Google Wants to Custody Banks' Bitcoin. Brazil Shows Why You Hold Your Own | Rabbit Hole Recap 426

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. Music's got me feeling so free. It's time to sell. Big Daft Punk week in the car ride to school. We're working on our... It's a favorite one. I've been really into something about us. Last week. But the car ride for the boys, like one more time.

0:58 It's very, especially the drop at the end. I get really into it. I'm kind of stuck on Kanye's newest, Bully. Bully, I haven't listened to it that much, to be honest. There's one song on Bully that's fucking phenomenal that I'm obsessed with. I could just keep looping on it. Let me find which one it is.

1:21 Bully Deluxe. Father featuring Travis Scott is shockingly good. It's old Kanye. Kanye's back. He had a little detour that some people didn't like. He wrote an op-ed apologizing for that. And now he's back. And I really hope to go to that tour that he's doing. I feel like James would allow him. Robert Kraft, probably not.

1:49 I'm not sure he's allowed at Eagle Stadium, but. Is he going to play the Garden? I feel like he, I feel like it'd be okay at the Garden. just you know knowing Dolan's political views I think that he would just rip it um so I don't know but some some of them are are very I think adamantly against ever hosting Kanye again um east coast in general is going to be hard he's mostly stuck to like Texas he's done some stuff in Europe um Chicago the Chicago Chicago pretty epic I know a couple people that went Yeah, Jerk and I almost went out. Jerk is from Chicago, and we almost made a last-minute trip out there for it, but couldn't swing it.

2:33 Which we did. It looked amazing. I saw Kanye on the graduation tour in 2009 in Camden. Rihanna opened for him. It was the Tweeter Center then. Now it's the Susquehanna Bank Center. It's changed names multiple times. so this was probably 2000 i want to say 2005 he he was like the first or second act for ludicrous david banna and some other ones like he was still relatively unknown when did graduation come out i think like 2005 i was in eighth grade that was i i went to a show in philly and we were Like, the opener was really good.

3:17 It turned out to be fucking good. Like, nobody knew who he was. It was amazing. Ah, music, man. I would love to see Daft Punk live. That's on the bucket list. I know they don't tour that often anymore, if at all. Yeah, they had a divorce, those two. They don't like each other anymore, I suppose. Really?

3:36 They're two Frenchmen, right? Yeah. They're very good. I've never seen their real faces. Have you? Did they take off the masks for a publicity stunt at one point? Didn't they do a Vanity Fair shoot or something? Yeah. Unclear if it's real or not. But yeah, supposedly they've had a major falling out, which is what they all do.

4:03 And then the reunion tour is going to print them a kachillion dollars, the same as LCD sound system retiring. Yeah, absolutely. At a certain point, it's just like, we will pay you whatever it takes. just go out there together. You don't have to like each other. You have to do the work. Yeah. Well, I mean, for Daft Punk, you're sitting right next to each other in the booth.

4:24 We're like Oasis. It looks like they've had a genuine mending of their qualms when they're on stage together, but they're at least separated a little bit. Yeah. Anyway, this is a Bitcoin podcast. At least we think it is. Bitcoin's dead, man. This is a music podcast. It's never been alive. It's never been more alive.

4:45 It's never been more alive. We're going to talk about it. We got critical vulnerabilities being discovered. It may sound scary, but I think it's actually a good thing. Stan Druckenmiller, hype. He's hyped right now. First tweet ever about hyperliquid. Very interesting. And did you see John Seth? He found another 16-year-old scammer.

5:07 Interviewed for about an hour. I haven't listened to it yet. Have you heard it? I was listening to it before you hopped on here. I caught like 15 minutes of it. It is insane what's happening here. Yeah. And like, it's young kids. These kids are being led astray by Russians. Jon Seth's pretty convinced.

5:26 I was in a particularly bad mood and I just started like playing with one of them and mocking them. I was just like, oh, did you get this on fucking Roblox? Your parents know you're doing this? They'd be ashamed of you. Yeah. That's what Jon Seth said. They're finding these kids on like Roblox and Discord servers.

5:41 and convincing them to call people to scam them out of their money, their Bitcoin. It's a mess. But he also, you know, it's kind of funny with Jenseth because, you know, he got scammed by the Jimmy Song one. What was that one? That's how he lost access to his Twitter account. We talked about it when it came to what Bitcoin did live at HubKey with Eric Hason, American HODL, Jensith, me, and Danny, which was an awful podcast.

6:17 It made people really angry. It was so much fun in the room, but as a podcast, it was like fucking atrocious. It was like nails on a chalkboard. A sound problem or a content problem? It was really, really chaotic. So if you're listening in the car, if you're in the room having a couple of beers, everybody was laughing.

6:40 They were like, that was amazing. It just didn't translate at all without the atmosphere in the room. Yeah. I mean, we don't have much to touch on that John Seth calling another 16-year-old. I just retweeted it. Go find my X account and listen to it. I think it's valuable information, but don't answer your phone anymore, guys.

7:00 Tell the boomers, especially if you know boomers in your life that have a Bitcoin on an exchange. Tell them to stop answering random numbers if they still are. You shouldn't be doing this. It's like the mail, right? When you reach a certain age, like call it like 20 years old, nothing good in the mail is coming for you.

7:20 Like, you know, you'll get birthday cards when you're young, but same thing with the phone. Don't fucking answer it. Hopefully that hits with email at some point soon too. I actually had an age I had an agent, and it has worked so far. An agent go using Maple privately, go and take me off all the lists for junk mail, like call lists, got all my information off those websites that make it easy to find your information.

7:56 Did it for free? Have you used Incogni or, what's the other one, Optory? I don't know. Delete my data is one, I think, too. Delete my data. Incognito is pretty good. It's automated. And it'll just send it to the data brokers over and over again. Like, delete, delete, delete. You fill out a couple of forms, and it's just like blasts and keeps monitoring.

8:19 And then there's another one. Why am I still getting notifications? You can't hear the notifications, can you? No, I cannot hear them. Get out and vote. Get out and vote, sir. if I get another one of those texts I might do something I'm not going to do anything I'm just going to delete and report to spam I'm just looking for 10 bucks just another 10 bucks get out and vote for James Tellarico those are the texts I'm in they still think I'm in Texas I'm good wouldn't be voting for him anyway very weird guy James Tellarico I haven't followed that rate Much. I just see it when I have notifications on for Elon Musk. And sometimes that gets really annoying. And the Tallarico stuff is one of those times because it's just like this guy's an extremist terrorist.

9:15 Are you trying to become an Elon reply guy? Is that why you have noties on? I just feel like I like to stay in Elon's flow. No, I'm not a reply guy for him. I just like to see what he's talking about whenever he wakes up. It's like, get back to working on the robots. People want to put him in jail. People want to put him in jail.

9:35 For what? Because he's... What murder? We'll pull it up. We've got Brazil, the Brazilian elections on the list to talk about. We'll bring that up. We'll bring the Elon going to jail subject up during that too, because they sort of relate to each other. But first, let's do as we always do at the five-minute mark of the show or wherever we are right now, nine minutes.

9:57 You can get to Clark Mitty's dashboard. Current price of Bitcoin, $81,370. Ball tile. It's up, it's down, it's up, it's down. $79, is it going to go lower? $81,500, is it going to go higher? We're in this range right now. One cuck buck is going to get you $1,229. We're at $1.64 trillion market cap. We are at block height, $973,713, which means we are 15 blocks away from the next difficulty retarget.

10:26 It's looking like an upwards adjustment of 5.6%. That should be pretty accurate considering we are pretty much 98%, 96% to 98% through this difficulty epoch. Hash rate coming back online, narrative violation. All the big miners are supposed to be selling their ASICs for GPUs, but some are getting plugged in somewhere.

10:48 There are 1,293 transactions at Clark's Mempool. and if we go to mempool.space, we'll see that they have is mempool under attack? We'll not download. They have 57,846 transactions in their mempool. One sat per V-byte will get you in the next block. State of the network. They do the network right now.

11:18 Bitcoin, you're bearish, dude. Why are you bearish? You're always bearish. I'm not bearish at all. I hate the range-bound bullshit. The crab walk is so boring. That's what Bitcoin does. Bitcoin tries to shake you out, get you, get into a, lull you into a false sense of complacency. I'll take a, I'll take like a catastrophic dump over this crab walk, to be honest.

11:40 Just do something. It's boring. Okay. Bitcoin is boring most of the time. You gotta get used to it. Yeah. It's amazing all the time. I know. Well, maybe we'll start with that. Jason Calacanis, our boy Jason. Yeah. Bet me, Jason. Rage better. I love the guys that came out and it's just like, I'll bet you $1 million.

11:59 He's not going to respond. He doesn't even mean it. Jason probably holds a lot of Bitcoin. He responded to Grant Cardone. Oh, did he really? What? He declined? He said, who's going to ask her to bet? Jason did. I think he's going to flake out of it. Logan, pull up the tweet. It's somewhere in there. Let me see if I can find it.

12:18 Bet me. Logan's a bit discombobulated I've been using the Clanker to put together the list, and it puts in a lot of links, and Logan's a bit overwhelmed. It's hard to read. Is it this tweet? Yeah, it's that tweet. I'll pull it up and read it for people who haven't seen it. Oh, man, I pulled up the wrong link.

12:46 Give me a second. All right, so Jason posts, posts and also talks on All In? I believe it was the post was subsequent or before mentioning this on All In This was two days ago so it was probably after He said a brutal year for bitcoin is just getting started it october 29th there only two months left give me three minutes to explain why you should dump it now outflows from ets are signal and will continue we will test the 57k low again in the next 12 months why because there are far too many dynamic places to put your money that are creating much more value why put your resources into a dead network that offers nothing beyond a store of value. What's the point of place the BTC be if Bitcoin's Ponzi

13:31 scheme nature has gone away? The viral nature of Bitcoin was its power. If you didn't own, you were mocked. Now, completely reasonable, heck, smarter to ignore Bitcoin and place other bets. No one is trying to convince people to buy Bitcoin anymore. The memes and NFTs are gone. No one is saying Bitcoin can change the world because it won't. Because AI has just sell and shift from Bitcoin to super intelligence because one provides little to no value and other provides unlimited upside for humanity. This should be obvious to everyone right now. Bitcoin will never break its all-time high again.

14:07 Should be obvious. Should be obvious. Super intelligence. So there was a Taylor reply. There was a Cardone bet. I believe Freddie and who else piled into that? Somebody else piled in. Freddie Krueger. Freddie Krueger got in? You see Simply Bitcoin here, don't trust Verify, calling all of Jason's bearish, citing all of Jason's bearish calls since 2017.

14:33 There's been quite a few. This price is low as $16,400. I see Dan Held, Willy Woo, all the normals. I see a good midwit meme here from Brandon Quittem. That's a good one. But yeah, I mean, same old, same old. And getting away from jest and getting to the brass tacks of why this is idiotic. Yes. I think, Thomas, would you agree?

14:56 AI, superintelligence. We can get on a rant about superintelligence. Superintelligence. You can't say AI anymore. It's in all the government documents. Yeah, I don't know why they're calling it. There's something weird there. I don't know why they're forcing superintelligence on the market. I think it's just to fuck with Sam Altman and open AI.

15:12 You think so? Yeah, I bet it was like Elon being like, could you just do this for me? I'd really appreciate it if you changed it to superintelligence. Yeah. This is going to be like a litmus test. If there is an escrow, is Gary Cardone going to do a two or three multi-sig, or are we just going to go to like JPMorgan?

15:34 I think the escrow is going to be in dollars, so they both got to put a million dollars up in an account. No, come on. I'm certain that Jason has Bitcoin, and this is all just bullshit. What's the token that he's pumping here? This is a Tau token. BitTensor. crowdfund distributed LLM training with this token.

15:58 Yeah. Barry Silbert's coming back with that. I believe that this was the last like really hyped investment out of the grayscale DCG family before the, you know, Genesis collapse and BlockFi Celsius, all that went to shit. But I believe he has a lot in the works around BitTensor. I haven't seen much of it.

16:21 He does. I think Foundry is pretty heavy into it. But yeah, for anybody who read Jason's suite, I know there's a bunch of newcomers come to the show and they say, hey, let me learn a little bit about Bitcoin. I heard Jason saying I should just invest in superintelligence, not Bitcoin. They're not mutually exclusive. I think it's pretty obvious.

16:43 Thomas and I have both been implementing AI into our respective businesses. And I think we would both say with a resounding yes, that it is incredibly powerful. It has increased our profit margins here at TFTC. It's made us much more efficient. It's allowed us to do things that would have needed probably dozens of employees only a year ago.

17:08 And I love it. Superintelligence, AI, superintelligence, whatever we're calling it now. I love it. Big fan of it. Okay. But these things aren't mutually exclusive. Like, yes, you can be more productive. Yes, a lot of AI-related stocks, semiconductors, chips, Anthropic, their S1 went out this week. Maybe we'll talk about that a little bit. They're about to go public. SpaceX, obviously, went public as well. And yes, you can invest in those companies and make a return. But it's separate.

17:37 when you're investing in these companies, you're investing in a management team, cash flows, underlying fundamentals that are specific to that business. Bitcoin is money, okay? It's completely separate from that. And when we're having all this productivity and profit margin increases, you want to store the products of those increases in a good money, which is what Bitcoin is.

18:00 And to Jason's point, not to Jason's point, but to further detract from Jason's point, The Trump administration, Trump himself came out with an op-ed, but the Wall Street Journal quoted him saying, we're going to get through this with high inflation. So the government policy to make sure that superintelligence proliferates in the United States and that we dominate is explicitly, we're going to do whatever it takes with the money printer and the backstop of the treasury to make sure this happens.

18:32 So inflation is going to go up and you're going to want hard money. no amount of productivity is going to solve the double coincidence of one's problem. Hear, hear. I think it's ridiculous that he continues to loop back. Some people replied, I forget who said this. It's rage bait. It's rage bait. And we're falling for it.

18:57 Yeah, and we're falling for it. It's easy, right? If engagement is down, it's an easy way to pick it back up because Bitcoiners sort of flock to this. Somebody else said that this has a lot more to do. I think you mentioned Anthropic. That's a good segue because somebody else pointed out or made the case, I think is more accurate, made the case that it's not going well in AI venture capital land. In the recent filing from Anthropic, they need about $80 billion a year to cover losses.

19:34 No, we talked about this last week. Like, listen, I'm not the biggest fan of Dario and the effect of Altris, but the $80 billion loss that people are citing, like Ed Zitron is pointing at, that was a convertible note that got converted to equity. Like, that is not a recurring cost that's going to continue.

19:50 No, no, no, I understand. But people are starting to make the case that this is simply to offer up liquidity. If Bitcoin starts ripping and the alt, let's pretend the all in guys actually have the power to move markets and and affect sentiment to the point that they can push it in the direction of their portfolio.

20:12 Somebody, I'll have to dig this up, somebody relatively prominent in our space got a fair amount of traction around. This is really just making sure that people are not interested in a Bitcoin rally. if we're on the precipice of that, fighting with 79 and 81 here to allow for a little bit more liquidity that they could exit to dump onto.

20:32 But I don't think it's that plausible, but just pointing out the link between the two. Yeah. What do you think? What did you think of Anthropics S1? I think they're all going to need a government bailout. I think that we're looking at a real seismic shift in the space. It got way overheated. Trees don't grow to the sky for these companies.

20:59 And I think that they're still trying to figure out business models. This case in particular, right? Bitcoin, open source money, fighting an existing banking system. That's one thing. But in AI, superintelligence, sorry, President Trump. In superintelligence, you have sort of the big institutions in their early formation between SpaceX, OpenAI, Anthropic, fighting open weight models for control very, very early on in the game.

21:30 So open source is going to get good enough. The GPU market is going to be fluctuating a fair amount. Power is going to be fluctuating a fair amount. So we're not going to see the same thing that we saw in Bitcoin versus central banking and banks and investment classes wherever you want to place it. You're going to see a bloodbath.

21:50 And I think that it got way overheated in the summer of this year. And that's starting to cool off. And I think people are starting to get concerned. I don't think there's a tremendous amount of room for both Anthropic and OpenAI to have successful IPOs. I think Elon going first here is going to, my bet is that that ends up being a real advantage long term, like looking back for SpaceX.

22:15 And he also has other things to do. People are talking about the merge between SpaceX and Tesla, the consolidation of all parts of the organizations and projects that he's working on. So I think that's going to take a lot of hot air out of one or both of the balloons that are coming from Anthropik and OpenAI.

22:34 But this is not investment advice. This is not legal advice. And what the fuck do I know? But that's what I think. I'll get the pushback. I thought that S1 was surprising to the upside. If you look at the return on CapEx from or token efficiency on CapEx spend, that's going up and to the right. Obviously, they had a pretty big Q2.

22:59 The big thing that people are freaking out about is the Q3 numbers weren't in there. um and i i think that's being overblown like if you like i sit on the board of a publicly traded company and i know what the process of getting a 10q out is like and you typically not fun it takes like six weeks after quarter end to get it out and you have the deadline and they're trying to go public in the middle of november and they had to get it out this week so they have three weeks essentially after q3 closes to to tie up the books and then have an auditor check that to make sure it's okay so i can see why the numbers weren't in there and if they are going to go public in a few weeks here they're going to have to release the numbers anyway so it's not like they're

23:41 like hiding something that they never have to reveal and then on top of that even if they are trying to sort of mislead the market by not putting q3 numbers out there there's going to be lockups on the stock once it does go public so it's not like they're going to be able to like dump immediately. Anyway, at least a lot of the people involved.

24:04 However, the nuanced discussion, I read about this in the newsletter yesterday. Paul Kudrosky, he's a VC mathematician. He was on Dimitri Kofinas' Hidden Forces podcast, which is a really good one, been around for a while. I watched the first free hour of it, and I think he made some good points. Like, the bear case.

24:23 like people are like looking at Ed Zitron Ed Zitron was just on Jon Stewart Jon Stewart like had no idea how to actually ask good questions to him I think Ed Zitron's an example of like a terrible bear case he's just like convinced that this is a bad idea and is trying to use confirmation bias to fit his idea into or to like form fit his narrative into the market and I think Paul actually he made a more compelling bear case which is that when you consider the CapEx expenditure that's already been laid out and is projected to be laid out in the next two years, something like $4 trillion, then you need $4 trillion of revenue by 2030 to get a return on invested capital.

25:07 And then on top of that, you need to hit a hurdle rate of probably like 10% to 11% to make it make sense. and his point was that the cost of training frontier models is going up. And I think his point was the frontier labs need to seriously consider how many people are going to need frontier intelligence.

25:28 I guess these models get better. And to your point about open source models, they're pretty much good enough right now unless you're doing some crazy math research or biomedical research. I don't really think you need frontier intelligence like GLM 5.3. I've been playing around with that a lot this week.

25:45 It's incredibly impressive. It's open source, relatively cheap through Maple, and I think that's the more compelling bear case. And the point he made which will be interesting to see if this actually happens is between the hyperscalers who is the uh who is the company that going to stop training frontier models first because once you do that the cost to train is probably the largest cost outside of infrastructure build out that these companies have and once you stop training and just um just go to inference solely which is much more profitable like that could be the potential winner is like when it's like okay intelligence is good enough, we can mass produce these smart enough models and just rely on inference and make

26:32 a ton of profit off of that. That's the thing to look for. One thing that I loved about this, obviously the risk factors where they say we may destroy humanity as one of the risk disclosures, a lot of people caught that one, but I only saw a few talking about the balance with public shareholders not getting any real say. The team still is retaining the majority of the shares over 50%. And a five person trust is going to appoint the board. That's not totally abnormal, especially for Silicon Valley and new IPOs. But tying it to the risk disclosure that, oh, by the way, these guys may have the power to end all humanity as we know it.

27:18 they might have wanted to take a slightly different corporate governance approach to that but here we are here we are do you think it's going to end the world are you are you preparing are you prepping how much rice do you have how many gallons of water do you have you have one gallon of water per person your household per day to survive for 90 days when they shut down the grid i have prepper tendencies yes uh i don't know if you're supposed to disclose that but um we have We have, I would say, good enough plans, but not for like a nuclear weapon or whatever.

27:54 They're going to take down the grids, dude. They're going to take down the grids. Have you seen all these announcements from the government agencies? Prepare, prepare, prepare. Yeah, Manhattan's not the best place to be if that happens, I would say. But we could hunker for a bit. That current setup. oh man the city you know it was what was the last blackout what was that blackout from around sandy when the transformer blew oh yeah i was actually i was living in chicago but i was in town at the time luckily my wife was living on the upper east side so we had power it's pretty funny man like you know i would say the first 18 to 24 hours are like so much fun like bars with candles and like New York camaraderie that wears off rather quickly.

28:45 You get to 36, 48 hours and somebody smashes a store window. Like, you know, it, it, it does wear off. Um, but New Yorkers have been through shit like this before. Hopefully we could keep it together a little bit longer than that so that I can make a crossing with my family. Yeah. Do you, do you have a canoe?

29:05 You gotta have a, just in case, just in case you get two canoes. You can paddle across the Hudson. Yeah, like a blow-up. You could get a blow-up raft with a little motor that could get you across. A canoe would be hard. Hudson has actually pretty strong currents, particularly in lower Manhattan. So it'd be fine, but it wouldn't be fun.

29:29 It'd be hard. But you'd survive. It's all about survival. I mean, there is a lot of fear-mongering on X. I have a lot of side group chats of people sending me like, oh, man, the grid. Oh, the vague posting. Enough with the vague posting around these elections. Cyber pandemic is coming. It's coming. They're going to shut down emergency right before Monday.

29:52 Monday is the last day. They're going to shut it down right before the midterm elections. Marshall Law. It's coming. He's going to do that? Can he do that? Tens of thousands of sealed documents are being audited right now. They're going to be released. Q is right. It's just early. Let's talk about elections.

30:07 We've had two really big ones, Brazil and Israel, both very hot on Twitter, both, you know, allegations of shenanigans. I think more so with Brazil than Israel. Where do you want to where do you want to jump off of this one? Let's start with Brazil. Let's start with Brazil because I think we can tie Bitcoin into it in a way.

30:30 So Brazil, Flavio, Bolsonaro, and the son of, what's his father's name? Javier? Yeah. Javier Bolsonaro? I think it is. What's Bolsonaro's name? The older guy. Bolsonaro? I think it starts with a J. Logan, do you know? Yar. Yar. Yar. Yar. Yar. Yar. Yar. Yar. Yar. I was close with that. Yar. I mean, Jair Bolsonaro was essentially, like Lula, won the last election against him and basically sent him into exile.

31:03 I think arrested him. House arrest. House arrest, didn't treat him medically. He had some pretty bad medical condition that they refused to treat. Lula is an avowed socialist slash communist trying to bring a socialist utopia to Brazil. Flavio Bolsonaro, and I believe actually a number... of family members from the Bolsonaro family ran for different offices, Flavio running for president.

31:34 Polls were looking good. Prediction markets were saying that it was looking like Flavio was going to win. Pretty handedly, it was looking good for him up until the moment when the polls closed. And then one of the federal judges that will, I think the Supreme Court judge that will appointed during one of his last two terms, decided last minute, we're actually going to extend voting hours in the districts where Lula is favored by a few hours.

32:03 And that pushed Lula over the edge. And then immediately the Brazilian court system moved to try to prevent Flavio from escaping the country. They tried to put him on house arrest. He was able to make a conniving escape to Argentina. And I believe he landed in the U.S. yesterday. And now he's an exile in the U.S.

32:29 Yeah. In Miami? Miami? I don't know. You just assume all South Americans go to Miami and come to the U.S.? All right. There's a big Brazilian population in New York. That was very presumptuous of you. That was very presumptuous. No, no, no. I think they did land in Miami. I don't know if he's staying there.

32:47 But, yeah, no, Miami would make sense. But it's ugly stuff. it does look like there were a lot of shenanigans here. The extension of the voting hours for two hours plus reports, unconfirmed reports. I'm not Brazilian. I don't know a lot about Brazilian politics. I see things on Twitter. Bom dia, bom dia.

33:11 That's the extent of my Portuguese. Obrigado for that, brother. But I think, you know, there's a lot of noise on Twitter here. The polymarket chart is not good. I'm not saying that Polymarket's super accurate with polls and stuff. There was a fair amount of money in this one. What was the total? Did you say what was the total pot?

33:34 Population of Brazil? No, what was in the contract on Polymarket? How big is it? Polymarket Brazil. God, I can't type. Brazil. you got to look for size in these because a lot of them come out and people say these are better than polls if you look at the Blakeman Holcomb polymarket it's grown but at one point you know she's 97 but it was a $15,000 delta um so you got to watch the size uh 250 million 250 million That's pretty sizable.

34:17 That's sizable. So, a swing, that dramatic of a swing, you know, increases the odds that this would be some nefarious activity on the part of the Socialist Party of Brazil, or whatever party Lula is. Yeah. Well, and the reason we're talking about this is, obviously, socialism's bad. It's never gonna work.

34:43 It never has worked. Nobody's gonna be able to manifest the socialist utopian reality because it completely is against reality and it is unnatural. And I think if you're over the age of 20 and you believe in socialism, you are not well educated. But the point being, I think we can say this and like, what is the proof?

35:08 I think the Brazilian markets are proof of that. The Brazilian stock market was limit down immediately, a market opened the next day. I think it fell 15%. I haven't checked it today. I imagine it hasn't recovered. The Brazilian real was down 25% against the dollar in the same day. And this is the market sending a signal like, hey, it is obvious that the rule of government is not going to respect private property rights and capital and freedom in the 21st century.

35:35 And so we are going to move our capital out of this equities market and out of the currency. And I think it ties to Bitcoin because... you shouldn't have to tie your like you shouldn't have to take the risk of tying your capital up like everybody who thought uh flavia was going to win was tying their capital up um very bullish and then within an instant federal judge extends voting lula gets tipped and it's obvious that these aren't going to be markets that are conducive to freedom and capital particularly when it comes to private property rights of your capital and so capital fled bitcoin if you're holding your money in self-custody in Bitcoin in Brazil, you don't have to worry about any of that.

36:17 Bitcoin, like we said, is choppy and it's held its value relative to Brazilian equities and the real. One of the most jarring ones. Oh, sorry. Go ahead and finish. There you go. You go. One of the biggest, you know, in the banking sector, digital bank, New Bank fell 17% on that news. really scary to see that level of volatility out of a bank.

36:46 I don't have great information on how customers dealt with that. I think they probably saw something similar to the early stages of a bank run, but a 17% drop is pretty fucking ugly for sure. Before Lula's victory here, Brazil runs PIX, which is the central bank's instant payment system, and they're building Drex, which is a digital currency issued by the central bank.

37:13 Shout out to Nick Anthony at the Cato Institute and the Human Rights Foundation. They have a digital currency tracker. We can link to that. But you can go and see all the stuff that Brazil has been working on there. And they're actually pretty far ahead when you start to think about countries that have a central bank instant payment system and are developing a digital currency, I'm sorry, a central bank, CBDC, central bank digital currency in terms of issuance and control, oversight, surveillance, social credit scores.

37:47 Brazil's certainly implementing that stuff. The concern from conservatives and folks on the right is that this victory and how this victory has come about, if true, with using the Supreme Court and shenanigans to ensure a victory starts to look a lot like what happened with Chavez in Venezuela and moving on to Maduro.

38:08 It's not just one individual. Lula's quite old, but there is infrastructure, political infrastructure in the party to continue with these things. Once they start having access to things like central bank digital currencies and AI surveillance tools, very, very difficult to unwind that. Brazil is the largest economy in South America.

38:28 And seeing it move in the direction as Venezuela, I believe Venezuela was larger at the time at its peak, right? Yeah, Venezuela is like one of the strongest economies. I think it was the strongest economy in South America. Similarly in Argentina a century ago, they called it the France of South America before they went down the road of money printing.

38:50 The France? I was thinking of a different one. but I think we have we have some ugly things you know starting to take shape you know when your government sees every payment you got to stop reading the comments I know what you doing right now What I know you're just reading the comments. No, I'm not reading the comments. I can't, I can't possibly look at the comments.

39:19 Damn, you lost Odell and became the parrot. I don't even know what that means. What are you parody what am i parody i don't know but lula supporter in the chat i suppose but uh the i mean this is an important point and we're not immune from it here in the u.s logan pull up the tweet and this is going to tie back to elon we have a socialist uprising particularly in the the halls of of many of the political offices here in the united states both federal and local and this is a tweet from, let me find it here. I can't see. Where did I put it? Devin Erickson quote tweeted it, but let me find where I put it on my tab. Too many tabs open. Too many tabs open.

40:08 This is what I was looking for. One quick thing before you move on here. I couldn't find this. In the victory speech, Lula promised to build sovereign Brazilian AI that runs on Brazilian renewable energy so the country won't have to depend on U.S. or Chinese tech. Just tying all that together with the central bank digital currency.

40:28 And this was in his victory speech as a pretty significant talking point. I mean, Brazil should do that. I mean, I think they should do that. Will they be able to do it? No. Will they be able to create the economic policy conditions to enable that? No. And that's just like... Well, there are definitely good ways to do it with open-weight models. It depends. If they're building a national version of AI that the government is controlling, what garbage goes in, what the political stance of the AI is, and what it tells individuals when they ask questions, then I would say that would be a bad thing.

41:05 Yeah. Yeah. But to the point that we're not immune to this here in the United States, there is socialist undercurrents that are getting stronger and stronger by the day. And we'll find out next week just how strong they are. It looks like a lot of Democratic socialists could potentially gain seats in the House and the Senate.

41:26 But I wanted to highlight this tweet from Senator Alex Padilla, who simply said in all caps three days ago, investigate Elon Musk. And sharing the Devin Erickson tweet, because I think he puts it perfectly. In free nations, we investigate crimes to see who is guilty of them. In communist tyrannies, they investigate men to see what they can be punished for.

41:46 and then you see Hans Carlsborn here. You bring me the man, I'll find you the crime. Like these are warning signs if you're living in a country and you have politicians saying things like investigate Elon Musk without any crime, like not investigate this crime or investigate this fraud, which is running rampant.

42:06 In the United States, you're targeting the most successful entrepreneur in the country and trying to find something he's done bad so you can throw him in jail. That is communists and socialist tendencies that need to be called out and thwarted as they arise. And so, I mean, this is a growing trend here in the U.S.

42:29 We could become Brazil. We could become Argentina or Venezuela rather quickly if we don't defend liberty in the digital age. And there is a strong, ignorant group of rising politicians that want to throw us all in the gulets. Yeah, I think the DNC is kind of stuck between a rock and a hard place. I don't think it's, look, it has a lot of momentum right now.

42:54 I'm obviously in New York. We have Mondami. We have some other representatives that are up for election right now that are avowed supporters and members of the DSA. It has a head of steam. But this has happened before over the course of American history. It does start to hit. The fight between Mondami, for example, and landlords and real estate developers in New York City is going to be one of the biggest ones to watch.

43:21 Also, how he deals with the unions, like the teachers union, for example. He has a real budget problem. And the cold, hard realities hitting socialist movements tend to be how they work out, unless you have gulongs and they kill a lot of people. Sometimes it takes a long time and it's super painful to actually have it play out.

43:42 But my hope is that the cold, hard economic realities of some of these plans just cannot be implemented. And it might be a hard time for the city. City's doing pretty well right now, to be totally honest. There are some things that Mandami's doing that, you know, I like. He has some focus on small businesses.

44:01 Some libertarian-leaning policies have been implemented as it pertains to permitting and cleaning that up. So what he's saying right now, in terms of implementation, there are a couple of questions on the ballot in New York that New Yorkers are voting on now through November 3rd. But once it gets implemented a little bit more and they get more control, maybe control of, you know, central bank policies and treasury and stuff like that, that would be very hard times for Americans to work through.

44:33 Yeah. It's not great, Bob. It's fine. No. Every day is a beautiful day. Thank God for Bitcoin. Thank God for open weight models of super intelligence. I'm bullish. I think that we are over-rotating. The algorithms are making us absolutely mentally ill. You got to get away from them. I would agree there.

44:57 I've been telling my group chats, nothing ever happens. Everybody's like, they're coming, they're going to shut. Who knows? Maybe we won't be able to record RHR next week because the power will be out in the Northeast. but I don't know. If that happens, we'll get together. We'll do it in person. We'll record it and publish later.

45:12 Yeah, we'll do it over ham radio. Yeah. That would be so much fun. We actually have to prepare for that just in case because that would be a great episode. Pirate radio when the power's out. Speaking of Bitcoin, we did Israel election. Oh, Israel. What's going on in Israel? I was telling you I'm not well-versed on.

45:34 I read into it a little bit. it was contentious uh i know a lot of israelis are mad because palestinian citizens came out and drove to vote i believe there's some intricacies like this is like wave one and or round one and even if some of the bb's opponent wins he could stay in power for an extended period i've seen theories but honestly haven't dove deep into the israeli elections what's going on yeah so neither neither of them um i'm just pulling up they're pulling this up now So Netanyahu's block won 53 seats. Opposition won 48. And the Arab parties control a record 19.

46:15 So nobody has the 61 needed to form a government on their own. So now we're in a coalition fight. And I think that Netanyahu is probably favored here. He's probably very good at the coalition fighting, but a record 19 for the Arab parties is pretty shocking to see, given everything going on, for them to perform that well. This is, I don't have a lot to say on this either.

46:49 I don't know a lot about Israeli politics. I don't want to wade into the conflict, but based on what we were just saying, the algorithm is making you crazy. I think this is one such point point out here. I think it's striking people as a surprise that Palestinians are able to participate in governance and that the Arab party is able to win a record 19.

47:09 If you were just to see what, believe what you see on the algorithms and on the news, you wouldn't think that that would even be in the mix here. So you got to check your sources and dive into these things a little bit deeper. But I think it is going to be pretty scary. Both of the, if a coalition were to form around Netanyahu or the opposition, I believe both are pretty aggressively, you know, anti-two-state.

47:35 And the conflict will continue and both are, you know, very anti-Iran, obviously. So the tensions there are likely to remain and nothing ever happens as undefeated again. Yeah. Well, the point maybe doesn't pertain to the Israeli elections, but more to the Brazilian elections and the rise of socialism here. The United States tying it back to Bitcoin. Again, Bitcoin's not a panacea. It's not going to solve anything.

48:03 yes, governments, particularly if they become covertly socialist, will throw out the rule of law and throw you in the gulag. But it does give you both an exit and a voice by saving in Bitcoin, securing it properly in self-custody. You're voicing, you're exiting the system saying, I don't agree with this or I don't trust the system to preserve my capital.

48:25 and then the Bitcoin price in the market cap is the market voicing its displeasure with governments and central banks and how they're managing things. So it does give you that option. Many people think voting doesn't give you that option. Why vote? It doesn't matter. They're rigging the elections anyway.

48:45 Bitcoin is a more potent vote, I would argue. And speaking of Bitcoin, bringing this to the technical realm of Bitcoin, There were two vulnerabilities disclosed this week, Bitcoin Core. Don't know if I can find the link. Let me find the link here. Oh, God. I'm just going to go to BitcoinCore.org. So the vulnerabilities were discovered by Lupe, Project Lupe, which is out of Block's family of businesses.

49:18 I believe Spiral. specifically the first bug is cve 2026 11 7349 slow unbounded memory growth on pause pre-bit 31 peers so the explanation of this bug is bitcoin core queues announcements for all peers including paused ones bip pre-bit 31 peers could stay paused forever and let the queue grow unboundedly if fixed for this issue it was released in bitcoin core versions 29.5 30.4 31.2 and 32.1 this vulnerability was discovered by eliza rowers project lupe again and then uh low rink also discovered it both disclosed to greg sanders it has been patched so if you're running 29.5 30.4 31.2 or 32.1 you should be good if you updated those um and then the second vulnerability that was discovered was unbounded memory growth uh through tcp urgent data on

50:18 non-Linux systems on platforms other than Linux. Malicious Pure could cause a node to run out of memory by sending TCP urgent out-of-band data. A fix for this issue was released in Bitcoin Core version 29.5, 30.4, 31.2, and 32.1. These bugs were discovered recently. The one I just mentioned was discovered on October 23rd, so six days ago.

50:41 It's already been patched. And the slow and bounded memory growth bug was found on September 15th. was officially patched on the 26th, I believe. Most importantly, I mean, so go update your nodes. I think the severity of these bugs is medium, so it's not like high. It's not low either. Could shut down nodes, both these bugs, which would not be good, but it doesn't look like many people have been affected in the wild as of yet, but I think most importantly, uh coinbase's chief security officer came out and i think it highlights just how robust bitcoin core development and particularly the review process is um he came out and said that uh bitcoin core is some of the most reviewed code in the world we were curious how our frontier ai

51:34 model would handle it so this is that coinbase last month they ran 16 agents across five of the top models for a week to look for issues in bitcoin 4 version 32.0 rc1 impressively they They surfaced two minor items, both now disclosed responsibly. Agenda teams have been a huge unlock so far for our security efficiency.

51:53 They're also remarkable to watch. And so the point here being is that Bitcoin Core is one of the most audited code bases in the world. And it's pretty clean. A lot of review. What do you think about skipping embargoes? If you can find a bug, I think it's specific to if you can find the bug through a simple LLM prompt, it's not going to go through the embargo process anymore. And I believe that was in place for them to show other teams outside of, you know, core, what the updates are into monkey tests and audit the code before it gets released.

52:29 but things are moving so quickly. Really no reason to be concerned about quantum while we're still in the mix with super intelligence hacks or exploits being found. What are your thoughts on the embargo no longer being in the mix? I think it's a sign of the times. I mean, Rob Hamilton at Coinbase two weeks ago when we were in New York, I think, and Matt and I for eight years on this show, we were very much a wait and see, don't rush to update any code base during the software updates part of the the show we would say hey just wait like if there's no rush to update but now the security posture has changed dramatically rob explained this on coinbase two weeks ago at pubkey and it was he i think he very

53:17 much had the same posture that matt and i have had on the show for years which is don't rush to update if the software is working for you now like there's the potential that somebody could introduce a bug in a new version, you want to wait for people to discover that. But now with the AI tools, they're so good at discovering these bugs. I think the inverse is now true, where you have to assume that any update has been audited by a swarm of agents that have either discovered or patched or discovered and patched particular bugs. And I think that is now the new assumption of the world of superintelligence is if you're getting a software update, it's probably wise to assume, Even if there isn't, but probably your base assumption should be that there's some critical security patch that's included in that update.

54:07 People are getting pretty lazy. There's not a lot of thought that goes into it. And I'm not saying I'm not ascribing this to core development or developers, but I know a lot of people that find it difficult to write an email, like a normal email without getting prompt in first and then editing. Do you have any concerns as this continues and development processes and the operating modes of development teams, engineers sort of gets watered down and we end up trusting these things far too much?

54:43 Sort of losing our individual edge to do our own audits. I mean, to this point, Callie had a good tweet about this earlier this week. I'll try and surface it, but the gist of the tweet, I mean, we were just living in a relative life of luxury because we were unable to find the bugs introduced by humans for the longest time.

55:11 Now that AI is here, it's becoming abundantly clear that the AI can code better. I mean, that's been a narrative for the last two years. is, hey, we're going to get to a point where these models can write code better than humans. And I think over the last six months, we've certainly crossed that chasm.

55:32 And I know we have a lot of hubris and ego as humans, but I think we're reaching the point, and I could be wrong. But again, I'm not an expert. I'm not a software developer. I'm not a security researcher or engineer. but again, I think we may be at the point where the computers are better at coding than us.

55:52 Logan pulled up the Cali tweet. And so I think this is a perspective from an engineer in the Bitcoin space working on many different protocols and many different projects. He said, here's my AI cybersecurity apocalypse, white pill. I've been fixing bugs and leftover human code nonstop for over a year now, literally cleaning up years of human slop.

56:13 At the same time, I've been building fully AI-written complex software, which I regularly review with AI the same way that I'm reviewing the human code. The difference is like day and night. Good models don't just find the bugs. They also produce far fewer bugs. The difference between a big project written exclusively by modern frontier models and one written by a dozen engineers is just incredible.

56:34 All those little obscure mistakes that humans overlook are mostly absent. If you take care of your project, the code quality can be great. And there's almost no accumulation of weird edge cases that sneak in inevitably over the course of multiple years of working on a code base with a team of humans.

56:47 Makes me very optimistic about the future. And so, yeah, I think we may. I mean, Calais, if you're starting from scratch with AI code, Calais is saying anecdotally, just comparing the code that I'm writing from scratch with AI to the code I'm reviewing that was written by humans over the course of many years.

57:10 the AI code is better. So it's hard. What do you think? I think it's hard. It's going to be a real mindfuck. This is definitely necessary. Moving at the speed, and also fuck you, Shamath. The White Hats, Red Team is hacking this too, for the better. The speed is critical because any CVEs can be exploited at the same amount of speed, and the cost of attack, which we talked about last week, the cost of warfare and these attacks coming way down makes it much more efficient to attack broadly.

57:50 So this is definitely necessary in the moment. But I have some concerns about the long-term ramifications of just handing this all over to AI, particularly if we are going to see a world five years from now, 10 years from now where the software engineers and the developers have become too trusting in the actual, uh, super intelligence that's auditing or, you know, reviewing or upgrading code.

58:18 Um, time will tell, but it's not without its concerns. Yeah. Are we getting, go ahead. I was going to say, I mean, you had Ben Carman in the comments here, the Cali tweet, especially if you set up proper review systems and have a build good testing and fuzzing. like i think if you can set up a harness that pings multiple models across frontier models open weight models across different versions and you're you're very your your process is extensive and and wide i don't know like i think we're going to like what you sound like maybe you sound like a horse carriage driver when the car came out like i don't know if we can trust these cars I don't know if we could trust people in these cars.

59:01 I think there were some accidents that were pretty gnarly. I think some cities were designed in really shitty ways because of cars. I think that some things can go wrong from technology. Look at Houston. That sucks. Yeah, but is the EV overall positive? I think overwhelmingly, yes. Yes, of course. Of course, it's overwhelmingly positive.

59:26 We got Rob Hamilton in the chat. Rob. Rob, I see you in the chat. I don't know if you've been listening to the conversation. He's known to provide better context for this. Rob, should we be trusting the AIs over humans moving forward for code review? Are we going to lose something if we don't? And you were mentioned earlier.

59:46 I don't know if you're just hopping in, but you actually, your Coinbase appearance started this conversation. We'll wait for him. Thomas is a bit of a Luddite. Not a Luddite. are we getting dividends today? Stretch dividends? Daily dividends? Is that what you're talking about? No, the e-cash fork is, what is it? It's like eight or nine blocks away.

1:00:15 It's happening today in block 973728, which should hit around 230. We're an hour and 25 minutes away. oh my god don't give your tote don't give your new coins your dividend coins to some telegram goblin there's going to be a lot of bullshit today uh in your dms uh nobody i haven't heard anything of it like if you didn't mention that i've heard nothing i hope it's super successful for a month or two and we get you know we get some nice dividends it was pretty sweet thinking about it remember remember bitcoin diamonds bitcoin gold bitcoin private what was that guy's name Brett. So beautiful. What a beautiful time to be alive. That chronic forker, Bitcoin private devs.

1:01:03 Is that the same one that did diamond? I think diamond was the last. And like, didn't, didn't do nothing. Didn't do. If you search Bitcoin private, is defunct dormant fork of Bitcoin and Z classic? Who was it? Maybe it's in the GitHub. Bitcoin private. Who are the devs working on this? People. I don't know.

1:01:25 What the hell was that guy's name? There were so many shitcoiners back in the day. It was fun. It was so entertaining. They throw the best parties because they know they're not going to have that money for long. Free coin day. Going to be a lot of phishing in your DMs. Just don't touch this stuff for a period of time.

1:01:50 You got to let it all sort out. at least a week or two. Yeah. Especially with everything that's going on. If you have a cold storage wall that you haven't touched and you're connecting it to your computer with a Ledger Live or Trezor that you're not sure was downloaded properly, there's a ton of men in the middle of tax.

1:02:16 Especially if you have Bitcoin and cold storage and you're thinking, maybe I should go split the keys. I think considering everything going on in the realm of these AI hacks right now, you're probably better off just keeping that Bitcoin in cold storage than exposing it to some piece of firmware or software.

1:02:33 Pull up Layer 2 Labs' Twitter, if you don't mind. Have they mentioned anything about... Replay attacks. They got to be... Well, certainly that, but they were forking just off of Core. Are they using 321? Because if so, I would imagine that we could see a delay here. Layer 2. Labs, what are they saying?

1:03:06 Bro, just watched a dub. Due to recently disclosed critical vulnerability fixes of Bitcoin Core, we were working on releasing version 1.2.0 builds of the eCash L1 daemon based on bitcoin core version 32.1 there will also be a corresponding version 1.0.1 release of the bip 300 sash 301 enforcer which ensures compatibility with the v 1.2.0 ecash l1 damon all node and pool operators must update to version 1.2.0 before the fork point this was announced six hours ago and they're forking in an hour and a half so update your system i wonder how much hash rate is behind this right now i thought there would be a future of market on this wasn that the the whole point of drive chains Yeah I mean maybe Grapefruit Trading will offer some I believe they invested in Layer 2 Labs

1:03:57 They were also big supporters of Bitcoin Cash. Also, a difficulty adjustment, I think you said, 5.7? Yeah. So going into, because the block it launches is a difficulty adjustment to start fresh within a difficulty period. So an adjustment up of 5.7%. It's going to be fun. I'm sure it'll be fine. Maybe that's why hash rate's been coming on.

1:04:22 All the miners getting on, making some revenue before the fork, and then immediately shifting hash rate over. It could be interesting. It could be interesting. Has Paul convinced any of the big mining pools to support this at all? I don't know. Not that I know of. but I'm all for this. You know, testing out drive change is totally fine and forking off is totally fine.

1:04:48 And if we get some sweet, sweet dividends around it, that would be fine by me as well. I don't know if I mentioned it on a previous episode, but we had Paul Stork for one of the very early Coinbase at PubKey, me, Jerome Strong and Arb Down. I was there. I was there. You're right. When we screwed up the audio, it was like phenomenal.

1:05:09 We went into... Yeah, and he was complaining about lightning the whole time. I was there. I was on stage. Yeah, that was a great one. And I'm so, so bummed that we screwed up the audio because we went into how does Layer 2 Labs make money and what were the promises to investors so that they make money?

1:05:28 And I think it bricks the entire thing. You have a three-way peg. Drive chains to the base chain is not a two-way. You have a three-way when you factor in OTCs that can sort of just trade balances and not actually utilize the mine or peg. So I don't think it'll work out the way that they have proposed, but I'm all for testing it.

1:05:50 I think it's phenomenal to test these things. I agree. And hey, we're ragging on Paul quite a bit here, but I think Paul's contributions, despite my disagreement with BIP300, dry chains and all this. I mean, his early blog posts on Proof of Work versus Proof of Stake are still, I think, some of the best evergreen content.

1:06:11 Totally agree. Totally agree. Paul's great. He just gets mean when it comes to lightning. And we've never had a lightning transaction at PubKey fail. It just took a while with Trump. Some of them are a little slow. There was a glare on the iPad. Yeah, exactly. It had nothing to do with lightning. And he was trying to say that it did.

1:06:32 But as soon as the QR code caught, it went through immediately. It's a beautiful protocol. Yeah. So then we named the bathrooms BIP301, BIP300. It's not easy to fight with a dive bar. Shifting gears here to cybersecurity. Again, double-edged sword, we're highlighting how it's finding vulnerabilities.

1:06:54 In Bitcoin Core, Logan pulled the tweet from CoolerWave. We mentioned last week how people are reverse engineering their TVs filled with spyware and clunky middleware to make them more efficient and to rip out the spyware. I'm not sure if you caught this this week, but this Twitter account, Cooler Wave, has been documenting basically connecting his iPhone to Opus 5.5 and trying to figure out where any privacy leaks are.

1:07:22 and he's discovered that, oh, wait, we've got, oh, God dang, we've got community notes here. He's running with the story. Logan, go down to the community notes. We've got to share the notes. I thought this was real. AI can get you. The author is posting AI-generated engagement bait text with various random claims of deleted photos and videos on a daily basis.

1:07:49 So this is a story I got got. I got got. You got got. I got got. Happens to the best of us. We talked about this either last week or the week before, Piehole, a Raspberry Pi that sits close to the router can help block some of these pings and call homes and stuff like that. What other devices in your house are you concerned about?

1:08:15 The toaster, the oven? We don't have any smart devices. like our phones or our tvs we use apple tv so we don't even connect them to wi-fi who knows that they're phoning home maybe i should i think it still works even if you're not uh connected to wi-fi directly from the tv yeah i might uh i might point point clawed at it over the weekend and see if they're snooping uh my wi-fi devices i got the new router from start nine i gotta plug that in as opposed to the Comcast router, the Xfinity router that I have.

1:08:49 But yeah, we're a very anti-smart home family. We don't have Alexa. We don't have Google Home or anything like that. We have these things. I mean, this thing's listening right now. So yeah, that's about it. That's all you need. That's all you need really is just one. What about you? I endeavor to get rid of all of them.

1:09:12 It just seems impossible. I don't hook up any of the smart devices. My apartment has the GE. You have to connect it if you want to use the air fryer. It's just like, well, fuck it. I'm not going to do that. Yeah. We have like a hardwired system, but it's not like Ring or anything like that. It's more bespoke.

1:09:34 Yeah. You got to go the James O'Byrne route. Yeah. He open sourced that, by the way. Yeah, he did. It looks like a big project, though. It does, but it's worth it. It's worth it. Yeah. What else do we have here? Bitcoin development. There was a Bitcoin++. I forget where it was. I think it might have been in Germany.

1:09:58 But something that I've been passionate about on this show for quite a while, I'm not sure if you are, is PayJoin. and there was a hackathon experiment that was released I believe by Fabian Jar, Bitcoin Core developer, and a couple others. Logan, here, pull up this link. It's not possible on Mainnet yet because it would require a soft fork.

1:10:26 It's called PISA, P-I-S-A. I think it's a play on cross input signature aggregation. So pay join with cross inputs, signature aggregation, a pay join whose inputs from two wallets share a bit for 60 signature, a prototype on reg test. So prototyping better privacy tools on Bitcoin. This is something I want to see. And we've been talking about a while.

1:10:48 For a while, Zcashers are out there trying to pump their bags saying Bitcoin is not private. I believe that you had a recent conversation trying to explain to somebody that, yes, Bitcoin is an open ledger, but there are tools that you can use to reduce the common input heuristics that are used to track people throughout the chain.

1:11:10 I think cross-input, signature aggregation, and page-oing separately do an incredible job of obfuscating that. CISA, cross-input signature aggregation, does it by making it so any multi-sig or multi-input transaction looks like a single-sig or single-input. And then pay join basically makes it so both the sender and the receiver put up an input.

1:11:34 So it's hard to see, hard to understand exactly which UTXO, the sender and the receiver, own at the end of that transaction. this is combining the two and making it even better. So we're talking about if you have Zcashers out there saying Bitcoin can't be private, I would say that there is tech out there.

1:11:57 Payjoin's live now. You can use it now. We need exchanges to implement Payjoin at scale. I think that would go a long way to perturb the common input ownership heuristics used by chain surveillance firms. But if we get something like PISA, it would accelerate that even more. and it would be harder for people to say that you can't use Bitcoin privately.

1:12:16 Don't forget Lightning. Lightning helps too. Yes, helps quite a bit. eCash as well. There's many different ways to achieve privacy on top of the Bitcoin stack. The new blockchain? eCash? No, no, the real eCash. The real eCash. How about GitHub deleting a repo because somebody else deleted theirs? Anthropic employee deleted a private repo from a company that Anthropic acquired.

1:12:50 GitHub's policy then wiped a startup's copy of that code in under two seconds, and the startup recovered it only because they found it on somebody's laptop at the firm, at the company. I didn't hear this. I didn't hear this. Trust the two parties. Was it an oopsie by Anthropic, or were they trying to?

1:13:07 Here, I'll drop it in the chat so you can pull up the link. Give me one second. There you go. I can pull it up. Pull it up. I can't read that. You're going to have to read it. You're going to have to give us the gist here. I imagine you have it on your screen, Thomas. What's that? You're going to have to read the gist here.

1:13:41 I can't. So this Ayush Argawal from Dodo Payments, I have no idea what Dodo Payments is. That's probably it. So it's an AI native SaaS business for, I don't know, payments or something. Anyway. One of their private GitHub repos was deleted. Ayush, who I believe is the CEO, came out with an initial sort of confusion around what has happened.

1:14:18 There was no invite membership or role. Nothing in our org or enterprise audit logs gave them access. just one repo destroy from the GitHub client side sort of wrecked them. He's posted a lengthy update here, which I'm not going to read all of, but a company, Stainless API, got acquired by Anthropic back in May on October 22nd with zero heads up to us, and I assume anybody else that was using parts or all of the repo from Stainless.

1:14:52 they deleted their copy of the repo. Turns out when you delete a private repo on GitHub, every private fork of it gets deleted too. Same request in under two seconds. And our audit log shows the person who deleted their repo as the one who deleted ours. And that's why it looked like a random outsider walked into our organization and nuked something. No email, nothing. And then he takes a shot at stainless and github and anthropic obviously But not cool definitely some notice You can protect against this make sure you save your code that you working on locally But certainly suboptimal I bet this company kind of shit their pants.

1:15:42 Had a not so fun October 27th. Yeah. I mean, this has been a big problem. I think a lot of Bitcoin code is hosted on GitHub. There's a lot of questions about whether or not that should be moved somewhere else like Git or some other open source GitHub alternative. Luckily, many people have copies of the Bitcoin code downloading their computers globally.

1:16:07 But I think, yeah, trusted third parties or security holes need to be aware of something like this. I don't know if we talked about this last week, but Logan, I want you to pull up... Did I put it in the chat already? No, pull up this Fred chart here. We're going to get to the economic side of Bitcoin.

1:16:28 people are wondering what's going to drive the next wave of Bitcoin adoption. What's it going to happen? What's happening with Bitcoin? And I've been thinking about this and I'm not sure if you've seen this, but conversations I've had, it seems like the cost of capital, the amount of capital being targeted towards Bitcoin lending desk, the cost of capital is going down, the amount is going up.

1:16:50 And this is, I think, one of the more underappreciated bullish fundamentals that's developed in this bear market is despite the fact that the price is down and we're in the shoppy period more capital is coming to this bitcoin lending desk which is driving down the cost of capital so your interest rate on bitcoin back loans is going down across providers and i think i was having a conversation with another bitcoiner earlier this week we were we were spitballing about like what what could be like a pretty bullish but boring catalyst and i think once the cost of capital for bitcoin collateralized lending falls below the HELOC rate to get a home equity loan.

1:17:33 That can be a bullish catalyst because HELOC, if you're looking for comparisons of Bitcoin, particularly in the realm of collateral, homes are considered the savings account of many people throughout the world, but specifically here in the United States, a lot of boomers locked in low interest rates. They've already paid off their house and they're just living off home equity lines of credit at relatively low rates. 7.36 is the most recent HELOC rate from yesterday from the St. Louis Federal Reserve data site. And we're getting close there in Bitcoin.

1:18:08 I think some of the providers of capital to the lending desk are getting into seven handles, six handles. Obviously, the people who are lending out the capital on the desk are going to put some margin on top of that. So the lowest consumer rates vary anywhere from, I believe, 7.25% up to 12%, depending on how big of a loan you're taking out. But I think this is something to watch moving forward. Once Bitcoin backed lending rates drop significantly below HELOCs, I think that's going to send a signal to the market like, oh, this is better collateral. And I think that could drive a wave of capital towards Bitcoin. Yeah, I agree. I wonder if this is related to some of the news coming, some of the recent news or reports coming out of JP Morgan. I know that

1:19:01 Morgan Stanley is also working on a suite of products. I know about some of them. There are other ones in the works. It looks like the big banks are, you know, certainly warming up more and more. And I wonder if this is part of the equation for them behind the scenes. Well, I mean, we've talked about it quite extensively throughout the years, but it's never a bad time to remind people. And comparing Bitcoin as collateral to something like a house, it's almost uncomparable.

1:19:27 And if you're looking at risk of loss from a lender's perspective, the risk of loss on a HELOC is way higher than the Bitcoin collateralized loan. Because if you do the custody right, you have the liquidation set up correctly. Obviously, you never want somebody to get liquidated. But if we're talking about the mechanics of how these loans are set up and comparing them if you're a lender engaged in a bitcoin back loan like your your risk of principal losses you can never say zero but it's as close to zero as you can get in the realm of collateral loans collateral lending if you will because you can sell the bitcoin right away into an extremely liquid market that trades 24 7 365 whereas with a heloc if your borrower defaults on on their heloc

1:20:12 loan. You got to go through the process of foreclosing on the home, selling it, trying to get value. It takes months to years to do that. So we're getting there. I think this is the first step. Second step, I mean, same dynamics at play for collateral. Like the Bitcoin collateralized loans should have a negative spread with treasuries, 10-year treasuries specifically, at some point in the next decade. And once that happens, I think it's all bets are off. It's be very obvious that bitcoin is the best form of collateral in the world from your lips to god's ears i agree it's only a matter of time but uh hopefully it's in our lifetime it's definitely gonna be i mean the trend is i mean what were bitcoin collateralized lending rates five years

1:20:59 ago they were like 19 yeah they were super high um those are collapsing i think out of you know some of the big shops you're getting, you know, sub six. Yeah. If you're going direct to the big shops, like. Yeah. Galaxy. What else we got? Well, to that point, to your point about the Thanksgiving, did you see Google's announcement yesterday?

1:21:23 I'm sorry. Did you see Google's announcement yesterday? No. They're coming out with a MPC, multi-party compute custody solution for banks. So like they're competing with fire blocks now. Like they're going to. Really? Yeah. I read about it in today's newsletter. I'll pull that up. But yeah, I think this is pretty big.

1:21:55 So on Wednesday, Google hosted bankers at Pier 57 in New York to preview a custody system for digital assets this morning. intercontinental ice invested in that hyperliquid thing with Stan Druckenmiller. But let's start with Google. The product is called Multiparty Compute, the threshold signing service.

1:22:15 Instead of one key sitting on one device, the key is generated in pieces called shares that live in separate hardware enclaves. No single machine ever holds the whole key. The transaction gets signed when enough of the shares agree. According to Coindesk, it's in private preview with design partners and major financial institutions.

1:22:30 and Google is targeting commercial availability in early 2027. Speakers from Morgan Stanley, Citi, Wells Fargo and OKEx were on the program per Cointelegraph. So yeah, it looks like Google is launching an MPC framework to help institutions custody crypto assets. I think they're going to focus on ETH and Solana specifically for world-world asset tokenization and stablecoins. But I did a deep dive on their docs and they do have they will have the ability to custody Bitcoin as well.

1:23:06 Hmm. All right, so Fireblocks, BitGo, and FordFi are going to get some competition. I mean, that's major. I wonder if that's ahead of... I'm seeing a lot more on tokenization of securities out of like Canton Network and other big institutions, which is also on the back end, I suspect, behind the increase in the BitLicense and some more government oversight across the country.

1:23:33 I think that they'll need a little bit more stuff to have the tokenization of securities actually implemented. And I wonder if Google is actually sprinting into this space, signaling a massive explosion there. Yeah. We have a question in the chat from Austin. Does the Google thing remind you of Frost?

1:23:53 Yes, it does. It's a bit different. the coordination like you're heavily dependent on on google for the coordination there with frost you're dependent on the people that you create the threshold signature i believe it's threshold signatures with frost you're dependent on the people that you create those thresholds with and not like a centralized third party and so yeah i think what google to Thomas's point is competing with is like Fireblocks specifically. And I think we've talked about this throughout the years, but that's my recurring phrase of the show today. Multi-party compute.

1:24:32 It's interesting. It seems like Google's trying to say they're innovating in this space, but Fireblocks has been doing this for years. And it's basically like a software layer that sits above any individual protocol that the MPC is being used to secure the keys of. But yeah, it's like coordination software on top of the protocols that bring sharded key material together to actually sign an individual private key.

1:24:59 It's very different than something like multi-sig on Bitcoin, which uses native Bitcoin scripts. It's dictated by the protocol itself, not by the coordinator on top of it. And so I think understanding those trade-offs, there is centralized third-party risks here with Fireblocks and Google in these cases.

1:25:20 But it's not what I would use to secure my Bitcoin, but I do think it is a validation that, like, to your point, like, oh, to Jason's point, Bitcoin's dead. It's like, no, Google's building custody software for this, for institutions. Like, it's not going anywhere. Yeah. It's an interesting reframe of the Fireblocks news from earlier in the week.

1:25:40 I think that there was rumors of an acquisition by Visa that they denied. Fireblocks denied Visa, I don't think, commented on it. But then they had a pretty significant down round announced around the same time. I think this was on the 22nd. But, yeah, that increase in competition from Google has got to be pretty unnerving for Fireblocks, particularly if an acquisition failed to complete or get over the line.

1:26:12 Yeah, it's very interesting timing for this multi-party compute announcement too because they had the Q3 financials, they had their earnings call yesterday and it looks like Google ad revenue is taking a big hit with the emergence of people using LLMs instead of Google. And so you can see them maybe cresting off of one wave onto another if they think stablecoins, rural-world asset tokenization is going to take off.

1:26:37 Like, okay, we need to diversify revenue streams. So let's announce this to soften the blow of decreased ad revenue. I'm just laughing at the... So Fireblock says, this is news to us and not true at the present time, which is like the most fucking true... It's true denial in corporate history. Yeah. So is it bullish?

1:27:01 What do you think? Is it bullish? Is it bullish overall? Yeah. Look, Bitcoin's not super affected by this. This is much more tokenization and stablecoin specific You know we have the plumbing and the tools Like just because Coinbase is going to design a button and JP Morgan is going to let you buy something and it secured by Google MPC, like great. How much control do you actually have over these assets? How portable are they?

1:27:33 I would be shocked if, you know, the DTC and Seed & Co and the infrastructure that's already in place is replaced by any of this stuff. I think it gets integrated into it. So rather than the DTC having a massive Excel spreadsheet of who owns what stock, which is really just seed and co, and then there's allocations through brokers and whatever, maybe it harmonizes. But a long time ago in 2014, I worked for Digital Asset Holdings, which initially was a Bitcoin company, then became a blockchain company. They're also behind the creation of Canton in the last couple of years, which is driving towards security tokenization.

1:28:18 And all stakeholders didn't want to talk about two things. They didn't want to talk about Bitcoin. So that's where the pivot came from. We had to drop Bitcoin from any pitch deck or any meeting. And the other thing that you really couldn't talk about is disintermediation. They didn't want any stakeholders to get their backs up with any new technology.

1:28:39 It was always trying to figure out how are they going to fit into this stack? How do they benefit from it? So it's a really backwards approach to driving new innovative technology that can do things differently. Like driving efficiencies in a lot of cases means you're taking out of one of the intermediaries or a middleman that is wholly inefficient.

1:29:04 But that wasn't the real approach here. I can't say I'm an expert on Canton. I haven't really followed the enterprise blockchain shit for a very long time. But some color on where this is coming from and how I think this could play out. Bitcoin, I think, remains unaffected and separate and distinct from all of this.

1:29:24 If that causes people to look into the technology and say, okay, this use case is kind of cool, getting more familiar with private key security and best practices and stuff like that, you know, jump to figuring out digital money, digital gold, however you view Bitcoin, could be a nice little bit of a boost.

1:29:48 More people getting familiar with this tech or Bitcoin adjacent tech said better. What was your favorite blockchain, corporate blockchain company, R3? What was Blake Masters called? Blake Masters was Digital Asset Holding. That's where I worked. Oh, you were with Lice? Yes, yes. What was she like? Was she nice?

1:30:11 She's actually great. She's super funny. The company, early stage startup, you also had Preston Burns, Marmot coin. I think he had an early one. digital asset holdings in R3 I think were the two that survived you also have Paxos which came out of Ipid they made a strong run at this stuff for a while I don't really know the landscape anymore Ripple happily said goodbye Ripple I was actually fired from digital asset holdings for what? What did you do?

1:30:48 I talked about Bitcoin too much and I was very pessimistic on the future of enterprise blockchains. What did they say? What was your exit interview like? This isn't working. I was like, yeah, I know. No shit. I want to go do Bitcoin stuff. Well, to your point, though, there's a very large innovator's dilemma here.

1:31:14 I alluded to it earlier, but Stan Druckenmiller and ICE invested in Trade XYZ, which is a hyperliquid perps exchange. And so, yeah, another, I mean, it looks like ICE is trying to disrupt themselves. I believe they invested in Polymarket as well. So it seems like we're moving towards 24-7, 365 markets.

1:31:36 And it would make sense that all this infrastructure is getting built if you believe that all stocks are going to be tokenized and we're going to be trading very liquid, always on markets in the future. And so it's like, who adopts that? Again, this is distinct and separate from Bitcoin. But again, but also I think it's a massive top of funnel for Bitcoin at the end of the day.

1:31:59 All roads, man, all roads. Did you ever imagine Stan Druckenmiller's first tweet would be about Hyperliquid? No, it's pretty bizarre. Stan likes the coin though. Stan likes the coin I mean you got Stan Kevin Warsh and Scott Beston that's like the conspiratorial Marty Jones is coming out I don't think it's a coincidence that Stan's first ever tweet is about infrastructure running on crypto asset rails if you will because it seems like part of the Indiana Jones idle bait and switch that they're trying to do now to drive demand for treasuries is pretty contingent on all this infrastructure being built and adopted by different players across the space from broker dealers to exchanges to the visas of the world.

1:33:00 They're trying to force stable coins and tokenized assets because they want to maintain dollar dominance. What do you think? Is that good? Hour 30? I think hour 30 is good. Anything else you want to? Any midterm talk? You want to talk about Hagerty at all? Yeah, let's talk about Hagerty. Fair shake. Hagerty is pushing for more Bitcoin on the strategic reserve.

1:33:29 I like this. I'm so happy that we're close to being on the other side of the midterms. I hate this. political theater and dance. I think no matter who ends up winning here, I think the one thing that flips, I think the data center issue dramatically calms down relatively quickly and both sides of the aisle are like, yeah, we love the corporate tax revenue.

1:33:57 So I think that's going to be pretty fast as states become more competitive. We went down to Alabama a couple months ago, talking to them. They want more of this stuff, and you have the governor in New Hampshire enacting another moratorium. I really think a lot of that stuff starts to calm down. Hagerty recently was out there again, still seeking the market structure legislation.

1:34:26 I'm seeing a lot more about clarity pop back up. I have absolutely no idea if there's a pathway with the Democrats. If the Democrats win, I don't believe that there's a real pathway for clarity. Maybe I'm wrong about that. It may pop back up similar to what I'm saying, what I think is going to happen with the anger and anxiety around data centers calming down.

1:34:48 It might be an opportunity for the Democrats to move in and get more of what they want, but get some things through for clarity. Again, clarity is more relevant to stable coins, but there's also been a fair amount of chatter that the Bitcoin strategic reserve is still in play. and the Fairshake numbers are huge.

1:35:12 So Fairshake alone has- What are the Fairshake numbers? Where's Fairshake? Fairshake is the crypto pack. It's like Coinbase and a couple of other organizations contributed to a pro-crypto pack that was deploying tremendous amounts of money. A lot went into beating Sherrod Brown against Bernie Moreno.

1:35:35 I believe Sherrod Brown is running again. I have no idea. Anyway, still deploying a lot of money is the point. 150.8, 68 of which against Sherrod Brown. So we'll see. We're on the other side of that soon. I'm very excited about it. One other thing. What do you think about the Thai court ruling that Bitcoin is property?

1:36:05 Thailand Thailand yeah I mean yeah it's obvious it is property it's not obvious to courts yeah and it's big it's big for the people of Thailand shout out to the Thai freaks out there there we go your Bitcoin is recognized as property it's been property or money is money property can it probably like I think property is a layer above money needs to be defined as money and money could be your property Yeah, I think it needs to be defined as money broadly across the world.

1:36:39 It already is. And that's the thing, like, definitionally, we're detaching ourselves from the human constructs of courts and getting down to first principles logic. Bitcoin is money. It is no matter what a court says at the end of the day. That's what it is. So, yeah, we'd like to see recognized as money by governments.

1:37:03 Not going to hold my breath on that. That's going to be probably the longest trail that we walk is getting it recognized as money by the world's governments. But it is money at the end of the day. Whether governments say it is or isn't doesn't really matter. It's money. It's pretty hilarious. So it's the equivalent of Thailand's Supreme Court affirming that Bitcoin can be owned, can be transferred, and it can be stolen.

1:37:30 Just like other property assets. Yeah. What fucking year is it? Anyway. It's 2026. All right, I'm going to go stack up on, I need, there's five of us, we need a gallon a day for 90 days. Yeah. I need 450 gallons of water. Yeah. I need, I think like 450 pounds of rice too. So I got to go shopping. I got to rent a truck, put it in the bed.

1:38:00 The cyber pandemic's here. The grid system's going down. They're going to turn off the internet. um so you got to prepare it's been this is the last show that we ever do it was it was it was it was fun times should we go get some supplies for like government shutdown like the grid going down where do we go like chinatown yeah big bags of rice big bags of rice yeah maybe we could like package them do like a rice and bean package like a um uh a survival pack from pub key batteries double a batteries very popular very times like this double a batteries all right you gotta get the d batteries too you gotta get the d batteries yeah generator get a starlink we got a lot to get we got a lot to get starlink yeah

1:38:45 anyway it was nice knowing you it was fun love you brother i'll see you on the other side you're a good guy peace and love for us bye you