're going to have a civil war at some point because these lunatics that run it. Don't agree with the majority of the people. And frankly, who cares what they do anyway? In Vietnam, it's strange that they have all countries would care so much because I believe in the past they've been pro Bitcoin and sitting right next to Korea and Japan, why on earth would they want to fight the trend? Because that region has the ability to become the power center of the world. But again, who cares what Vietnam does? And either way, people are going to buy it. There's local Bitcoins and all kinds of other ways. So government, any government that fight, look, the Chinese government is barely even fighting at this point. The US government is going to approve an ETF. So why would the Vietnamese government care about anything to try to stop it? I should say Gabriel, Tvon. What exactly is the question here? Is it will the government be successful in restricting Bitcoin activity? I'm going to say no. They're going to be unsuccessful. You can't really stop this thing. It's a lot harder than even gold. The countries have had a very difficult time seizing all the gold in the possession of the citizens to stop a digital protocol on the internet. I mean, that is the definition of what's the word I'm looking for. Impossibility. You say again? Impidity. Well, it's impossibly impossible. It's the definition of futile. And so this is just like some really impotent sort of signaling. They're trying to basically this is it's really I don't think this actually has anything to do with the people. It's really the regulator signaling to the banking industry within the given country that they want to get a job. So it's kind of like the signaling. That's what happens in these centralized systems. We have these governments and institutions. And they signal to each other in order to pass the ball back and forth so that they can keep the power. And of course, there's terrible fallout for everybody else is honestly trying to make a living. You know, plumbers and surgeons and cooks are actually giving a service and providing and creating wealth. While, you know, these rent seekers are basically, you know, doing sort of social signaling to each other. Or you might even call it fraud signaling, right? To the other intellectual yet idiots in their society. So, you know, what to the extent that any given government cracks down on Bitcoin will be will indicate the standing economically in the very near future. So these countries should probably be even more careful, but it doesn't mean anything there. It's futile. Totally futile. Max Hillbrand. Well, what is going on here is a of course financial warfare and specifically a attack that is that is called the speculative attack in a currency. And of course, financial warfare, the Keynesians are the experts here. And so this specific attack has been explained by Paul Krugman, the best economist there is, of course. And it basically explains that if you have a loose money, a money which is inflated by the government a lot and a lot and a lot, then this of course will lose value, right? Because the slight increases the value of something decreases the purchasing power of money. Plus all the Kantian effects and boom and bust cycles and everything, Austrian economics explains that, right? But on the other hand, if you have a scarce money, a hard money, a sound money on the free market, which will not increase in the money supply, then this will just as Bitcoin did rather increase in value if it is a useful medium of exchange. So what will happen? The fiat money, the loose money will decrease in value and the Bitcoin, the sound money, the hard money will increase in value. Well, how is money being produced in the fiat system to the credit markets? So there is a incentive to take out credits out of this already falling down currency because you have to repay the loan with money that is less valuable. So you will go much more likely into debt and you will use this newly created debt money to buy the hard asset, the Bitcoin. And this will mean that you will further increase the money supply in the fiat, further lose destroying its value and you will buy the hard asset, the sound asset, the gold and Bitcoin. And this will increase the sound asset, the Bitcoin asset. And the cool thing is the more money the government prints, the better it is for Bitcoin. Because that is the speculative attack. This is what kind of the attack quote unquote that Bitcoin is using on the fiat system. But we are not controlling it, the government and the central banks are controlling it. Because they could defend themselves pretty easily against a against the speculative attack. Stop printing money, stop defrauding people and all the troubles of that attack go away. Because if you stop loosening the money supply, the value of the Bitcoin compared to the value of the fiat currency, at least the supply doesn't really change. So it's no longer quite a question of supply and demand, but just demand, not no longer the supply because that is similar. And then it's which is the better money again here, Bitcoin is just much more useful. But the speculative attack which is going on all around us, really good for Bitcoin. Oh yes, Paul Krugman, hater of the internet, defender of the facts machine. Moving on to the exit questions, which of these three strategies will be the most successful in restricting Bitcoin? Will it be Saudi Arabia restricting Bitcoin trading, Vietnam banning mining machines or Turkey just saying, please buy our currency. Andy Hoffman. It's probably going to be Saudi Arabia because people are just terrified of getting their head chopped off. But then again, I mean who cares? The answer is who cares because ultimately Bitcoin cannot care less with the people in Vietnam, Saudi Arabia or the United States do. Don't lose your head is not a popular expression there gave real divan. One more vote for Bitcoin. Don't care. Doesn't matter. Max Hillbrand. Yeah, exactly the honey betcha does not care. It will continue. But will the governments do they will try to get Bitcoin out of their country, but they will get their country out of Bitcoin. The smart people, the smart human capital will leave. They will go to other places where freedom is more treasured and private property is more securely well secured. And they will experience massive flight and the dumb and the old and the sickly people will stay behind in those countries that will be the most oppressive, the most restrictive. I'm forced to agree with Andy here. Vietnam is too connected to everything else. What are they going to do? Check every crate for a Bitcoin miner. No one's going to buy the Turkish lira, but controlling trading in Saudi Arabia. That seems possible. Let's go to predictions or a story of the week. Andy Hoffman, are you ready with a prediction or a story of the week? Yes, I didn't have one until now, but I certainly do because when you mentioned the 172 people watching whatever. And I also see how many people watch my shows. I mean, back in the fall, again, in the fall, I was a brand new person and I was getting 5,000. I'd be getting like 800 people and you were probably getting 2,000. So I'm predicting that this show is the bottom of people watching and it. And frankly, I've seen a lot more interest in the last few weeks than I have before. And finally, my Twitter following is starting to go up after several months of being flat. So I have a feeling that we're going to start to see a lot more articles, a lot more people watching, tweeting, a lot more searches. I think that the bottom is in in every way and sentiment and price and everything. And I really look forward to the end of the year. Gabriel, divine. My story of the week. There was something on the tip of my tongue that happened on Twitter this week that was really big. Well, you know, it's really just a general comment actually about the bear market and how it shook out a lot of trolls and weekends. And that has an effect on the information landscape as well. I feel like the voices. I mean, my Twitter timeline is, you know, as always, I only follow a certain subset of people. So it's very restricted. But it's like the quality of the post has reached an all time high now. Like I jump on Twitter and there's such interesting stuff. I mean, the amazing developments in the software. We have that new. The Bitcoin. I'm trying to remember what it's called Bitcoin up tech, which is, you know, a roundup of the technical happenings. I think it's a weekly newsletter or blog post. And that is just incredible to see what these guys are doing. And then there's all the new. There's some new podcasts that are really, really terrific. Some new bloggers out there that are writing amazing articles like Nick Bautia and Stephen Lavera's podcast is great. The noted podcast, of course, Pierre Rochard and Michael Goldstein. I think the quality of information that's available now is ultra high. It's really killer. So that's just kind of my observation for the week. Max Hiller brand. We have already mind 17 and a half million Bitcoin. We will only continue to mind three and a half million Bitcoin. The inflation rate, the flow to stock ratio as Syphodine writes in his great book, the Bitcoin standard, is going to flip really, really soon. It is already flipping, especially at the next happening, but probably even before. This means that all those malinvestments that have been made over the last nine and a half, almost 10 years will be seen. They will be uncovered when we have a truly hard money because we have not yet have a. Oh, Max got too close to the truth. They don't want to talk. Yep. Oh, well, that's too bad. How's that hard money? It's frozen. Yeah, there will be a hard money. Max Hiller brand. Very good. Max. Thank you. Yes. It's a candy had an ending, but I just want to thank everyone for watching, giving us a thumbs up and a share. And I want to thank everybody that stuck with the world crypto network. We had four live shows again today this Friday. Friday seems to be WCN day. So make sure you subscribe down below, hit that bell to get the notifications and check out Andy Hoffman's interview with Francis Puyo. We had that this morning. Then we had Bitcoin talk show myself and Max took calls from the audience. Your calls right there. Then Shen Booth Svane talk to the chat and told you about the future of Bitcoin on Bitcoin 2049. And now you're watching the Bitcoin group on the world crypto network. So I've got to go hand out flyers and Las Vegas later. If you're in the Las Vegas area, join the Bitcoin Las Vegas meetup at Bitcoin Las Vegas dot org. Be sure to give us a thumbs up and a share. I want to show the QR code one more time. So if you have some extra Bitcoin or any of these crazy alt coins that they accept on trezor, please donate them now. What no be kids. I've never heard of that one. But until next time. Bye. Bye.