Episode Transcript
[00:00:00] Speaker A: I have heard on far too many shows and from far too many prominent people recently that Epstein has hijacked Bitcoin. And even though this theory is so utterly ridiculous, there's a lot of things to point to that if you don't actually dig into it or you don't understand the context of when all this was happening, and you don't look at anything else Epstein was doing or anything else any of the other people were doing at the time to actually try to challenge the idea, it can kinda look like it's true. And Brandolini's law that it's easier to invent bullshit than it is to refute it. Or there's a lot more resource cost in refuting it, since that applies so deeply here.
[00:00:44] Speaker B: I've gone back and forth about whether or not I should really devote time to this, but I feel like there's
[00:00:50] Speaker A: still enough credibility and enough attention put on it that it's still worth a little bit of energy refuting until the B cachers lose any and all credibility.
So with that, I think it's time for a Guys Take episode the Best in Bitcoin made Audible. I am Guy Swan and this is Bitcoin Audible.
What is up, guys? Welcome back to Bitcoin Audible. Sorry for the kind of thin on the episodes recently. I've just been working on a ton of other stuff and this is. This is an episode that I argued with myself about whether or not to do. And so I went ahead and actually knocked this out as videos. And I spent a lot of time in the last two weeks while working on this, which is actually a series of videos.
There's seven in total, but I've just put them all together for this episode. So what you're listening to is basically a two sats video made into an episode. But I've kind of used this time and this project, this video in particular, to kind of get my form and my workflow and my process around pumping these videos out much better and faster.
And I've also finished and. Or, well, I haven't finished. I've made. This will never be done, but I've made some huge strides in my media, my meta analysis tool for film footage to find film footage relevant to, you know, some particular context or for a facial expression or a reaction or a meme or anything like that. That tool is slowly coming together and I've kind of found, I found kind of a style and I think a quick way to put these together that I really kind of like.
So actually, any feedback in this Context is super, super useful. So I really, really appreciate it. And I already did get some feedback on Nostr and I think the breaking this up into seven parts probably wasn't a good idea and I should just made it a 25 minute video.
[00:03:10] Speaker B: But.
[00:03:11] Speaker A: And in fact I think. I think I'm just going to combine them back together for YouTube. So I'll have the full video over there and I'll just. I will literally just take these and smash them together.
Now this also isn't comprehensive because there's a whole second layer to this with Brock Pierce and Tether and all of this stuff. But the reason I stopped with kind of the main idea is because essentially all of that just becomes crap that stablecoins are doing and. And has nothing to do with the block size war and has nothing to do with whether or not we were doing small blocks or crippling bitcoin or anything. It just becomes stuff that stablecoin people are doing. If you don't accept the part of the theory that I'm talking about in this episode and there were actually a bunch of little details that I also just didn't have time to get into and. Or I cut because. Because I didn't want the videos to be 40 minutes long.
So with that we will just go ahead and get right into it Again. There is video with this, so there will be things that don't make sense or there will be little noises or clips that you might be slightly confused
[00:04:21] Speaker B: about, but it makes a whole lot
[00:04:22] Speaker A: more sense if you watch the video. And I will have the link to the YouTube in the show notes. But with that, let's get into this guy's take episode.
[00:04:32] Speaker B: Did Jeffrey Epstein hijack bitcoin? It's a conspiracy, man. So bitcoin is in the Epstein files. It's connected to various investments, many conversations, and even the funding of actual bitcoin development.
This has become the latest ploy by big blockers to say that bitcoin was hijacked and specifically that it was all related to the block size war. Big battle that peaked back in 2017 caused the network split into two opposing camps. The bunch of nerd stuff. But we'll get to it in a second. This is not something to dismiss outright. It's a pretty serious claim and he did have money in the space. But luckily we have literally thousands of emails to pull information from. So in the spirit of bitcoin and don't trust verify, let's actually dig into it. So first let's cover the TLDR of The conspiracy. Bear with me for a second. The big blockers were trying to save Bitcoin from the terrible small blockers. They want to keep Bitcoin peer to peer digital cash, while small blockers want it to be digital gold and to not use it as money. The big blockers came in with the brilliant idea of just adding more transactions. The center has to be at least three times bigger than this. But Epstein and some secret government agents captured Blockstream and they had taken over Bitcoin development to keep blocks small and prevent it from being used as cash.
How was this done? Well, Blockstream was a very prominent company and they've funded development at various times in Bitcoin's history, including layered protocols like their liquid sidechain product and then the open source lightning network. So it goes that they had to handicap Bitcoin in order to sell their solutions. What's the evidence? Well, in 2014, Epstein invested $500,000 into Blockstream. He had direct contact with Austin Hill And Adam Back, two of the 10 founders of the company. There was even an email in relation to Amir Taki where he says, I'll have Andy back on my island this week. Then there's Brock Pierce. Brock Pierce is basically Epstein's best crypto buddy. He's deeply connected to a ton of stuff in crypto, including being a major part of the Bitcoin foundation, which had fallen apart right around this time due to a bunch of scams and money mismanagement. Sorrow, what you done? Yeah, Tyrone, what have you done? This is when MIT Media Labs stepped in to continue funding the developers, even specifically mentioning Gavin Andreessen, who was the lead maintainer at the time, as well as Vladimir von Der Lan and Corey Fields. Epstein, through Joy Ito, had given money to MIT Media Labs over a few years. It amounted to $850,000 and some of that money went directly to funding the core developers. Ito even said, and I quote, many organizations scrambled to step into the vacuum created by the foundation and take, take control. His quotes, not mine, of the developers. We moved quickly, talking to all of the various stakeholders, and the three developers decided to join the Media Lab. This is a big win for us. Now, most of the other things I've read follow with a bunch of stuff about Tether, which is connected to Brock Pierce, and then they connect it to today's political landscape and crypto in the White House and all of that stuff. But honestly, none of that actually means anything unless you believe the narrative up to this point.
So I think this is the key part to Address.
So let's hit these one at a time.
The first and most infuriating thing about this debate, the big blockers cannot be honest about what the debate was about.
[00:08:11] Speaker A: So what was the block size war really about?
[00:08:14] Speaker B: They pose it as one group themselves who wanted Bitcoin to be digital cash and money for the whole world, and then the evil small blockers who just wanted it to be digital gold.
The block size debate was not, and I repeat, was not about digital gold versus digital cash. Bitcoin is decentralized, peer to peer electronic cash. The key word being decentralized. If it isn't decentralized, then no matter how cool it feels to use it, it's not digital cash. The actual debate, half of it was about how to scale the network so it could be decentralized money for the whole world, while the other half was exactly how to make changes to the protocol that required cooperation from everyone when things were contentious. There's a reason why every argument from the big blockers is some conspiracy about a government takeover, rather than one about the actual technical debate. Why it's easier to spin a web of nonsense than argue about protocol nuances. Here is the technical reality. Bitcoin is a broadcast layer network, one where every single participant must broadcast their message to every single other participant in the entire network. This is part of how and why Bitcoin stays decentralized. Anyone who wants to do so can confirm every last rule of the network has been followed by every other participant for its entire history. Essentially, it's made every single one of its users their own referee to the game. Trying to put the entire world's transactions on this layer would kind of be like you having to receive every email on planet Earth just to sort through them to find the ones that are addressed to you. Can you imagine what your inbox would look like? So on that path, you have two options. Either most people just stop being referees and you have a few big companies doing the same job. Which means, why do we have Bitcoin in the first place? Why don't we just trust a few big companies with Ecoin, we control the ledger. Or you figure out a less naive way to scale the system. Basic network design demands a unicast layer. This means that you can route the information directly to the recipient without broadcasting it to everyone else. So you can still verify the system without having to know about, verify, or store all of these individual payments. The naive and largely thoughtless approach of just make the blocks bigger, let's make it bigger is actually referred to as Having inverse scalability, every one additional transaction on the Bitcoin base layer, you have to verify, save and forward hundreds of thousands of times. So one unit of scaling produces 100,000 or more units of resource cost. Making blocks bigger doesn't scale Bitcoin at all. It just asks how much can we stress the inverse scalability without breaking Bitcoin security?
Scaling Bitcoin demands some way to reverse the dynamic and keep Bitcoin the security where one transaction can verify or secure thousands or hundreds of thousands of payments. But how do you do that? Well, one crazy idea was to use the programming script to turn a transaction into a channel. And who came up with this brilliant idea?
Satoshi. That's the concept behind the Lightning Network. Lightning Network itself is a brilliant concept. It is a decentralized, non custodial, censorship resistant, private and importantly scalable network. And it's built with a contract inside of a bitcoin transaction. So why don't we hear big blockers argue with this position?
Because they can't. And every time I argue with them, it inevitably ends up at, well, lightning will work better on our network because we have bigger blocks. Which is honestly just kind of an admission that you have to have something like the Lightning Network no matter what future we end up in. And kills half of their narrative that Blockstream handicapped it so that we did have to have lightning because otherwise we could just scale it with bigger blots forever. Instead, they pointed a bunch of random breadcrumbs and vague connections to frame it. Like the CIA or Epstein got wind that this random magic Internet money was about to conquer the world way back in 2014. They had to jump in and stop it. So if the scaling debate is actually completely artificial and has no merit, then their foresight was legendary. The very first sentence ever written in response to the Bitcoin idea was we very, very much need a system like this. But the way I understand your proposal, it does not seem to scale to the required size. The Rothschilds are everywhere. Or this is a super basic network primitive. And thus it was the first thing ever said about Bitcoin because it's actually a really difficult problem to solve since the big blockers refused to argue the actual technical discussion. Anyway, let's ignore this completely and embrace Brandolini's law and spend a little energy refuting their bull conspiracy.
Just follow the money.
Blockstream did it to trap everyone on Lightning and they'd be forced to go through them. Therefore they control it all. Well, how's that going? I thought I'd Find their note at the top, but instead they're 281st, it has 1.4 Bitcoin of capacity. Okay, so maybe they're non existent on the lightning network itself, but certainly everyone must be using their node software and they charge a substantial fee for it.
Okay, so it's got like 11% adoption and the software is completely free and open source. Kind of funny that they could so easily hijack all of bitcoin, but they couldn't hijack the very network they helped build from the ground up to trap everyone and don't even seem to be making an honest effort to try. Yes, Epstein invested $500,000 in Blockstream back in June 2014.
But what is conveniently left out is is he was forced to divest just four months later in September 2014, and his $500,000 was part of a $21 million seed round, shortly followed by another $55 million seed round. And how does this stack up against his other investments? He put $40 million into a general fintech fund with Peter Thiel. He put $500,000 into Blockstream but divested almost immediately. He gifted a total of about $850,000 from what we can tell to MIT Media Labs over the years and then he invested $3 million into Coinbase. And this all basically happened right around the same time in 2014, early 2015. Let's put a pin in that because we'll come back to it and answer the question. Did Adam back go to Epstein's Island?
Now, did Adam back go to Epstein's Island? I'm a just island.
I'm not going to make claim about somebody who's always been very nice, seemed really smart, and anytime I've spoken to him he was really helpful. But you don't know anybody just because you spoke to him a few times. I've literally read through thousands of these emails against my better judgment.
And of the few hundred that are related to bitcoin, every last one of them seems to be kind of generic. Investor speak, their pitch decks for shitcoins, prospectus for a company really just a bunch of people emailing him asking for money. Epstein invested in a ton of stuff. I highly doubt he went to every investor meeting with one of his 12 year old sex slaves changed to him. So it would make perfect sense that people at the companies he was looking to invest in were going to sit down and have a meeting with him. However, there is a line in one of the emails around this same time where he says, I'm going to have Andy back on my island this weekend. Some people are trying to defend it by saying back might have been a mistype and that it was actually meant as I'm going to have Andy back on my island. I don't know about that one. So I thought, how could we determine the probability? So I did a little vibe coding and decided to go through the entire DOJ email dump of Epstein files and tally up every single one of the spelling and grammatical errors and put them in a category. There are numerous spelling errors. There are numerous times in which he did not capitalize a name that he should have capitalized. And he did have a tendency to sometimes nickname people. However, if Back was an accidental capitalization, then in all of the Epstein files we have right now, he did that one time and it was with Andy back. Now, did he go to the island or did he do something terrible?
How on earth would I know? But with the conversations happening around that time, with the fact that he was investing in the companies that they were talking with. Amir Taki, who is also a prominent bitcoiner, who would have known the name, that being a reference to Adam Back makes the most sense. And Austin Hill, another co founder, was mentioned as part of the same meeting down. Does this mean that they're totally compromised and he has them on a leash forever after? Well, my smell test says if something really unbecoming happened at that meeting, then they probably wouldn't have been so quick to just a few months later, forcing him to divest from the company. But I'll be honest, that's not a lot to go on. No matter how you twist it, hanging out with Jeffrey Epstein is not a good look. So now the important thing is, can we connect this to the block size war? Let's put it all in the timeline.
Almost nothing happened in the block size war in 2014. It was mostly just bitcoiners arguing in general, which is all bitcoiners do, really. First major lines drawn in the block sized war weren't until the end of 2015 and the beginning of 2016.
This is when the community really split and it started getting vicious.
[00:18:09] Speaker A: Well, you have bad hair.
[00:18:15] Speaker B: What did you say? In 2016, things started happening very rapidly. Agreements, companies showing support, making accusations, public attacks, promises made that nobody could really keep, various clients gaining or losing support on an almost monthly basis. Now, before we do this, let's go over the ground rules. The 2017 is when the veritable hit the fan. It was the actual war. Not a week went by without some sort of major development or Scandal or claim or new client. If I am to believe the conspiracy. This is when Joy Ito, the major players at Blockstream, and Epstein and the government were in their deepest of cahoots. This was the plan in execution. This is when everything came to a head. Epstein's planning forks sewing chaos, pushing developers to side with certain people or clients. Which arguments should they use. Spinning up fake nodes and bots to attack the network supporting the uasf. I mean, flaws in Bitcoin, XT to crash the network and waiting for the right moment to execute everything so they can capture Bitcoin, keep the block small and destroy its future from ever becoming money and relegate Bitcoin to forever be a stale, unscalable, digital rotten boy that escalated quickly. So how did all their communications line up? From what I can tell, Austin Hill corresponded with him 15 times in 2014, basically just talking about investments. 2015 there were 21. In 2016 there was zero. And in 2017 there were 12. What did they talk about in 2017? Two different threads. One about investing in his and Brian Bishop's side projects and about Epstein's idea to make Sharia coins. Oh, important note. Austin Hill left blockstream in 2016. What about Joy Ito? In 2014 there were 140 emails. In 2015 there were 92. In 2016 there were 35. And in 2017, when the vicious war was minute to minute, there were zero.
It just doesn't add up.
Here's the most important piece of this little puzzle. In the hundreds of emails and documents I've read, Epstein never once gives anything even remotely close to an opinion about the block size war. There is zero discussion of forks or plans to support or denounce anything, or discussions of who to use to broadcast what message, or anything that could even be remotely considered a legitimate opinion about how the protocol even works. In fact, the major email that everybody's pointing to is from Joy Ito to Epstein. And what's the context of that email?
He's explaining the basics of client development like he's speaking to someone who's never heard about it before. It's basically what you might find at the introduction of a Bitcoin development section of a Bitcoin for Dummies book. And what is Epstein's entire response to this? Gavin is clever. That's it. In fact, something I've found across the board is that Epstein had very little to say about all of it. There's hundreds of one sentence responses that share nothing of consequence from his side. Nearly all the discussions sound to me, like people reaching out to him, pointing him to cool ideas and projects and hoping to get some money. But again, let's not leave it to that. Did he fund a particular side of the debate?
So $500,000 went to Blockstream in 2014, but he divested from them just a few months later.
850ish went to MIT. Some of it went to student grants. A lot of it went to bitcoin development. Which developers were mentioned directly? Gavin Andreessen, Corey Fields and Vladimir von der Lan. What were their stances on the war? Vladimir was a reluctant small blocker. Almost all of his opposition was about the risk of a rushed and contentious hard fork, which as I mentioned at the beginning, was half of the debate. Corey Fields wasn't really public about his position at all. His work was mostly focused on infrastructure and tooling rather than protocol direction. But I'm pretty sure he was a small blocker. What about Gavin? Gavin was quite possibly the single most significant voice on the big blocker side of the war. He coded and released one of the most prominent big blocker clients and had discussions with the largest bitcoin miner in the space about Bitcoin Classic. They actually discussed committing $100 million to openly attacking the legacy chain if the small blockers didn't adopt the fork they wanted. What about Joy Ito and mit? Numerous times Joy Ito talked about how important it was for MIT to remain neutral and not worsen the controversy. He only briefly share his concerns about the process of implementing a hard fork without overwhelming consensus, which you can still read in an article on Bitcoin magazine. But wait. Epstein also invested $3 million into Coinbase. Coinbase was the largest exchange in the world. Might still be, I'm not sure. And one of the most consequential signers and organizers of the closed door New York agreement, the one where they tried to force a fork of bigger blocks. Their CEO Brian Armstrong even said they needed to work behind the scenes to take away influence from the early ideological developers. They were openly talking about firing the developers and wrenching control of the protocol away from the current community and using their majority hash rate to attack the network that didn't follow their rule change.
In other words, hijacking bitcoin. So if Epstein really was trying to hijack bitcoin for the small blockers, there's a few questions we have to answer. So if Epstein really was trying to hijack bitcoin for the small blockers compromised Blockstream took control of the developers to force them to go along with his plan? Why were two of the main developers not even prominent small blockers? Why was the single most prominent developer he paid for on the big blocker side? Why invest six times as much in Coinbase, the most influential big block corporation? And why immediately divest from the small block company that was supposedly at the center of this big brilliant plan, while staying invested in Coinbase all the way into 2018? Why is joy explaining the basics of bitcoin development over email? Why are all of their conversations basically just people asking Epstein for money? Why are there no plans or detailed discussions or updates on what's happening? Any mention of nodes or clients or a specific proposal? Why did the word segregated witness one of the most controversial and most talked about about pieces of this whole debacle for three full years not show up one time in any conversation? Why is 2017 utterly empty of any correspondence with anyone? Why would he make such minor investments in Bitcoin compared to his enormous general fintech investments, if this was all a huge and critical focus to ensure that bitcoin didn't stop their dastardly plans to control the future of CBDCs? So how exactly do we connect all of the things that Epstein invested in and said to the small blocker side of the argument? You just make it up pure fiction. It's fiction. We made it up. There's no indication in any way whatsoever that he had any opinion on the block size war. The only thing seemingly concrete that I've seen anybody point to is a throwaway comment in an interview where he said it was digital gold. Which takes us back to the beginning. That was not what the debate was about. That's what big blockers say in hindsight to make themselves look like the good guys. It had nothing to do with about whether to scale Bitcoin or not. It was about how to scale bitcoin to keep it decentralized. And honestly, it's a perfect example of projection. We thought we were at the center of the world and making the most important protocol decisions for the future of humanity. But you know what? Most of the world probably thought nothing because they had no idea. And the few who did probably were thinking is wrong with these nerds? If I was trying to be impartial, I would say that all of Epstein's investments look to me like trying to throw at the fintech wall and hoping something sticks. If you want me to put my conspiracy hat on, I think there's a much better argument that Epstein was a big blocker and he tried to hijack bitcoin and Failed. But I don't think that you want to know why, because there's no indication that he cared one way or the other. And he just threw some money at Coinbase, which was the biggest exchange. So of course you throw some money at Coinbase. And Blockstream was a big deal in development. So of course you throw a little bit of money in Blockstream. And MIT was full of all the tech bros. So of course you throw a little bit of money at mit. So why do the big blockers need this to be about the block size debate? So they can just say that the people who won are evil and they don't actually ever have to argue the technical merits. And the reason you don't hear small blockers talk about Epstein being a big blocker trying to hijack bitcoin is because we actually have the technical argument on our side. We don't need some stupid conspiracy to prove our point. The simple fact is that bitcoin has been full since the beginning of nefarious and conflicting actors, tyrants and freedom fighters used for selling drugs and surviving sanctions, protesters and authoritarians, libertarians and socialists, republicans and anarchists, cipher punks and crypto bros, scammers and whistleblowers. You could go on for days. That is exactly what it means when we say bitcoin is money for enemies. Even though there are some of the craziest or nefarious people in bitcoin, you can run a node and know without a shadow of a doubt that they can't change the rules objectively.
What happened during the block size war was that the big blockers wanted to change the consensus rules of bitcoin. They got dozens of the largest and most prominent companies, a ton of the hash power to force the most contentious change in bitcoin's history at the height of of the fight over it. But too much of the bitcoin community refused to go along with it and it failed.
That is objectively what happened. So did Jeffrey Epstein hijack bitcoin? Of course not. And I don't sort of know that I can check my node and prove it.
But anyway, that's just my two cents.
[00:29:18] Speaker A: All right, guys, I hope you enjoyed that one. Any feedback is very welcome. Any details, any questions and I will catch you on the next episode of Bitcoin Audible. Catch you on YouTube if you want to watch the video and or socials X and Noster. And until then, I am Guy Swan. This is Bitcoin Audible.
And that is my two sets.
