Read_900 - A Flood of Censorship, Inflation & CBDCs, and an Ark [FFR 80-86]

[00:00:00] During the event, attendees paid with lightning as usual. But ARK powered the transactions behind the scenes. [00:00:08] This was ark's first mainnet deployment. It offers a glimpse of how activists and dissidents might one day use ARK to achieve low cost and accessible Bitcoin payments. Even as demand for Bitcoin transactions grows, this milestone brings ARK closer to to real world adoption. [00:00:30] The best in Bitcoin made Audible I am Guy Swan and this is Bitcoin Audible. [00:00:53] What is up guys? Welcome back to Bitcoin Audible I am Guy Swan, the guy who has read more about Bitcoin than anybody else you know. [00:01:01] All right, so we are getting into I wanted to do I wanted to pick a single Financial Freedom report that I just thought had kind of the best collection of events or news or tools more recently that I was kind of like most excited about. But I found myself when I was kind of digging through savings one of the sections or wanting to highlight one section in literally a number of them. And so I decided actually let's turn this into kind of a guy's take. And I actually just want to cover hit random things items from a handful of various issues of the Financial Freedom Report because there's just a lot I really kind of want to talk about real quick. A shout out to Leden Ledn IO for making simple, boring, easy Bitcoin backed loans. I've mentioned this a few times, but I became a customer of theirs when I started into the basement project here at the house which has been all kinds of chaotic. But I took my loans out to get this project done, which is still not done. Back when bitcoin was in the $40,000 to $60,000 range, if I had instead just sold my bitcoin it would have cost me almost three times as much in BTC to actually do this project. But today I still own that bitcoin and I'm going to get about 2/3 of it back. Now of course look at all the fine print do all the due diligence. They have everything completely open. They do monthly open books, they have proof of reserves twice a year. All of the details are explicitly laid out. And of course bitcoin price doesn't always immediately double or triple in price after you take out a loan. There are absolutely times where you need fiat and you really it's just not the time to be selling any bitcoin. And there's and this becomes an incredibly useful tool especially for those on a bitcoin standard. Check them out. I actually have a special link with a minor discount to your interest rate if you use the one right down in the show notes. Also check out synonym and the protocol stack that they are building. They have PubKey P U B K Y.app which is kind of their showcase for a fully fledged product that is using their various tools. They are using tried and tested test technologies to re decentralize the web. I've got the link down below plus my pub key so that you can follow me and check me out up there. And then of course your light health at Getchroma co. And actually the light that I've found myself liking more than anything recently for some reason just because I can like carry it around, it's battery powered is my skylight mini. I can switch it any percent between daylight and full amber light. And it's got a basic mount so I can basically stick it on all of my camera tripods and my little mount. I can even put it on my mic mount actually. But I don't know, I just wanted to point that out because I've been using that one like a lot the last few days. It's been a great nightlight when I put Rad to sleep because I can just take it. I have like little diffuser on it and I can just take it and I can sit it face down on the top of his dresser and then after I get him to bed I can just pick it up and take it out. I really kind of geek out on things that I can use for like 10 different purposes because then I just go right back and sit it on my mount and now it's a light for my video. And anyway, check out Get Chroma. They got some really cool stuff and you got a 10% discount with code Bitcoin audible. [00:04:17] All right, so let's get into it. I'm pulling this from I think I got like five or six of these Free of Their Freedom Report newsletter. This is, by the way, the Financial Freedom Report by the hrf. I'm sure you've heard me talk about it. And the Human Rights foundation is also supporting the show and I am immensely grateful for that. But then just in general, their Financial Freedom Report is a fantastic way to stay up to date on both the fight for freedom around the world, where to watch and see what the outcome are of certain measures taken by governments around the world, and to see kind of the dominoes falling and what the best. You know, it's only through information and story and understanding what's happening in other countries and how people are fighting back, both from a policy perspective. And then also from a very practical perspective, we need to learn from each other in order to prevent us from going down the wrong path. But. But then also just what those tools are and what the new tools that are coming out that people are trying to use, how they're using it, and what issues and, or benefits that they're getting from the new tech. So anyway, the first one that I want to hit is actually from Financial freedom Report number 80, and it's about something that we've talked about for a really long time, and it's happening in Russia. [00:05:30] Russia tracking Bitcoin mining via national registry Russia launched a national registry to track bitcoin mining equipment three months after the proposal was first floated by its Ministry of Energy. [00:05:44] The move is designed to monitor energy use, enforce tax collection, and stamp out unregistered operations in key mining regions. A separate law, still in draft form, would also allow courts to seize digital assets linked to mining deemed illegal. [00:06:01] Miners who fail to comply will face fines of up to 2 million rubles. [00:06:06] Six regions are already under a full mining ban until 2031. Overall, Russia's new bitcoin mining registry poses serious risks to financial and civil liberties. By forcing miners to register equipment and comply with rules under threat of asset seizure or closure, the Kremlin gains greater surveillance and control over Bitcoin mining in Russia and offers a potential blueprint for other authoritarian regimes. [00:06:32] Okay, this is something we've talked about forever, that this was likely the route that was eventually going to be taken. And one of the things that I remember reading into as this was starting to unfold is that there were actual comments from people within the Russian government that were translated. I'm assuming that they were translated accurately, but I was reading in kind of the spattering of details that I was getting around this story is that they explicitly were talking about how if we, if we simply ban it, there will still be a lot of mining going on and that it's better for us to build a registry to try to track it so that we have a bigger or a better and more thorough image as to how people are using mining in the country. And so that we can track and know we have a better insight on what's happening with the bitcoin inside Russia. So the example of China and banning mining, which basically in a, in a period of about six months, took about two thirds of the hash power of China, it picked up, left China, and essentially went to North America. I think it gave a great example of why simply mining, simply banning bitcoin mining isn't the route to take isn't the best route for nation states to go. And they're not stupid, so they're not going to continue to do stupid things. What they want is control over the capital. What they want is insight over what's happening. And I think energy is the easiest excuse for most nation states to say this is why we're doing the right thing for the country. And it's just, it's just going to be their excuse. Right? It's the whole climate change thing. It's the agenda of more power, more control, more money through government, more money printing more debt. All because insert big terrible vague problem here. And obviously the only solution is more government power and taxation. This is also why the mining pool problem is, is such a concern. I mean granted there's a number of different reasons why it's a concern, but if the mining pools, if you can just go after the mining pools, the degree to which those, those mining pools are a threat and are a problem for the Bitcoin system is the degree to which the mining pools have control over what the miners are doing. And this is why I cannot talk about datum or stratum v2 enough and why I think they are the most important things in Bitcoin right now for Bitcoin's decentralization and longevity because this is a simple attack that nation states will do en masse and understand. I also don't think all nation states will do this. They will have incentives to. But there are also counter incentives where if you want mining it's going to be easier to get it if you don't do this, if you don't make it appear as if you're about to confiscate all of their mining equipment. And hopefully the people aren't so stupid that they keep falling for this trick. Because we had Mauricio on the show, one of the co founders of Leaden was in chat 135 do one thing and do it right. I'll have the link to that in the show. Notes 1 But he talked about their experience in Venezuela and one of the things that got me about the story that he went which is an absolutely fascinating story but one of the things was that Venezuela came out with all this oh, we're friendly to Bitcoin and mining is going to be great and all you need to do is register and we're going to have our own oil coin. [00:10:03] Just all this stuff. There was this apparent embracing of it and everybody kind of got excited when. But this was exactly the Entire purpose of the registration was just so that they could strong arm the miners later on. And that's exactly what they did. And it's exactly what happened to Mauricio's brother. And this is exactly why also under the table mining is so important. This is why heat punks are so important. It's never going to be the majority of the network, at least I don't think so. But it could be a significant enough portion to be one of those things that stays under the radar for a long time. And even though I will have traditional heating in my house, probably, I will always heat my house with bitcoin miners. In fact, I'm looking at another miner right now that's just designed as a heater, the Avalon. I can't remember the one of the tabs over here is open and it's the Avalon space heater, which I also have my S9, but I would like something that I can do S9 and my actual cryptocloaks case. [00:11:02] But I would also just like something that I can. I don't know, this more cohesive, looks more like a product designed to be a heater and just happens to mine bitcoin. But going back to datum and stratum v2 is that this is the core issue, I believe the, or the the most important far and away risk of where mining pools hold extreme amounts of power over the bitcoin network and not over individual miners over the network itself. Because miners are not running full nodes. They are not constructing their own blocks, they are not deciding what goes into bitcoin. They are hashers that are renting their hash power. They are loaning it out to centralized mining pools. And that needs to be fixed. Because the degree of risk of, of registered mining pools of KYC AML mining pools and the degree of control they have over the actual people who control the hash power itself and are using the energy, this means that heat punks themselves using mining pools are at risk. Which means that it's not even really helping to decentralize the network. [00:12:15] Even though the energy itself and the mining infrastructure itself is distributed all over the world or specifically distributed in places that are much harder to control or to have visibility into. But if you still have to KYC AML to the pool and the pool itself is still controlling what you're hashing, then really kind of like 90% of the reason we want heat punks and we want people using miners for heat and we want small amounts of miners all over the place and you know, thousands of different homes and garages and all of these things that the very core reason why that's such a huge benefit to decentralization is kind of moot. If we're all using centralized mining pools that the government can say this is what you have to mine. And the hashers themselves can't really do anything about it. And all they can do is actually react after finding out that their miners are potentially contributing to an attack or potentially contributing to censorship. So this one's a really important one to keep a close eye on and also is to. And this might be something where we have to be very careful and we need to talk to other Bitcoiners and you know, have private conversations because a lot of this stuff might not come out on Twitter very easily or, you know, it might be a very significant risk to certain people in order to, for, for some of the information to go public. But watching what happens to mining in Russia, for the mining that does stick around inside of Russia due to a policy like this and how this, how the industry itself and how the miners themselves react to a policy like this and what people can do to actually get around it and still mine, quote, unquote, in the dark. I think this is a very important one to keep a close eye on. And actually in that. And this is something we talk about in the roundtable as well, which should be coming out on Wednesday. But this actually leads me to one of the major developments in Bitcoin tools that was in the Financial freedom Report number 86. [00:14:19] Block Incorporated introduces proto Rig and Fleet Block Incorporated, a company co founded by Jack Dorsey that works on permissionless financial tools, released its latest project, the Proto Rig. It's a modular Bitcoin miner built for accessibility. It has easily swappable parts that can be replaced faster and used for much longer. The Proto Rig also comes with Stratum V2 built in. Stratum V2 enables miners to build their own block templates. This reduces reliance on large mining pools and contributes to Bitcoin censorship resistance. Alongside the new hardware, Block announced a free open source software called Proto Fleet that helps people run all their Bitcoin miners on one platform. These tools lower the barrier to entry to Bitcoin mining, making it easier for dissidents and individuals to contribute to and strengthen Bitcoin's decentralization and freedom properties that many of them ultimately rely upon to continue their work. [00:15:21] This is so many things fixed at once. So let me tell you a little bit about Proto Rig and what they're doing with their miners. First off, they are Price competitive with, with the next gen bitmain miners. And that's just straight out the box. I think they're still like second in line for price per terahash. But here's the thing. The entire thing is modular. There are three units per mining cage, I guess so to speak is the way to put it. The fans are a separate structure as part of the cage. The Internet connection is separate and you plug the ethernet in to run for three separate miners. The power supply is part of the cage and the mining boards themselves, the hash boards are actually hot swappable and there are three different boards per machine. What this means is that all of your infrastructure is not tied to your hash boards. So right now if you have a bunch of bitmain miners, you have what's miners, whatever. Basically any mining, any ASIC available for sale has all of its major pieces in a single unit and all of it is basically locked in together. You have to break out screwdrivers and pry things apart like to get into it and actually do any sort of maintenance. You still have to remove. The entire rig has to be removed. So if you lose one, not even a hash board, if you lose one chip and you actually want to fix it, as opposed to just leaving it in there in a diminished state, Every other chip in the entire device, plus your fan, your, your Internet connection, your, your power supply, your case, all of it is out of commission to replace this one chip or to fix this one hash board. And importantly, it's out of commission for a while. And even if you can just break it out and you can fix it yourself, it takes significant amounts of time to replace a hash board. But rig is entirely modular. [00:17:20] You have three separate hash boards which are literally like slide in, slide, shunk, shunk, plug and play hash boards that click in, that lock in to the casing so that all of your infrastructure, the power supply, the cords, the ethernet, the fan, the case, all of it is just infrastructure. You set it up once and then you can just. If you have any problem with a single hash board, you just take out the 1/ash board and either replace it or, or repair it and at most a third of your machine is down in hash power until you make the fix. Or if you've just ordered a replacement, like let's say it's lost like three chips or five chips, they're damaged for some reason in this one hash board. Well, you can keep it hashing at a diminished rate and then just order a new hash board and when it comes in, you just slide that one out and slide the new one in. And now you're hashing at 100% again. And you can repair the hash board this damage and then put it back in. But you don't lose, you don't lose mining while you're in the process of doing maintenance. And note that you can do the exact same thing when you upgrade your hash power, when you upgrade to the new version of the chips. Now put this sort of a setup in a house for home mining, for heating or a heater in your living room that you don't have to replace. You don't have to build an entirely new heater or buy a new one or, or if you're doing oh, and it's also immersion ready by the way. So you use the same unit, you don't really change anything. If you want to just drop it into an immersion tank. So if you're using an exchanger or a, you know, I don't know, a radiator, whatever you want to call it to heat pool water or something like that, any of these other alternative use cases or heat based use cases, you don't have to be stuck with an ancient miner. Like for instance, like right now I have what's miners M30s which were doing pretty good at the start for the first winter that I had them, but today they're not going to really do that much. They're going to be way, way less profitable. Now imagine if I could pay for 60% or 70% of the cost of the miner and just get new hash boards and keep my cases and importantly I don't have to remove my cases from their, from the setup from where they, where and how they are heating my house. I can just swap out the hash boards and keep going. [00:19:46] That would be freaking huge. [00:19:48] That would mean that all of that infrastructure that you know, a bunch of heat punks or greenhouses or anything, anything that's set up in any alternative use case for the mining heat or for mining just in general can actually stay up to date without these massive structural changes and updating of machines or just permanently keeping old machines because it's just too hard and too costly to make a change or make an update. This just knocks out so much cost and headache and maintenance time and frustration and deconstructing and reconstructing of all sorts of infrastructure and devices and use cases for mining or heat or all of these different things ongoing into the future. [00:20:37] And then of course you have an open source fleet management for miners that can be easily self hosted. The this, this is absolutely without Question in my mind going to be the standard. [00:20:51] This is what mining has needed for a really long time to make it more mobile isn't really the word. Well actually mobile is part, partly the word, but really modular modular. The fact that it is modular encases so many different benefits to why modularity is more efficient, why it is more adaptable, it makes it broader in its use cases and importantly it makes it easier for other people to work with it. Like imagine. And I don't know exactly how, I haven't dug into the specifics of like are they trying to make it so that the connection for the rig miner, for the hash board to the thing is somehow proprietary or is that open source? Because they talk about open source a couple different times, but I'm not sure. [00:21:37] I have no doubt that their chip is probably not open source. But I do wonder if it wouldn't be possible to have somebody else produce aftermarket or a third party hash boards that plug into a proto rig case and unit or vice versa. Somebody who makes cases and units that are different and you can plug a proto rig hashboard into it. I suspect. I would really like to think that they're smart enough to actually do that so that this becomes a standard. Because if you can create a standard like this, this means that you can have infrastructure ready to go all around the world that might even be usable for other use cases. I mean it's not as if ASICS could be the only possible compute use case that you could put into a machine like this. But just think if somebody could actually set up the infrastructure and set up the casings and the supplies and everything with, with you know, one generation of miners and then someone can come in and actually buy their facility ready to go and in a day or two basically have everything swapped out to their new, to their new hash boards and be up and running. This just feels like to me the next major leap and how, and importantly this will also kind of mature the capital markets in mining because the infra setting up the infrastructure, setting up the, the capital equipment needed to mine is actually separate from the miner. This is just a really cool development and I think it will, I think this will be another boon to the decentralization and kind of spreading out of the availability and the capacity to mine in various locations and to do so more efficiently over longer spans of time. You know, the hash boards are probably, they're probably like 80% of the cost, maybe even 90%, I don't know. But let's say, let's say you're saving 10% to 20% somewhere in that range for ongoing upgrading costs. And, and importantly that compounds every single era or every single new series of hash boards that you continue to use with the same infrastructure like that adds up really quick after a few generations and it just increases the longevity and the utility of a setup like this. Because I'm just a few years in and mine's already kind of reaching a place where it's like, I mean obviously it's still useful and I can still continue to do what I want with it. [00:24:09] But it would also be really nice to be able to update my hash boards. But I don't want to buy. [00:24:14] It's going to be a problem to get an entirely new rig. So I'm unlikely to do it. I'm just going to run them on low power so I get the most efficient use out of them as possible and you know, keep them warming my house all winter. I don't know what I might do is if the market, you know, explodes upward and we have like another cycle, I might get rid of my miners for whatever the slightly inflated price is at the time of kind of the, the boom of the cycle and then put that toward some sort of an upgrade which would probably be something like the proto rig. But I don't even know if you can get like one unit or two units at this point because it's, you know, it's just quote unquote contact sales to get pricing and details and all of that stuff. But this is just super, super exciting. And it will also make the aftermarket or the kind of peer to peer market and the OTC market for mining and mining equipment way, way better too because you know, it's like a computer. Like it's one thing to just be able to like, oh, I can pick between this computer and this computer and this computer in, you know, ebay sales or Facebook marketplace or going to kaboom racks. But now I can get a psu. It's like a custom machine except that everything just kind of like slides and snaps together and I can get better fans. I can replace my psu. I can just go on and get some new hashboards. I can get one new hash board and have the other two hashboards still be the old ones and just, you know, wait until I have the income or the capital necessary to go ahead and put them, put it into new hash boards. It's just going to make the market itself way more rich and more specialized. I believe this will be a standard and we will probably see Whether or not Proto makes it so that you can easily build alternative devices or chips or boards or PSUs or whatever to easily plug into this, whether or not like all of their frame and structure is open source itself, somebody else will do it. I would like to think that Block does it just in kind of the same way that, you know, Tesla open sourced their connectors and their, their charging stations and all of that stuff. Why? Because that meant everybody else built charging stations for them. Everybody. All the other car companies that are trying to build electric cars. And it was a perfect move. They immediately, here's a standard. Tesla's already figured it out. Tesla's already got a whole bunch of charging stations around. Now they don't have to build their own infrastructure and this giant network of charging stations so that Tesla owners have somewhere to go to plug in, it becomes the USB of electric cars. And in that same way, I would love to see Block and the Proto rig basically become the USB standard of all of these things and enable this in this depth of modularity markets for all the other potential use cases or specialized setups that people could have, because it is inevitably going to extend mining into kind of new areas of environments that it can easily get into alternative use cases for heat that it can get into and increase the longevity of those remaining viable and relevant for maybe even decades to come. So just really stoked about that one, to be honest. [00:27:38] All right, now there's another one. There's actually a number of different stories about CBDCs. Like Rwanda has actually revived their CBDC plan. [00:27:46] But there's one specifically about Pakistan that I want to hit and something around that that I just want to riff on for a bit. So let's jump into this section. This is From Freedom Report 86. [00:27:59] Pakistan develops digital Rupee in partnership with Soramitsu the State bank of Pakistan is partnering with Japanese blockchain firm Soramitsu to pilot its rich digital rupee cbdc. The move comes after the State bank of Pakistan, or sbp, Governor Jameel Ahmed's announcement of a national pilot launch in July. Officials claim the currency will enable cash like transactions in underserved and low connectivity areas. [00:28:28] At the same time, Parliament is drafting a national Bitcoin policy and reserve. The recently passed Virtual Asset Regulatory Authority also grants sweeping oversight of all virtual asset providers and digital tools. Framed as financial technology progress, these steps arrive alongside rising Internet shutdowns, online censorship and expanded digital surveillance. In practice, the digital rupee and adjacent regulations equip a repressive state with the capacity to monitor transactions, block access to funds and suppress dissent. [00:29:02] Okay, so there's a couple of things to unpack here. First is Pakistan is drafting a national bitcoin policy and looking into a bitcoin, a national bitcoin reserve. Now this, on the, on the note of the reserve, this is one of the things that I've increasingly feel like we're seeing is that a lot of states, a lot of nation states are actually making plays for this, but it's low on their priority list. I can't remember. We just read a piece, actually, I covered something on the show very recently that was talking about this, and I can't remember exactly what it was. Maybe it was Roy Scheinfeld's USDT on lightning, I don't know. But one of the pieces we covered recently talked about this and it, it struck a chord of something that I've been thinking for a while and I thought it put it into good words, but that this is going to be a low priority for nation states. And most of it's just seeing like, oh, we're technologically advanced. You know, it's like kind of, it's like politically useful. [00:30:00] But you know, with huge, with wars going on, with, you know, really serious conflicts and changes happening in just technology in general, with AI and with monetary infrastructure changing, just this idea of like, oh, we support bitcoin or we have a bitcoin reserve is really going to be on a low priority list. It's not, it's going to be seen as this nice to have where we have all of these really need to deal with problems in the way first. And sure, we're going to be technology focused or whatever, but only a small subset of people who are actually motivated inside these governments of nation states all around the world will actually care about moving the needle on these, whereas the leaders and the establishment at large will just be kind of like, okay, yeah, we're sure keep, you know, keep making progress on this. Maybe we'll vote on it. But we have big, we have real problems to deal with. You know, very much the mentality of, you know, Trump's comment at bitcoin at the bitcoin conference the year before last was, you know, and all the other things, good luck with your bitcoin and all the other things you're playing with is that it will be seen as just kind of like this little thing. But I think smaller nation states will start to adopt this quicker because it will actually make more of a difference for those nation states, like the Kingdom of Bhutan, like the United Arab Emirates, which news just came out. And I think this was actually in one of the financial freedom reports, actually I learned this. [00:31:32] I don't know which one it is. I'll see if I can find it before we finish this episode. But regardless is that the United Arab Emirates now actually holds an enormous amount of bitcoin. It was discovered or revealed and maybe this was actually kind of old news and we, it's just like update. And now we kind of like have a better idea of how much they have, but they've been mining it with a ton of their excess energy reserves or excess energy production and that the amount of bitcoin that they have is actually very meaningful for their gdp. And they are continuing to do this. And understand this is very similar to the story of the Kingdom of Bhutan is that they did this really quietly. And I think this is likely to be the case and it will not be loud, it will not be clear how big of a difference this is making probably until we're into the midst of a massive bull run like a, like a hype cycle, top of a bull run. And it's recognized that small countries that invested 10%, 20% like energy, excess energy and all of these things into mining bitcoin suddenly have enormous portions of their GDP or enormous portions of their national debt in bitcoin reserves. And that will probably kick off in the next cycle. This is why I still think we're five to seven years away before nation states really, really take this seriously. And this is kind of the corporate era, this is the institutional era where I think we'll be looking at retirements and pensions and you know, just benefits in general, like potentially having small savings accounts or where all retirements and stuff like I think I just saw something recently about strategy is might be getting approval this week for being in the s and P500 and they've apparently quote unquote qualified to be in the s and P500. And that means by default tons of retirements are going to be invested in strategy and in and you know, by proxy have a hand or have a, an attachment to the success of bitcoin. So the next few years are going to be really, really interesting and I think it's going to be most interesting for small disparate governments that kind of do this kind of quietly. Now the interesting thing about the stablecoin stuff and the CBDC of state run electronic currencies, quote unquote is the fact that I don't think this helps small currencies. [00:34:06] I think this is going to be a. And I don't know what else they would do though in that, outside of just like trying to embrace bitcoin as the national currency. But that means that the state is going to admit that they want to be, you know, they want to have austerity and they don't want to go massively into debt and they don't want to print their own currency and governments just don't tend to do that. So I think they're going to try to make their, their cbdc, you know, the one that all of their people have to use and you know, expand access to all of the quote, unquote underserved. Because underserved really just means under enslaved of, you know, capital controls and the ability to slowly and persistently steal from those individuals. So getting them into the CBD system is a great way to spread out the network that you can inflate capital out of. But I also suspect a lot of these countries are starting to see pressure because of use of things like cbdc, excuse me, of USDT of tether. But here's the thing. As these, as the access to these networks start to merge, as it becomes easier to use US dollars in Pakistan or Rwanda or Venezuela because they can just use stablecoins and as the US introduces and makes use of stablecoins in the US banking infrastructure and as these become tied to lightning or bitcoin in the fact that there's just networks that can easily swap in and out of these, I think this is a disaster for small currencies, is this will greatly expand the networks of the largest currencies. And I think this will actually grant a sort of second wind to the dollar. But I think it will be a last wind, a just kind of a last breath of the dollar's success before we start looking at a true monetary shift on a global level. And 10 years out we're talking about nation states and bitcoin. But basically every week in the Financial Freedom Report, there's some new news about CBDCs and extending programs and pushing new pilot programs and all sorts of stuff like this is a push. I don't see this slowing down, especially with the rise of stablecoins being so politically acceptable now. I guess the fact that the US has made a bid for that and with the explicit purpose, with the stated purpose of expanding access and expanding the network of the dollar, which I think they are right to think that would be a huge help for them. I actually think we're going to see something like this make its way up the ladder of the priority list for a lot of nations around the world. [00:37:01] Alright, so another item. This is from Freedom Report 83. [00:37:06] This is about a full node implementation that I did not know about until I read it here and Jameson Lopp actually brought it up underneath a post that I had on Thing noseder, but doesn't really matter. [00:37:20] Florista adds encrypted peer to peer and Testnet 4 support Florista, a lightweight Bitcoin full node implementation powered by Utree XO, released version 0.8.0 adding support for BIP 3.24 BIP 3.24 is an encrypted peer to peer transport protocol that allows Bitcoin nodes to communicate over encrypted channels. This is a major step forward for improving privacy and security at the network layer, helping protect metadata like IP addresses and node connections. The release also includes support for TestNet 4, Bitcoin's newest test network for dissidents running the Bitcoin software, the RESTA provides a lightweight and now more private option to do so. It continues to lower the entry barriers to running Bitcoin, helping make the network more decentralized and censorship resistant. [00:38:14] The big thing here actually is just that I wasn't even aware that there was a client out there using utrixo, which I'm kind of excited to see, because utrixo is that ability to it basically turns the entire UTXO set into a hash table to a hash tree, so that you can essentially get one hash from your from any other full node, from any other Florista client that you're connected to. You can get a single hash and you know whether or not anything in the UTXO set is valid immediately. And you know, a hash basically is the size of a Bitcoin address. Like it's a tiny amount of information. [00:38:53] But you can compute that if somebody sends a transaction, you can actually know by hashing the transaction before it the UTXO in question that's being spent, and know if it's in the hash table that has been created in the utrixo root. Now in this instance, obviously it's like a light client. You're trusting whoever sent you the utrixo ute, excuse me, the root hash. But the thing is, is you can obviously run a full node and calculate your own root and obviously make use of it yourself in a totally trustless way. But the big thing is that bootstrapping a new node to connect to and get the current state of the network is not only more private, but it's also just like so much faster. You're not even having having to pull in blocks yet to go ahead and just start normal operations. [00:39:44] And this is something that I was really. I'm just been surprised that people don't think about when it comes to a node implementation or making use of a Bitcoin node and actually having it be something that's useful to the user, to the one running it. It's to start it up as a light client and get it running in seconds. So it's like boot up, bam, you can use it. Here's your transactions, here's all your stuff, here's your utrixo root. And now you can know whether or not your transactions are part of the blockchain. You can go ahead and start requesting that information in the background and you can sync the entire thing and prune the entire thing ongoing while you're using it. And that, shockingly, this is not. [00:40:25] This isn't the norm for all of them. And I get it from the context of like, oh, it's about security and all of this stuff, but literally all you have to do is have a checkbox or like a shield like you do in your freaking URL. Because people just want to use Bitcoin and know that they're getting the most secure option that they can. The idea of making it unusable until it's secure or until it's like a hundred percent fully sovereign, fully private, it's this. It's this. There's no spectrum of any of these things. It's just like black and white. You either have it or you don't. And therefore there's no reason to kind of like start to turn it on. There's no process in any of this. It's just you can't use it until it's fully sovereign. [00:41:04] I don't know, that whole mentality and everything about it just drives me crazy sometimes because everything is a trade off. Everything is a trade off. There's no such thing as a solution, there's just a different trade off. And like what a nothing trade off is that to just have it boot up and start working and get like a Utrixo root and have everything respond as quick as physically possible to get connected and operating on the state of the network as is and then fully verify everything after the fact. The only people that would even be susceptible to this were people who booted up and then started using millions of dollars worth of Bitcoin immediately and they happen to be under an attack or like an eclipse attack. I think that's the one where you have a whole bunch of fake nodes and they're only connecting to fake nodes and then sending them false information about what the state of the network is. And honestly, if somebody's just booting up a node for the first time ever and in seconds they're trying to send millions of dollars or accepting a transaction of millions of dollars and not waiting for confirmations or the sinking of their note. Like what the level of edge case that we're talking about and the number of people who would actually be vulnerable to this when, when hundreds of thousands, millions of people are just holding crap on an exchange or punching their seed phrase into an email that they get from somebody rant from coinbase support.dx.xyz. like this is just not the reality of either a significant risk or of something that's, that's even easy enough for a scammer or for an attacker to do. Like anybody who's thinking about being attacked at that level, like we're talking about nation state actors or huge corporate entities, they're not going to be rushing to boot up their node and make absolutely massive transactions or receive and then expect them, you know, deliver some of some good or contract or whatever. Like it just, it's just not realistic at all. Anybody who actually knows or is dealing with it at that level is, is just going to let the node sink. Whereas the flip side, the people who are using exchanges or completely custodial wallets, is that at least just having the one that's the fully sovereign option, the most secure option that they can have boot up and work as fast and as reliably and as simply as their custodial or exchange wallet option or even easier because you don't have to log into it. That solves like a thousand times as much risk as it puts them in. So, so why not just start there? [00:43:39] Anyway, I know that, I know there's a bunch of like software and wallets and stuff that do that. You know, it's not like, it's not as if this doesn't exist. It just, that whole mentality just, just gets to me sometimes because it just seems so, so focused on the wrong problem in my opinion. But yeah, I don't know much about Florista. I have just looked into this in fact, actually I believe the developer who's kind of heading it off responded said it's still a work in progress. Where is, where is this? [00:44:11] I've got a comment. One. [00:44:16] Okay, yeah, so Jameson said Florista is cool I said, I didn't even know about it. [00:44:24] Probably because Eric 17, 19, 27, 99 isn't a drama llama. I said, need to step up his game. He says, yeah, not a drama person. Also, I'm not making too much noise about it because it's a work in progress. I don't want users possibly burned with a work in progress project. [00:44:41] As far as I know it works. But we are writing a comprehensive test suite and testing it ourselves to make sure everything works fine. So just a client definitely to start keeping an eye on. And I love that somebody's actually taking a shout out to Eric, by the way, I'll have a link to his page or his Twitter so that you can follow him and keep an eye out for this client. Because I love to see somebody actually making use of things that are proposed and that are very beneficial. But then don't seem to make any like, you know, like test it, get it out there, put it in a client so that we can know how it behaves and whether it's a good thing to have or not. Because I think this is how you push core or not to get these things in. If it's clear that these are safe, they work in practice and they really do give the benefit that they are touted as. And then of course, having encrypted communication between clients so that you're connected to the node and they can't tell which transactions or blocks you're downloading, they can't get explicit information about who you're connecting to. It just starts. It really helps get the metadata leak from just having a node up and connecting and sending information back and forth. [00:45:58] It's, it's far safer. Again, every layer, there's so many different layers of privacy and security and it's only ever as secure as your weakest link. And this is why so many people like think that, you know, just running a, running a light client or a node and, you know, checking your own transactions and stuff is enough to be safe or to be private when, you know, there's a lot of old clients still that just reach out to the network and just request, hey, I'm looking at this utxo, can you give me all the details about the balance? And you can just kind of make the assumption on the network, if you can see people's traffic, you can say, well, he keeps requesting the information from this address, this address, this address and this address. And he's done it like five times in the last two weeks. Those are probably his addresses and those are probably his balances. So it's just good to see progress at basically all layers of the stack and the network, the network layer and the metadata layer and the transaction layer, which actually there is another. I think this was in the Same Freedom Report, actually. 86 Clarista no, that was 85. [00:47:04] Okay, 86. So in Freedom Report 86, Ginger Wallet, which is an open source, non custodial bitcoin wallet for desktop, added coinjoin functionality to strengthen activists financial privacy. So that's one I didn't know about either. I had heard about Ginger Wallet, but it's just really cool to see Coinjoin start to make its way into other wallets. I've been a big Wasabi user for a long time. I think it's a great way, especially if you're on a bitcoin standard, to kind of separate, you know, savings or stuff that you do with, you know, people regularly. Like, let's say I'm constantly transacting with one particular person or one particular balance or institution or something like that, and I want to really separate that from the other people that I do business with or I want to separate my savings from people I do business with. Then obviously I don't want just a direct trail from this balance. [00:47:58] Here's a transaction to another one and then transaction to the person I'm paying. And so I always just wasabi. And I have this kind of like interim wallet that I think about my privacy and disconnecting balances and people and that I'm associated with protecting both them and myself by obfuscating all of those flows. And it's really great to see wallets that actually do this natively because Wasabi is great for that purpose. But I also, I love Nunchuck for all of its other purposes. It would just be cool to have Coinjoins native in Nunchuck. And let's say I was using Ginger Wallet. It would be cool to just have it in Ginger Wallet. And so I would love to see these things kind of become maybe even just kind of more protocol oriented or things that can be plug and play, kind of like a SDK sort of thing. Because that's how you really increase the anonymity set that's or and the liquidity in general for all of these things. And you get the best of all worlds by having it so that other people can plug into it as opposed to needing to implement it in every single wallet in some unique way. And that's kind of what we've had for a long time, right Is you have competing clients. Like you have Join Market and the Join Market client. You have Samurai and the Samurai Market or the Samurai Wallet. Then you have Wasabi's implementation and you have Wasabi Wallet. I would like to see more wallets that are just wallets just plug into the Wasabi coinjoin. Just plug into Join Market or whatever it is. I think we separate out the kind of basic use and features of the wallet from the privacy features in Fooocus. And I would really like to see them kind of bridged together where you can just kind of have a button that you turn on and privacy is something that you can have in one wallet or that you can have in some like that I can make a transaction and I could have. Have it say, make, send this transaction out in a day or in the next three days and have it go through a coin join in the process and so that I can get the benefit of that obfuscation. But then I'm also not just like having ongoing costs to like constantly coin joining. And I don't necessarily need to do that to my entire balance. [00:50:12] I just do it to the degree that's related to a certain payment or to certain people that I'm paying to. And of course, how many other people need this for the many different. [00:50:23] You know, for activists, for dissidents around the world, for people who are, you know, being persecuted just for mining bitcoin for. I mean, look at the crackdown on censorship and Internet controls and all of this stuff, stuff we talk about, stuff that's in the Financial Freedom Report all the time. These tools need to be more just more accessible. And it's good to see more. It's good to see better adoption of these. [00:50:47] And speaking of, I actually just want to hit one more tool. There were a couple other things that I wanted to hit, but we're already reaching pretty long episode now. And this one I don't want to let pass. So this is in. I think the latest one. I think this is in Freedom Report 86. Yes, here it is. And this one is actually relevant to a lot of these different things that we've been talking about. And of course, scaling Bitcoin in a whole new way. All right, so with that, let's just hit this little section. [00:51:17] ARC Labs first real world deployment of ARK. [00:51:24] At the Baltic Honey Badger Conference in Riga, Latvia, ARK Labs showcased, AR, a protocol designed to scale Bitcoin's transaction capacity. By testing it with conference participants, ARK can make transactions faster, cheaper, and more private. By processing transactions off the main blockchain, but non custodial funds can expire if not spent during the event. Attendees paid with lightning as usual, but ARK powered the transactions behind the scenes. [00:51:54] This was ark's first mainnet deployment. It offers a glimpse of how activists and dissidents might one day use ARK to achieve low cost and accessible bitcoin payments. Even as demand for Bitcoin transactions grows, this milestone brings ARK closer to real world adoption. Learn more technical details about the experiment here. [00:52:17] Alright, so we've talked about ARK a few different times on this show and ARC Labs has been hard at work for years now to bring this into reality. And just for a quick overview, for those of you who don't know or don't remember, this is a kind of a different Lightning service provider type construction where you actually use what are referred to as virtual UTXOs so that essentially you can open up a lightning channel without actually going on chain and still have unilateral exit so that you can execute that channel and then execute the exit to it and get your funds and that this is possible even if your ARK service provider, the person who is running the Ark there is a service provider quote unquote. Just like lightning service providers. Even if this coordinator goes offline, you can still get your funds. You always have the capacity for unilateral exit. But importantly this completely takes away the liquidity restrictions of onboarding people to Lightning and Bitcoin. You can receive instant payment instantly in an ARK based wallet without opening a channel, without waiting for a confirmation. None of it. You just receive the payment and now you have the ability to do unilateral exit instantly. It is essentially access to lightning without needing to do all of the initial setup of Lightning and then the ARC provider or any other system or bridge in the midst of this can actually fulfill lightning invoices on the other end because you basically have a channel with them and so it all works exactly like lightning on the receiving side and that's the really crazy thing about this. [00:54:12] So I'm just gonna read it's a very short thread and it comes with some pictures and I will have a link to the thread in the show notes. Actually let me go ahead and copy this down right now so I don't forget it copy paste. Alright, here's the link. [00:54:25] So this is from ARC Labs, this is on Ark arkark, ARK Labs HQ is the username on Twitter, but this is the thread. Again, it's really short but I urge you to go see the pictures and the scrolling through all the transactions they did and all that good stuff. [00:54:42] So last week in Riga, we ran a quiet experiment to honor the event's cypherpunk traditions. We pulled off the conference's biggest hack. We hijacked the point of sale system. [00:54:55] Attendees paid merchants via Lightning as usual. But something different was happening behind the scenes. [00:55:01] Every payment was powered by Arcade swaps. So they have a really fun name, ARKADE Arcade. [00:55:09] Via our Bolts HQ integration, merchants received VTXOs virtual UTXOs instead of traditional lightning balances. [00:55:18] All notion of channels or liquidity completely abstracted away. [00:55:23] All of this made seamless through BTCPay server hat tip, Mr. Cucks. This effort marked the first main net deployment of the ARK protocol. Significant work remains before public launch. But the results couldn't have been stronger. Arcade OS working seamlessly with all popular Lightning wallets. No learning curve, pure interoperability. [00:55:47] On the backend fullmine, our enterprise lightning solution, orchestrated every swap. Lightning operators can soon deploy the same stack efficient liquidity management through Bolt's HQ seamless arcade settlement. What worked in Riga works everywhere. This milestone could not have been possible without our partners. Now we are expanding access. Private mainnet partnerships are now open for infrastructure providers and any builders ready to tap into Ark's potential. Full Riga data drops next week on ArcadeOS. That's Arkadeos level up. [00:56:27] I want to read one line of this again. [00:56:31] Arcade OS working seamlessly with all popular Lightning wallets. No learning curve, pure interoperability. [00:56:42] They did this without anyone knowing. [00:56:45] So everyone using the Lightning wallets they're already used to were able to fulfill payments to merchants. [00:56:52] Also speaking Lightning without the merchants or anyone needing to set up channels or run a node, anything of the sort and all of it could happen non custodially such that every single person had the ability to unilaterally exit and every bit of it was off chain. [00:57:12] I'm getting really excited about ark. I think this could be a sign it does have higher liquidity requirements. But I think they've, they've continued to improve it because the last time we had a burak on the show I believe they found they, they had a certain construction or they made some modifications to actually be way more efficient on liquidity because it's a little bit worse than Lightning itself where lightning you just need, you know, the amount in a channel you, you kind of need multiples if you're, if you're having something that goes to one person and it like bounces to multiple other people because you're basically having lock up liquidity for every single transaction and they expire at a certain time to basically free up liquidity. So the service provider itself, whoever's operating the Ark, has a bigger burden on providing Bitcoin available so that everybody can securely hold it. And then of course, during that expiration time, they also need to know, need to be able to defend themselves against any malicious actors who join the network and try to steal their coins. [00:58:19] Basically the same way that a Lightning justice transaction works. [00:58:24] But this is just super exciting. It's got so many potential benefits for privacy, so many. Obviously it's a massive and fascinating scaling solution. The fact that it's immediately interoperable, it shows so many things that we've talked about on the show to be true. That Lightning is kind of the universal communication layer. It's the protocol of the Bitcoin payment stack. And Arc Labs is ready and working with Lightning out of the box and that we are very close to potentially having wallets that we can onboard that have none of this initial payment and channel limitation problems where opening a channel kind of has this burden or this like significant delay because now you can add channels and combine quote unquote channels with virtual UTXOs with completely off chain transactions and you have none of this delay or importantly a huge variance in fees where when you're actually changing the liquidity, you have a really high fee. But otherwise, when you're just receiving small payments, you have a really low fee on Lightning and that doesn't make sense to a lot of people. Well, what if all of that is obscured away and the fee is just standard? It's, it's completely, it's like a perfectly balanced thing. Every single Transaction it's like 0.3% or 1%, whatever it is. But whether you're receiving a dollar, whether you're receiving a hundred dollars, whether you're sending $50, whether you have quote unquote the balance or not to do that or the liquidity to receive it. Nothing is different. There's no modifications or anything. It's just a standard operation because the Ark is actually handling all of this. And the quote unquote channels that you are opening are entirely off chain. So they just come like anything else. They come with a, the fee for a payment period. And then you create a market to do that as efficiently as possible. And all of it speaks Lightning, all of it speaks the infrastructure and adds liquidity to Lightning and adds users to be able to send and receive Lightning to. And then the potential of having stable coins on Lightning to add to liquidity like this. I think we're going to break into a new era really pretty soon, probably within the next year. [01:00:36] Probably when this kind of bull run gets kicked off is lightning is going to work its way into a new chapter. And it's just really exciting to start to see these Lego pieces come into place because there's so much, so much of this work has been very long in the making and a shout out to ARC Labs for just absolutely killing it. [01:00:59] This is just super exciting to see this in the wild. [01:01:03] Now there are there's plenty more news and other tools. There's some cake wallet Updates, there's a BTCPay server updates. There's things that I would really like to cover, but I just don't have time to cover in the every weekly Financial Freedom Report. [01:01:17] So absolutely subscribe and keep up to date on this one. I will have a link in the show Notes Financial Freedom Report by the Human Rights foundation so much news and politics and political control, censorship, CBDCs, inflation. [01:01:36] There's so many different things that you just can't get with legacy news because legacy news doesn't even care about it. They don't even want to talk about inflation because the more they make you knowledgeable or informed about what's going on in all the other places around the world, the more it's just obvious what the hell is happening here and in the West. And of course they don't care about real financial freedom. They just care about, you know, which bank is in charge and whether or not they're politically left or right leaning. So get the real news, get the real information about the tools, the real updates and stories from dissidents and activists and people who fight for freedom around the world. The Financial Freedom Report. [01:02:14] That's my pitch for them. Big fan. And a link is right down in the show Notes to subscribe. And with that, I think we're going to close this one out. Thank you guys so much for listening. Don't forget to leave a review on Apple and Google Play or whatever the hell they have. Shout out to the audionauts and I will catch you on the next episode. I am Guy Swan and that is my two SATs. [01:02:51] If we wish to preserve a free society, it is essential that we recognize that the desirability of a particular object is not sufficient justification for the use of coercion. [01:03:04] Friedrich August von Hayek.