Latest / Adam's Favorite Podcasts / This Week in Bitcoin - 130: Trust Fall

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This Week in Bitcoin - 130: Trust Fall · Adam's Favorite Podcasts

• 0:00
  Welcome in to This Week in Bitcoin, episode 130.
• 0:17
  My name is Chris, chrislas.com, jupiterbroadcasting.com.
• 0:23
  Yeah, I'm coming at you on a Monday.
• 0:25
  I'm doing a little early this week because I'm flying to Texas and I didn't want to leave
• 0:29
  without an episode midweek, but it also gives me an excuse to talk about the Binance hack.
• 0:35
  I don't really have a lot to say, but apparently I've got something to say that other people don't.
• 0:41
  They seem to be missing something here.
• 0:43
  So instead of starting with macro this week, we're actually, we're going to start with Binance.
• 0:47
  you know they had to go and do the hack just after the show last week
• 1:01
  couldn't think of me couldn't think of my news cycle but we do have some updates as of today
• 1:08
  but just in case you missed what happened here is a very quick recap of the main story a black
• 1:14
  excellent event overnight then was the story around Bitcoin in this crypto hack. And Bitcoin
• 1:18
  is currently down 1.2% at 77,800. It's recovered some of the losses after falling more than 3%
• 1:25
  on the news that the world's largest crypto exchange was hacked. Binance says $6.3 billion
• 1:31
  worth of funds have been affected with $3 billion currently frozen, $3 billion worth of crypto
• 1:38
  frozen. Let's get more with Emily Nicole, Bloomberg's digital finance reporter who follows
• 1:41
  this space very closely. Emily, what do we know about the hack? So far, we don't know a ton.
• 1:49
  From what we've heard from Binance, there was a targeted attack made on an employee's laptop,
• 1:54
  which enabled the attacker to gain access to some parts of Binance's internal architecture.
• 1:59
  And through that, they were able to siphon a large amount of funds. Right now, the confirmed
• 2:03
  amount is around $6 billion worth of crypto. Making it the largest heist ever. We'll come
• 2:08
  back to that laptop story in a moment. You'll notice how they led with Bitcoin. They make it
• 2:13
  sound like a Bitcoin attack. But the attackers, they stole $1.5 billion in U.S. value of Bitcoin,
• 2:20
  which was 18,270 Bitcoin. But they stole $3.8 billion worth of Ethereum and a whole bunch of
• 2:28
  stablecoin subtokens and crap like that. But of course, it gets framed as a Bitcoin issue.
• 2:33
  The story about the laptop's a bit odd.
• 2:36
  So Binance's initial assessment pointed to a compromised employee DevOps engineer laptop as a possible entry point.
• 2:43
  And then pretty quickly on October 30th, Binance stated that further investigation had, quote, uncovered additional points of breach, end quote, and that the incident was, quote, a complex attack.
• 2:54
  They then said the attacker used, quote, self-destruct mechanisms that destroyed the tooling and traces, which, sorry, guys, is complicating the investigation.
• 3:05
  They also noted that on Ethereum, EIP 7702 delegation was used.
• 3:11
  Sorry, I don't know what that is, but sounds like something complicated on Ethereum.
• 3:15
  And that was used to obtain execution approval over a hot wallet.
• 3:19
  So I guess in that way, Binance says it, quote, did not pass through our normal approval controls, end quote.
• 3:27
  A few days later, like they said, withdrawals did get turned back on.
• 3:30
  They started trying to cover customer funds for what they could.
• 3:33
  And of course, the stablecoin companies tried to lock up as many of the funds that they could.
• 3:38
  Welcome back.
• 3:39
  Binance says it has resumed withdrawals following the record theft of $6.3 billion in token assets earlier this week.
• 3:48
  Withdrawals have resumed for Bitcoin and other cryptocurrencies.
• 3:51
  Binance says it has covered up to 90% of the assets stolen.
• 3:55
  These have not been recovered from the hacker.
• 3:58
  Instead, Binance is tapping its Secure Assets Fund for users and its corporate treasury.
• 4:03
  It also said it will replace the remaining 10% of token assets through market and over-the-counter channels.
• 4:08
  The FBI says North Korea is responsible for the hack.
• 4:13
  In a statement Saturday, it said it, quote, observed,
• 4:15
  Trader Trader, actors converting stolen assets primarily into Ethereum.
• 4:22
  Trader Trader is an elite North Korean hacking unit well known to the FBI.
• 4:26
  Oh, yes.
• 4:27
  And of course, when Binance did open with the withdrawal doors,
• 4:31
  there were a fair amount who ran towards the exit.
• 4:34
  More than $6 billion in tokens left Binance-linked wallets
• 4:37
  in the 24 hours after the exchange reopened withdrawals
• 4:40
  following last week's record hack.
• 4:41
  That's about 3.6% of the $171 billion Binance held before the attack.
• 4:47
  TFi Llama still tracks roughly $129 billion sitting in those wallets.
• 4:52
  Binance says it's already replenished roughly 95% of the assets stolen on October 29.
• 4:57
  And for reasons I don't seemingly fully understand,
• 5:00
  the ETF holders reacted very strongly and dumped, dumped, dumped.
• 5:05
  U.S. spot Bitcoin ETFs just shed $643 million in a single day,
• 5:10
  the biggest outflow since June, and enough to wipe out 63.6% of their entire year-to-date inflows.
• 5:17
  BlackRock's IBIT led the exodus with $234 million out, followed by Fidelity's FBTC at $201 million.
• 5:24
  Analysts tie the rush to the exits directly to the Binance hack.
• 5:28
  Derives Nick Forster said traditional investors moved fast to protect against further losses.
• 5:32
  I mean, in a way, with the ETF sales like that, a Binance hack like this,
• 5:37
  I was pretty impressed Bitcoin held up the way it did and has so far.
• 5:42
  I mean, we're not out of the woods yet.
• 5:43
  But I've been wondering why this hasn't quite felt like FTX.
• 5:47
  When FTX blew up, we had a 25% drop in Bitcoin.
• 5:51
  There was blood in the streets.
• 5:53
  And there also doesn't seem to be the same call by Bitcoiners to get your funds off exchanges.
• 6:00
  In fact, when you consider the total number of users and the total amount of money that Binance has under control, really only a small portion of their users are actually leaving.
• 6:16
  In fact, some of the on-chain data I looked at suggests that users are depositing money today.
• 6:22
  They're adding to their Binance accounts.
• 6:25
  This is the opposite effect of running from the exchanges.
• 6:28
  Some people are actually running back in while the building's still smoking.
• 6:32
  So Scott on the Daily Wolf says the reason for this is simple.
• 6:36
  And there's a reason why this is nothing like FTX.
• 6:38
  And it's because they are uniquely positioned as the largest exchange in the world.
• 6:42
  Now, it's driving me nuts because I'm seeing false equivalencies with FTX.
• 6:47
  Now, if you want to compare similarities, they both had massive withdrawal flight, six, I think it was six, seven billions for FTX.
• 6:55
  The difference, it happened at midterm elections, interestingly, exactly four years ago.
• 7:00
  But that's where the similarities really end because FTX was a fraud that had no money.
• 7:07
  And Binance is a successful company with a massive balance sheet that has the money.
• 7:11
  So part of this obviously coming from their Safu fund, which still is the most laughable name in customer protection.
• 7:18
  Your assets are Safu, the Safu fund.
• 7:22
  But the rest is coming from Binance themselves.
• 7:24
  And they could have covered, you know, a hack, probably many multiples larger than this if they had to.
• 7:30
  So I'm not surprised that there's people depositing and that the withdrawals have been somewhat muted relative to how much assets they hold.
• 7:37
  Because when people immediately see that you're going to make them whole, no matter what happens, they're going to continue to have confidence in the exchange.
• 7:47
  And we've seen a similar thing happen with the liquid network.
• 7:49
  People are leaving, but not in like a bank run style.
• 7:54
  And there's many that are staying on the liquid network.
• 7:57
  So I agree with Scott there to an extent, but I actually think there's a larger trend at play here.
• 8:04
  And I'm going to come back to that.
• 8:05
  But first, I felt a little called out by Scott.
• 8:08
  That you're going to make them whole no matter what happens.
• 8:12
  They're going to continue to have confidence in the exchange.
• 8:15
  Now, interestingly, there's also been a massive debate of nonsensical conspiracy theory on
• 8:22
  X that I'm sure you've seen at this point because we all know that fake news goes viral
• 8:26
  nine times faster than real news.
• 8:29
  But many people seem to believe that Binance did this to themselves because they have an FTX hole in their balance sheet that nobody knows about because of bad investments and such The FBI and basically every law enforcement agency on the
• 8:43
  planet have agreed and said this was North Korea. The Lazarus Group and more specifically
• 8:50
  Trader Trader. That's T-R-A-D-E-R-T-R-A-I-T-O-R. Trader Trader. Oh yeah, we know. Very clever.
• 8:55
  Trader Trader Group from North Korea. North Korea is behind this. It is confirmed. So please,
• 9:01
  please stop with the nonsensical conspiracy theories until there's actual evidence.
• 9:07
  I hate to be a conspiracy theorist. I think that's kind of a slur in some ways. It's just,
• 9:12
  this doesn't sit easy with me. We're talking $6 billion in funds that got messed around with,
• 9:18
  not all of it were successfully taken. And when we have a nice tidy answer to a crime like this
• 9:23
  so quickly, I don't like it.
• 9:27
  Real attribution in cybercrime takes genuinely long, hard hours.
• 9:34
  It takes more than just a few hours to figure that out.
• 9:38
  And think about it for a second.
• 9:39
  So these hackers, these North Korean hackers are so elite that they can pull off the biggest
• 9:44
  heist in history, not just a crypto heist, but the biggest heist period in history using
• 9:50
  quote, complex methods that quote, self-destruct.
• 9:54
  That's pretty advanced.
• 9:55
  I'm not even sure how I would make a program self-destruct.
• 9:58
  And I've used computers my entire life.
• 10:01
  But they can't cover their tracks.
• 10:05
  They can't make themselves look like somebody else.
• 10:07
  They can do all this stuff.
• 10:10
  But they don't know that stable coins are going to get seized.
• 10:12
  They don't track.
• 10:13
  They don't trace.
• 10:14
  They don't cover their traces.
• 10:15
  I'm not trying to fry a bunch of conspiracy bacon here.
• 10:18
  It just seems odd. And when the numbers involved are this staggering.
• 10:25
  And the story about the vague laptop thing then changes into vague 40 hacking.
• 10:32
  And we're all just supposed to accept that when there's all this money on the line and a massive screw up by the largest crypto firm or exchange in the world.
• 10:42
  And their founder, CZ, happens to have ties to the Trump White House as well.
• 10:47
  So there's probably lots of ways to reach out and get messaging taken care of is all I'm saying.
• 10:55
  I don't know.
• 10:56
  I'll tell you what the issue is.
• 10:58
  First of all, I don't feel like we have enough evidence.
• 11:00
  Just all happens a little soon.
• 11:01
  I'm just the type that's like let's just wait and see.
• 11:03
  Wait for more information.
• 11:04
  Don't form an opinion completely yet.
• 11:06
  But I default to skeptic, I admit.
• 11:09
  But I think it made me realize that this is touching on a trust problem that we have now.
• 11:15
  we've all been
• 11:17
  you know I think
• 11:19
  a little messed with by the recent
• 11:22
  quote unquote cyber attacks
• 11:23
  it really started with the cold card stuff
• 11:25
  this year's been rough
• 11:26
  this has sucked
• 11:27
  and now it's a bit ironic that Bitcoiners
• 11:30
  are having a hard time even trusting the tools
• 11:33
  that they've depended on forever
• 11:34
  and you know as predicted
• 11:37
  the cold card was just the starting line
• 11:39
  of these types of attacks
• 11:40
  we've seen more hardware wallet attacks
• 11:43
  we've seen embedded devices in hardware wallets
• 11:45
  BTC pay server has gotten popped.
• 11:47
  I'll have an update on that after the boost.
• 11:51
  Now, Binance has gotten hacked, right?
• 11:52
  The Liquid Network has gotten hacked.
• 11:54
  And I think we all know this isn't over yet.
• 11:56
  So most of us, I think we expect this to last for a few more years.
• 12:02
  And that, I think, has a lot of us just really questioning what we can trust at all.
• 12:07
  And so people are buying ETFs.
• 12:09
  They're going to Binance exchanges as they just sort of want to hunker down.
• 12:14
  You know, as James Lopp put it, and James Lopp was on BMTV recently, AI compresses the security clock. And I think that's a clever way to put it.
• 12:24
  And I'd love to zoom out for a minute and just talk about this macro trend you're talking about of increased hacks across the whole Internet, really.
• 12:33
  The cybersecurity pandemic, as a lot of folks are calling it.
• 12:37
  We see a lot of different takes from cybersecurity experts and researchers, even some from these frontier labs, indicating that various degrees of panic or fear are warranted at this time.
• 12:50
  Some saying that this is going to be very temporary and eventually developers will have the tools in short order here to make sure none of this even gets to production.
• 12:58
  Others are saying this is like the early innings of COVID-19 and we're going to shut down the Internet.
• 13:03
  What is actually warranted?
• 13:06
  And in the medium term and also the long term, does this change the value proposition of Bitcoin?
• 13:12
  Is this going to change the way that people, maybe traditional cybersecurity workers or bankers who are seeing their software being hacked, is it going to change the way that they're viewing an asset in a technology like Bitcoin?
• 13:26
  um mostly i think that what this is going to change is that uh you know before security was
• 13:35
  often an afterthought like even in a lot of big businesses you would do like one big security audit
• 13:40
  per year and that would keep you in compliance with various frameworks and now if you want to
• 13:47
  be secure it needs to be real time it needs to be a part of your software development life cycle so
• 13:56
  So that basically means that as you are writing the code, you need to have these latest competent security researcher LLMs looking at the code and trying to break it before you even release it out the front door.
• 14:12
  Because you know and you should expect that the bad actors are going to be out there using those same tools to knock on your front door and try to find the holes in it.
• 14:22
  So really, it's the same story as ever, right?
• 14:26
  Security is always a cat and mouse game.
• 14:28
  It's just now the timeframes are much more compressed
• 14:32
  and you need to be secure as you are deploying your software,
• 14:37
  not some point later because you're hoping that you have some lag time
• 14:42
  before a researcher is going to come along
• 14:44
  and discover whatever vulnerabilities you accidentally let through the gate.
• 14:49
  Linux is dealing with this.
• 14:50
  Linux is definitely dealing with this, and I think Bitcoiners are going to still be dealing with this for a while.
• 14:56
  Only the paranoid and the informed are going to survive.
• 15:00
  I maintain I think we're still going to be better off, and we're going to survive.
• 15:03
  More of us will survive than the traditional institutions.
• 15:06
  But it's going to be rough, and they're not ready for it.
• 15:10
  Speaking of which, let's do some macro.
• 15:12
  First up in macro, we need to go over a few numbers, about 40 trillion of them.
• 15:23
  Out of this mountain of debt that we've got. And the Wall Street Journal reports that our U.S.
• 15:29
  national debt hit 100 percent of GDP for the fiscal year that just ended, September 30th.
• 15:35
  This is kind of it's the first time that's happened since 1946.
• 15:40
  So this is wartime level debt that we're staring at last.
• 15:46
  And the debt currently standing at forty point six trillion dollars.
• 15:50
  And it comes as if there's a projection from the CBO Congressional Budget Office that the Treasury will spend 20 trillion dollars in interest alone on the national debt over the next decade.
• 16:00
  If you look at the previous year, I believe it was like $1.36 trillion in interest on the debt, and it was almost $1.99 trillion.
• 16:09
  All right, these numbers are coming fast and quick, so I want to back up here.
• 16:12
  She says projected interest spending on the national debt over the next decade will be $20 trillion.
• 16:20
  So not paying down the principal, just going to the interest charge, will be $20 trillion smackaroos.
• 16:27
  That's massive.
• 16:28
  Next decade.
• 16:29
  If you look at the previous year, I believe it was like $1.36 trillion in interest on the debt, and it was almost $1.99 trillion in a deficit.
• 16:40
  But you grow your way out of it.
• 16:41
  That is the only way that we can tackle this horde of borrowing.
• 16:46
  You grow your way out of it.
• 16:48
  You hear that often.
• 16:49
  You've got to grow your way out of it.
• 16:50
  I think when you hear that, you could have a little word replacement program in your head, a little macro that executes and realize it's a shorthand way of saying we have no other choice.
• 17:01
  We have to grow our way out of this.
• 17:04
  And the more we pump this thing, the less painful it's going to be for asset holders.
• 17:09
  And you know I been calling the I been talking about the I guess Well I been saying it the unwind of the A trade It was a little early on that And it been it been it been maintaining that trajectory
• 17:21
  And I've been trying to stress that this matters for Bitcoiners, because when you're 40.6 trillion dollars in debt here in the U.S.
• 17:28
  And of course, we know that's a massive issue across the West.
• 17:31
  When you have weaker GDP growth, that means you go from what's kind of a manageable getting by burden into a heavier drag on the middle class and living standards get even worse.
• 17:45
  And where we're at right now, the margin of error is so small that if GDP starts to back off, those pressures start to escalate very, very quickly.
• 17:56
  And that does impact all kinds of things from the housing market to the grocery store.
• 18:02
  And yes, the AI trade, which is still quite responsible for a big portion of that GDP.
• 18:08
  And it seems like your buddies over at OpenAI are starting to smell the way things are going and adapting as fast as they can.
• 18:18
  OK, Leslie, thank you very much.
• 18:20
  Keep us posted on all that.
• 18:21
  Now let's get to OpenAI.
• 18:22
  The company is scaling back its fundraising ambitions as investors scrutinize the AI boom.
• 18:27
  Kate Rooney joins us with more. Kate.
• 18:30
  Hey, Sarah. So we are hearing that OpenAI is now dialing back its fundraising target amid some of this tech market volatility.
• 18:37
  You guys were talking about sources now telling me the chat GPT maker is looking to raise up to $20 billion.
• 18:43
  So that is a change that is down from an earlier target that we reported, which was up to $30 billion.
• 18:48
  I'm hearing that they are still looking at a $1.25 trillion valuation.
• 18:54
  That is before this new capital.
• 18:56
  So that's known as pre-money.
• 18:57
  But it is still a jump in valuation.
• 18:59
  The last pre-money valuation was around $750 billion.
• 19:03
  We did report previously that CO2 and the UAE are going to be leading this round, or sovereign
• 19:08
  wealth from the UAE.
• 19:09
  The round has not closed yet.
• 19:10
  A person directly familiar with these deal talks tells me that the numbers could change.
• 19:15
  So we'll keep you posted.
• 19:16
  The FT first reported the lower target, saying that some investors have cut their allocations.
• 19:22
  OpenAI, if you remember, last raised $122 billion back in March.
• 19:27
  Sources have described this as an opportunistic bridge round ahead of a financing event, an IPO, of course, in 2027, which is what we're hearing on their timing.
• 19:36
  One last dip at the money before things get really bad or before they have to IPO.
• 19:41
  We'll see.
• 19:42
  Adam Johnson, though, he runs Bullseye American Ingenuity Fund, and he has traditionally been very, very bullish on the AI trade.
• 19:51
  But I think he's been rattled recently.
• 19:54
  He says, OK, I think there was a bubble, but maybe it just popped.
• 19:58
  You know, that's what we're what we're learning with the way all these data centers and the capacity around them is structured.
• 20:05
  You're putting up a lot of money over 18 months, and you're going to get a payout over 12 to 15 years.
• 20:14
  Now, there are ways to account for that.
• 20:15
  You discount back to the present and all that, which is what all the analysts do to try to make sure that the numbers foot.
• 20:22
  But it also depends upon being able to execute and that all your assumptions are correct.
• 20:29
  And that's what the market has been repricing over the past six, seven, eight weeks as all these stocks have sold off.
• 20:36
  Hmm, they say they can do it. Can they really do it? Let's run the numbers. Run them again. Run them again, right?
• 20:39
  That's what everybody's been doing. Well, maybe we ought to shave it a little more. I shave a little more.
• 20:44
  But I think what has happened is that all these stocks have been taken down so far and so fast that you sort of say, hang on.
• 20:52
  Wait a minute. Time out. Should we really take Google down 14%? Probably not.
• 20:58
  Okay.
• 20:58
  Core weave we took, and I own it, you know, from, what, 250 down to 50?
• 21:03
  Well, that too.
• 21:05
  Really?
• 21:05
  I mean, really?
• 21:06
  Should we really take it down that much?
• 21:07
  Probably not.
• 21:09
  So, pendulums always swing too far, and then they swing back.
• 21:12
  My hope is that the pendulum last week went as far, you know, that was the most the rubber band, to use another metaphor, is going to get stretched.
• 21:21
  That's my hope.
• 21:22
  We'll see if I'm right.
• 21:23
  But there's a sense that it's I think a lot of people have talked a lot about the chance that the bubble, so to speak, is going to pop and we're going to get a recession.
• 21:31
  It already did.
• 21:32
  You don't need.
• 21:33
  The bubble popped.
• 21:33
  Right.
• 21:34
  And you don't need a recession.
• 21:39
  We'll see if he's right about that, if it's popped or not.
• 21:41
  I mean, I do think there's genuine demand, but you hear some of the numbers they're kicking around.
• 21:45
  The financing is pretty crazy.
• 21:47
  So we will see indeed.
• 21:49
  It seems Jordy Visser is thinking along the similar lines, though, as Adam Johnson.
• 21:53
  He picked up on a story that I was surprised didn't get more play.
• 21:56
  Maybe I noticed it just because Microsoft is local to my area.
• 22:01
  But to me, this seemed like a pretty big signal.
• 22:03
  The Microsoft News does not get enough press.
• 22:07
  60,000 people is 27% of their employees.
• 22:10
  27.
• 22:11
  Now.
• 22:12
  Is that a lot?
• 22:12
  Well, to put it in perspective, I mean, when you have 223,000 people and you're saying, okay, 60,000, you can take a buyout.
• 22:21
  Now, they obviously don't expect all of them to do it.
• 22:24
  They did this once before, but they did it with 8,000.
• 22:28
  60,000 is a big number.
• 22:31
  And what do you think those 60,000 people that have been offered the buyout, are they like feel secure in their job going forward?
• 22:39
  or was this a message that this is our hope?
• 22:43
  Now you said, are they using this for money?
• 22:46
  I mean, I've run a business.
• 22:49
  I know what micro, like you can go through their compensation.
• 22:51
  So let's assume it's $400,000 a person
• 22:53
  when you add in healthcare at Microsoft.
• 22:56
  That's $24 billion.
• 22:58
  Not 24 billion for one year.
• 23:00
  That's every year going forward
• 23:02
  unless they go hire more people.
• 23:05
  That number, if they all took it,
• 23:07
  would take them back to 2020 levels. Their revenue has grown, will have grown 70% if they just meet
• 23:15
  numbers into next year. So revenue per employee has gone through the roof. So this has a lot of
• 23:21
  issues to the government. And this is why it's positive Bitcoin. This is why I wrote a substack
• 23:25
  about this whole thing, comparing what Microsoft was doing to what was happening in France,
• 23:29
  where the common thread is going to be affordability. Because on the one side,
• 23:33
  What do employees making $400,000 have to pay in taxes?
• 23:37
  Yeah.
• 23:37
  50%, 50 plus, depending on where they live.
• 23:41
  What does Microsoft pay on corporate taxes?
• 23:43
  There's an arbitrage here that's becoming a bigger story to the government because if
• 23:47
  Microsoft doesn't have to pay the same amount, you're losing receipts from this if people
• 23:53
  don't get jobs or if they end up taking less of a job, whatever the case is.
• 23:56
  I think this is becoming a labor versus capital story that is much, much bigger than people
• 24:00
  realize because we're just entering the productivity boom.
• 24:05
  That's the other message that Microsoft is saying is they believe they can do this buyout
• 24:10
  at five to six or six to seven times the last one.
• 24:16
  What is that saying about their expectations about what AI is going to enable their business
• 24:20
  to be like in the future?
• 24:22
  Now, I'm not so sure that AI is the entire story to these buyouts.
• 24:26
  But if Geordi's right and Microsoft is laying people off because they're seeing AI gains and efficiencies at those levels, he's touching on that Luke Groman theory.
• 24:37
  And Luke has been developing this theory for about a year.
• 24:40
  And I think maybe he'd probably call it the who services the debt theory.
• 24:44
  I'm not sure if he has a name for it.
• 24:46
  But he was just on the macroeconomics podcast that I'll link in the show notes.
• 24:51
  I listen to it every week and I'm drawing a blank on the name.
• 24:55
  But I'll link to it in the podcast.
• 24:56
  or in the show notes for this podcast.
• 24:58
  And he was just on there.
• 24:59
  And he kind of laid out the theory of what he's explaining is if Geordi's right,
• 25:07
  if the AI companies are truly going to start, you know,
• 25:10
  getting these gains where these models are so good that for $100 a month,
• 25:15
  you can replace two employees.
• 25:17
  And if you spend this amount, you can replace 50,000 employees,
• 25:19
  according to your Microsoft or whatever.
• 25:21
  The 60,000 was the buyout offer, which is not going to be that.
• 25:23
  But the theory that Geordi is pushing, putting forward is that the AI gains are going to be so good.
• 25:30
  The models will be so good that the gains for all the companies that use them will be so good that they can lay these people off.
• 25:36
  And then the tax receipts for the government could start going down.
• 25:39
  This is where Luke takes over and kind of takes it all the way.
• 25:45
  The dynamic that there is 19 trillion dollars in consumer debt outstanding mortgages credit cards auto loans primarily
• 25:57
  And that means, so 5% of that number is call it a trillion dollars for easy math.
• 26:07
  So if you assume that AI is going to really displace a lot of white collar jobs,
• 26:14
  And I think there's been a pretty robust debate around that.
• 26:18
  I think it's foolish to think they won't.
• 26:20
  But this, by the way, is Macro Voices 556.
• 26:24
  I also, not to interrupt Luke here, but I'm curious to know if you think AI is going to take jobs or create jobs.
• 26:32
  I think my personal take would be it initially probably slows down hiring.
• 26:38
  Companies add new things.
• 26:40
  They start doing new products and then they need more people.
• 26:44
  The AI doesn't help with the human stuff, all of the stuff that the human stuff to do, but also the task management, the prioritization, kind of the collaborative thinking, the creative thinking, the human touch.
• 26:56
  You're still going to need people to do that.
• 26:58
  There's been a pretty robust debate around that.
• 27:01
  I think it's foolish to think they won't, but there's been a robust debate about it. But I think in the last literally two weeks, the side saying that AI is going to create a lot of white collar job loss has started to strike some serious body blows to the side that everything is going to be fine for white collar jobs.
• 27:21
  you had Kroger layoff, talk about laying off, I think 37% of their corporate workforce.
• 27:26
  Kroger's business model hasn't changed in a long time. They sell food, right? So this is AI related.
• 27:31
  American Express last week came out and said, we are firing 5% of workers because of AI.
• 27:36
  Barclays came out last week, said we're firing 5% of workers because of AI. And then of course,
• 27:40
  yesterday, Microsoft is buying out 27% of their workforce. Yikes. And the reason I bring up these
• 27:49
  numbers, and this is the credit side that people just, the second derivative credit side that no
• 27:53
  one is talking about. And I think they're not talking about it because there's nothing to say.
• 27:57
  There's nothing to say, which is all of these people getting laid off. They're not going to
• 28:03
  find another job, not easily, and probably not at the same wage because the AI is hitting everybody
• 28:10
  all at the same time in finance and tech in particular, but white collar more broadly.
• 28:14
  And if you just kind of play that out over several quarters, that $19 trillion in consumer loans, let's pretend 5% of those default as a result of AI, just sometime in the next two years, three years, 5%, it's roughly a trillion dollars.
• 28:31
  So by way of comparison, the entire equity capital base of the United States banking system, according to the Fed, is $2.6 trillion.
• 28:40
  So every 5% default rate increase on consumer debt as a result of AI unemployment or deflation in wages is equal to 40%, 40% of the total equity base of the United States banking system.
• 28:57
  You see the problem here?
• 28:58
  And that's the side that no one's talking about yet. And I think they need to be. If 40% of the equity capital base. So what are banks going to do if AI starts to create this joblessness? They can stop making loans. They can, you know, again, take this as a grain of salt. I'm a tourist, but they can stop making loans. They can sell treasuries that they're holding for as high quality liquid asset to raise capital. But oops, now you're going to have another seller of treasuries to go alongside foreigners, to go alongside Scott Besson.
• 29:28
  etc. They can issue equity, which the market isn't going to love if banks start issuing trillions of
• 29:34
  dollars of equity because, oh, by the way, that's somebody else who's got to issue capital alongside
• 29:40
  Scott Best and alongside AI. And now the banks, that's not good for risk. Or you slow the economy
• 29:47
  down a whole bunch. But none of those are good outcomes. That doesn't work for our debt position.
• 29:52
  We have to grow out of our debt. When we slow down, we don't grow out of our debt. And so I think
• 29:57
  And it's almost like, to me, the last two weeks, particularly around this Microsoft news, this Microsoft news, I think, was like, we're going to need a bigger boat moment for the employment argument around AI.
• 30:12
  It's not that I disagree with Luke.
• 30:15
  I just don't take it all the way to 11 like he does.
• 30:17
  Like, I suspect there's more to an offer to buy out 60,000 employees or, you know, give them basically an exit package.
• 30:27
  A buyout's a funny term.
• 30:29
  I think it's probably more to that story than just AI.
• 30:32
  He also cited Kroger as an example.
• 30:36
  Kroger's been struggling for years.
• 30:38
  Go look it up.
• 30:40
  They've had a lot of problems and nothing about their recent layoff suggests it's due to AI efficiency.
• 30:45
  It has to do with the fact that they're collapsing as a company.
• 30:50
  So like he kind of like – and then like these other companies that he cited that are – that I looked it up.
• 30:58
  They are saying that it is due to AI efficiency gains, the other companies he mentioned.
• 31:03
  But I also don't take that at face value anymore.
• 31:07
  I know that makes me I guess a skeptic but I am just – I just don't trust these people anymore.
• 31:12
  And I think they're willing to say whatever is good for their ticker price.
• 31:17
  So I tend to fall more in the middle of Luke's analysis.
• 31:21
  Things are tight.
• 31:22
  We are walking a very hard line.
• 31:24
  And a reduction in GDP would be devastating.
• 31:28
  But what I think, I don't know, I'm sure Luke understands this, but we might just be seeing a repricing in the market as the market learns that the deal has changed.
• 31:38
  The Meg 7 has been called the Magnificent 7 because they have been a cash cow.
• 31:44
  Stock buybacks, cash machines.
• 31:47
  I mean look at Apple.
• 31:48
  Apple is that still today with their services business and they just make a ton of money because they didn't go crazy on the AI investment stuff.
• 31:57
  But Google and Microsoft and Amazon and Tesla and everybody else in that 7 category and especially the Meg 5 has.
• 32:04
  And so the deal has changed for Wall Street investors.
• 32:09
  These have gone from cash rich to cash poor companies.
• 32:12
  They've gone from sitting on piles of cash to spending it and even raising debt for the next hundred years in the case of Google.
• 32:20
  The deal has changed.
• 32:22
  We are in the middle of midterms.
• 32:24
  We're smack dab right now.
• 32:25
  We're at the peak and they're repricing everything.
• 32:29
  And so the cash flow situation, it's flipped in the last few years for these tech companies.
• 32:34
  And, you know, as Lynn Alden points out, it's just a more nuanced issue than perhaps where Luke is going.
• 32:39
  Like I kind of there with him for a bit, but then maybe he just takes it a little too far.
• 32:44
  So I'll play this clip from Lynn when she was on with Natalie Brunel.
• 32:48
  I think it really depends on what part of the industry you're talking about.
• 32:51
  So I've been more in the bullish camp on semiconductors.
• 32:55
  I'm not very bullish on the frontier shops, like the models themselves.
• 33:01
  I think that their valuations are hard to justify and their economic moats are thin, which is, I think, part of why they are kind of aiming for regulatory moats to kind of augment a pretty weaker economic moat.
• 33:19
  So when you're talking a trillion plus valuation, there's a lot of risk there.
• 33:25
  um uh the hyperscalers that would then put somewhere in the middle because unlike the
• 33:31
  models i mean that you know they have these other business lines uh they do have economic moats
• 33:36
  because hardware and scales just it's very expensive and you know they all have their
• 33:40
  other businesses that have uh economic moats and so it's mostly a matter of how much are they
• 33:45
  over committing um or not uh and like i used to be bullish on alphabet for example
• 33:52
  uh that was kind of a contrarian position at the time because the view was like who's going to
• 33:57
  search when when you know you can you can just ask ai now um but i did kind of a deep dive into
• 34:03
  that and i had the view that alphabet was interesting and of course they did become
• 34:08
  part of an ai play themselves um but like for example i am less bullish on them after they had
• 34:14
  a big run-up and because they they're so much of their cash flow now is is has to be reinvested
• 34:19
  So it's not that I think the hyperscalers crash per se, but I think they're less stellar
• 34:26
  investments compared to what they were doing.
• 34:28
  in the 2010s and the early 2020s, which was basically super profitable growth, very low
• 34:36
  reinvestment growth, and then they could plow all that money into share buybacks or
• 34:41
  forge this balance sheet.
• 34:42
  But now that they have to just aggressively invest, it kind of diminishes them.
• 34:49
  Okay, so we're right smack dab in the perfect moment for you to make a prediction, a ridiculous
• 34:55
  prediction and then find out almost immediately if you were right or wrong.
• 34:59
  So boosted to tell me if you think we are at the bottom of the AI trade turbulence or
• 35:05
  if the unwind continues from here.
• 35:07
  Will things turn around after the midterms?
• 35:09
  Perhaps I'll play some stats on that after the boost.
• 35:14
  Or are we going for more a collapse of the AI trade?
• 35:17
  The tightening credit, the borrowing costs are going up, yada, yada, yada.
• 35:22
  Coreweave this, Oracle that, Bubble Pop this, that.
• 35:25
  What do you think? Let me know. Boost.JupiterBroadcasting.com.
• 35:29
  I mean, come on. This is just for fun internet points.
• 35:32
  Not a big deal, but I would like to know what you think and where this is going from here.
• 35:37
  And why not? Put it in the Boost.
• 35:39
  We're going to find out. We're going to find out pretty quick.
• 35:55
  We'll see you next time.
• 36:25
  lending and buying sats river is great the bitcoin well is all about self-custody you guys they're
• 36:31
  the best of the best no official relation as the kids say we're not shipped as my kids would say
• 36:37
  but i do like the the products and i and i use them not you full card so disappointed in you full
• 36:45
  card
• 36:55
  And now it is time for Le Boost.
• 37:10
  Oh, it is indeed.
• 37:11
  And we're going to start out with our baller booster, who is J-Cube, coming in with a sharp 77,000 sats.
• 37:18
  Hey, rich lobster!
• 37:20
  JQ Brides, I use the Gemini card and I pay the balance every two weeks.
• 37:27
  I use River and I keep cash balance at River to get the interest sets.
• 37:31
  I also have strike count and honestly, I'm having trouble picking.
• 37:34
  What's your take, River or strike?
• 37:35
  They seem neck and neck.
• 37:38
  I agree.
• 37:39
  These are the two competitors and I like River's tech stack more and I like their interface
• 37:45
  a lot and I like the people behind River.
• 37:47
  I also like strike a lot and I like strike's interface a lot.
• 37:50
  I don't like their tech stack as much, but I don't have any hands on like reasons where it's bit me.
• 37:56
  My understanding is that River is an elixir shop and that Strike is a .NET shop on the back end.
• 38:02
  That's my personal bias sneaking out there because it's never been an issue for Strike.
• 38:06
  I think Strike has the leg up on overall features at the moment, right?
• 38:10
  Because not only does Strike have fantastic lightning support, of course, but they have great prices for stacking DCA, especially if you do it through bill pay.
• 38:20
  I mean through your check.
• 38:22
  River does as well.
• 38:23
  But I think maybe where Strike kind of has the leg up is the lending stuff that River is just not willing to get into.
• 38:30
  And Strike seems to be doing it right and responsibly, kind of setting the example of how this can be done.
• 38:36
  And their interface is fantastic for managing that stuff as well.
• 38:39
  And then you add the recent stacks feature so you can have sub wallets that can also DCA.
• 38:46
  That's really powerful.
• 38:48
  I would love to see River get neck and neck on some of that kind of stuff because I love both companies a lot.
• 38:54
  And in a way, we're kind of spoiled.
• 38:56
  We have some great options and we're lucky because just the two of those are just fantastic.
• 39:01
  Good question.
• 39:02
  And JQ, it's interesting that you pay off the Gemini card every two weeks instead of once a month.
• 39:06
  and I'm wondering if you use River at all for the bill pay.
• 39:10
  Like, are you using the cash balance on River to pay the Gemini card?
• 39:15
  Are you using the Gemini card for everything
• 39:18
  and that's why you're paying it off every two weeks?
• 39:19
  I'd love a little, you know, extra operational details if you're willing to share it
• 39:22
  because I'm trying to model how I might do it.
• 39:25
  Thank you, sir. Appreciate you being our baller sat booster.
• 39:28
  Obi comes in with 21,000 sats.
• 39:32
  That's so nice to hear from Obi.
• 39:34
  I'm not worried about quantum at all.
• 39:36
  Quite possible it's not achieved in our lifetime.
• 39:38
  If it is, Satoshi has a S-load of wallets.
• 39:41
  Lol, he'll probably be the first to move.
• 39:44
  Would that be funny?
• 39:45
  I would love to see that.
• 39:46
  Love to see the reaction.
• 39:47
  I'd love to be doing TWIB if that ever happens.
• 39:52
  Yeah, all of it so far is theory, right?
• 39:54
  There's no hardware yet.
• 39:55
  So you might be onto something there.
• 39:56
  You might be.
• 39:57
  I'm going to go with that, OB.
• 39:58
  Even though I don't know if I believe it, I'm going to go with it.
• 40:00
  Thank you, sir.
• 40:00
  It's nice to hear from you.
• 40:02
  Ace Ackerman's back with a row of ducks.
• 40:04
  That's 2,222 Satoshis.
• 40:07
  The quantum narrative is likely to be the cause of decline in Bitcoin's price at the end of the next bull run.
• 40:12
  I'd like to think we could help the FUD awareness, but nobody listens.
• 40:15
  I don't know if you're right here, Ace.
• 40:18
  But I really like this theory.
• 40:21
  Because there an old adage that the cause of the next crash is always apparent at the beginning of the bull run I probably messing up I think there like a more succinct phrase but that the general idea is that you could
• 40:36
  kind of suss out what's likely going to cause the crash if you had the means, right?
• 40:41
  Like going back to FTX, I suppose, or whatever.
• 40:44
  But so in a way, you can see that, right?
• 40:46
  Like we get a good bull run going for a while, then some quantum advancement, who knows, right?
• 40:51
  Who knows, Ace, because I still don't think it'd be that soon.
• 40:53
  But I'd also take like a 10 year bull run.
• 40:56
  If then we got a quantum scare at the end of that, I'd make that trade.
• 41:00
  Thank you, Ace.
• 41:02
  Appreciate you.
• 41:04
  I'm going to say Jace Neville comes in with five thousand sats.
• 41:07
  Coming in hot with the boost.
• 41:09
  Listening to your banking troubles, I wanted to direct you to Sequence, get sequence.io.
• 41:14
  I moved from Fold after they announced their reserve and decided to keep my DCA with River.
• 41:19
  However, Sequence has allowed me to look at my money the way that I've always wanted to.
• 41:23
  Move it around and get rules for what is needed for each different thing, and then they're on the one map.
• 41:28
  They also have an MCP, an API for connecting agents, which is very useful to convert our budgeting spreadsheets into rules.
• 41:36
  Okay.
• 41:37
  I didn't think I was going to say this on air, but that is actually one of the things I'm considering.
• 41:41
  I run my own private Hermes agents.
• 41:43
  I don't necessarily have my own private model.
• 41:46
  Anyways.
• 41:46
  Anyways, an API and MCP is literally a deciding factor for me.
• 41:52
  And this is very interesting.
• 41:54
  It looks like it has almost like you connect blocks and diagrams, like a routing system.
• 42:00
  This is really cool.
• 42:01
  I don't know if this is exactly the kind of way I like to visualize it because I just plan to have an agent do it all.
• 42:08
  Interesting.
• 42:10
  Different cards.
• 42:10
  Very good recommendation, I will say.
• 42:12
  Very good.
• 42:13
  That is getsequence.io.
• 42:15
  Thank you, Jace.
• 42:16
  Appreciate that.
• 42:17
  Hey, Mary, Oscar is here with 10,000 sats.
• 42:22
  Mary just says, great updates.
• 42:24
  Thank you, Oscar.
• 42:25
  Appreciate you very much.
• 42:26
  Good to hear from you.
• 42:28
  Satoshi-san is here with 5,021 Satoshis.
• 42:31
  You make me want to be a better man.
• 42:33
  I just realized that Bitcoin is the only asset that everybody can afford to buy.
• 42:37
  Yeah, you got it.
• 42:38
  You're doing very well.
• 42:40
  You can buy one little sat at a time, you know, in theory, or 10 sats at a time.
• 42:45
  You can't do that with real estate.
• 42:46
  Even once they tokenize it, you're not going to be able – it's not a bare instrument.
• 42:50
  You're not going to be able to put it in a cold wallet and you physically custody it or at least the key.
• 42:59
  Even with tokenized real estate where maybe you could buy 100 acres at a time or something like that, they're not going to be able to give you that or they won't.
• 43:05
  They might be able to but they won't.
• 43:08
  Bitcoin will remain the key standout asset there.
• 43:12
  Thank you, Satoshi-san.
• 43:13
  Appreciate you.
• 43:13
  nakamoto 6102 is here with 3,500 satoshis i could see the quantum narrative having a short-term
• 43:21
  impact on price but i'm not worried about in the long term i hope you are right i do
• 43:25
  i really hope it is just a short-term thing thank you sir your inner child is here with 2,130 satoshis
• 43:32
  2030 or i'm sorry 2130 equals 2,000 plus 130 for the episode oh i see okay please bring vance crow
• 43:42
  back onto Twib or onto Twib to talk about how the Bitcoin community can communicate with the outside
• 43:47
  on the quantum scare versus continuing to fall incentives. You know, I don't really do interviews
• 43:52
  on the news pod, but I have thought about every now and then doing pre-record specials. This might
• 43:56
  have been a good week for it. There was some news going on, you know, doing a pre-record special when
• 44:01
  I'm on the road. I don't know if you know this, but I'm going to Texas. Pretty excited. I'm going
• 44:06
  to Austin. Meetup.com slash Jupiter Broadcast. I'm going to have a lunch meetup on a Saturday.
• 44:10
  Thank you very much.
• 44:11
  Appreciate it, inner child.
• 44:13
  Magnolia Mayhem is here with 3,000 sats.
• 44:16
  Woo, cheap sats.
• 44:18
  Yeehaw.
• 44:18
  You're doing very well.
• 44:20
  Yes.
• 44:20
  Just pump the brakes right there.
• 44:22
  No, no, keep going, I say.
• 44:23
  Thank you.
• 44:24
  Nice to hear from you, Mayhem.
• 44:25
  Colorado Snows here with 6,000 satushers.
• 44:28
  Good news, everyone.
• 44:30
  Maybe it's just the way my algorithm gives it to me,
• 44:33
  but I rarely hear the word quantum without Bitcoin being mentioned.
• 44:38
  It seems like Bitcoin is such a small portion of the issue of the problem and quantum computers that they would end up creating.
• 44:45
  I do worry the narrative has these two tied together as it could slow adoption for such a great asset.
• 44:53
  I also think I see it tied together more often than it should be.
• 44:56
  I'm surprised we don't see it.
• 44:58
  There's a lot of things that use elliptic curve cryptography.
• 45:02
  And so I'm surprised.
• 45:03
  I have to believe it's because Bitcoin sells.
• 45:07
  There's a theory out there that Bitcoin is a brand.
• 45:10
  And if you can associate your story with that brand name, you get more clicks.
• 45:15
  And you kind of see it play out in the tech industry with Apple.
• 45:19
  If there's any reason they could put Elon or Tesla or Apple in the name or Zuckerberg, if they can put a name in there, they'll go for it.
• 45:28
  Even if it's kind of like Zuckerberg's meta says, right?
• 45:32
  It's just kind of a branding thing, I think, Snow.
• 45:35
  But I don't like it because it does create that association.
• 45:40
  Thank you, sir.
• 45:40
  Appreciate you.
• 45:42
  KBog is here with a free member boost.
• 45:44
  I evaluated and ran Fold Plus trial early on and found that their rewards were confusing and the ACH payments weren't supported by all my services.
• 45:52
  I did have a couple of that, too.
• 45:54
  Then I moved to River and I've been happy with their service, especially if you can set and forget the auto stack at a level you're comfortable with.
• 46:00
  Oh, OK.
• 46:01
  So this is a thing that I need to know.
• 46:02
  the ACH like payment stuff's been better with river huh than it was with fold that's my that's
• 46:08
  the implication i'm taking from this uh rewards on cash back credit card is not a taxable event
• 46:12
  typically they are higher percentages than crypto rewards you could have a process of taking those
• 46:20
  proceeds and purchasing bitcoin or holding the cash in river and then earn bitcoin interest on that cash get creative i do feel like that kind of what I realizing KMog is that I got some options here It just
• 46:32
  how I put it all together. And I want to put it together where I'm making some passive Bitcoin.
• 46:37
  You know, that's my thing. The more Bitcoin I can make, the better, because I don't want the
• 46:43
  fiat. I mean, I need the fiat to pay the bills, but I'd like to be able to passively stack too.
• 46:48
  So that's good information. And if anybody out there has experience with River or Strike with their ACH services or any of the systems you're using, that's a key element because you can get on there and they don't always work with all of the banks or credit cards or utility bills or whatever it is.
• 47:04
  So I'd love to hear that if you want to boost that in, boost.jupiterbroadcasting.com, of course, and as well as I want to hear your thoughts on the AI trade.
• 47:12
  Let's wrap it all up. This was a shorter recording window. So if you didn't hear your boost, that's just because I'm recording on a Monday instead of a Wednesday. And you got in late. Or I got in early. I'm not sure. But you know what to say about the early bird. So thank you, everybody, that stream sat 17 of you stream sets and collectively you stacked thirty three thousand two hundred and fifty six Satoshis.
• 47:42
  And when you bring it all together, this week we stacked 174,336 Satoshis.
• 47:55
  Not our best week ever, but I'm not complaining on a quick week.
• 47:59
  This is a value for value podcast.
• 48:00
  There's no advertising.
• 48:02
  My alignment is to you.
• 48:03
  You are my customer.
• 48:05
  If you got value from this podcast and you want to keep it going, boost.jupiterbroadcasting.com.
• 48:09
  you want to put your support on autopilot you go over to jupiter.party you sign up over there and
• 48:14
  then you also get a free member boost once an episode which is pretty great and you can send
• 48:19
  your support directly at boost.jupiterbroadcasting.com thank you so much everybody who supported this
• 48:24
  short episode now we do have a few things i want to get to including a btc server pay server update
• 48:31
  so let's do that
• 48:32
  on november 1st we received reports of a bitcoin and of litecoin being stolen from hot wallets on
• 48:49
  btc pay server they write on the btc server log blog i can do this i promise a hot wallet stores
• 48:56
  the keys needed to spend the funds on the server of course and their investigation found that these
• 49:00
  attacks targeted servers running BTC Pay Server 2.4.1 that was released on July 23rd,
• 49:07
  2026 or earlier. There's several different methods that are being used to exploit it.
• 49:11
  If you're already on version 2.4.2 or later, which is the current version, then you are likely
• 49:19
  just fine. And so far, they have seen no impact on those versions. If you are running 2.4.1 or
• 49:26
  earlier. You need to listen to this. The folks at BTC Pay Server strongly recommend moving to an
• 49:32
  entirely new server with a new wallet after sweeping any remaining funds from the existing
• 49:38
  hot wallet. Do not reuse the system, they say. Wow. Also, it's worth noting that if you run
• 49:47
  an LND server, a Lightning server on Linux, there was a massive TCP flaw that was announced this
• 49:54
  week. And LND is written in Go and takes advantage of multi-path TCP, which is one of the scenarios
• 50:02
  in which this vulnerability is the most critical. So the default LND setup could be the most
• 50:08
  vulnerable setup for this new Linux CVE that came out for the TCP stack. So you need to update your
• 50:14
  Linux kernel. It is not an LND issue. You need to update your Linux kernel. I want to talk about
• 50:21
  BitAir for a moment. This is something I haven't brought up on the show, but they made some news
• 50:25
  today, and I think it's worth talking about. So this is a company called HeatBit, I believe,
• 50:32
  and they have their BitAir miner. It is a heater, like a room heater, that also mines Bitcoin.
• 50:39
  And today they are open sourcing the hardware design of it. Now, your boy here actually ordered
• 50:44
  one of these quite a while ago, and I was told that it would be shipping to me around late
• 50:49
  September. So far, it has not shipped. So I have not been able to do a review for you.
• 50:55
  But I did learn that my information was leaked and that it was my account information was
• 50:59
  compromised. So that's wonderful. I'm still very optimistic, though. I think this is a fantastic
• 51:03
  use. If you're already going to run an electric heater, why not run one that mines Satoshi's?
• 51:09
  So what they did today is open source the PCB and some of the components. They write,
• 51:13
  we believe that Bitcoin mining can reach far more people when it's simple,
• 51:16
  useful and accessible.
• 51:17
  The hardware is now open.
• 51:19
  The software they say will open soon.
• 51:21
  They're taking extra time for security audits
• 51:22
  given so much AI hacking lately.
• 51:25
  Okay.
• 51:26
  Looking forward to building more features
• 51:27
  that can be ported across the open source
• 51:30
  mining devices.
• 51:31
  More to come, they add.
• 51:33
  I, you know, I'm a little cynical
• 51:34
  because they told me in September
• 51:36
  it'd be shipping very soon and it hasn't shipped.
• 51:38
  But I'm also very excited
• 51:40
  because I am somebody that uses
• 51:42
  electric space heaters
• 51:43
  and I've always hated that they're just sitting there
• 51:45
  wasting, wasting energy, not doing anything productive with that energy other than, you
• 51:49
  know, keeping me comfortable, which I suppose is something.
• 51:53
  The HeatBit Air mainboard carries a single Bitmain BM1370 Bitcoin mining ASIC and an
• 51:59
  ESP32S3.
• 52:01
  And the heat from the ASICs is used by an air purifier.
• 52:05
  So that's the design of their unit.
• 52:08
  And it looks like a nice tubular unit with a fan on the top.
• 52:11
  I like the design and look of it a lot.
• 52:13
  it looks very modern and clean
• 52:15
  and compact and I hope they ship it
• 52:17
  and I hope I get to give you a full review of it
• 52:19
  because I will use the heck out of it I can tell you that so there you go that the HeatBit and they announced that bit air is going open source And I think this could be fantastic Now it is you know it midterm season and I didn
• 52:33
  want to talk about it much in the show because it doesn't really impact us, except for it does
• 52:37
  impact the way the market invests, which does impact the spot price at least. And it seems like
• 52:45
  we could end up with potentially a little bounce after the midterms, depending on how things go.
• 52:51
  And Adam is back with stats that have held up since World War II.
• 52:56
  I don't normally get into this kind of stuff, but why not this one time?
• 52:59
  We're talking stats.
• 53:00
  I'll give you guys a couple.
• 53:01
  So if you go back to World War II, you look at the various compositions of who controls Washington.
• 53:13
  If you have a Republican in the White House and you have Democrats in the House and Democrats in the Senate, that is on average a 9 percent return.
• 53:23
  You say, oh, 9 percent. Not bad. But hang on.
• 53:27
  If you have Republicans in all three, which is what we've had, you have a 16 percent average return.
• 53:34
  You say, wow, that's great. I hope they just keep it as is.
• 53:39
  Well, actually, if you have a Republican in the White House, you have Republicans controlling the Senate and Democrats in the House.
• 53:47
  You have, on average, an 18 percent.
• 53:49
  Even better.
• 53:50
  That is the best combination out there.
• 53:52
  So arguably, even if you're a Republican, you should kind of want the House to flip, at least for your portfolio, because, again, that's a very powerful concept.
• 54:00
  And you talk about, well, you both talked about gridlock.
• 54:03
  That's actually the perfect combination of gridlock.
• 54:05
  If it's Democrat, Democrat, and then White House, nothing gets done.
• 54:11
  And you need to get stuff done, as you point out, right?
• 54:14
  We've got some important bills.
• 54:15
  But if you have Democrats in the House, which is where spending originates, they tend to spend more.
• 54:22
  And then the Senate, OK, Republican, they're going to keep a check on that.
• 54:26
  But still, you know, there's going to be more spending, which is stimulus.
• 54:29
  That's a very good combo.
• 54:31
  So, yeah.
• 54:32
  And by the way, that scenario is very, very possible.
• 54:35
  Stay tuned and find out.
• 55:05
  305 Satoshis to $1.
• 55:07
  We're down 39.3% from our all-time high 392 days ago.
• 55:12
  You complete and utter maniac.
• 55:15
  That's incredible.
• 55:17
  Look at you go.
• 55:19
  Estimated difficulty change this time is going to be a downward adjustment of 2.6%.
• 55:22
  Not too crazy after a pretty big upward adjustment.
• 55:27
  And there are only 18,493 nodes on the network.
• 55:32
  Where'd they all go?
• 55:33
  Now, fascinatingly, we are only down 4.3% in the last seven days after the Binance breach, after the ETF sell-offs.
• 55:43
  Only down 9%, 9.6% in the last 30 days.
• 55:48
  I mean, it really could be worse.
• 55:50
  It actually could be a lot worse.
• 55:52
  I'm pretty impressed by that.
• 55:53
  So there you have it.
• 55:54
  The state of the network, other than the node drop-off, which we'll keep an eye on that, but the state of the network is strong.
• 55:59
  Bitcoin has remained strong during all of this, and you should thank it.
• 56:14
  All right, you know what the drill is.
• 56:16
  Links to what I talked about are over at thisweekinbitcoin.show,
• 56:19
  plus some stuff that didn't make it into the show.
• 56:21
  Let me know how I did.
• 56:22
  My goal is to give you a show that doesn't get distracted by the emotions,
• 56:25
  the drama, the politics, but focuses on the signal.
• 56:28
  so you can plan for yourself, your friends, your family, your future, your business,
• 56:31
  whatever it might be, boost.jupiterbroadcasting.com.
• 56:34
  And, of course, I want to hear your thoughts on the AI trade,
• 56:37
  anything we talked about in the Boost segment as well.
• 56:40
  As I wrap up, hopefully I'll see some of you at the Texas Linux Fest
• 56:44
  or at our lunch meetup.
• 56:45
  It's going to be at the Austin Beer Works near the Commons Events Center.
• 56:49
  Details at meetup.com slash jupiterbroadcasting.
• 56:52
  If you can make it, we'll be there on the Saturday after this episode posts,
• 56:55
  and I'd love to see you there.
• 56:56
  All right. That's it for me. Thank you so much for joining me on this week's episode of This Week in Bitcoin. I'll be back with stories to share, macro analysis and probably probably some changes in some of the directions of these trades with the elections wrapping up, I imagine. So keep an eye on all of that. Thanks so much for joining me. See you back here next week.
• 57:26
  Thank you.
• 57:56
  Thank you.