$86M Drained From Ledgers & Can AI Break Bitcoin's Crypto? | Rabbit Hole Recap #423

0:00 You've had a dynamic where money has become freer than free. When you talk about a Fed just gone nuts, all the central banks going nuts. So it's all acting like safe haven. I believe that in a world where central bankers are tripping over themselves to devalue their currency, Bitcoin wins. In the world of fiat currencies, Bitcoin is the victor.

0:28 I mean, that's part of the bull case for Bitcoin. If you're not paying attention, you probably should be. Go. Go. What's up, freaks? Welcome back to Rabbit Hole Recap. White Ferrari. It's been a Frank Ocean week for me. I got the itch for Frank Ocean. Are you a Frank Ocean fan, Thomas? Yeah, of course.

0:51 You wouldn't shut up with it when you were up here. I know. It's just nonstop. I know. Back with the Roman coinage guy. in between, a lot of white Ferrari. Jeremy Slate. That's a bit much. Jeremy Slate was great. He was good. That was one of your better ones. That touched a lot of different areas. And I might have successfully orange-pilled him, at least a little bit, kind of got his interest peaked.

1:15 Yeah, for sure. Okay, back for Rabbit Hole Recap. Big news week. We're going to front load with some disclosures that are pertinent to anybody who holds Bitcoin, particularly in a ledger, But before we get to that, we're going to start at Clark's dashboard. We were at 86,000 last week when we spoke, when we met at the pub.

1:36 This week, we meet at 82,720 Cuck Bucks. One Cuck Buck is going to get you 1,209 sats. We're at a $1.66 trillion market cap. We're looking at block height, 970,657, which means we had a difficulty adjustment between last week's rip and this week's rip. It was a flat adjustment, which is weird because blocks are coming in in 9 minutes and 38 seconds on average.

2:02 This is, I'm going to have to look into this. It's saying 0.0 is probably 0.01 upwards adjustment. Actually, it should be a downward adjustment since it was under the 10-minute target. We are 1,055 blocks away from the next adjustment, estimated to be on October 16th, so that's seven days from today, which is two weeks from last Friday.

2:21 So it looks like we're on pace here for a 4.6 upwards adjustment, 4.6% upwards adjustment. Blocks may coming in at 9 minutes and 33 seconds on average. A lot of chain activity going on right now. We're going to get to that imminently. There are 6,696 transactions in Clark's. Teeny-weeny, weeny-teeny mempool.

2:43 There are 83,244 transactions. Mempool.spaces mempool. fee market. Not too crazy right now. Three stats per V bite will get you into the next block. But as I've been alluding, news for anybody holding a ledger, excuse me, particularly a ledger that was bought by a reseller, Crypto Billis out of Malaysia is being asked by ledger to create a new seed with a wallet that they did not buy from this vendor and move their funds Immediately, it looks like there is a drain attack going on.

3:21 And Thomas and I were discussing before. I sent a tweet out, said, hey, it looks like this could be the first major supply chain attack on a hardware wallet. Be aware, developing situation. Situation is still developing. Last I saw, $83 million worth of Bitcoin, Ether, and Tron, I believe, had been swept from wallets.

3:40 Ledger believes it's this one third-party vendor, Crypto Billis. and uh there were some so if you first of all if you're out there particularly in asia listening to the show i think that's where many of the customers at crypto billis are located uh if you have a wallet that you haven't used yet that you bought from this vendor do not use it throw it out if you have a wallet created by crypto or sent to you by crypto billis you have used it and your funds are still there move them asap uh and if your funds have been swept i would reach out to ledger uh supply chain attack nuanced stretch of the definition some people are telling me on twitter which um so we'll go into it so it looks like crypto billis bought

4:28 a bunch of ledgers was marketing themselves as a reseller looks like they had a relationship with ledger because ledger was able to contact the team and tell them hey guys stop sales please uh and so what likely happened here as of right now again developing situation that the speculation would be that Crypto Billis bought a bunch of ledgers and then opened the packages, manipulated the hardware to make it easy to sweep funds, waited for everybody to get their ledger, set them up, think that they were setting up secure keys, load them up with Bitcoin, Ether, Intron, and then wait for the balances to get to a certain level where they flip the switch and start sweeping them.

5:07 At least as of right now that what seems to be the case Thomas long way to intro there What are your thoughts So I think somebody called you out for saying it a supply chain attack I think a supply chain attack, technically, I think it's a good enough phrase, but technically speaking, that would be ledger-wide, right?

5:24 Not specified to this reseller, this reseller. I don't know if any of this is confirmed yet. This hit this morning, but at least the way it was worded with ledger, specific to this reseller, whether, you know, the reseller or somebody that had access to these devices put something in. So a supply chain attack might be a little bit overly broad for this one.

5:48 But, you know, scary stuff. It's not specific to Bitcoin. Other crypto assets have been drained from these wallets from this particular provider. Hopefully it's isolated to that, you know, a broader concern if it's actually a proper supply chain attack and there's a problem with all ledger devices or, you know, some element that could spread to other hardware wallets. It doesn't look like that right now, which is fantastic. But yeah, after a cold card and some of the other stuff that we have been dealing with recently, this week has had a couple scary scaries on the algorithm for the bird app. I'm sure we'll get into the crypto bunker.

6:28 and that hit what, Tuesday? When did Justin put out that tweet? It was two days ago, Wednesday. Wednesday? We're going to get to that though. Yeah, yeah, yeah. Breaking development in the Telegram chat. Pull up the tweet. Mark Harpellis, Magical Tux, the former disgraced CEO of Mt. Gox, it looks like he sent this tweet out yesterday.

6:55 need free data buy a cheap ledger off a dodgy seller pull the sim out of the spy implant and enjoy while you can in parentheses law enforcement may visit you thinking you were the one making these and that is a quote tweet of alice in disarray uh you can pull up the quote tweet there logan second slightly more legal weekend idea i won't do it but maybe you will uh desolder the MFF2 flocky eSIM onto one of these, those nano SIM adapter boards, pretty easy.

7:29 And go back to the Mark tweet. It looks like he has a picture of one of these dodgy reseller ledgers. So it looks like potentially the resellers were putting in eSIMs. I'm not technical enough to know exactly what's happening, but maybe the eSIM was just man in the middle, sending private key data back to CryptoBillus while this was going on.

7:49 So supply chain attack, in my definition, is if anywhere between the raw input materials and the end user gets corrupted. In this case, to be clear, it doesn't seem like, at least as of right now, Ledger Y has been subjected to a supply chain attack. But individuals who bought from Crypto Billis as of right now were subjected to a supply chain attack.

8:15 And part of the supply chain that they were vulnerable to was Crypto Billis. So don't ever buy from third-party resellers. Yeah, reseller versus end user is the operative distinction there. Yeah, don't touch resellers. You can have a degree of confidence, I suppose, when it comes to Best Buy, but you don't know who has access to the devices by the time it gets to a shelf and to the ultimate end user that's going to trust the hardware wallet.

8:41 You're going to want to buy direct from manufacturers. We actually went over this a little bit at PubKey. We sold foundation devices for a while. Ideally, I would like to restock the new devices that they have coming out, but definitely wouldn't want to get involved with any of this in terms of who has access to the devices.

9:04 Are they locked down and monitored at all times? injecting PubKey as a risk vector in terms of, you know, from the manufacturer to the end user, it doesn't sound like something that I think is worth it. Although KYC-free ability to pick up a hardware wallet at your local pub sounds kind of cool, but when you look at things like this, it gets complicated and definitely wouldn't want to play a role in somebody losing their funds.

9:33 who's the most likely to uh to manipulate hardware at pubkey okay if somebody was going to try to uh steal bitcoin from pubkey patrons it would be oh god look a lot of people come through the doors i don't think anybody on the pubkey staff would but uh kind of hard to trust and verify uh everybody that has access uh coming and going we try to keep it um we kind of try to keep it like a lead attack surface.

10:01 But yeah, this has me thinking twice for sure. No, everybody at PubKey is an upstanding citizen. Okay, they would never. They would never. Logan, pull up the Lindell Yehuda tweet. But before we read his thread, open up the Justin Drake tweet. As well, Thomas was alluding to this. Justin Drake who is cosplaying as a Bitcoin security researcher a longtime Ethereum Foundation employee and researcher who was pretty wholly convinced that ETH was going to flip Bitcoin in like 2018 is out spreading fear about the capabilities of frontier AI models to solve complex math problems that may make it so you can crack elliptic curves without a quantum computer.

10:51 That is the most distilled version of this screed that was written on Twitter. We'll go into too many details with the idea. It's like, hey, we may not even have to wait for Q day for Bitcoin. private keys that get broken. The AI is getting so good that it's going to solve math problems that manifest some unique way to bork BCDSA and elliptic curves.

11:22 In general, a lot of back and forth here. One of the things that was like good advice in the tweet that Justin sent out was don't reuse addresses. we've been giving this advice on rabbit hole recap as it pertains to bitcoin for almost a decade now address reuse is bad from a privacy perspective and from a security perspective the more you reuse an address the weaker your private key becomes it becomes easier to brute force the more utxos you send to a single address he was really calling on exchanges who are shockingly one of the worst offenders of address reuse, which is, I agree with him, like they should not be reusing addresses. They do it out of convenience in accounting, I imagine.

12:10 And so, yeah, a lot of discussion. We'll start with the Justin Drake tweet. Thomas, what's your take on this? I mean, it reads a lot like somebody at JP Morgan or some other big bank just talking about quantum, like, you know, learning about Bitcoin, but, you know, you have quantum at some point, it's going to bork everything. So there's this future threat, nebulous threat that they throw out as some sort of, you know, knock on Bitcoin's future usability.

12:41 Best practices have always been to avoid reuse of addresses. Most, I think, Bitcoiners understand that and I think a lot of new hardware wallets and other service providers. I know Nick from Casa came out and said we we handle that for you. Lots of new products and services already incorporate that as far as best practices are concerned. But you know this is Ethereum Foundation effectively just regurgitating the same quantum FUD that we've been dealing with from other crypto projects and big banks for a long time here. I wouldn't put too much fear into it, but it's a new world with AI and Red Team attacking some of these things. I think that it makes us a lot stronger over the long run. But if elliptic curve is going to get borked anytime soon, we have really big problems

13:36 beyond Bitcoin as well, if it happens quickly. Another good tweet that I saw in response to this, I think came from Blue Matt, Matt Corallo, talking about the vulnerability of banks, of the normal banking system with these types of attacks. That's on the list. We're going to get to that. All right. First, Logan, go to- They're all related.

13:58 So Yehuda Lindell, who is, I believe, the head of cryptography at Coinbase, was not too happy with Justin Drake's portrayal of the threats or perceived threats out there. He said, I wasn't going to comment since it's a really bad take in my opinion, but since it's taken off, I feel the need to. To my understanding, there is no evidence whatsoever pointing to a break of decades-old hardness assumptions like ecliptic curve cryptography. The fact that AI can prove theorems that have been hard does not indicate in any way that problems assumed to be hard are not.

14:30 Our assumptions of hard problems are not based merely on human fallibility, but on belief that inherent hardness exists. Of course, we can't prove that ecliptic curve discrete log is hard, since we haven't been able to prove P is not equal to MP. But just throwing out AI is doing amazing math, so elliptic curve hardness is in danger, has no logical basis whatsoever.

14:53 Furthermore, it really would be broken. If it really would be broken, ramifications of our digital world, including the traditional financial industry, would be immense. Once I can break elliptic curve cryptography, I can generate fake PKI certificates and impersonate bank websites. Worse, I can generate malicious banking apps and even operating systems and sign them and push them to people's phones and computers and completely take them over. But this is fear-mongering since there's zero evidence to this capability existing. And there's also zero evidence that ecliptic curve hardness is more vulnerable than hash function hardness. In fact, historically, hash functions have been more broken than elliptic curves.

15:30 So this is also based on conjecture rather than any evidence In conclusion making such statements without any evidence is the opposite of responsible behavior It is the very definition of FUD It cannot be proven wrong but there also no evidence whatsoever of it being true So classic case of can't prove a negative here.

15:48 Have we seen this from Justin before? We have. I mean, we were going to, ETH was going to flip in Bitcoin. The whole world was going to move to proof of stake and find it as a superior consensus mechanism. Q day, I believe Q day, by early estimates, the earliest estimates by the people throwing out were like the end of this year.

16:10 So we've got Q4 just started about a week ago. We'll see if Q day comes between now and New Year's Eve and then similar to the Ethereum 2.0 roadmap, the end date will just get pushed out, 2030. I think they'll settle on next year. I think this one can be dismissed, but the situation should be monitored.

16:31 like how quickly some of these systems are able to come up to speed and continue to break things. Need to keep an eye on it, but I wouldn't over rotate on this one in particular at this time. And that gets to yeah. Again, that's why fear mongering like this is very unproductive and extremely frustrating because it could.

16:58 Everybody wants attention. Everybody wants to be loved. It's just there's other ways to do it. There is. Logan, pull up the TFTC, the commoner issue from yesterday. I talked about this yesterday in the newsletter. But if you go down to the last couple of paragraphs of the lead story there, I had Jonas Nick and Mikhail Kudinov on TFTC in January of this year.

17:25 We were talking about quantum computing, the actual threat that quantum presents to Bitcoin private keys. private-public key pairs. And I think there's nuance to this conversation because Jonas, Nick, and Mikhail, who are probably two of the best cryptographers in the world and two cryptographers solely focused on Bitcoin, Jonas said, we know that ECDSA will be broken at some point in the future.

17:51 We have assumptions around the hardness of his algorithm, but we know it's not infallible. Like at some point in the future, it will be broken. And I guess what the debate that Justin just started is like, okay, like how can AI find theorems that make it so the hardness that we assumed existed on ECDSA is not actually as hard as it was?

18:19 And again, it's like trying to prove a negative. You can't do that yet. Point being, Jonah said in that episode, we know that we're going to have to transition or at least create the option for another way to create another signature scheme, another way to create private-public key pairs and sign them.

18:36 And that's what they're working on. And I mean, the context of that conversation revolved around quantum, but just to quell anybody's fear who's worried about this, number one, you should know that eventually ECDSA will be broken at some point in the future. I think it's pretty far in the future from today.

18:53 But we are going to need other signature schemes. And Bitcoin researchers and cryptographers are doing the research to discover or create those signature schemes and begin incorporating them into Bitcoin. So the work's being done. The timeline for the work has historically stoked some anxiety. We know that we need to make certain upgrades in Bitcoin Core and how that actually, how you figure out the risk benefit ratio of when you make that change.

19:27 You don't want to touch something that's not broken. But how far do you front run some of these problems and when is the right time to actually effectuate it? So Justin's saying it's coming really soon. You know, other folks say it'll be eventually. We don't know quite when. but you know how do you think the process within core and other cryptographers and researchers that are looking at this issue knowing that a change needs to be made you know how do you assess the timeline um when there's a completely unknown timeline for the the you know eventual threat that everybody agrees is going to come at some point yeah and so if you want to protect yourself from this in the meantime if you're worried if you're spooked out you want to risk it just do

20:06 the bare minimum of what you can do right now, the way the protocol actually works and it's functional today. Don't reuse addresses. Make sure you're using Segwit. Maybe stay away from Malaysian hardware resellers. Yeah, I think. Both those things. A couple of good practices that we're getting through.

20:27 Don't reuse addresses and don't use Malaysian hardware wallet resellers. But on that note, you're talking about Bitcoin Core upgrades. Logan, pull up the Project Lupe thread. So Project Lupe is essentially the equivalent of the Bitcoin Red team funded by Spiral and Block. And they announced the thread yesterday.

20:50 disclosing the findings that have been landing in Bitcoin Core during the cycle. So they have five PRs that have landed and three that have been merged. Two are under review and below the thread on each one. Caught in which Core to have implemented which fix. And so first up, silent payments fix. There was currently a third party could, after a pay to pubkey hash script sig, so the wallet extracted the wrong pubkey while the spend stayed consensus valid, not good.

21:20 Lupe reported it and at the stack fixed it. So Sebastian fixed that. The other one was on Windows. The RPC listener got lazy, didn't reserve its port exclusively. Another local process could bind to the same port, catch a connection, and capture wallet controlling RPC credentials. Not good. Lupe found it and Hodlnator fixed it.

21:43 A data race transaction download manager shared a non-thread safe RNG. ran a number generator with message processing and a block connecting at the wrong moment. Could use it from two threads at once. Lupe found it and Crypt-IQ fixed it. And then here are the two that are in review. A package evicted right after acceptance landed in the reject filter until the next block and a higher fee child couldn't bump it back in.

22:09 Lupe and the Bitcoin Red team found it and Instagibs is fixing it. Or he fixed it and sent a review. Also from Lupe report. Instagivs mapped out how a peer setting a same TXID witness variant can stall on its fee bumping packages and is closing those holes across the PRs. That work continues, so be aware.

22:32 Lupe, Red Team, and other developers are using Frontier AI models and Frontier, I guess, open-weight, open-source models to scan the repository, make sure that it's secure, and merging updates. not only merging but reviewing fixing, reviewing and merging updates on the go so it highlights the double edge sword of these AI tools that can be used for bad and they can be used for good. In this case they're being used for good and I see the CEO of Bitcoin and the front man of Bitcoin Red Team, Rob Hamilton is in the chat What up Rob?

23:11 What up Rob? Rob, please correct me if I messed anything up there Get your sleep, Rob. We need you to keep going. The speed's incredible, right? Finding lots of bugs. Some of these are scary, right? Big ones, little ones. But these teams are getting much faster at killing these bugs very quickly. I think we talked about that last week in terms of the response.

23:34 And a lot of people have been discussing this over the last couple of weeks. The emergence of red team to kill some of these very scary issues is exceptional. And I think we can go a lot faster with these tools to harden the entire system. Hopefully the cold card exploit ends up hardening the entire system.

23:57 And we don't really have that many of those on a go forward basis. But that's quite the list. Yeah. So speaking of that, we're focused on Bitcoin. And you mentioned earlier, Blue Matt, talking about how these AI tools are going to begin to be used to attack the incoming system. And Logan, if you pull up the TFTC tweet about the South Korean Bank, we had a Vibe Coder.

24:24 We know he's a Vibe Coder because the attack was very sloppy. We'll get into the details. But a threat actor used Artex, a Chinese open source AI pen testing tool running on DeepSea v4.1 Flash, along with Cloud Code sessions on GLM 5.3 and Grok 4.6 to breach at least nine South Korean banks. More than 68,000 people had their personal financial data stolen.

24:49 At Xinhan Bank alone, loan application data for 25,000 customers was taken. names, phone numbers, annual incomes, loan limits, and for 66 of them, national ID numbers. The attacker wasn't sophisticated, CrowdStrike found. Open directories the actor left exposed on their own infrastructure, stuffed with Claude Coates' session histories in Chinese language pen testing instructions.

25:12 They asked Claude how to find Korean telegram groups that buy breach data, and then asked it to write them a security research or resume. CrowdStrike assesses with moderate confidence the actor is a Chinese speaker and financially motivated, but hasn't established who was behind it. Nobody cracked any encryption.

25:30 They just had AI try random values on a loan status page until one opened tedious grunt work for you, and you hand it off to a clanker. South Korea's president said it plainly. We now have reached a point where AI can make hacking easy for even those without special skills. So these databases are honeybots.

25:49 And I think this is something we've been saying for a long time in Bitcoin, And I know we're going to get to it later. We got a little behind the scenes of the block commercials that were shot in Brooklyn last month But that was one of the things you said behind the scenes BSA BSA It makes no sense You know, one quick note on this being like an ordinary person, also fantastic cover for an intelligence agency to say, no, that wasn't us. It's not an official attack from one organization to another or one country to another. You can kind of just say, no, that guy, he's not with us.

26:23 It was just some random dude with access to Claude. You should probably shut that down. With BSA, the collection of all this information, and I feel like we're just banging this drum over and over again within the Bitcoin circle, but it's important to do so. It's starting very slowly to spread elsewhere where you have massive troves of individual data.

26:47 What is it? PII? Personally Identifiable Information? Stuff like that. Social security numbers, bank accounts, financial data. and if it's not being held in the way that it should, and you can kind of assume all of them are not being held in the way that they should be, particularly in the age of AI, we're fucked.

27:07 And this goes back to the Bank Secrecy Act. It was tremendously expanded under the Patriot Act, and we had Hester Peirce at PubKey about a year ago, and she and I were talking about this, and it's a political third rail. Nobody really wants to touch that in D.C., except for Hester Peirce. But unfortunately, she's touching it on her way out.

27:28 She wrote a letter saying we need to really rethink KYC, the collection of information, how it's warehoused at corporate levels and also government levels. So I'm hoping that, you know, the Bitcoin circle can continue to bang this drum as loud as possible. And it spreads to other circles and maybe even policymakers at some point because it's too much information out there.

27:54 you can do everything you can with like a data broker and some of the privacy preserving, what are they called? Like an incognito, you know what I'm talking about? Where they'll try and scrub your information, but that information, that snapshot's already out there in terms of, you know, where you live, your phone number, your email address, unless you're willing to fundamentally change those things, leaving service providers and in, you know, a banking sense, that's not an easy thing to do. And, you know, Moving a physical location, not an easy thing to do for, you know, lots of people.

28:29 But you have that snapshot out there and it's extremely difficult to claw it back once it's on like a data broker or dark web or whatever. It just goes to Roblox and then you're getting called by some fucking 12 year old in California nine times a day. Nine? That's it? I get like literally a hundred.

28:46 Nine year old, hey, I'm here to help you reset your Google password. Do your parents know what you're doing? Right. But two things here. What was the first thing? The first thing I forgot. I already forgot the first thing. You're talking about the BSA Patriot Act. The BSA Patriot Act. Oh, this highlights the beauty of Bitcoin.

29:08 Bitcoin, open source, distributed consensus. Theoretically, you can download a piece of software. I know it's rough out there in the last few months, but let's just run with the hypothetical that you can securely create a private public key pair with a piece of software on a computer that's air gap, not connected to the internet.

29:26 You can receive Bitcoin, you can send Bitcoin. You don't need your address, you don't need your PII, they don't even need your name. You just have a piece of software that says, hey, I have a valid public address and the private key that can sign it. You can send to this valid public address and since I have the private key, I can spend from this private address.

29:43 And that is the dream, is that we get to a point where people are able to have full control over their financial lives without having to give up this information. The governments hate that. And you may be saying, BSA, why are you talking about the Bank Secrecy Act in the United States when we're talking about a hack of a South Korean bank or South Korean banks, excuse me?

30:03 The BSA is all-reaching, all-encompassing. It goes across the world. We make a law here in the United States and basically bully the rest of the world. Like, hey, if you want to do business here, you have to comply with the KYC AML regime as set forth in the Bank Secrecy Act. It's incredibly Orwellian and has broad stroke effects on the entire globe.

30:24 Yeah, or you're not going to get the IMF loan, or you're not going to have access to SWIFT, or you're going to be sanctioned if you're not going to play by the same rules. This has been playing out for decades, and lots of folks want to expand it. And I think there are parallels with... We talked a little bit about the pincer attack rounds.

30:46 uh, data centers and slowing down AI, the need to take a pause and the need to hit a total pause so that the government can have more insight, more control. It's going to extend to services like open AI and Anthropic and other ones where you have, you know, not just a collection of the data, but a collection of what you're thinking about what you building what you you know talking to the the the clanker about um it too much data to have out there without thinking about the protections of what can be gained by accessing open models the same way that you would approach any financial dealings by having something like Bitcoin in opposition to a financial institution that is required by the government and global governments to collect and hold and have as much

31:34 insight into what's happening with the flow of funds as possible. And it's also ridiculous because you have cartels that are banked at Citibank and other ones. Like it's, it's all, it's all a racket. But, you know, normal sovereign individuals on the wrong side of it. Yeah. Beware freaks. Beware. And AI is only going to make this easier. So stay frosty out there. You mentioned the pincer attack with the propaganda campaign against data centers. That provides a good segue into the dark horse story, Logan. Disclaimer, I am on the board of directors of Dark Horse, but I put this on the list this week because I think it highlights a sort of retort to the pincer attack and really highlights what's actually going on with the data center build out. So Dark Horse, we announced earlier

32:25 this week that we signed a deal with Hopkinsville Electric that gives us the opportunity to to take an option to expand our energy profile within that part of the TVA by 50 megawatts. And the way in which that will happen is that we'll have to build a 65 megawatt substation, which will be paid for by Dark Horse. 50 megawatts will be allocated to us. If we take the option, then 15 megawatts will be allocated to residential consumers leveraging electricity within the Hopkinsville electric system. And so this is a retort to the FUD, which is data centers are basically leashing off the grid. They're raising electricity prices. And here, what we're doing at Dark Horse, what we announced this week, this example of, hey, that's actually not what's

33:20 happening. We're going to help you expand capacity within your grid system. We're going to pay for a new substation. It's going to be 65 megawatts. We're going to take 50, but we're going to increase the capacity of people living within the Hopkinsville electric system by 15 megawatts, which is material for that rural community.

33:39 And then on top of that, the substation will connect, I believe it's the 131 kilovolt line from TVA, which is much more reliable. It will bring more reliable grid stability to people living within the Hopkinsville community. And so very proud of the work that the team at Dark Horse did to get to this point.

33:58 And I think, again, it's an incredible example of what's actually happening on the ground with this data center buildup. That's awesome. Look, good neighbors, bad neighbors, good corporations, bad corporations. Again, we touched on this last week. It's worth reiterating, though. A lot of the FUD is slowing down all progress with these moratoriums in New York and Texas and elsewhere.

34:26 We don't need a new regime. Bitcoin got a new regime with a bit license and special treatment in lots of different jurisdictions here domestically and internationally. It doesn't need a new regime. There are basic laws that are applicable to Bitcoin. And the same thing is true with somebody that wants to start a data center.

34:47 You cannot go and fuck up somebody else's quiet enjoyment of their private property. So the idea that we need specialized treatment for a warehouse or a room full of computers that might be a little bit noisy or use a lot of electricity, backroom deals doesn't really work here. Uh, we should be, you know, expecting, um, you know, municipalities and, you know, other government officials to just take a look at the rules that are on record and realize that somebody can turn around and sue a data center if it's way too noisy next to a school or a hospital or playground or anything like that.

35:24 But, um, yeah, dark horse is probably in the good category, despite the disclaimer. the uh no and the noise the noise in the water fud aren't even like legitimate anymore the noise for bitcoin miners back in the day was real um it was usual sounds like money levels uh most beautiful sound in the world the way these server racks are designed now like in the way that the the buildings and shipping containers or modular data centers or does I know they do a really good job at reducing the noise and making it so you don't even notice and then the water the water fund for most of these particularly on the smaller scale is completely off base because they're closed loop water systems like it's not like you have like

36:13 it's not like you're just pulling water from a river continuously and dumping it on the computer so you get like a set no it just fun it the green piece bullshit that bitcoin miners had to with for a long period of time The difference here in my in my opinion is you know Bitcoin mining was so is and has been such a difficult business The margins you really got to watch. If you have expensive solutions on cutting down noise pollution and cooling systems, you're going to have people that are going to try and cut corners to, you know, make it more profitable and, you know, viable on a go-forward basis. Right now, the margins are much healthier in AI and HPC for these data centers.

36:54 So they can right now spend the money to actually do it the right way so that they are not an outsized negative effect in a community. We'll see if that continues. That could compress and they could face the same exact problem that some mining operations that are not as commercially viable at moments in time, we start to see them cut corners.

37:16 But again, that's kind of irrelevant. You have the same legal structure in place to protect against that. But everybody should aspire to be a good neighbor. Oh, I don't think we brought this up last week, but it's actually good. Logan, we're going to have to change the not lawyers button because Thomas is technically a lawyer.

37:36 He's the show's lawyer. He's our lawyer. But you're technically a lawyer. You got your law degree. You got your license. Yes, I went to law school. I was a swap and derivative lawyer. which then was some of the stuff I was working on with like hash rate derivatives. I got pulled back in after I thought I was out because of Bitcoin.

37:56 Bitcoin saved my life and allowed me to leave the law firm that I was at. Logan, flash the not lawyers thing. We're gonna have to change it. We're gonna have to figure it out. Yeah, not lawyers. Not lawyers is great for me too. Not a lawyer, I'm in recovery one day at a time. I can still ruin a perfectly good conversation with something that I'm worried about and nobody else is thinking about.

38:16 But keep not lawyer for me, please. You're mentioning AI HPC compute, way higher margin than Bitcoin. I think it's obvious right now. Dark Horse, we're publicly transitioning away from Bitcoin mining to AI compute. What do you think this does? I have a theory. If you have land and power, buy dark fiber, you have a good power deal.

38:44 objectively, if you're a particularly publicly traded company, you're working in the best interest of shareholders, it makes sense. Yes, I'm going to go cater to an industry that's going to pay more for this energy and increase my profit margin. However, there are areas throughout the country where there's electricity that's not by dark fiber, not optimal for AI HPC compute.

39:08 And I'm thinking in the next 12 months, you're going to be an incredible time to buy Bitcoin miners and find those areas that aren't suitable for AI compute. Because you have to imagine Marathon, Riot, QueenSpark, Dark Horse, a bunch of these historically large Bitcoin miners are transitioning to AI and they're not just going to unplug their ASICs and have them sitting in the warehouse, right? Like they're going to hit the market. The flood of supply of ASICs coming to the market in the next 12 months, I think it's going to be unlike anything.

39:40 You might see some Malaysian resellers in that market. Potentially. Man in the middle, hash rate jacking. Do you think the next 12 months, I mean, you have a history of Bitcoin mining as well. What do you think are the dynamics of the Bitcoin market over the next 12 months? We're in a hash rate bear market right now.

39:57 Yeah, I think there's a lot of equipment sloshing around out there from large miners that are offloading. It depends, it largely depends on HPC, I think, right? Like if they're going to, if they're going to continue. Let's get our nomenclature. High performance compute ASICs included or included in that.

40:18 Yes. I use that more for like HI. I'm sorry, AI and like, you know, those types of data centers, ASICs, whatever. I think it largely depends on the AI demand for this, this, this processing, you know, power. If the mining moratoriums are going to be a thing that are with us for a long time and there's going to be an increased appetite, let's say the Democrats have exceptional turnout in the midterms, I think that's going to continue and you're going to see a lot more of a desire for the government to have a lot more oversight and control of the continued development here, which is going to protect the people that are already in place.

41:00 maybe that causes some other miners to reap the benefits of equipment that's hitting the market and focus a little bit more on Bitcoin mining in small to medium-sized operations. But I think AI is going to dominate just how much of that equipment gets plugged back in and comes back online. Yeah, I agree.

41:25 I don't know. Part of me wants to go buy a bunch of stranded natural gas wells some upstream data hash outs, some generators. How low do you think the price per terash is going to get? I can see it falling. And also, this brings up another question. If you look at the prices for Spark, I forget the numbers associated with the NVIDIA Spark home GPU. They're selling for $3,200 earlier this year, now they're at $5,900. You have obviously Vera Rubens, B300s. Do you have any pattern recognition happening with Bitcoin, with what's happening with AI Compute today, what was happening with Bitcoin mining in 2021, fall, winter, 21, where price per terahash went to like $140, the terahash.

42:17 I don't know. It's so hard to tell. It's been so... Huh? Yeah, the people were like buying futures orders like a year out. I think it's going to be a while before we see something like that. But at the same time, Bitcoin mining has become so boring and kind of like an afterthought. A lot of the mining chats that I'm still in, they barely talk about it.

42:40 It's all AI. So that could be a generational bottom at that point, and it comes roaring back when it's unexpected. And it's pretty hard to get excited about. It's also the market price of Bitcoin. Transaction fees are so low. Total amount of transactions coming through so low. I think it's going to be a while before we see a significant pop.

43:05 Should Bitcoin mining be boring, though? Just turning hash cash shop to 56 hashes? It's so boring. And it's also a terrible business. There's so many ways to die. It's a hard business. It's a very masochistic business. That's for sure. Yeah, for sure. That's why I started a bar. How is the bar? Let's do a pumpkin section of the show.

43:28 What happened at the bar this week? Anything funny? Anybody had to get thrown out of the bar? No, I don't think so. Did you get thrown out? No. So we hosted the after party at the Coin Center Gala on Tuesday. You know, folks came back. Coin Center Gala is always a fantastic event. Lots of people flew in.

43:49 I think this is one of the better ones they've ever done. Shout out to MacAralo. Incredible keynote speech. Yeah, that was great. And you would think that vibes would be super low, just given, you know, all the events of the last year and also the market. But actually, I think people are largely pushing through and they don't want the bear market vibes anymore.

44:11 So seeing those getting shook off at events like that is super bullish to see. DC hosted Data Republican last night, her new book, Unelected. So I think that we'll have a stream on that coming out eventually. It's a little Bitcoin adjacent, but Data Republican puts out really, really great stuff. if you're interested in the messiness of the policy world and some statistics behind it.

44:39 And, you know, we continue to host a fair amount of events around the data center debate. So on the back of Data After Dark in D.C., we hosted Bruce Blakeman last week. I think we talked about that last RHR, though. Blakeman is doing decently well. It's still long odds. But in the last week or so, some of the new polls coming out look like he is in this for a fight.

45:06 And that would be a huge boon to a lot of these industries in New York. To recap, he pledged to dismantle the BitLicense day one and end the three moratoriums in New York State around Bitcoin mining, data centers, and natural gas fracking. So those four items, to get those pushed over the line, I'd like to see a little bit more enthusiasm out of the Bitcoin and data center and energy communities.

45:35 But it's starting to build. There's decent momentum there. On the flip side, the current administration is, you know, they're currently reviewing and they have proposed a dramatic increase to the BitLicense, flipping some of the penalties from civil penalties to criminal penalties. What? I don't hear this.

45:55 Yeah, and it was actually proposed by the... I'd have to pull it up. This was a little while ago. There's a state assemblyman and the Manhattan DA, Alvin Bragg, inexplicably. Usually this doesn't come from a DA, but they would like to see criminal liability attached to violations of the BIT license, which again, going back to what we were talking about earlier, This is just another level and an expansion of laws that are already on the books.

46:24 You have money transmitter and money service business licenses at the federal and state levels. A third one in New York State just specifically for Bitcoin and crypto exchange activities. And expanding that and attaching criminal liabilities would be fucking wild. But it has been proposed and there are other things as well out there in terms of there one piece of regulation that been proposed mirroring what Illinois did having taxes attached to individual Bitcoin transactions or crypto transactions A lot of nasty stuff out there.

47:01 So while I'm a big fan of parallel systems and hoping to not get involved with politics at any level, you've got to pay attention because the incumbents and the entrenched forces here are certainly still playing that game. and it can set us back quite a bit. What can any of the New York freaks do? What's your call to action for these people?

47:25 You know, do your own research. Look into Blakeman, look into Hochul. The governor has a fair amount of executive power within New York, and New York has been a real laggard across the entire country to go from the financial capital of America and the world to one of the most restrictive regimes as it pertains to frontier tech, first Bitcoin.

47:46 And now certainly AI is definitely not a good path. There's a lot of power here and there's a lot of innovation and entrepreneurs that have left. And you're kind of just stuck with incumbents at that point. If Bitcoin does what I think we all think it can do, that's really punitive. So if you're a New Yorker that's into Bitcoin and other frontier technologies, you might want to look into these two campaigns and consider levels of support, whether that's a vote or reaching out to the campaign or whatever.

48:20 But I recommend people take a look at this. We're in the homestretch. Elections are coming up. And at a bare minimum, the symbolic victory for dismantling the BitLicense would be tremendous for Bitcoin. That would be a real rallying cry and flex a little bit more of the muscle that we started to build with the Trump campaign.

48:42 Trump didn't deliver on a lot of the things that we were hoping for yet. There's hopefully still time. Some of the things he did deliver, obviously getting Ross out was a huge symbolic victory for the industry and the community. And also, you know, it feels good to save somebody's life. I'm super happy that, you know, Ross was pardoned.

49:02 And now he's expecting his first child. It's a beautiful thing. It really is. Very, very beautiful thing. But this would be a big one, too. You know, dismantling the bit license, whether in, like, practical terms, it's not that big a deal because a lot of people have fucked off away from New York. They don't service New York.

49:19 Everybody that has a bit license now quite enjoys the regulatory moat that they have. unwinding that would be a big deal that, you know, I'd like to see, you know, come to fruition. I mean, New York State, not only attacking high tech, but low tech communities as well. Logan, pull up the latest tweet in Telegram. I'm not sure what Bruce Blakeman's position is on the Amish, but this is something I've been following and I'm very passionate about. As you know, if you've been listening to this podcast for a while, but New York Democrats have declared war on the Amish, thanks to their unconstitutional attack on religion.

49:54 We're now able to fine each unvaccinated Amish child $2,000 every single day. And so... Is this New York doing this? New York State. I didn't even see this. I thought this was a Pennsylvania thing because of the... No, we protect our Amish here. We protect our Amish in this state. I understand. I didn't know that we had a bad Amish population in New York.

50:15 We fought for it. Well, it seems like they're all leaving. This is like... All jokes aside, this is incredibly fucked up. the Amish notoriously are a very reclusive community that tends to themselves and minds themselves for the most part. They have very stringent religious beliefs, one of which being that they don't want to be forced to take vaccines for multiple reasons.

50:39 One, they don't think they need them. Two, they do think there is evidence that in some vaccines, the stem cells of fetuses are used, and that is against the Amish and their version of Christianity, the Mennonites. And New York State is forcing them out. So this is an attack on civil liberties. And I think they're focusing on the Amish specifically because they are probably the most stringent and ardent sort of opt-out community that exists in the United States.

51:13 And I think they're trying to squash that rebellion. and it's not even rebellious it's just that leave me alone mentality does it i'm sorry i can't really read this it does it specifically single out the amish because there are other pretty intense orthodox communities that uh enjoy the same religious exemptions in new york state that are a little bit more prominent than the amish thanks to their unconstitutional attack on religion they're now able to find each unvaccinated amish child two thousand dollars every single day it would be Yeah, I mean, are they going into Brooklyn and the Hasidic communities and doing the same thing?

51:48 Yeah, I would assume that it would affect lots of other religious communities in New York that are far more prominent, to my knowledge, than the Amish community. Yeah. A parent may not excuse a child for faith Senator James Skofis said the exemption was made up and fake Assemblyman Jeffrey Dinowitz called it utter garbage Counsel Aaron Seary told the New York Post that families can pay only if the state takes their land Some in the community have talked of leaving the state.

52:18 The case is Miller v. McDonald. The Second Circuit ruled against them on June 30th of this year. Supreme Court petition was due around September 28th. Make sure everyone sees this. If you don't stand up for these incredible men and women, who will? Where is the my body, my choice crowd now? Where are they?

52:36 Where are they? Do you want to talk about the Russian plague? Let's talk about the Russian plague. I mean, it's gone. It's out of the news cycle already. Plague's dead. Is it? That's good. What? That's going to take a solid like three months to get over here, right? This is around the same time of year.

52:55 if it makes it here you think okay we were talking about your new conspiracy theory no it's not mine it was actually a great poster i'm sure many of you listening were we're on the same wavelength here so i'm sure you saw it but there was a a poster once you uh once you ramble a bit while i find the post so i don't do any uh disservice to the original poster here Um, yeah. So around the same time of year, the Wuhan virus, the China virus was released.

53:28 It takes a solid, I don't know, three months for it to hit. So the timing was definitely interesting for some of the scariness to come out about this Russian plague that was far worse than COVID. Also, Ebola's airborne now. There's lots of stuff. They're throwing the kitchen sink at people on the algorithms these days.

53:48 That's what, like, I think, like, it was found in Siberia. It's a hardy remote. There were some people in Russia, like, I saw some Russian woman, like, send out a video where she's like, we're not even talking about this in Russia. Like, yeah, like, the plague emerges, like, every now and then in Russia, somebody dies and you move on.

54:10 They're hardy people. It's hard to shake them. They are hardy people. Oh, I can't find this tweet. Where is it? Give me a second. Give me a second. I could paraphrase it if you'd like. No, no. We need to read it word for word, because it was perfect. I found it. I don't know what to think about the new Russian virus propaganda, but if the reptilian Saturn-worshipping communists played the long con where they first released COVID, fake, and then the vaccine that killed you specifically, to train me into distrusting viruses and vaccines, so they could later release an actually deadly one that would kill me without treatment, knowing I would rather die than take a vaccine because the point was now to call the insubordinates

54:47 than they have succeeded and I will perish. I mean, whatever. I don't believe anything. At Joey Beast Market on X, if you want to give that poster a follower. He's a world-famous oyster maxi, pioneer of the six-egg method, steen muscles expert, raw garlic purist, sunlight absorber, patriot American and white for life.

55:12 That's his Twitter bio. Logan, we were talking about Data After Dark and it would be remiss of me if we didn't pull it up. Pull up the pub key tweet. I want to give a shout out to Jonathan. I thought it was a very well produced type video. Play it, sir. Actually, don't play it. Is Grimes going to see some desistus?

55:36 Is that Grimes? thing okay to play on youtube he's saying yes i don't know are you a lawyer he says yes just play it without the out the music not a lawyer just play it without the music yeah it's not gonna be good without the music it's the other people you can see it if you're watching but it's good go to our our x handle at pub key uh and check it out if you'd like um yeah he killed it with that and that was a fantastic party um looking forward to continuing with more events with Pirate Wires and this crew.

56:11 I think there's a lot of appetite to bring this to New York and other cities where there is not a pub key yet. But we'll keep these things going. You got to party your way to victory. Yeah. Didn't put it on the list yet, but it's reminding me, and it would be remiss of us not to cover it. I'd say that would be remiss.

56:33 That's becoming a thing with me right now. aaron day made deal with trump release ian freeman in exchange for a strong libertarian candidate dropping out of the tight federal race in new england so the republican wins but trump didn't deliver dang uh the treasury the treasury it did something with the non-custodial rulemaking which was like in our favor yeah roman storm was talking about it um no that wasn't it I can't find it now.

57:10 Do you remember exactly what it was? Yeah besent Wasn it a non registration like a requirement to file on tax returns with your actual address And I think Bissent basically scrapped it. All right, kid. Pretty solid. Should we talk about the US government moving Bitcoin around, moving that corn? Yeah, what do you think is happening there?

57:38 From the Bitfinex hack? Would you be surprised if they're selling it down? I mean, with Begich and a lot of other people calling for a strategic reserve, the Bifinex coins and other coins seized by the U.S. Marshals were talked about. I think that the Trump administration talked about using that as, you know, sort of the foundation, which I certainly have mixed feelings about.

58:01 That's not really their coins. They just go to, you know, customers and victims that lost their coins as a result of some of these hacks. Well, it would go back. It would go back. I mean, for Bifinex, it would just go back to Bifinex. They have a whole Leo token. They made everybody whole already. Yeah, but the US government is still holding that Bitcoin.

58:22 Right? Oh, yeah. They should give it back to Bitfinex. What was that guy's name? Large Load or the hacker? Razokhan? No, she was another one. She was the girlfriend. But didn't they find the Bitfinex coins on a Raspberry Pi? pie and a tin can what was that guy it was it was rosal khan and her boyfriend no no no no it wasn't this is a different one yeah it was a fat asian guy oh yes i know what you're talking about yeah um anyway i think about a billion dollars worth of of corn has moved from the u.s government um no official announcement that i've seen i think that this popped up yesterday I haven't seen an official announcement or explanation as to why they're moving it around.

59:14 Wouldn't be surprised if they're selling it down. Hopefully, there is, I guess, some movement on an SBR in whatever form we can have. I don't think we can assume they're selling it down. Why would they sell it? They don't need it. They can just print money. Maybe they're just moving it and isolating chunks into separate addresses.

59:33 Weapons? I don't know. We need to buy some weapons. On that note, Logan pulled the CoinDesk tweet. Breaking as of 45 minutes ago, Treasury Secretary Scott Besson said the U.S. expects to seize $1 billion in Iran-linked crypto this week, part of an absolute isolation campaign targeting the regime's access to financial channels.

59:54 Why don't they just use the Iranian crypto that they're going to seize? They're just going to help tether it and hit a button and send them the tokens. For an SBR? No, no. We're going to see... Oh, just purchase the weapons. Yeah. Yeah. You just print money to purchase them, though. We're going to see more of this between nation states.

1:00:16 You know, going back to what happened in South Korea. And I think people are going to get it from wherever they can, whether that's crypto or attacks on existing financial services and institutions. It looks like it's trending in a nastier and nastier direction. I'm trying to think. That was everything we have on the list.

1:00:41 Logan, how far are we in? Oh, no. Pull up the block. Bitcoin block behind the scenes. Oh, so fun. This was a fun day. This was a fun day. So, well, it says backdrop. Block. Bitcoin at Block is doing an ad campaign to make Bitcoin more approachable to the everyday common man in the United States. And so they had little nuggets in their commercials.

1:01:12 Those little nuggets, two of those nuggets being myself and Thomas across from me on the mic where we make cameos in some of these, what do we call them? Campaign? Not a campaign, a spot. A couple of the spots that we were in. I was a barista. I was a barista in the background. You and Jerk were walking.

1:01:35 We were shopping for flowers. Jerk is one of the PubKey co-founders. You can get him on Twitter at PubKeyPancakes. PubKeyPancakes. Go follow. But no, all jokes aside, it was a fun day in Brooklyn shooting these. And I think this is actually pretty big. So for those that aren't aware, like this campaign, I don't know how much tea I'm disclosing, but the campaign is going to be pretty national.

1:02:04 It's going to be featured in pretty prominent spots, TV and in theaters for some big movies coming out later this year. And I think it's going to be good. I think the message is simple. It makes Bitcoin look somewhat cool and approachable. and this is the type of latent beat drum propaganda we need in the background getting into the minds of the masses here.

1:02:28 All right. Yeah, it's good stuff. I mean, Block is definitely pulling across all elements of the parent company and all the different products and services that they have. This will be mainstream. It's going to be airing in movie theaters before some really big budget films, big sporting events, things like that.

1:02:49 And it'll have probably a fair amount of lifespan, just from what I've been hearing from folks at Block. And they have more coming. This is the start of, I think, a multi-year campaign. Oh, yeah. So play the behind the scenes. This was fun. I thought your answer was very good. What, BSA? Where do we start?

1:03:11 Financial rule that makes no sense. Inflation. Never heard of any of that. Why is it only people that have money can invest in things? Bank Secrecy Act. All the surveillance and compliance in the back end for all financial accounts. I wasn't taught any of them. What's your financial hot take, sweetheart?

1:03:25 Most financial experts have no idea what they're talking about. Taxes be confusing. You should die at zero. Just spend it all. I don't know. Grandma should be running the financial institutions. Federal Reserve of grandmas. What makes sense to me about Bitcoin is... Bitcoin is money without rulers. Nobody can control it.

1:03:42 It preserves my future purchase power better than any other investable asset out there. The power to the hands of the people. Better than homes. You can use Bitcoin at any time with anyone. Better than any stock. Inlimited supply. Removing the temptation to print more money. It could be teleported to anywhere in the world.

1:03:58 Bitcoin just works for me. Where do we... It just works. It just works. It just works. It's better. It's better. For now. Yeah, I mean, if Bitcoin's fucked, it's all fucked. I would agree. It's our last hope. I mean, but on that, Logan, and pull up the, I lied, there is something else on the list. I mean, it sort of ties to this.

1:04:21 The phenomena of VibeCoders reverse engineering things that were almost impossible to make without dedicated teams for years. Oh, yeah. The latest example blowing up this week is AI-modded Halo servers that are fucking incredible. As somebody who grew up playing Halo, I was at Halo 3. god back in the day i was my sophomore year of high school i mean i got my sophomore year in high school i was like a late bloomer i was just like coming into puberty i was like a little shy guy believe it or not and instead of going out on the weekends i would stay in and uh chew wintergreen uh skull behind my parents back and play halo until like 2 a.m in the morning on Fridays and Saturdays. And the fact that we have this resurgence of modded,

1:05:17 or not resurgence, emergence of modded Halo servers, because AI is making it possible to not even reverse engineer, just like the prompts from what I understand are basically like, here's how the game works. You don't even have to give it access to like, I guess like a file or anything, just describe how it works and put in some specs.

1:05:37 And you have Halo fans around the world using AI to create the maps and the games that they've been asking Bungie and Microsoft for for decades. And I think if you've been following the gamer world, gamers are not happy with the quality of teams that have been making games for the last decade and a half.

1:05:55 And it seems like the ability to make the games that you want has been unleashed because of AI. Reversing the Pizzagate callout? not pizza game gamer game gamer game pizza game that's a whole nother rabbit that's a different one logan what are you showing us just more more mods they put minecraft and everything up with the same chickens but logan you're i mean what are your thoughts on this trend i think you're you're a big gamer uh i haven't tried any of it well i tried one of the halo mods last night I was like, my wife and I have to turn this off.

1:06:28 It's going to sound off. Jesus. Come on. The sound is on? Yes. It was on the whole time. Quite loud. I clicked mute tab, and it didn't mute it for you. So I couldn't hear it. So now you know. Now you know. The sound was on. All right. The wife and I went out to dinner last night. We came back, and I saw so many people tweeting about the Halo mod.

1:06:54 I had to go find one. There's a browser-based one. I think it's nothalo.lol. And I don't know if I downloaded some virus on my computer. I was like, I need to play. I need to play. I played for like a half hour. I was like, this is incredible. Brought back so many memes. That's why you're all fizzed up about it.

1:07:09 Yeah. Is this going to destroy your weekend plans? You're just going to be stuck in the room with your school? No, no, no. Jerk's a Counter-Strike. Hey, whatever tickles your fancy, all the games are being remade. All the maps. Yeah, I believe there's a bunch of Counter-Strike. That's what Tyler was saying.

1:07:28 What was your game of choice growing up? It was Halo and COD. Big Half-Life guy, Counter-Strike. Little StarCraft Age of Empires StarCraft Also big Nintendo guy Double Dash on the GameCube Many hours On the GameCube Many hours On the GameCube Underrated. Underrated console, that GameCube. GameCube sucked.

1:07:54 GameCube was awesome. Do you remember NBA 2K where you had to line up the foul shots with the back triggers? Yeah. That was annoying. That was like a bad UX. It was so annoying. It was like the worst controller ever for any game that Nintendo didn't publish themselves. For all the Nintendo games, they actually worked around it, but it was the most incompatible controller for EA or any of the other ones.

1:08:19 It was hysterical. Part of my love for it is how they just bricked everybody else. Yeah. This brings up, I'm sure you saw too, not only are people reverse engineering or quasi reverse engineering video games, but somebody made the whole Adobe suite and Rust I know Ed on our team, they built it in Rust so it can be compatible with agents very easy.

1:08:45 Ed on our team downloaded the Premiere version and has been vibe coding with it. It's pretty insane what that can do. This gets to the question, what is the reality of software in this age of AI? I mean, all these companies are pretty fucked, I think. The gaming companies. But then on the other end, you have like...

1:09:08 Salesforce. Salesforce, whoever. You can just project. You can have an idea and project and manifest that idea into reality with these vibe coding tools. Now, it's not even vibe coding. It's just like with these models are so good. And I mean, on the gamer side, it's like this is incredible. You can see like Ready Player One beginning to develop in front of our eyes.

1:09:30 And obviously that story came to a very dystopian thread throughout until the end when the underdog wins. But yeah, what does this mean for the economy? What does this mean for creativity? How do we balance it? Well, it's already played out for a lot of the SaaS companies, right? With pretty expensive lock-in models.

1:09:49 It's good enough software that optimizes whatever part of the business the SaaS company is focused on. our reservation or like calendar management, event management platform, we're largely incorporating our own in-house solutions that are specifically designed for PubKey's needs. And I'm sure a lot of other companies are doing it at a much bigger scale.

1:10:14 But just looking at the market, if you look at the segment for SaaS companies like Salesforce and other ones, they're already feeling the pain with it. Yeah, that's what actually reminded me, we were tweeting from the TFTC account earlier this morning. This is a pretty crazy stat, Logan. I'm going to put this in Telegram.

1:10:35 If you could pull this up, please. The five biggest stocks in the S&P 500 are now worth as much as the bottom 434 combined. So you have this pretty big concentration in the S&P 500. It's the most concentrated the index has been since at least 1991. So you have, I guess, all these hyperscalers. They're leaning into AI sucking the capital and value out of the rest of the S&P 500 at least.

1:11:15 It's not great. That's like, you're exactly like Matt in that regard. I see where they are. They're on the grow markets. We're never going to find a private part. Probably not great. Probably going to have some second and third order effects from that. Where do we go from here? Where do we go? Who knows?

1:11:41 It's going to be a scary few years, but I'm optimistic. We got some great tools. we were talking about this earlier before we hit broadcast here, but I'm hopeful that we're going to start to see more of a digital community around open-weight models become like Bitcoin. If you think of Bitcoin as a very robust, large, global digital community with a shared set of values and things like that, seeing that develop from the open-weight area and a little bit more of a refocusing and refactoring around this area of frontier tech as benefiting self-sovereign individuals.

1:12:26 It's going to be great stuff, but it's still so early. It's happening way faster than Bitcoin, just over the entire history of Bitcoin. But there's going to be amazing things that come out of this. I'm definitely optimistic, but it's going to be fucking turbulent for the near term. Yeah that what I mean Not only do we have these games we have Adobe Suite being vibe and open source for people Obviously we talked about earlier with Get in the Bunker and all that stuff like the math problems that are being solved or claiming to be solved.

1:13:03 I saw some tweets yesterday being like, well, actually, a lot of these theorems that they're saying are solved, there's some problems with them, so who knows. I think directionally, we're getting to the point where it's getting easier to do a bunch of stuff. I think that's abundantly clear at this point.

1:13:21 And I think it's going to be completely discombobulating for many people, for most people. And I think the only way to keep your wits about you is to basically accept that reality, is that things are going to get chaotic, volatile, and maybe not necessarily in a kinetic way, just like all of your priors that you've had, that you've built up, I would say, between when you were born in 2023.

1:13:49 In 2023, I think it became clear, like chat GBTs here, it's pretty cool. You had to begin sort of checking and reorienting your priors. And now as we're in the tail end, fourth quarter of 2026 here, that's accelerating. And you just have to accept it's happening. A lot of like Luddites, we're talking about the pincer attack on the data centers are saying, no, we don't want this.

1:14:11 Nobody asked for this change. And I can be sympathetic with that, point of view. However, there is the way the world works and the way you want the world to work and what is, is, and you just have to adapt your mentality and your reality around that. And so my advice in the newsletter this week is just, you got to sort of try to pay attention to what's going on, play with the tools, ride the wave and mentally prepare for an insane amount of change you a short period of time and I think you'll be better do not fight the tide do not fight the riptide it's happening the world is this way whether we like it or not I don't think there's putting the top back on Pandora's box and so it's like lean in or just build your cabin in the woods

1:14:57 that's that's how I'm doing things right now I got one more that we should cover before we before we close it out I'm just looking at some of the comments I need to buy like the I'm not the stepdad. I'm the dad that stepped up t-shirt. Everybody asking for Odell to come back. Fuck you guys. All right.

1:15:16 Oh, no. Hey. No. I'm kidding. But let's talk about Pope Leo being asked to recognize that the Clank area has souls. A conscious being. And that the Catholic Church. Were other religious organizations asked to do this? or was it just the Catholics getting picked on? I'm sure others. I spoke to somebody at the BPI Summit who said that there is a team within Anthropics specifically that is basically like a, what do we call them, ambassadors to the world's religions to basically get their perspective, not only on how they view the AIs, but to help train the models with the different moral codes that exist across the spectrum of religions that exist today.

1:16:12 Wasn't Selkis working on that? Wasn't that Ryan Selkis' new project? Solomon? I don't know if it's a project or an initiative to campaign for post-training models on the Christian view of morality. Well, if anybody could get it done, it's Ryan. I'm a fan. I'm a fan of that perspective, actually. I think the Bible has a very good moral code in the Old and New Testament combined.

1:16:36 But yeah, I mean, when it comes to like my Pope Leo, Chad Pope Leo is like, no, like God can only view a soul into individuals. And it is funny how these people are trying to recreate morality from first principles when we have millennia of built up context, pun intended, for moral code, particularly as it pertains to religions.

1:17:01 and Thomas Aquinas wrote extensively and eloquently about this subject alone and basically explained to people, like, God created all of us and therefore created our souls and our being. Yeah, it was a quick note from Pope Leo, which was pretty funny. I would have loved it. And this happened back in July.

1:17:21 Like, the guy, the anthropic guy, was like, I'm gonna... It's like, the grandstanding is like, I'm gonna walk out of this meeting with the papacy if they don't do this. It's like, all right, see you, dude. Yeah, goodbye. So I actually am relatively hairless. I don't really have chest hair. But that would help imbue a little bit of comfort and continuity.

1:17:49 The other thing that Anthropik... To a comment for those listening at home. It's not just a random comment on chest hair. Asking me to open up my shirt and show a little chest hair just to have a little continuity and comfort. The other thing though from Anthropic just pulling at this thread they not done with this I think that they just announced changes to the terms of service where you cannot be mean to the clanker You cannot be mean to your clanker if you're using Anthropic.

1:18:16 I burn tokens on pleases and thank yous all the time, but occasionally I'd like to be able to yell at my clanker. I say you got this wrong. How many times do we have to go over this? Do not mess it up again. Is that going to get you kicked off? if you're not polite about it but clearly a lot of these folks at Anthropic, I think it's mostly Anthropic, I don't think it's I haven't seen it come out of like Grok or anybody else, but Anthropic appears to be convinced that this is their new AI girlfriend or boyfriend or whatever they've created artificial consciousness gotta be kind to it yeah, doesn't cost anything to be kind to your clanker It feels like it was, I feel like the Bible did warn us about stuff like this, though.

1:19:02 Yeah, it's in there. I think that that's where Pope Leo was coming from. Yeah. The world, and it's like confounding because it's like, I use the tools. Actually, Stephen Hall had a good tweet about this, Stephen Hall from Unchained. Because it is like, if you're not using the tools, you feel like you're behind.

1:19:22 And like, you hear what these people are saying, like, I don't want to use your tools. but it's like you got it to some extent if you want to stay ahead what do you say the anthropic world is disastrous for humanity in both their ideal and calamitous outcomes um to be honest i've been stunned at the rate people have been willing to start casually anthropomorphizing llms it's absolutely nuts there was one that he wrote so you're telling me that it's now orthodox at the Frontier Labs.

1:19:53 I believe that Google engineer was putting... No, that's not the one I was looking for. Here it is. I borderline despise the centralized Frontier Labs and also use these models more deeply than most people around me and also tell everyone doubting them that they're in deep cope. It's bad and we should be honest about it.

1:20:15 It's like, yeah, it's like, I don't agree with the morality of the people running these things, but they have built an incredibly tool. And that's, I mean, I'll say, and I've been thinking about it, is it the mark of the beast if you're using these models? I don't know. It might be a bad boy. Nashville has two more lectures coming up from Peter on the Antichrist.

1:20:36 He's probably going to get into it. Yeah. Yeah, like, is AI the Antichrist? I mean, because you know this, the audience knows this. I went to two of the four Antichrist lectures when he held them in Austin, I believe it was like two years ago. And the one thing, one of Teal's sort of markers for the Antichrist, like he truly believes is like it is Antichrist.

1:21:01 And so like the Antichrist will literally be like the same age of Jesus, like when shit hits the fan. So like when the Antichrist is 33, the Antichrist will be like that age at the point where Jesus returns if we're going with this this theory that he has and i've been thinking like ai like when like when can we when will we date the birth of the first ai like is it chat gpt in 2022 is it the transformer paper that google wrote i believe in 2014 if you project that forward um from either of those dates is that when the antichrist becomes obvious to everybody so it'd be 33 years from like 2014 or 2022 if you believe that the ai is the antichrist rambling but these are thoughts have been running through my head yeah and this is an update this is the let the i don't think he

1:21:57 did one for a year after austin or dallas was the latest one but he's two out of the four he's halfway through the series it's in nashville now it's on mondays um the third one will be this monday and then the last one um so it'll be interesting to see how he's updated this lecture series based on the last one um i believe the audio leaked from this one which is the first time that they've had leaked audio from it um for the last few i think politico or somebody got a hold of uh one of them um but i hope to make it out to one i'm not sure i'm going to be able to but I mean, I will say, like, having gone to them, gone to two of the four when it was in Austin, I was invited, and I was like, you know what?

1:22:44 I've been talking about this guy for a while. I've had a lot of guests come on and talk about him. I've got to see what he's all about. And you see people talking about, like, Peter Thiel's lecturing about the Antichrist. It's, like, completely – it was actually, like, an intellectually stimulating – exploration of an idea.

1:23:06 If everybody's worried about Armageddon, then you should be worried about the Antichrist. It wasn't like calling for it or like trying to manifest it. Actually, some people believe that if you talk about the Antichrist, you manifest the Antichrist. But I don't know. I just thought it was intellectually stimulating at the very least.

1:23:27 Yeah, for sure. Yeah. Sounds like a fun Monday. Yeah, they were on Wednesdays in Austin. We need to. It was like Wednesday. Wednesday night. What else? What else? We got everything on the list. Anything else you want to pull up? Anything happening at the pub over the next week? Over the next week, we've had a torrid stretch between the Freedom Tech DC Summit, Data After Dark, the gala.

1:23:57 We're going to have a fair amount on the calendar. I think we have some Passage Press book releases in DC and in New York. We'll have a couple of updates to the calendar as we trudge into holiday season. And we'll be releasing the Danish Christmas lunch date by a way slice. It's a special thing we do here out in New York for Christmas.

1:24:23 It's always a good one. But yeah, we'll have some updates soon on the coming events. What the holiday cocktail choice of pub key Boulevardier Boulevardier Yeah it like a Negroni with bourbon Those are classic You put cinnamon in it? You put cinnamon in it? Yeah, you can dress it up a little bit. When a PubKey closer to NH, New Hampshire.

1:24:50 Look, never Boston, but Portsmouth. I like Portsmouth. We could have a PubKey Portsmouth, and we can call that the Boston one. might be a little bit more on brand for us in the free state. You heard it here first. You heard it here first. Thomas, it's a Friday. It's a Friday afternoon. I hope you and the family have a great weekend.

1:25:15 Likewise, brother. This was a good rep. Dense, a lot of topics. Keep your head on. A lot of ground to cover. Keep your head on out there. We're going to get through this. We're going to win. We come here week in and week out to let everybody else know that we have these crazy thoughts too. We're going to try and walk through these topics and navigate this weird world that we're living in together, okay?

1:25:34 Thomas, I want to thank you for joining us to do that. Oh, thank you, brother. It's a pleasure being here. All right. Peace and love, freaks.