122: Weakest Links

0:00Welcome in to this week in Bitcoin episode 122. My name is Chris. Chris LAS.com. Jupiter Broadcasting.com. This was not my week. Not only did my kids get me sick, the moment they returned to school. And it seems to be like a bad one taken out the entire family. But I finally had my number come up in this week's Bitcoin AI vulnerability bingo. The liquid situation got me guys. I'll tell you more about that in a little bit, but hasn't been a good week. And if you're an alby user, it could potentially be a bad week. So you'll want to stay tuned to the end of the show. In fact, there's just so much important stuff to talk about this week. I probably would have taken it off because I feel like crap. But there's stuff you guys need to know about. So let's start with the macronus.

1:11It's been fascinating watching the collective oh crap develop over the last, I'd say, about eight days around the war with Iran. The problem is six months is not two weeks. And the promise was this would be a two week war. And it feels like at least to my estimation that we are further away from a resolution than ever. And the pressure on energy prices appears to be going up. But let's begin with the action in Iran driving oil and fuel prices higher again today. Amen. Javers is in Washington with the latest. Amen. Hey there, Kelly. The US military over the weekend struck three Iranian crude oil tankers in the Persian Gulf region. The US said this was in response to Iranian revolutionary guard launching ballistic missiles toward two US Navy worships. The military said that the aircraft carrier and guided missile destroyer targeted in that attack, evaded the attacks and no Americans were harmed. Sent comm issued a statement last night saying at least one of those Iranian vessels sank.

2:15They said thanks to the precision and professionalism of American service members, the motor tanker Kylo sank in the Gulf of Oman today and joined Iran's Navy at the bottom of the sea. Meanwhile, Houthi rebels in Yemen who are closely aligned with the Iranian government launched attacks against Saudi Arabia today, hitting oil infrastructure and utility targets and wounding as many as 70 people according to local authorities. Saudi energy ministry said that operations at oil facilities and utilities in the southern region of Saudi Arabia have been temporarily suspended. The firefighters work to extinguish those blazes. And here in Washington, Kelly, the US Treasury announced additional sanctions targeting the Iranian aviation industry this morning. I asked officials on a briefing call today if they are seeing any impact on Iranian decision-making as a result of this stepped up economic pressure. One official said the US is seeing what he called anecdotal evidence that the campaign has been effective. But I'd share any details of that evidence, Kelly.

3:15Back over to you. We have a minute situation where our oil price is going up, but Iran's money is running out. I mean, that's what I read this morning is that they might have only a couple months left. So it's this, it's kind of a war of attrition, I guess, who's going to blink first? Yeah, absolutely. It's eyeball to eyeball economically in both countries have enormous economic stakes on the line. What President Trump is betting is that the United States has a larger capacity to absorb the economic challenges. And he's doing that ahead of these midterm elections, which are crucial for his Republican parties. So he is gambling here, but so is the Iranian regime and the question. Yeah, what's their gambling is that perhaps with support of outsiders, they can outlast the US because six months in, this thing is just getting more expensive. This bet is getting more and more risky. And today Buffalo Besson announced he's buying up more bonds. Mike. I had, well, all of our bond market friends are getting the information they were looking for. The Treasury is going to buy back $6 billion worth of 10 and 20 year notes.

4:20The question had been, would they go above the four billion that they suggested, which was double the normal two billion amount? And they have gone over that, maybe to send a message that they are serious about all of this, starting on, starting on September 10th, rather, they will raise the size to $6 billion tomorrow. We get the first buybacks of the day. And you can see the debt distribution right now of what we have out there that the people can pick and choose to try to sell back. These will be off the run, treasuries. All right. So let's pause here. So the size of these buybacks, I mean, they're big-ish. This is not like some sort of historical, unprecedented thing that's happening. I mean, it is a little unusual. We have this two billion. Well, we're only going to spend $2 billion. You might remember when I covered that on the show initially. And then as of like three weeks ago, it was, well, it's going to be at least $4 billion. Guys, it's not a big deal, but it's going to be like $4 billion just to provide some buyer pressure here. And then this, well today, it was announced that it's going to be $6 billion now.

5:25Still small, versus the outstanding debt, right? Because we're talking tens of trillions of dollars. So still, overall, a drop in the bucket. And it is large compared to any single 2000 to 2002 operation. It's larger than average for sure. But what's big is the noise they're making around it. That's the unusual part. It seems to me like they're making a lot of fuss about this, trying to get people to notice it. And I don't know what that's about. I think a lot of people are reading it as Buffalo, Besson, Hubert's. I don't know so much. The bond market just unscrewed you and literally on the news, the yield rallied higher. So like on the news, like just did the opposite of what the treasury wants. So it seems to me the bond market is quite literally fighting Buffalo Bessons right now. And as the Iran war continues and the 10 year note is getting higher and higher, if they don't have some sort of pressure release valve here, we could see next week, the 10 year

6:28yield rise above 5%. And I say that because I pulled it up on a chart today and we're up 100 bass points since the Iran war began on the 10 year. It's just to do it. It just keeps ticking up on like a clock. It just blocked by block almost. It made some impressive. So we're on track here for something that ain't so good. The economic war is getting real and the US is starting to struggle. They didn't get their stable coin act, which was going to provide a trillion dollars worth of buying to the bond market. They didn't get that. Congress screwed the pooch because their political fights prevented them from seeing the bigger macro picture of the dollar structure issue here. One of the biggest myths in Congress, I think in 2026, because you're talking about the financial stability of the United States and the dollar system. Because they were too concerned about Trump making a couple of billy on selling some Trump coin company. Unbelievable fumble, unbelievable fumble.

7:29And so now, Besson doesn't have that trillion dollars of buying and he has got to fill the gap. And that's why just 30 minutes before I sat down, he's on X pleading with Congress to get when they come back to pass it, which is would be unprecedented before a midterm. It would be unprecedented if they pass the Clarity Act before the midterm. And there was some kind of memo that went down that said, you get your button that seat and you vote. Because otherwise, it would be unprecedented for it to pass before the midterms like this. And they desperately need it and they cannot wait because if they could pass the midterms, then guess what? The Democrats are going to run the house and they're even projected at the moment to run the Senate. There are no way they're going to pass any bill that's positive for Trump at that point. They've already proven that regardless of what it means for the dollar system and the stability of the bond market, they don't care, right? Because they don't get it. They don't realize that's, they think it's about crypto scams. Well, maybe it is. It's so funny. So Besson has to run around trying to patch this thing, best he can and the markets just

8:33not taking it. And so he's got to just keep stepping up. Well, what people are reading is hubris. I think it's him trying to project confidence, but the bond market is skeptical. It's a long term problem is the issue that Treasury faces. They are currently printing two trillion extra dollars and the Congressional Budget Office says that is rising in finitums to 3.6 trillion in 10 years. And so if the government is putting that much money, it really, it's just kind of paper and over the cracks to buy a couple billion here. There really doesn't do anything. And I think this has really ignited a rally and things like Bitcoin and other hard assets, like gold, because it really highlights there isn't a real way out for these countries like the United States. Think about it. The US largest net debtor in the world. Like how can it pump, quote, make markets in bonds when it's the one that has to be force selling of two trillion a year? And I think that's what's driving people into crypto.

9:35You can't print, there's 21 million Bitcoin. You can't print more of them. And so all of this really is highlighting a problem that's hard to see where it goes. And inflation is already 3.4%. And that debases 90% of your purchasing power over your life. So if you have the choice to own something hard like Bitcoin or a US piece of paper money, you know, Bitcoin has historically gone up about 70% a year and paper money is debasing at 3.4% a year. You love hearing the narrative work its way in. You love people finding the market fit here. And what he's talking about is something that people are processing as this war with Iran stretches out, as the energy prices go higher, as the stress on the yen continues. And as he has to continue to bail out the bond market a little bit by little bit, he has to project confidence because this is an economic war. Whenever people say, oh, well, Treasury Secretary is taking risks.

10:40Well, it's my dream. I have asymmetric information. I am the house now. You know, people are reacting extremely strongly to him saying, I am the house now. I get what he's saying. But it breaks the illusion. It says the quiet part out loud. It breaks the fiat illusion of bank independence that a lot of this stuff is pinning around. It's my dream. I have asymmetric information. I am the house now. When we intervene with the Japanese yen, I have pretty good insight into what the Japanese, what the bankers Japan's going to do, what Japanese policy makers are going to do. And you bet against me if you want. See, the hubris that people are reading in there is understandable. And what we like to do in the fiat marketplace is just pretend like this isn't the case. Really. They just like to go around telling themself that the Treasury Secretary of the United States doesn't have asymmetric information about the bank of Japan and Japan policy makers.

11:44They like to go around telling themselves that they're actually independent in the Japan's bank isn't a vassal system of our system. I'll play a little bit of this fiat wank just so you can enjoy the little games that they play. And they all just do this together. They all pair at the CPI number. They all pair at the PPI. They all pair at this kind of stuff. These like, oh yeah, the banks are independent. Because if we all believe it, then we can trade on it. Joining us now is Bloomberg's event. Pretty unusual verbal intervention there from the Treasury Secretary. I do like the term verbal intervention. As verbal intervention goes, you know, shorted and see, will it work then? Well, it is working for the moment, Voney. I think it's, as you said, it's highly unusual for him to say something like he has asymmetric information on what the bank of Japan is going to do. At once, that raises a lot of uncomfortable questions, not least your future is going to be the fact that is the BOG's independence compromised here? If he already knows what they're going to do, and how is he going to know what an

12:45eight and a nine member panel is going to do ahead of time. So very disturbing questions indeed. Oh, yeah, yeah. This guy, either he's really naive or he's just pretending. I think it's notable that Bitcoin is slightly down on the expanded buyback news. You know, we had a really pronounced rip when a smaller buyback was announced three weeks ago, which caused a squeeze, which then, I think, was like one of the best three day pumps in Bitcoin's recent history. So to me, it suggests that rally we saw might be more of an announcement premium and not really the sign of a bull market. If we saw Bitcoin, I think get above current levels, get up to 80, that would sort of improve my opinion there. It's just so hard to say these days. Here are some of the things that quote unquote investors or traders are worried about. I say quote unquote because anybody that's just buy and selling Bitcoin, like it's a tech stock or something like that, they don't understand what they've got. So I don't actually consider them an investor, but they do. So on the 11th, we get a new CPI print.

13:45So we get the new gospel traders are going to watch that because if CPIs up, that's an indication the feds going to raise rates on September 15th corporate tax and settlements are due. The treasury is going to get a little bit, a little bit more money thanks to that, but it also likely means you're going to see or probably are seen right now a pullback on corporate Bitcoin purchases because they got to pay some of their taxes. And then of course, next week, we have the FOMC meeting. That's when Warsh gets up there and tells us what the price of money will be. The banks estimate that there's a 60% chance of a rate hike next week. People are freaked out that that will destroy the AI pump if that happens. So I'm not so sure, but that's next week's problem. I also think at some point Buffalo, Besint is going to need to refill the TGA, the Treasury checking account. And if they want to keep this up, they may need to go above their trillion dollar balance line. That if it happens would likely put a multi week liquidity drain on the market as they

14:46issue bonds and whatnot. That's probably that would probably land right around the midterms too. Not ideal. So, you know, not exactly the way I see it really bullish for the short term. I still think we've what he's talking about on the buybacks. If he starts really ramping them up and issuing more treasuries at the oil tea bills at the front end, which might have first, when we start to see that, we'd probably come under a bit of pressure in Bitcoin and and risk assets generally. But if we start to see that funding pressure, like we had like in Q4 of last year, then I think you'll see the Fed step up the RMP purchases. And in that's when I think we'll really fly because on the right now, you're just really monetizing all of this. So we're building into that. OssomniL will end up in sort of low as a dollar being pumped into the system. And say, I'm kind of looking at some point Bitcoin is going to fly. I kind of look at it like this myself. Bitcoin's been building for this moment. And then the world is just moments away now from finding the market fit as this realization

15:47clicks more and more. You know, it's sort of one of those things where everything that's been happening so far has been in preparation for, I don't know, the next 20 years. Are going to have to somehow manage their spending. So effectively, if their money is going to pay interest, there's only two options. One is have to cut back on other spending or they're going to have to print money. And if they print money, that creates inflation. And that's going to create a different kind of feedback loop. And people forget that there's a massive stock of government debt and debt around the world, which is the flip side to the fact that people have borrowed. And higher rates will and defaults for that matter will result in losses on existing holdings for any investor for and interestingly enough, central banks because of quantitative easing own a lot of these bonds. And I actually had a look earlier this year, the US Federal Reserve has unrealized losses

16:49on its holding of US government debt of just under a trillion dollars. And that's obviously going to be higher now because the interest rates have gone up and globally the losses are four to five times that amount. And so that's the one side of the equation and the other side is we all know that asset prices around the world are overstretched, whether it's shares, whether it's properties. And in fact, if it's art, it's all overstretched. And as interest rates move up and you discard back those cash flows today, clearly you're going to have to adjust in some way. And essentially that is the process by which all crises start. And that is the trajectory we are on. And I see no reason that that's going to change in the near term. Yeah, so buckle up kids because this is a ride that lasts the rest of your life. Nothing is longer than a nation state fiscal train ride.

17:53The first 30 years was a different conductor, but don't worry, the train might not arrive on time, at least when you expect, but the fiscal dominance express has left the station and destination, Japanification awaits us all. So this concept that you know, you've talked about quite extensively, physical dominance, this train has no breaks. How long and obviously it would be a period as you mentioned where cash and bonds perform rather poorly over a long period of time and scarce assets do quite well, how long do you expect this period to last? Is it like a five year thing, 10 year, 20 year, how long? So that's partially political question. The trade off there is kind of like duration versus magnitude. I mean, like in say World War II, they held, you know, the yield curve, like short end rates were nearly zero, the law in was 2.5%. And at one point you had 19% inflation and they just completely held the yield curve down at those rock bottom levels.

18:54So if you can inflate away faster when you have that bigger gap. Now they also had a better excuse back then. I mean, that was the frontline news compared to what's going on in the Pacific, what's going on in D.A. and all that, right? And so, you know, then there's a time kind of political unity where people were kind of putting aside the differences and saying kind of killed the Nazis first. And so, you know, they can get away with that kind of a faster approach. In general, when the problem is like structural and titanment issues, bloated D.O.D. and no major war, are there the ones we start? Kind of. There's just less overall appetite for it. And so, my expectation is that it's a very long ordeal. I mean, this has arguably been going on since, I mean, really it's at the global financial crisis, but you know, the more recent wave of it, I would say started in kind of 2019 or so right before COVID and obviously COVID then accelerated for a period of time. I'm not think this will least be going on in the 2030s and perhaps longer because it's

19:57a slower motion type of train wreck rather than a more imminent type of crisis. Now, there have been economies in the past. Like, you know, I think Israel had like triple digit inflation for a few times. I think I then, you know, they kind of this really big rapid move. Obviously, other countries struggle with it more persistently. They have both magnitude and duration, you know, Turkey, for example, super high inflation and pretty persistent. Those are, you know, those emerging markets, you know, at least Turkey is emerging market. And so, for a developed market, I think it's more of a long term grind. Similar to what we've been seeing out of Japan. I mean, Japan's ahead of the curve on this. And I think we're going to see more countries go to the Japanification group. Well, the liquid network has a pretty serious recovery problem on its hands. On September 6th, someone exploited a bug to create roughly 4,000 liquid bitcoin with no bitcoin backing it.

20:58When they were able to withdraw nearly 4,000 real bitcoin from the federation's reserve, if you're not familiar, liquid is a side chain that pegs in and out to bitcoin. A $320 million hack of the bitcoin linked liquid network. Another dent to crypto's reputation. But luckily, most of the money was returned to investors. Let's get the details from Bloomberg intelligence senior crypto analyst, Dushant Sharawat. He joins us for this week's edition of Money, Rewire. D I do want to start with that hack. It's just the latest. And the space, if we think about vulnerability, perhaps, when it comes to this space in your view. So what bitcoin and other areas, but right, we're in the domain of bitcoin, what bitcoin's going through is there on the front lines of advanced AI models that are capable of finding flaws that humans would otherwise miss. So you can point a fairly competent model at say GitHub, ask it to go through the recent issues, potentially find something before it's been patched everywhere.

22:02That was possible before, but just not achievable at scale. And then of course, to develop the corresponding exploit with it. That's what's going on. This is not unique to bitcoin. Bitcoin is on the front lines because you get real money when you create an exploit. But as we tighten up our defenses, they'll move on. So ask yourself, as you listen to this clip, if you think they'll speak about all of the other industries that inevitably go through this with the same tone, just, you know, an observation. What do we know about the details and what damage, if any, does it do to the ecosystem? Sure, Tim. I mean, this is the biggest publicly disclosed crypto hack of 2026, $320 million, absolutely a big dent to the credibility of the infrastructure that holds up in this entire space. So what actually happened in this case was this wasn't the case of, you know, some hackers stealing funds away. It was actually a software bug in the code itself. And it happened in one of the entities called block stream, which is bulletproof technology. So you know, whether the money is returned back or not, apparently 90% of the money has

23:05been returned by white hackers, but it does the damage to the credibility of this space, which you've seen over the last, you know, many years. Ironically, the technology, underpinning all of this crypto stuff is getting better over time, but all these hacks, obviously don't help. But clearly a big hit to the confidence, but I think, you know, what's unique here, what's important to note is this wasn't about customer funds being stolen. It was a software bug that created almost kind of fake Bitcoin, which then gone, drawn away from the account. So all right, let's tap the brakes. We don't want that spreading anywhere. Geez, that's a bad analysis. Liquid Bitcoin can be traded or pegged out for Bitcoin. Little Bitcoin was claimed. No Bitcoin was created. Unfortunately, real Bitcoin was taken, 4,000 Bitcoin, much of which was returned, except for about 15% roughly 598, 598.5 Bitcoin remains with the person controlling those funds. 3,400 Bitcoin actually came back. So let's sort of reset and tell you what happened.

24:08On the software side, there was an update to elements 23.3.4, which is out now, which includes additional protections and whatnot. It corrects also another issue. Liquid's history doesn't undo a Bitcoin withdrawal. There's nothing they can do about that, but they can have better practices around redemptions, which I'll get into. There's also the side swap element of this. So what has happened is the liquid network has been shut down and all pagans and pegouts have also been shut down while they try to recover the funds and then improve the security of the network. Side swaps account of what happened, I think, is particularly interesting in this case. They put out a blog post today. They say our peg out key was kept online and payouts were automatic. Side swaps peg out authorization key was held online on our server and every federation payout was forwarded to the customer automatically in the same Bitcoin block. That design is what turned a reversible event on liquid into an irreversible payment

25:11on Bitcoin. Had the keeping kept offline, the funds would have remained under side swaps control and could have been returned. We should have run it the right way and we did not. We did not have adequate checks on peg out orders. Our peg out pipeline processed the order automatically with no limit on size with no limits or rates on velocity, cap relative to the total supply of liquid Bitcoin and no check on the age or history of the depositing wallet. In order for roughly 4,000 liquid Bitcoin, a very large share of all of the liquid Bitcoin in existence, placed from a wallet only hours old was handled with no human review and nothing to hold it. Straight forward volume, velocity and origin checks would have caught it. We had none in place. So I kind of appreciate that they're owning that element of it, which I think is good because it was the side swap service that was used in this. Now they do explain why it worked like this. We pre-funded the pegs as far as we could so that users did not have to wait the 102

26:16Bitcoin confirmations a peg in normally requires. So if you run the elements node and you do a you can pay anyone can pay again to liquid. But like they say here it takes 102 confirmation. So a lot of people would use something like bolts or side swap. Only however to peg out you have to have permission from a federation member. So anyone can peg in, but peg outs are what do they call it? I'm too sick to remember, but peg outs are authorized right? They're not just given. And so now peg outs are also off. The choices serve users for five years across the large majority of liquids peg activity. They also remove the human checkpoints that would have held this order. That is the tension we had not resolved and are resolving now. It's our priority. They also add a couple other details here I thought was interesting. And the vulnerability was identified. We were not told of its details nor asked to change how we operated our peg out key nor asked to pause the peg outs. The security bill that we were asked to run did not prevent the attacks either.

27:16So there will be a time to look at what block stream could have done better here. But it seems like block stream new of this issue potentially tried to resolve it. Maybe didn't fully resolve it and didn't fully warn side swap. Even though the whole federation was aware of how their peg out authorized a system worked was obvious. The peg out requires the federation's own signatures 11 of 15. They were given to a single order of roughly 4000 Bitcoin, a very large share of all liquid Bitcoin in existence without any check on its size or plausibility. The network level controls that could have caught this with the federation as much as any member. That's probably fair. What happens next? Now this is important. Block stream and the liquid federation are leading the network level response, including the fix, the restart and the status of the liquid Bitcoin backing. The federation has said it will carry out a full security review of the network and the peg process. We welcome that and will adopt policy frameworks that come out rather than making our piecemeal changes on our own. Now here's the important part.

28:18We will not resume peg in or peg out until the federation are confident the process is safe. We will say plainly that what has changed before we do. Peg in and peg out will remain offline until the federation security architecture is in place. However, once the liquid network is back online, side swaps markets will return to normal. Okay. So what they're saying is some of the other trading services that use liquid will be back. The concern I have with that and this really comes down to the timing of all of this is that could create a discount window for liquid Bitcoin. So right now liquid Bitcoin is valued at the cost of Bitcoin. So 100,000 sats in liquid are worth 100,000, 1000 sats in Bitcoin because of the peg. If the peg is unavailable, then that doesn't set the price anymore. What sets the price is what the market is willing to pay you for your liquid Bitcoin. And the market might be wanting to pay you like a 15% haircut right now.

29:20And the longer this gap goes where the liquid network is online and trading services are online, but peg services are not the higher the run they run the risk of this discount window opening. So I don't I don't love that. Hopefully the ideal scenario here is they get one to one backing again and they don't have to really do that. That would help close that discount window. If someone can buy liquid Bitcoin cheaply and redeem it for a full Bitcoin, there's incentive to do so. So they will do so. As of September 19th, as I record, there still isn't a way to exit liquid to Bitcoin. And we are seeing more and more fishing attempts, aqua wallet users and block stream have been putting out warnings today. The users are receiving fishing attempts about ways to recover their funds that are not legitimate. So here's where it got me. The risk profile that I think a lot of us have looked at liquid was in the federation members. 15 keyholders. You need 11 to peg out. They have to have a certain amount of liquidity. So you watch the amount of liquidity available. You make sure the network's operating normally that the members are online.

30:23That's your security threshold. But it turns out the actual security threat was side swap. And there's a real humbling here because that's always the weakest link in all of this. You can have the most sophisticated setup, right? You could have the block stream app on liquid with Jade protecting your liquid Bitcoin. And if side swap has an issue that gets taken advantage of, then the Bitcoin that backed your peg is gone. And that's where we're at right now. And what happened to me was when the cold card bug hit, I had to move quick. And I opted to sweep my funds to liquid, then jumped on air, recorded a podcast, and by the time I was done doing the show, I thought to myself, I'm going to wait a beat for Sparrow. I'm going to wait a beat for Sparrow to have an update because it's coming. All of these wallets are coming for all of these wallets. And so I thought, I don't want to put my funds on an exchange, right? Because that's a one counterparty risk. And at least with liquid, it's a 15 counterparty risk, right?

31:26It's like putting, it's like an exchange run by 15 different companies. So it's not one bad actor could really rug you. Well, turns out I was wrong. Now it's not all my funds. But it's the largest amount of my funds. It would be one of my largest wipeouts if it doesn't work out. And it sucks. It sucks because I was moving quick. And I was right. Sparrow did have a security update, pretty major security update. And it just didn't move back to Sparrow fast enough. So now we wait. But I think really we're learning over and over again. It's main chain is safe. It's the software and the services around this that are weak. And there's going to be a real humbling as we find more and more of this stuff. So I can graduate side swap for at least returning the 4,000 Bitcoin that they got in this fee for this transaction. That's something doesn't close the 500 Bitcoin gap that's missing. And now the discussions online seem to have gone badly with block stream and the attacker.

32:29And they're calling block stream having hubris for not patching and spending enough money protecting this and doesn't sound like they want to give back the 15% that they have. Hopefully we'll figure this out. Block stream currently states the plan as this. The recovery plan remains under active development and may be revised as testing and validation continues. Based on current assessments, the anticipated stages are number one, resume block production while peg operations remain suspended. Number two, replay transactions verified as valid. And then I suppose number three is start pegs. Geez Louise, this is, this has been a bad couple of weeks. So I got a question for you, boost.jubitorbroadcasting.com. What is your threshold for an emergency podcast around these things? I use the term kind of ingest, but you know, like I debated when doing a podcast, the moment the liquid news came out, but there wasn't really anything you could do. And I don't have the sense that a lot of you are big liquid users. I could be wrong on that. I'd be curious to know if that's not the case.

33:31But when would you like a quick dedicated episode was because I think we're probably going to see more of these security events come up. And so I don't know, don't know what the threshold is. I have a sense that I would probably like the cold card one was obvious, but outside of that, I kind of like to know your threshold for, hey, heads up, you might need, especially if it's something where you need to move funds, that seems like probably anyways. Let me know boost.jubitorbroadcasting.com and we'll figure it out together. Well, you can support the show just by doing what you do if you want to buy yourself some sats and stack on river. Use my link in the show notes. One of the best ways to stack sats in the U.S. would have been better just having my sats on river all this time. The Bitcoin, well, an automatic self-custody platform, they don't have the wallet you

34:32do. If it's time to go from lightning to a gift card, check out the Bitcoin company, they refresh the website, it looks great. Sats to gift card in just seconds, you can even log in with your lightning credentials. Yeah, you've got lightning credentials. Fold card, fold card, let's just stack sats passively. As you're paying your bills, do what you do, fold card. Salt, lending, and strike, both ways to get access to your Bitcoin without selling it, different options, both great. No official relationship with these companies, but have used them all, do recommend them, and you can support the show by using the links in the show notes. Stay a while and listen. Must not watch your podcast can boost for you, but watch you can boost for your podcast. It is time for boss and Bobby Pins kicks us off as our baller booster with 110,000 sats.

35:36Hey, Richard, stop. All right, Seth. Thank you, Bobby Pins. Thank you for being our baller this week. Bobby Pins says rip, bip 110. Glad we're done with that. Next we get over clarity and how much of a nothing burger that's been. I think you're right. In the macro factors mean much more. Hope you've been doing well. My summer has been crazy, but there's light at the end of the tunnel and it's glowing orange. Oh, good. I'm glad it's not a fast approaching train. I would say I was doing well. And then I got the one to sick and the liquid thing, man. It's been rough. It has been rough. Do not want the whole family is down and out right now. Who wants that? But I do appreciate the baller boost. Thanks, Bobby Pins. Hi, Richard. I'm here with a very generous 50,000 sats. I hoard that which are kind of covered. Coming in with the coveted and limited boosty, boosty boost. But boosty, boosty, boosty boosty boosty. Thank you, hybrid. Appreciate you. Ha.

36:37A train's here with 25,000 sats. Thanks for all the quality info. Finally got my Jade walled, warming up the dices we speak. Bye-bye, cold card. Nice a train. Very well done. I do like that, Jade. Well done. Glad to hear it. OBS here with 23,222 satochis. Hmm. Hmm. Hmm. Let's hear it, good, buddy. He writes, do you know what's up with RHR? Just thought you might have some inside info. I think they're just, Matt needs to take a break after the cold card incident because they were, you know, big advocates of cold card, buddies of MVK, sponsors. And I think Matt O'Dell has just been having a tough time with that. I am seeing them prop up more and more stuff pop up. So I think it will be back soon. Value of the currency, even Bitcoiners lose sight of this. Current price of Bitcoin is $77,359. I asked LUMO what it is and what it would be inflation adjusted to the year 2020. It's at 99,800 with inflation of 29%.

37:40Whatever number is the input, we aren't higher in purchasing terms. Jeff Booth is good follow for how to look at Bitcoin price. It has not been a great like five years, really, I think. However, I don't think that, I mean, it's really your matter of perspective. I wouldn't have it any other way at the same time. I'm glad to be sacking stats. But you know, we took it in the chin this last year. BJ is here with a row of McDux 22222 Satoshi's. Things that were looking up put all my duck hard to find a way to move stats without bolts. I used a swap market to get up Dio and it seemed to work. Some things, some newer services are popping up as well. I'm finally back to boosting. Yay! Well, you were probably not now. Interesting swap market diet.io is not loading for me at the moment. Oh, and if they're, oh, there they go. Do they have liquid on here? They do liquid, huh? Huh. What if I wanted to go from liquid to Bitcoin? How can they be doing that? I wonder if it's working at the moment. I could not connect to the provider's API. Please try again later. Yeah, I might not be working at the moment. I wouldn't be surprised.

38:41swapmarket.github.io. So when it is back, it's another alternative. To bolts. Thanks, Jeff. MDS is here with 21,000 stats. To the longest of the eight. 21,000 watts. Win Lambo? I think I'll have an answer for you at the end of the show. So stay tuned for that MDS, thank you. Code 27 is here with 5,000 Satoshi's. Oh, I'm in. No message, just value. Thank you, code. Appreciate that. Use your 54 is here with 4,000 Satoshi's. No message. Just crickets. I appreciate that. Thank you very much. And Cronkodonk, the doggo is here with 11,111 Sat. The traders love the ball. No message, just value as well. Thanks, guys. You don't always have to have something to say. Budgetized dorm troopers here with 12,345 Satoshi's. Yes. That's amazing. I got the same combination on my luggage. Nothing really jumps out of me to Comic-Done. So here's a boost. Keep on keeping. Thank you, sir. Appreciate that. Read BTC is here with 6,426 Satoshi's.

39:43This is the way. I discovered Twib on only boost.social. It's a great weekly Bitcoin news podcast. And that's great takes. Check it out. Only boost.social. Yeah, I guess that's a good way to discover boosted shows. I like it. Thank you, Read BTC. Appreciate that. So hangs here with a row of ducks 2,222 Sat's. Did you know the idea that pre-money humans bartered for services is a myth propagated largely about Adam Smith, anthropodolid, anthropodolid, whatever, suggests that reality was closer to community pooling of resources and trading favors instead of cows and sheep. Oh, I believe that to be true. Yeah. I'm sure there's a lot of that, right? Probably a lot of reliance on the family structure and sharing inside the family and passing things down generationally as well. No doubt then initially developed into what would be, I think we consider capitalism. I think that's probably both things could be true at the same time. I like it. Thank you. So, now we're here with a row of ducks. Got some bonus stats from the Bitcoin well for DCA in weekly since last year, thought I'd pass them on because it's a great show.

40:44Oh, well thank you. Appreciate you thinking of us. Ace Akramins here with a row of ducks. In response to Sir Jean about Bitcoin for kids, Turtle, Twins, Cartoon produced by Angel Studios has two episodes that talk about Bitcoin. They also have books that discuss economics, the Constitution and stuff. Ah, well there you go, Jean and thank you Ace. Jones, Jones is here with 3,000 sats. Great work as always. Thank you, Joe's. Appreciate that and your tones. Kiwi Bitcoin guide is here with 4,567 sitouchers. Oh my god, the straws feel like broo-loops. You played a few clips a bit wise lately. And that would be Matt Hogan I think. When the ETS first launched, they put themselves out there as real Bitcoiners, not touching the ETS coins and donating to fast developers. But a lot of that has changed. So now I'm a bit worried of them. They got a ETS coin ETF and didn't support the devs on their way. They originally said they would. Yeah, I was wondering where that ended up. I thought they ended up giving some money to a project.

41:46I'm very skeptical of any claims made by anyone claiming to be Bitcoin adjacent now. And this is just another one. I think there's two ways you can look at this Kiwi. And yours is one of them. I don't know if your standard will apply in the era of Wall Street assets. And digital assets. Because they don't look at it as a lump sum singular game. They don't look at it as the future of money. And they don't look at it as fix the money, fix the world. They look at it as an asset to trade. And they look at adjacent assets as beta trades to that potentially. So you can have individuals like Matt that might be Bitcoiners, but institutions that are multi-asset. A block is an example of this. Jack Dorsey, you know, some people think he's Satoshi just putting that out. But Jack Dorsey has been a staunch Bitcoin advocate. And yet block, despite his preferences, is getting more and more involved in stablecoins. We have some news on them coming up in a little bit. So it's just I think the nature of the Wall Street beast.

42:49And so when you measure by that standard, I think you just have to take their individual takes. That's my opinion. But I like the way you're thinking. What up, Kiwi? Sleaks. Sleaks, I always struggle with this one. Sleaks stack sat comes in with 15,000 sats. Yeah, let's give them another one. Give them another one. There we go. Concerning Bitcoin teaching aids. Oh, Conor's boy acts turtle twins. Huh, has some good stuff. There's blockchain memory game called Shaw Memory and I have a graphic novel. And I have seen a graphic novel teaching aid. Well, a while back. I'm in the process of trying to figure out lightning walls from my eight and ten year old. A way to pay allowances via lighting network so they can watch their stack grow. See, I would have said a while ago, that's a great use for liquid too for small things like that. Because that's what I did. I put my kids allowances in liquid, not big amounts. I do rotate those out to wallets, but you know, it's been a few months. Yeah. I think lighting is probably the way to do it. I think, you know, eCache, there's going to be other technologies. I think that's the message I'm taking away.

43:50It's time to learn the new stuff. So I'm looking at some of the new stacks. You know what I mean? I'm going to read a lesson. Take your sleeves, appreciate it. Summers, turfs? No. Some rest of, oh, you guys I'm sick. Why are you throwing me? Why are you throwing me for curveballs? Cheese. That's us. What do you say, meath of all? I just tease. I appreciate the boost. 7,777 sets. Did you buy that from a certified vendor? For my Normie friends, I started referring to Twib as a timely macroeconomics class with Bitcoin sprinkled in. I think that's a compliment. Well, be dear. Thank you very much. Department of Lowles comes in with our first fiat boost, $100. Thank you, Department of Lowles. As I listen to the show from three countries this year, and it was the one constant value for value from Australia. Cheers, Chris. I really appreciate that. Especially today.

44:50Thank you very much. 805 sets also comes in with $100. Hey, what's your stop? It's $100. It'll 5 sets is I usually pitch the Thousand Oaks meetup group decided to try send some support on my own. Thanks for what you do. Well, thank you very much. I appreciate that. Thanks you guys. Man. You know, it's funny too because when did that come in? The third and the other one came in on the second and I must have checked. Huh. I didn't. I must have checked at some point and didn't see those and I thought, oh, boy, it's kind of a big kind of a light episode this week. Thanks, guys. Zinner comes in with $50. Hey, Chris and crew. Also very much. Thank you. I hold that which you all kind of. Thanks for all the podcasts over the year. Self-hosted was a great show and Twib isn't far behind and gaining. Thanks, Zinner. Appreciate that. And ever after comes in with $20. Let's go keep fighting the good fight.

45:52Thank you, sir. Appreciate that. Yes, sir. Sir, sir, sir, sir, sir. All right. That's all are above 2000 sats and we didn't have any member boost this week. So thank you, everybody. That really turned things around though. We had 25 of you stream sats as you listen to the show on a podcasting 2.0 F. You sat streamers stacked 49,600 and 27 sats. This is a tasty burger. And you combine that with our fiat boost and our baller boosters. The show stack to really, you know, surprisingly strong 745,996 sats. Thank you, everyone. That was way better than I was expecting and very much appreciated. I had to restart this episode three times just because my brain is such mush. So we'll see if I get it out. Effort. Effort was put into this one.

46:52So that is very much appreciated. Boost. Jupiter Broadcasting.com or Boost in a podcasting 2.0 F. Also, you can become a member. If you haven't already update your AlbiHub. Albi confirms a critical vulnerability in older versions of AlbiHub. This fix has been out for a while. So if you updated semi recently, you're probably OK. Albi writes we have confirmed a critical vulnerability in AlbiHub version 1.70 through version 1.18.5. So releases prior to August 2025 when the AlbiHub is publicly accessible from the internet.

47:56The vulnerability could allow an attacker who could reach the hub's management API to gain unauthorized access and send funds. The Hub version 1.19.0 released August 29th of 2025 or newer is unaffected. So check your installed version you want update to 120.0 immediately. If you run an affected version which was accessible from the internet, you need to update your unlock password and delete app connections after the update. If you're not affected by the issue, they still recommend updating the latest version as it includes additional security issues as well. Who dodged that one? Thankfully, I can keep you my Albi Hub up to date. But I do appreciate them getting that information out there. We watched this develop online last night and then they came out with the information today. Here's another story that I think has some really long-term ramifications. Block Jack Dorsey's block they want to build a bank. Block has applied to establish builders bank and trust with the OCC which would provide a federally regulated custody and financial services for Bitcoin and stablecoins bank.

49:02Not a checking and savings bank, not with loans and branches. In fact, they would have no branches, but it would hold asset and execute by and sell orders behalf of customers. Builders bank would consolidate custody work. The block now runs over more in more than 50 state money transmitter licenses. One consolidation. Builders bank would be headquartered in South Dakota. All five proposed directors live elsewhere and block as asked the OCC to wave the rule requiring one to live within 100 miles. Jack Dorsey himself is not among the organizers, directors or senior executives and only appears in the filing as blocks co-founder. I mean, really I think those shows you the ambition that block has there. I think they have some serious ambition. Where this takes us? I don't know. All right, final clip of the week time because I'm falling apart. Speaking of Bitwise's Matt Hogan, I've noticed he's been pretty consistent with his 2030 prediction, but where I'm still kind of short term bearish.

50:02I hope to be wrong, but I'm just a little worried about the short term. Matt is both short term and long term bullish. He thinks the market has figured it out. And now when they get back from as they are getting back from summer break, he thinks it's going to be game on by 2030. I think it'll be substantially higher than that. So our long term prediction is we get to 1.3 million by 2035. I think we have a good chance to get back up to 100k this year. I think the conditions are extremely bullish. Remember, we're just getting traditional Wall Street back in their seats after their August break. I think as they come into their seats and they look at this macro setting, they look at crypto forming a nice bottom. They're going to want to start allocating. So I'm bullish on the short term. I'm very bullish on the long term. I think 1.3 million by 2035. It's going to be relatively easy for Bitcoin. All right, let's check in on the Bitcoin network before I get out of here.

51:05I'm squeak and buy at Blockite 966,267. The Bitcoin price US $78,260. That puts our stats per dollar at 1,278 Satoshi's to $1. We are currently down 38%. Right on the money, 38.0% from our all-time high, which was 338 days ago you animals estimated retarget date for the Bitcoin difficulty adjustment is September 19th, 2026, so about 10 days away. An estimated difficulty adjustment, at least at this point, of an upwards adjustment of 4.5%. 26,560 Bitcoin nodes currently reachable on the network. All right, one set per VBite for transactions. Our look pretty normal again, it was really interesting because we were getting up to 6 and 8 even for immediate transactions earlier in the week. And a half hour now is just 0.10 stats per VBite.

52:08So back down to regular, what I'd say have kind of been baseline transaction fees, but we did see a pretty big spike earlier in the week, kind of adjusting as it should. Things are moving right along, and the Bitcoin network is strong. Well, if you made it this far, why not have a little fun? Boost it and tell me if you think we're going to get a rate hike, or a cut, or a hold. Just got to get it in before Wednesday. So that way, not only can it be in the show, but before they actually announce it. If you just feel like having some fun and you want to get your prediction on there while you support the show. And of course, I want to know what your threshold is for the emergency pod, where when you'd like me to cut into your feed with a purpose built episode. All right, links to what I talked about today are over at this week in Bitcoin.show.

53:11That's the website. You can get the back catalog and all of that over there. Let me know how I did too with a boost if you would. My goal here is to give you a show that doesn't get distracted by the emotions or the drama around what's happening, but focus is on the signal. So you can plan for yourself, your friends, your family, your business, your future whatever it might be with the best clarity possible. And of course, when I make a mistake, I'll be right here telling you what I did wrong and what lessons I'm learning from it. So I guess thank you. And let me know if you want more coverage on the liquid stuff too, because I really don't have a sense if anybody out there's a big liquid user. So I just wasn't sure when to make that episode. But I hope I think the timing was right. We let things develop and whatnot, but it's always something I'm interested in as well. Okay, I'm out of here. Links over this week in Bitcoin.show and hopefully hopefully I'll see you right back here next week. It's not 100%. I can't tell you what direction this thing's trending. I'm hoping this is the thick of it. If history plays out, I'll probably be better just in time for Sunday to do Linux unplugged. But we'll see.

54:11Anyways, I appreciate you and I hope to see you right back here next week.