The Bitcoin Group, the American Group, for over the last 10 years, the hardest, the hard of cryptocurrency talk. We'd welcome. Victoria Jones from Satoshi's page. Hey, hey, good evening, everyone. Robert Allen from CoinCube. Hello, everybody. Good to be back. I'm Thomas Hunt from the World Crypto Network. Moving on, the price of Bitcoin is 65,000 even. That's $1 for 1,538 Satoshes are up around 0.75% for the day, of around 65,423, a low of 64,150. Issue 1, the cold card hack, as at Cali BTC says on Twitter, this is worse than any previous Bitcoin exchange hack. It is arguably one of the worst things that could happen. The popular hardware wallet cold card had a faulty random number generator, R&B.
Funds are being driven from ordinary users' hardware. where wallets read this. Users reported this to block less than 24 hour ago that moves out of wallets. The exploit was most likely discovered with help of AI. Later on, it was confirmed that the random number generator had a fallback where it would generate the key off the cured device. As at it newscom reported, the cold card bug demo, a duplicate wallet found in 4.7 seconds. Brulter simulator to elevate the severity of the cold guard entropy bug on an N1 max mini it found two identical wallet seed after generating about 1.2 6 million seeds taking just 4.7 seconds so you would get one normally after millions of seeds but it was just taking four seconds as this continued way out this week a hundred and eleven million dollars confirmed stolen so far in cold exploit at galaxy research.
Thanks to victim reports, we can confirm with high confidence that around 1,719 Bitcoin have been stolen from cold card victims so far, perhaps losses exceeding $130 million. It doesn't hurt that cold card was largely Bitcoin only, talked about it in the community, had all the stickers, all the other things supporting the Bitcoin-only cause. Their CEO was known to mock other hardware wallets and other hacks publicly on Twitter on his account, saying that that wouldn't happen to cold card users. And now, here we are. If they had just held with older versions of the software based on Trezor, they would have been okay. This, again, was an un-audited piece of software.
It was not open-source, all of those things. Victoria Jones, what do you think about the cold card hack? Oh, it's incredibly distressing and my heart goes out to everyone who's lost Bitcoin as a result of it. I mean, I remember at one stage, someone telling me that cold card was the best possible, you know, hardware wallet you could use. Fortunately for me, it was, it was more complicated. I prefer something like the Treasor because it's much, much easier and much more user-friendly. you know, I was prepared to stick with that. But I know many, you know, I go to a lot of Bitcoin conferences and I know many technical people recommended Cold Card above and beyond anything else like that.
And so the fact that this has happened has just been a complete shock. And unfortunately, undermines the trust in all hardware wallets because, you know, if Cold Card was seen as the most trustworthy, how do you, how do people who aren't technically savvy know what to trust these days. I think it's a huge blow to the trustworthiness of hardware wallet storage, which is one of the things that, you know, the true Bitcoin advocates recommend, you know, because we don't want to keep it on exchanges. But if you're not going to keep it on an exchange, then you need to have a wallet that you can trust. So I think this has been very undermining for a large part of the Bitcoin community.
and you know for those who've lost money through it I you know I feel terribly sorry for them it's very sad yeah I don't see how anyone can support people not keeping it on exchanges at this point or not going out there and just buying some of one of the Bitcoin ETFs and holding your Bitcoin that way to expose yourself to this potential risk when we have the quantum Bitcoin thing coming up we have lots more AI intervention some kind of coin group or open source group or something went ahead and paid a bunch of tokens to the AI and found thousands more vulnerabilities. Again, I don't know the specific wallet or how bad those vulnerabilities will be, but it's pretty obvious that you need to be open source.
You need to be audited. Cold card bragged about this a lot in the community. The many podcasters were paid to recommend a cold card. Like you said, Victoria, people would show it at conventions. People were very fond of this. this little calculator thing. I never had one myself. The closest we got here on World Crypto Network, Max, Hillibrand did several interviews with the cold card people and the how-to, but those were all in 2019 before this 2021 bug for what it's worth. But it's still possible. People could have watched that and gotten some bad wallets because of us, so it is unfortunate. I recall it as the one where you could roll the dice. It turns out if you rolled the dice, I guess you were okay.
Your random number was random. This all goes back and reminds me of the problem with the original paper wallets. Everyone says, what happened to paper wallets? It was so simple. The same thing. It was too simple. The most popular paper wallet generator at the time relied on the Java random number generator, which was not random enough. So they started hacking people's paper wallets, and they would have their money moved without their permission and without their knowing most of the time, and that's what this was. what an absolute horror show for people who thought they had done everything right uh they'd secured their bitcoins they'd taken them line they probably had safe deposit box or they buried them under their house or who knows what they're up to encasing them cement all printing them into metal keys and putting them in a little too if you create the key improperly which again there's no way you could have known this is not a fault of the user but if the software is unaudited as it turns out and it creates the key improperly it's a worthless key even if you put it on metal and bury it under the house uh robert allen what do you think about the only hard uh disaster and uh all the people who've lost a lot of money right now uh well yeah my my heart goes out to people it's um it's obviously a terrible terrible situation and you know i've i've shared i think before the past in this uh show i was a victim of a hack um from an exchange API key that was given to a developer of mine back in the day, forgot the key was given to him, and also was naive about the attack vector.
And so long story short, I lost a lot of Bitcoin. It's a terrible, terrible feeling. You know, I would push back a bit on encouraging people to just use an ETF or keep on an exchange. I mean, there's dozens of exchange hacks. you know, most of their money on exchanges. And, you know, if an individual can be hacked, what's to say that an exchange can't be hacked? Obviously, we have plenty of examples of this happening. I do think good advice in general in life is to not keep all of your eggs in one basket. And so, you know, I actually did have a cold card that I was using and I had some amount of my Bitcoin on it. I had a mark three and I never upgraded the, I never upgraded the firmware.
to the malicious version. So I was, I guess, never in harm's way, as far as I understand, I was using the treasor firmware. But, of course, I swept my funds out of that wallet. I will never use a coin kite again. I would, you know, highly advised not using those products. So, you know, so there's lessons that people are going to be learning here. And sometimes, you know, in a very, very hard way. I saw one guy lost, like, he said, like, of a stack. You should never be holding 90% of your stack where there is a single point of failure. That is a very bad idea. I think this is, you know, it lends credence to my approach with my company CoinCube what I've been building, which is multi, multi, multi, multi-sig, multi-vender.
I think that is a reasonable way to go. You know, if you have a substantial amount of money, a three or five multi-sig, where you have different vendors. for each key, that puts you in a situation where three of those keys would need to be compromised for your funds to be at risk. So if you had been set up with a cold card in that scenario, this hack, this situation with the improper random number generation would not have impacted you because one key is not going to drain your funds. So yeah, I think multi-sig multi-vender is a good approach, and I think that probably needs to become the default for Bitcoin. I'm hopeful that what I'm working on will make that process easy enough and safe enough for people that they can do it in a way that's not super painful, but that is also, you know, that that's going to make, make their lives a bit easier.
But yeah, don't put all your eggs in one basket, multi-sig with multi-vender keys, I think is a smart way to go. And, you know, we're going to, we're going to make it as an industry. And people, you know, sometimes you have to learn the hard way. And so I'm sad for people. And I hope those who have been impacted can, you know, get in the right mental place and realize that, you know, family and health and these things are the most important. And if you have those, try to be grateful for what you do have and try to come back stronger. So those are some of my thoughts. I think Robert's right on trying to split it up into full baskets, maybe getting mold treasures or ledgers or saying, create the multi-sig with multiple key anything you can do to spread out the risk a little bit even like we're saying hold it in exchanges may hold some in exchange some in a treasor some in a ledger like just have a variety of things so that you're not at this single failure i do that adly is probably going to wipe out a lot of the early bitcoin i think a lot of the early libertarian class bitters are the one probably using these old cards uh promoting them at conferences, promoting them on podcasts.
I know I saw BT sessions put out a real heartfelt piece. You know, he had promoted it to his family, to his friends. I don't know he was personally affected. I think a lot of the people he helped turn on Bitcoin is a great feeling when they buy it low becomes worth more and they're proud of it and they moved it around and they sell a little bit and all that becomes a horrible thing when they're wiped out. we're saying here you did the right thing you had a what seemed on the outside as a good wallet a lot of people supported it a lot of people promoted it apparently no one audited it um that's a huge mistake there uh but other than that uh these people did nothing and like you say robert it's been very sad they've been putting out posts on twitter and i don't know if they're true or not but it's like you know oh at least i have my family at least i still have jesus you know this is a these are some really bad people who Unlike a lot of us who are suffering this downtrend and you say, well, you know, at least I don't have leverage.
I don't have any of that stuff. I have the underlying asset. And I've been down 50% before. Maybe it comes back, right? Maybe everything's fine. For these people, it's not going to come back. The hackers took it all. First, they took the large, took the medium account. And then they came back for the small accounts. Like they didn't stop veining this company for a day. the other side of what kind of solution could they have had let's say that card knew about this because certainly there are tweets that show people found this bug years ago and were shouted down blocked and banned and whatever but if you did know about it i think as horrible as it is they have to rug themselves right there's no way to get this this bug fix out to enough people before everybody just starts hacking it and you can't say well just rug the big accounts i think you have to all the accounts as far as any hope on this uh people have been saying to the hacker you know go white hat take a big bug bounty you that you could use trade all this money that you can use that's going to be attempted to be tracked forever and uh you know come this is well because this needed to be exploited by somebody and it found it internally i think they could have exploited uh victoria jones what do you think will they go white hat uh should the company if they found such a horrible bug especially given us probably didn't have email for a lot of these people i mean i guess you could rug their wallet and give it back to a similar key they'd have to like move the key somehow someone could prove the key if the room generator was bad generated so that's out um that's a big mess yeah i mean i think it says a lot about a company they respond in a crisis.
So when I was studying for my MBA, this was one of the things that we studied, you know, how a company responds in a crisis says a lot about how they're going to retain their customer base over time. And I haven't looked into it too closely, but I have heard through the grapevine that the response from the CEO has been particularly egregious, which doesn't inspire faith in any. anybody, you know, to not seem to even care about the way in which your customers can suffer. Does, you know, it just makes you wonder about, you know, what's really been going on in that company and whether or not the whole thing was set up in the beginning in order to disrupt Bitcoin, which wouldn't surprise me, you know, Bitcoin has a lot of enemies.
And who's to say that there aren't other people who are planning exactly the same thing. You have to be so careful. And you can't afford to be naive. You need to be very aware of the fact that, you know, as much as Bitcoin has the potential to disrupt governments, that means we've got a very powerful enemy. And they're going to pull every trick in the book in order to try and undermine this. And this could well be just one of them. So, yeah, I mean, from the little I've seen, I'm very unimpressed. You know, I'm sure there are many things that would have been done in a situation where someone with genuine intentions discovered that. You know, we've heard of situations in the past where these sorts of bugs have been discovered and, you know, it's been sent out to some white hat hackers in order to try and figure out how to overcome it before it became public in order to protect their customers.
And none of that seems to have been done in this at this stage. So there were solutions and the fact that those weren't offered or followed through correctly is very disappointing. evidence that they're not state actors that they're not paid is that they've been posting about how they they still think they have a company at this they think they can go they're like oh yeah we're gonna we're gonna this and oh we're gonna keep selling that no no one's gonna buy that clock anymore clock is out right no bitcoiners out there right now oh i wish i had a clock from the company that cost everyone 1500 going and and ruined all these people's lives like people are more livid at this than they were the mount gocks these these bitcoins are gone mount gox they got a little something back actually i i don't need these core keeps emailing me about my 75 cents for like five years now so that's also kind of a return uh but no this is a total disaster for them they're not coming back they're never coming back and if they had half a clue they would have focused all their energy on white house i think you obviously get together whatever supplies whatever had left hopefully millions maybe some insurance and you put that in a pile and all getting now is about reaching hacker all of your marketing is like come on here to coin card you know give us the money back view i don't know 20 million dollars like clean money like your money is dirty we'll give you money this is good for you like you're still a big hacker like you can still try to hide you know with your clean this dirty money no good everybody's tracking it everybody's looking at it, I guess they're going to mix it, but, you know, they'll probably see it come out the other side.
I don't know how they're going to track it, but they've caught everybody else. So why do this? Robert, what did they focus enough on the bounty? Were they unprepared? They've obviously made it. That was never necessary, and they chose to do that. What do you think about coin response? Oh, my goodness. Yeah, it's been terrible. Absolutely. So one thing that's odd. The last I saw a tweet on this was like, I think there was at least 500 Bitcoin in one wallet, in one address, rather, from the attacker. So that is odd because if your plan was to try to make off with this money and use it in some capacity someday, putting it all in one place seems like a bad idea.
So this, you know, arguably is a nudge in the direction that it could be. state actor and they just don't care and they're not even planning to use it or or you know they just don't it's sort of they're above the law kind of thing I think given how egregious I mean I agree with Victoria's take overall on this I think given how egregious this is it doesn't to me I have a hard time imagining that this was not intentional not to say that the entire company was compromised but as far as I know it looks like there's a guy that just posted today that it's It's looking, I didn't read it, so again, you know, do your own research, but it looks like the CTO may be the same person who wrote.
So there was basically two different GitHub accounts. And one of them wrote the, like, I think a library that was used in the firmware. And then the other account was known to be the CTO. But the point being, it looks like there's a chance that these two accounts were the same person. And so then this person's literally having on GitHub with themselves. And all it would take is, you know, if the CTO was compromised and had a plan and the CEO, NVK was not as smart as he pretended to be, it's very possible that they could have basically, you know, engineered this, put it in place, and then had it ready for a later date. And, you know, obviously it would make sense you'd want to leave this in place, boarded, they're all generating, you know, these pseudo-random number generated seeds.
And then once you have a large enough honeypot, you know, you sweep it. So yeah, whether that's a state actor or an individual, obviously we don't know. But I think it's possible that this could be a state level attack. And I think, yeah, again, like Victoria said, we should we should not be so naive to think that governments would not want to go after Bitcoin in this sort of way. It's the trope in our industry that, you know, to don't trust, verify, clearly that did not happen. So just be careful with the memes that you listen to. And yeah, I mean, the Bitcoin influencer class has utterly failed. And, you know, a lot of these people should just retire because they had one job to do and they didn't do it.
They didn't do their research. And then they told a lot of people to follow them off a cliff. I don't really agree on the data idea, but I do think the exploit for a long amount of time, leaving it out there is something a state actor would do, trying to get money. Any normal person would say, oh, my God, there's, you know, say 500 Bitcoin there. You've got to take that down. I have to assume that if you found the bug, somebody else found the bug too. And, you know, are you going to be the guy that had the exploit but didn't make it down? leads me more towards the idea that this is a normal person. I want to say idiot with AI. And they used one of the new AI tools like Fable or Opus or one of the new models.
And they said, go out there and hack some Bitcoin wallets. And that would explain why they cut them up in one big file. Have no plan to mix it. Their mixing plan is probably, hey, AI, how do I make all the Bitcoin that I've stolen? You know, something like that, which is obviously a really bad. plan but knows maybe it works right maybe they only need a certain amount of money they mix it out the rest of it just sits there forever and they move along so um remember as well mount gocks hacker and remember he was refreshed multiple times we did a draw and this was so badly written it sent form from the withdrawal he kept all his bitcoin in like a tin underneath his house so this kind of thing happens allegedly the radical con people hacked whatever the bit of those exchanges and they were buying nonsense from walmart gift cards like playstations and tide and stuff and they were going to launder the money that way so as soon as you to hack a thing you're already logging it or dealing with the money after so it is possible they find this guy or this person robert go ahead more on this i just yeah i think those are fair points And of course, there's also the possibility that you have like a Patsy, right?
So you, I mean, yes, state actors are pretty well known for doing this. So you find someone and maybe you give them a tip or you help them to do the crime. But then, you know, then you're kind of in the shadows potentially. Yeah, just, you know, then you can turn them into a, you know, the, you can make them the person that is, that you pin the crime on. You know what I mean? So, but yeah, it's possible what you said as well. Yeah, I agree with Chris the chat, Sue. He says it's a Vera cope of the state actor. We kind of wish that Bitcoin was enough and we wish that self-custody mattered and that all these things were important, important enough the government to have special agents that would go and take it down.
But it seems a lot more likely that the person at Cold Card made a bad mistake. Oh, they're more on for a day. They're probably really smart the rest of the time. this up for a lot of people and then somebody else with AI just got really lucky and pulled down this exploit. It does definitely crush self-custody. It does crush the old Bitcoin class and it crush anybody who promoted or supported this thing. So that's bad. We do have WorldCru Network report on this. Like I said, mainly it was just Max doing a few episodes about this. They didn't interview. With NVK, we met him in Berlin at a conference. This was all like three years before the bug even happened.
So it's unlikely that people lost this. It's too, it's really sad. We also have been promoting and supporting hardware wallets and paper wallets for the last 13 years. It looks at the ledger, the most support being that paper wallets cold guard, 19 support mainly max. be more, but not that much. And a lot of with the ledger news was probably a ledger hack where Ledger's marketing saw their emails, their usernames was hacked, but their product is relatively okay as far as we know. Not putting any of these things anymore, but good luck with that. And we'll see what's going there. They say in the chat, the BTC Pace server has a vulnerability. So if you're storing funds in there, I would have pulled them up.
out. Going on to issue two, BitMex and BitMART, maybe the first casualties of a crypto trading slump. The rewarning era of crypto-trick took final blows. It announced it would permanently shut its operations in September. The platform famous for inventing the perpetual stop in 2016 may not be last. Additional bankruptcies include BitMart and other exchanges who are closed. closing down, they don't have enough hype, they don't have enough traders. Robert Allen, what about Bitcoin trading slump and the surprise closure of Bitmex? I honestly don't know if I have much of an opinion on this. Yeah, it seems a bit odd that, you know, a company that's been successful for what over a decade would just close up and move on.
a bit concerning as, you know, is there some reason that we are unaware of that is causing them to do this? Yeah, it's just, it's definitely odd, but I don't know if I have any real insight into why or what's going on other than that I just think it's strange that a successful business would just close. Like even if it's slow, you know, unless your operating costs are tremendously high, why wouldn't you just wait until the next wave of trading? know, because it's going to come and go, as all the cycles do. So it's just strange to me. I would have pardoned it. It settles you for all the crimes in the past, but not the crime might commit in the future.
So it might have decided it was a good time to get the heck of dodge. Well, quite an interesting exchange. I remember everyone talking about all the futures that they invented. investing in all the future coming bitmex. And there was a lot of talk as well that you had to use VPN to use bitmacks or these futures weren't available in the United States. There was always kind of skirting the law going on there. I wouldn't say anything officially, but they were always that questionable exchange. And now they are questionable more. Victoria Jones, what do you think? They got in and they closed in the exchange. I mean, I think, I mean, 2017, I suspect, was the peak for crypto.
I mean, it was just such a mad frenzy with, you know, the infiltration of new coins and everyone was trading left, right and centre and some of the gains that people were making that year, especially because of the B-cash hard fork and, you know, having to trade, you know, the fort coins and everything else. You know, it was hardly surprising that, you know, it started a whole new industry. But here we are 10 years later. And they often say that new businesses, many new businesses often don't survive past the 10 year mark. And I suppose this is the point at which they're all kind of dying a slow death. I mean, you know, the regulations have been pretty horrendous.
Even finance, which is the biggest one, has struggled to stay up to date with some of the new EU regulations. And of course, you know, A lot of the governments are on a mission to make sure that it becomes as hard as possible because they're responding to people who, A, feel it's unfair because they didn't get in sooner. And, you know, don't want anyone competing with their existing Fiat system. It's a big issue. You know, I don't, it might sound a bit conspiracy theory-ish, but, you know, that's the fundamentals of what we're dealing with here. You know, Bitcoin is a challenge to the existing Fiat system. governments only exist because of fiat currency.
So if you disrupt fiat currency, by de facto, you disrupt the way in which governments work. It's just basic. So, yeah, I mean, the governments have been cracking down on them a lot. Fortunately, they haven't been able to put them completely out of existence because some of them have done incredibly well. But obviously, you know, some of the smaller players, it's just, you know, part of the business cycle that a of them will be you know shutting up shop because they haven't been able to compete and they consolidate into the larger players and we have seen that with a lot of the other earlier bitcoin exchanges once household names huge exchanges something goes wrong they changed their mind they shut down sell off the customer list and that's the end of that let's move on to the exit question predicting against the magic eight ball the source of all truth and this and any other universe Robert Allen, will the price Bitcoin be higher or lower time next week?
This is a really hard week because we do have the BIP 110 software happening here tomorrow. I'm going to say lower. I think it'll be lower. Soft thing, but so far the business has slightly higher despite a hack. 5. Victoria Jones, higher or lower? Yeah, I think next week could be a bit tumultuous, so I'm going to go with lower. And now we will shake the magic ball, which can't cause. Will the price of Bitcoin be higher this time next week? Don't count on it. Don't count on it. The ball is negative. There you go. Check out world crypto network.com, where we've got more than 5,000. 2027 videos including lots of new shorts all cut from last week's show and the week before check it out at world crypto network dot com issue three apple responds to lawsuit over fake bitcoin wallet scam in app store apple is facing a new lawsuit three customers who alleges lost a combined 1.8 million dollars this was a big story before the big thing to fake bitcoin wallet app in the app or according to the cald in california federal court on friday it said apple should have protected their consumers it's kind of the point of the apple apps or and the walled garden it created victoria jones what do you think the apple hack now totally quaint compared to the cold card hack but still should they have been protected if a full liable for their customers Yeah, I mean, I was shocked by this.
I mean, Apple is normally known for being very robust with their apps. So I was shocked again that they allowed something through like this. And I'm also shocked that I'm also shocked at the people who were actually affected by it. names but one of them is quite a well-known competent bitcoiner so the fact that they were fooled I mean you know the the the chance of the of the general public not being fooled is even lower so again you know I think it's incredibly negligent on the part of Apple and it must have been a very good fake for the people mentioned to have been fooled by that so I'm shocked and very large amounts of money as well so Yeah, I mean, something's gone along there and it needs to be fixed.
I mean, I think one thing to try a lightning bullet or wallet of Satoshi, something like that, you put like 20 bucks in, be $100 or somewhere, you know, you could lose it. You're like, oh, that was a stupid thing. Somebody put millions of dollars into this thing or even hundreds of thousands into a wallet that you got on your phone. It's just such a bad idea. And I don't know who Victoria is talking. about the technically competent person who used it. But obviously they should be suing. And on the other side, though, I also think that Apple should have protected their users. They're so good at banning all of these little games that take Bitcoin, anything where you can get a 10 cent reward, or there's a wallet, and it looks like an MP3 player, but really it's a wallet if you push these buttons.
They find all of these, but they can't find this one, which masquerades as a wallet, which seems like a bad enough idea anyway i wouldn't think apple would want any wallets and then to turn into a wallet that steals keys or whatever happened in the end uh is uh like an obvious thing they should have protected against uh robert what do you think about apple should they have protected and uh should these people have trusted this weird wallet wow uh yeah i mean as you said it's it's pretty bizarre that anyone would download a wallet on their phone and put large amounts of Bitcoin into it. That's pretty crazy to begin with. I mean, yeah, you have a hot wallet, like how many thousands of dollars do you want to trust to your, you know, your single point of failure, which is not only your phone, but the fact that you downloaded something from an app store like that.
So that's really, really bad on the users. I mean, I think, you know, speaking more broadly, the danger of these walled is that people get lulled into a false sense of security that, you know, hey, everything is good here. I can trust whatever I get here. And the reality is that's, you know, it's not been the case for a long time. I mean, this is not the first time that fake apps have gotten into the app store and people have been rugged in different ways. So, yeah, I mean, it's probably an argument, you know, against these walled gardens and for, you know, a more open, free market approach, because in the end, we have to have a better way of doing this than just saying, hey, you know, trust me, bro, we reviewed the code.
Yeah, so I don't know what the solution is, but it doesn't seem like this is going to be a safe place for people to be downloading software, you know, because it hasn't been and how is it going to improve? I don't know. I don't see any change in these sort of centralized approaches. Don't millions of dollars over app you download in the app store. It seemed like a bad plan. But who knows, maybe these people had a reason they needed to have that million dollars on their, on their portable machine for some reason. No, no. Or having audio problems. I'm sorry about that. Not sure what to do. We could try turning off video, I guess. Let's go on to the next issue.
Issue 4. Coinbase CEO has a radical fix for america's 36 trillion dollar debt coinbase ceo brian armstrong is soaring u.s debt of over 39 trillion dollars he says that we should have two things a cap on rising government spending and a requirement for a hard-backed currency the united states would not be able to endlessly print me and then spend on whatever they want pretty libertarian ideas here basic brian armstrong Victoria Jones, what do you think of Brian Armstrong's did change the U.S. economy and save it with a cap on government spending and a requirement for hard-backed currently? I mean, quite frankly, what is he smoking? I mean, I remember doing talks in 2017 where I had a visualization of what a trillion dollars looked like.
And at the time, the visualization ended. with an idea of what 27 trillion looked like. And it was like skyscrapers of cash that were higher than the Empire State Building and not just one, but several. I mean, the fact that we've gone up by another 10 trillion in the space of 10 years means that, you know, we're now in a situation where everything is completely out of control when it comes to debt. You know, governments have demonstrated that they're completely incapable. of keeping a lid on it. So, you know, really is it such a genius suggestion for Brian Armstrong to come around now and kind of say, we need to keep a lid on spending. I mean, people have been saying that for decades.
And clearly it's made no difference. So, you know, I don't know. I mean, maybe he's just speaking for the sake of speaking, but it's like a ridiculous conversation at this point. That's been tried and done. And it's like the stable door has closed and the horse has bolted. that. CEO of a company can just put out your fix for America. I could say we should get rid of the penny and we should switch to standard time and have all in voting, those kind of things. They can just do this as a giant CEO of a company. So yeah, I agree with Victoria. I thought it was kind of a basic libertarian ideas from Brian there, not even very technological. Like I see the headlines.
and I'm hoping for some kind of, you know, cyber future co-op, working together dreams or something. I didn't get that. I didn't get that much for this. But I kind of, kind of appreciating him for trying something. And I'm seeing how that, let's go to Robert Allen. What do you think of Brian Strong's authoritarian pictures for the United States? Sorry, my screen. and got away from me there um yeah i mean i would say i largely uh agree with his ideas here it would be great um i'm not uh very sanguine that it would happen ever in our lifetime but it's uh it's great yeah i mean let's let's push more people should be pushing in that direction but uh i think um yeah it's probably more likely that i don't know the sun will turn into uh cheese yeah he doesn't provide any ways to make this happen like a constitutional convention or I don't know taking over the state legislatures or what it's it's it's particularly not very well thought out but again it's kind of cool if you're a big CEO you can recommend the kind of thing people write it ideas at least the idea gets out there I think we'd all kind of agree with these ideas but not this one we have a little bit more the i told you so section of the show uh this graphic quickly on uh a i on chat gvt it says i told you so uh minnesota's ban on crypto a p m goes into effect after citizens report losing nearly one million dollars in scam because the fraud we predicted this here right on the show that so many people were losing so much from crypto pms they wouldn't go with the education side they would go with the let's ban outright we also have go currency for cartels myth of perfect anonymity and it turns as we've been saying on the show for years crypto is actually really bad for cartels the fbi and other government agencies use the trail of crypto to track these people down it's a bad plan everyone says oh it's so easy for them to use it's actually bad for them.
And one year since they canceled the mRNA vaccine projects, it turns out that science continued and then it all flues with MRI. And 700,000 people have died since Doge's cuts. And they would need the U.S. is losing to China in AI. But it's grab bag. You guys can pick any topic you want or talk about the BIP 110 for that's going down tomorrow. Jones, what do you think? Would you like to talk about one of these topics? Obviously, we told you so on many of them, or the BIP 110. Go ahead. Yeah, I think most of those topics we've pretty much discussed in the past, you know, like the ATMs and people losing money through those scams really bad. Bitcoin isn't known for a long time that Bitcoin is probably the worst thing for criminals to use, but that doesn't stop the narrative.
from continuing. And as for the vaccines, I think I'll leave that one to a different, to a different podcast. But yeah, I mean, I was going to say my story of the week would be the BIP 110 fork that's happening tomorrow. Obviously, you know, there's been a lot of argument about it on Twitter. Personally, for myself, I'm glad that something has been done. I did express on this show last September that I was concerned about the fact that a bitcoin core wasn't taking into account just how strongly people felt about the issue of them exploding the filter and it would appear that there's a large minority that also feel the same way and because their voices weren't listened to they've expressed their power in the way they are able to because ultimately the voting in the uh who run a node obviously you know there are incentives and disincentives for everyone else following along with that but ultimately it's what it's what the node runners are prepared to run as a software on their nodes that ultimately is the voting power on the network regardless of what your opinion is if you have an opinion and you want to have your say then running a node is the answer and of course for many people they're just not technical enough they don't understand the issues enough and and also all the noise makes it hard for people to understand the issues in detail.
And so hopefully the node runners who have, you know, experienced the implications of this extra data going on the network. I mean, I spent some time with a colleague trying to put together some courses on how to run a node. And one of the first obstacles we came up against was the fact that the data on the nodes have just exploded, which makes them really hard to run, regardless of what feel about the actual data that's held on the node, just the fact that there's bloating that data is a problem and is definitely going to be a problem into the future. So, you know, the soft fork is a temporary fork. It can be reversed in a year. Really, the way I see it is it's a way in which a protest, it's a way in which to escalate the problems that were expressed verbally that weren't taken notice of.
and so something else had to be done in order to challenge that and for their voices to be heard. I don't think it's the ultimate solution. I still think there needs to be, you know, an even more robust solution going forward in the future. But I think for the moment, it's probably the best solution we had just in order to get more attention on the issue and to make sure that, you know, something has done about this because I do think the issues are a problem. And yeah, I'll leave it there. Plenty more people have said even more about it. But yeah, I do support, I do support the fact that something is being done. I do think something needed to be done.
And I'm glad, you know, I'm happy with what has been proposed. We've discussed this one before. You know, you guys, I disagree with you. I think you can already put a blog pain. They've already put text on there that's offensive. to people with nfti bugs and the inscriptions and the ordinals they were already putting ftis and images there so to have a way for them do it that doesn't bloat the block size that we could prune off i think is the reason that they changed it i don't have any trust in the nts crew in the programmers luke just share or any of the things put out so i think this would be similar to bitcoin where it would be a huge mistake to a practice or to turn this on and that it'll probably crash on its own in a few months as Bitcoin 2x did.
But I'm going to let you talk, let you have your opinion. Robert, what do you think about the various issues? We've had the Bitcoin Atoms, which we predicted there would be a ban. Now there's a total ban in the state of Minnesota. Bartels using coining it's anonymous and a little bit on the things and then the dead people. But really you probably want to talk about Bitcoin 110 or Bitcoin. What do you think, Robert, about the issues? Go ahead. Yeah, I'll jump in on BIP 110 because I think that is the most salient or timely topic. Yeah, I mean, when I got kind of introduced to this, like a lot of people, it just seemed kind of, I don't know, like what's the point?
What's all the commotion about? And I was, I would say, pretty skeptical. early on, like 23 or so, I kind of got sucked into, you know, let's make Bitcoin fun again. And I played around with some NFTs on Bitcoin, you know, some ordinals, minted some, quote unquote. And my opinion on this has changed a lot over the last few years. You know, I think the first wake up for me was after this had come out and, you know, a lot of bitcoinsers, the ordinal thing that is, we started to see that transaction fees were going very, very high in 2023 and 2024. And that was really concerning because, you know, I've always been a bitcoiner in the sense of I'm here for the monetary revolution.
I want to see a world where people can have money that is not controlled by governments, that is fair, honest. impartial, apolitical, and so on and so forth. And so, you know, if you can't get transactions into the network due to this other, quote, use case, that's a problem. And then, you know, my thinking evolved further on that because I see now that there's this, I would say, a naive idea that, you know, hey, transactions will just sort themselves out because there's a fee market. And so, you know, worry about it everyone will just pay their fees and so on and so forth but you know the the problem there is if we lived in a world that had actual free markets that perhaps could make sense but the reality is we have a situation where we have state actors who have essentially infinite money that they can print and so if they want to think adversarily and try to attack bitcoin and they have a money printer they can fund basically you know nonsense quote use of the Bitcoin blockchain.
And so I think there was sort of a test run of that in 2023, 2024. And as Victoria, I think, pointed out, you know, the amount of data on the Bitcoin blockchain ballooned since then, as well as the UTXO set. So these are things that are not, I think, they shouldn't just be dismissed so flippantly. And so I think I see BIP 110. as an attempt to nudge Bitcoin back in the direction that I think it should be, which is that it's a monetary network. Of course, there are ways to continue to use the network to spam and to broadcast spam. But I see this as we need to signal as a community that Bitcoin is not open for business for these, quote, use cases that are outside of the monetary use.
And, you know, in other words, and I think it's very easy to see, and I think it's easy to argue, 2020, sorry, 2013, 2014. In those years, there was an antagonism from the Bitcoin community against this sort of thing. And this is why Vitalik went and created Ethereum, because he wanted to do all this, you know, all of his smart contracting, stuff and he couldn't do it with bitcoin because the community said hey we don't want this extraneous arbitrary data and so the community pushed him away and and so it was the social signal as much as it was the technical signal because the bottom line is you know if spammers ordinal creators etc see from the community that look we are going to make your lives difficult and we can come back with additional measures you know, hopefully those would be in the relay policy direction.
But if you button up some of these, what I would argue clearly are attack vectors where taproot opened up, unintentionally opened up the ability for people to use if and to create these unspendable transactions where they're stuffing data. That was clearly an exploit. It was not intended behavior of taproot. So, you know, if we can close some of these exploits, make it more difficult. for these people. They will not have the VC money and people coming on, you know, and lining up and funding these projects. And so I think that that is where I see it being the necessary step. It's not perfect, you know, end-all, be-all. But I would also push back and say, you know, Luke gets a lot of flack and I've even had exchanges with him where, you know, he can be obtuse, he can be difficult.
And he can just be flat out wrong sometimes on things. But his understanding of Bitcoin as a technology is, is, you know, arguably unmatched. I mean, he's been working in Bitcoin since 2011, or sorry, what am I saying? Yeah, 2011, I think, right? So, you know, he's been around. He's, he's been right on a lot of things. And to just dismiss him and say, oh, you know, Knott's is garbage and who cares about it, I think that's, I mean, I think it's clearly that's a bit of a crazy thing to say, quite frankly, because you have a lot of people that have switched over, regardless of the success or failure of this BIP tomorrow, the soft fork, there's a large percentage of the community that has said, look, I don't want to run Bitcoin core anymore.
I don't trust what the core developers have been doing and the direction that they're headed, and I want to go a different way. And this is arguably one of the more beautiful things about Bitcoin is that If, you know, as a community, we see things we don't like, we can vote with our note. We can say, look, I'm not on the side of this. And I want to see something else done. So I think it's good. I think we need to see more bitcoins engaged in these sorts of situations. And, you know, we need to be more involved. Because if we just think, you know, the sort of magical thinking or like sailor claiming, oh, you know, Bitcoin is already won, we're going to lose.
in a big way. I think it's very naive to imagine that as Bitcoin grows, that it's not going to be attacked and there's not going to be attempts to subvert it and to, you know, corporatize it and ultimately to capture it. And so I think this is a really critical time for Bitcoiners to pay attention. And I'm not telling anyone to, you know, think as I think, you know, do your own research and make a decision, but be involved because this is a really important technology that we all. are, you know, engaging with. And it has ramifications for our families, our children, our grandchildren. And so, yeah, pay attention, get involved, run a node. I think it's really exciting to see the amount of people that have been deciding.
You know what? I need to get more involved. I need to run a node. I need to, you know, to be, I need to be involved more in Bitcoin. And so I think that's really exciting. And it bothers me that people on the core side, one of them, biggest frustrations of all has been this sort of attitude of node runners don't matter, you know, it doesn't matter that you, what you think, whatever, just, you know, sort of similar to the COVID narrative, which was trust the, trust the science, trust the experts. And, you know, Thomas, you and I were on the opposite sides of that situation as well. And I think time has proven out that it was wise to be cautious in that scenario.
And I think, again, when the dominant narrative seems to be controlled and you've got, you know, basically big corporations that are telling people what to believe about Bitcoin, we should step back and think a little bit more about the direction we're headed. So anyway, but I appreciate Thomas that we can be on opposite sides of the aisle, but still be friends and still be able to have communication on these topics. So those are some of my thoughts on BIP 110. I am signaling for it on my nodes. you know, very much interested to see what tomorrow brings. Yeah, I still think that we should trust experts, especially in the fields like medicine and politics and technology.
I think that the experts on this are trying to tell you that it's not a deal, that it doesn't really matter if you signal with your note or not. And it also, additionally, it doesn't stop the problem. people are addicted to putting sam into all new software and they will fill any new software they will use the existing ordinals and uh inscriptions bugs or whatever to put the bad stuff in there they've already put it in the text in that you could always put the text in so i don't see this thing solving anything i don't see us uh filtering the spam you want this is a good image that's a bad image i think that's never going to work and again for me to take a step back I think that sending around the world's money is even worse than sending around the world's child porn.
Like the world's money can actually use to buy things. So if you gave one CSAM people like a million dollars, they could presumably buy a lot of CP and spread it around, right? Because they're addicted to doing that. I see if you give a million dollars to a terrorist group, they're going to hurt people, right? As a bitcorner, when you're sporting this monetary you're already in it for all that, right? So I don't see that adding on images that are very hard to get to that are not easy to use is some kind of like a deal breaker or something, some kind of like a split. But we've talked about this before and we'll talk about it again. But again, you know, we'll see what happens tomorrow.
I don't think that they have the technical chops to do this. I don't think anyone should fork off. I don't think there's going to be a marked BTC or BIP 110 coin. There was with B Cash, right? I think we've been through this enough. But we'll see what happens. Maybe we'll talk about it again next week or in a few weeks on this show. But thanks to everybody for joining us. Let's go to predictions or story of the week. Victoria, anything else to say on this before we end the show? Go ahead. Yeah, well, before the show I'd considered, because it wasn't on the agenda, I'd consider bringing up Bit 110. Obviously, we've discussed it. And I think it's more, I think it is significant.
So yeah, you know, good luck to everyone out there, you know, may the best thing for Bitcoin win. You know, we've, we, this technology was invented for a reason. And, you know, at the end of the day, what we want is the best possible version of the software going forward in order to protect, you know, humanity with a decent form of money that will be honest and trustworthy going forward in the future. And I think this is just another step. step along that battle and the fact that we can even have this discussion and that there are ways to push back is a very good thing in my opinion. All right. Let's go to Robert Allen, prediction story of the week.
Go ahead. Well, I guess my story would just be that I'll update everyone I've been working tirelessly on CoinCube. and, you know, wish I had had it out the door a year ago. As I mentioned in the conversation about Cold Card, I really feel strongly about multi-sig. And I think it's very important to put people in a better position where they can hopefully not get rugged like what just happened with Cold Card. So very motivated, getting toward the end of QA testing. And I have not decided. I'm excited on a release date for the product because I don't want to rush anything, especially given what has happened recently. I want to double and triple and quadruple check any code that is mission critical.
So I'm taking my time. But yeah, really excited to get this thing out the door. Hopeful that Bitcoin will follow the soft fork and we can stay together As a community, I do think there will, if the BIP does not activate successfully, I think there will be a split. And I don't want that to happen. I really don't. So I'm hopeful that the miners will basically listen to the minority that is being, I would say, abused right now. And the minority that's saying, look, we want to tighten the rule set to try to mitigate some of this damage. I think it's a very reasonable thing to ask for. and I think it's a net benefit to Bitcoin. I think there's very little downside and mostly upside to the whole thing.
So I hope it activates and then we'll see what happens. But yeah, I'm like I said, working kind of around the clock and excited to bring this product out to the world. So that's my story of the week. Well, the best thing you can do for your product, Robert, is an adversarial audit where you pay White Hat hackers, someone on the outside to break into your product and to try to find out what's going on. It's easy to say it now with the cold card thing. Obviously, everyone's really in hindsight. But hindsight, if they had paid big bucks to one of these firms to come in and hack their product, and especially if you do it after every other, like you can just assume they're going to be fine.
You got to hack the update too. And I don't want to just support AI blindly on this, even having Claude or Codex do an adversary audit on your software might be a good idea. I don't know if the, you know, get in there and it steals the code or whatever, you know, secrets or whatever you have to do your own thing. But for this cold card thing, if they had audited it with a with an AI, with a whatever, it's quite possible they could have found this bug. And then I don't know how you fix it. We talked earlier about perhaps downloading all the wallets, but then they need them back to people, especially don't have their emails and so on and so forth. But do you just leave the coins out there to be stolen.
It's quite a thing, and it's a thing when you're working with people's life savings like this. Yeah. Serious software and serious people, and everyone kind of thought cold card were serious, and it doesn't seem that they are. But go ahead, Robert, a little more on the, go ahead. Yeah, no, thank you. Those are great thoughts. And so I have already, I engaged with a security expert to do an audit earlier on with the original, the vault. which is really the most important aspect of the product. That's the multi-sig wallet. So I've had one audit done and the results of that were good. I also, you know, the vault product piece was forked from Leanna, which is already pretty well-tested product, although, you know, given what's happening with Gold Guard, you can't really just say, oh, it's been out there and it's good.
But nonetheless, I felt, you know, that there was a bit more. sanity in taking something that's been around for four or five years. And as far as I know, has never had any issues. So part of it, you know, comes from another open source project. We'll be open sourcing both the desktop and there's a companion mobile app that I've been building. So those will both be open sourced. I do have one, the Connect API, which is basically what kind of glues everything together, will probably remain closed source because that's essentially the one. moat, if you will, that can give me some sense of security that I've built a product that can't just be outright copied.
But all of the cryptography and everything that really matters happens on the phone and the desktop app. So yeah, but long story short, I agree with you. I'm definitely planning to reach out and pay for an audit, you know, third-party security audit. I'm also going to have a bug bounty as well. So any mission critical bugs that are found, I would have some Bitcoin waiting there to be claimed if anything is found. And I have been using AI tools pretty significantly as well. And yeah, I mean, some of these newer frontier models are quite good and useful. So yeah, I'm kind of coming at it from multiple angles. But yeah, agreed. And thanks for the thoughts.
to know everything in hindsight and certainly the people at coin card had a lot on our hands on a lot to do with it does seem like in hindsight they do oughts certainly not enough they didn't have a bug bounty like you're talking about and they just were kind of unprepared and not looking at this factor not be very careful with their updates like you said people had the old version they were surprisingly fine it's people that created it under the new version and so forth who are it We all have to watch for these things. There's a lot of tools, like you said. If you're going to open source, many people ideally will look at it. We can't guarantee that.
But if it's open source, you could definitely feed it to the AI and then to the other AI have that one look at it as well and so on and so forth. And I think that's really what needs to be done these days. And that's the lesson of code card as well as just having multiple accounts, multiple wallets, multiple providers. as well. But thanks to everybody for joining us. I don't have much for the week. We're still doing a rewatch for all mankind. It's just a great show, so spacey, so sciencey. And again, just like all good Stephen King novels or whatever, it's always the people. You know, it's not, it's the technology goes wrong. It's also the people that affect everything and more and more as the show becomes about Mars and all the political troubles on Mars.
So check out for all mankind on the Apple TV Plus or wherever you download your show. And thanks to everybody for joining us. Hopefully next week on a network cable so we'll have better video, audio, and not have the problems we had this week. And welcome back to us after maybe on vacation. And this is episode 500. I think we've missed a few numbers here and there. So it might not be officially 500, but it is the number 500. so it's pretty cool to make it to 500 episodes. It's about 10 years or more of this show, maybe 13 years. And we're going to try to keep doing it. So we might go between every other week format, depending on guests and scheduling. We might keep up the every week.
If the news does keep coming back in, it kind of slow down a little there in the summer to reuse them with old news today, except for the BIP 110, old card issue which first took everyone by surprise and I think that's it for this episode so thanks to everyone for joining us until next time bye bye bye bye let's see