NEW ATTACK: 4,000 Bitcoin Stolen OVERNIGHT??? Are You Affected? | EP 1586

0:00A new Bitcoin hack has drained 4,000 Bitcoin overnight worth over $300 million. And what's suspicious about the timing of this new exploit is the fact of course that it comes only five weeks after the record breaking $130 million cold card hardware wallet exploit. And really, it's probably more that the Bitcoin price didn't even flinch on the news. Just doing its own thing. But this is a brand new exploit that broke yesterday. So we don't have all the information yet, but I'll do my best to try to explain who and or what was affected and what this means for Bitcoin moving forward. So guys, what what's Nico? We say it's never boring in Bitcoin. Well, hey, this might actually be the worst bear market ever in terms of sentiment. I think that's confirmed now. And of course, in terms of the exploits, we haven't really we didn't really see the

1:02capitulation, but it's been pretty brutal for everyone involved in Bitcoin. So anyways, what am I talking about? I think this might have been the first tweet that really kind of highlighted what happened and it was Ergo BTC. And it goes liquid got got. We saw a liquid peg out transaction of 4,000 or 400, 4,000 of 420,000 Bitcoin. And the hacker there was an op return message. And the hacker basically said, we are white hats. Contact us on chain. So it wasn't at least while we had this ongoing information yesterday, it wasn't a, you know, a hacker someone attacking and stealing that Bitcoin. It looked like it was a white hat. A someone that is essentially was looking into the code and did this preemptively. So that hackers weren't able to exploit the code. Now going further. Of course, same message. It was a lightening or sorry, liquid network bridge that was exploited.

2:04And the timing is suspicious just in terms of this ongoing as everyone's been calling it token wars are really using AI to exploit code, you know, critically important code. And there is a, there is another kind of suspicious timing of all this. So apparently chat GBT launch chat GBT 6 aka aster a few days ago. And now we see this happening with liquid. So it looks again, we don't have all the information, but it looks like the hackers were out there. You know, we had the infamous red team that were doing very good response after the cold card exploit. We also had Bitcoin loop from block doing something very similar, but it looks as if we are still as I said was going to happen in this phase right now where everyone is using the latest AI, you know, agents to check code here.

3:05And not just good guys. All right. So this was a, this was a pretty good example of the good guys doing it. So at first it did seem a bit uncertain whether they could actually return whether they were actually white hats, but I do have updates on all that. So we are still in the midst of the quote unquote token wars where coders hackers, whether they're good guys are bad guys, you know, white hats or actual, I guess you would say criminals are using AI to double check all of the critical infrastructure code out there and see if there's any bugs, any latent bugs. So as we keep going further into the, you know, beginning of the 2030s and as we start to see AI improve incredibly and dramatically, I think we are going to continue to see similar things happen though. I guess the silver lining is is as these AI exploits kind of continue that the code does become better. And as the newer AI models come out, hopefully the current bugs and exploitable code has already

4:09been fixed. So the newer code AI agents won't actually be able to exploit this critical infrastructure moving forward. So again, it seems like we are in the midst of a new AI model coming out and then hackers and coders using that to double check and also potentially exploit the critical code. Not just in Bitcoin. Again, I do want to emphasize that this isn't just a Bitcoin problem. As I mentioned last week and I believe the week before, we are starting to see that these AI exploits are kind of spreading to other critical infrastructure. Tradify, obviously the big story that we saw last week was that allegedly Chinese state backed hackers hacked into the Fed and the DOJ and there was someone else. So it's not just a Bitcoin issue, but obviously as we know, Bitcoin is a critical, a bearer asset. So if you are able to exploit the coins and you own that coin and you send it to an address

5:12that you own, there's really nothing you can do to roll it back. And that's why we are seeing Bitcoin attack first because of the, I guess I don't want to say inherent characteristics of Bitcoin, but because of the characteristics of Bitcoin, once you own the keys, once you hold that Bitcoin, it's your Bitcoin. It really goes back to that classic possession is 9th 10th of the law. Well, in Bitcoin, it's everything. If you possess the coin, it's yours. Yes, there is of course a legal route here in a criminal element of this and hopefully law enforcement is actually capable of doing their job. But that's why we're seeing these exploits happen on Bitcoin though. This is a, there is a silver lining here. So even though it was a little uncertain whether these were actual white hats, there is a happier ish ending than we heard with the cold card exploits. So the numbers here, this 4,000 Bitcoin that was exploited by white hats at the time is

6:14about 95% of the liquid network, which is a layer two network on top of Bitcoin to transact and of course add privacy though this, you know, for the, for the BIP coiners out there, it is another kind of black eye on the, on the face of blockstream though, I don't necessarily want to say, oh, you know, there's some conspiracy here with blockstream, but blockstream has been in a lot of the more interesting stories during this bear market. And here we have another one though. Again, this one does end a little happier, but let me read you this tweet here. It is a little longer, but this is from a Kaya BTC and he does a good, it is a little bit of a layman kind of breakdown of what this exploit was. So again, it is a little technical. I am going to read the whole thing so that you guys can kind of understand what happened. So liquid hack explain liquid has confidential transactions that hide the amounts for improved privacy, a bug in how these transactions are validated cause inflation of liquid Bitcoin

7:17or LBTC, which you see in some of the more popular Bitcoin wallets right now in particular, you see that in aqua. So if you've been using aqua, you will have noticed that there is a lightning to liquid Bitcoin swap. I blanked on the word. Hey, I took a day off and I'm already blanking on the words. So it is in some of the more popular Bitcoin wallets out there, in particular, the one that everyone uses is aqua anyways. A bug in how these transactions are validated cause inflation of LBTC and allowed hackers to empty the entire side chain. Liquid nodes don't see the amounts of a confidential transaction. So to make sure that the transaction is still valid and doesn't cause inflation, notes check something called a balance proof and a range proof. The balance proof is established at some of the input that the some of the input amounts equal the output amounts, ie that X LBTC going in and X LBTC going out, but there's a catch

8:20only relying on balance proof isn't enough. You also need the range proof. The range proof establishes that a hidden amount or a hidden output amount falls within a positive range. That means that a valid output must be at least one LSAP and at most to the 64 minus one LSAP range proof. So make sure that you can't mint negative LBTC. Why is this even necessary? Remember the amounts are hidden and a hidden negative amount would allow extra positive outputs to balance against it. Without a range proof, a transaction could say I've put one LBTC in and I'm taking two LBTC outputs out one with 4,000 LBTC and one with negative 399, wait 3,999 LBTC. This is going to cause a disaster in a little bit. Once the balance proof, the range proof and other validations pass, a transaction is regarded as valid and can pass consensus. However, because especially the range proof is computationally expensive, liquid nodes cash the result of a successful range proof in memory. Essentially the node remembers I saw this range proof before and it was valid all good.

9:26In order to recognize the same range proof later on, you need to assign a label to it. This is called a cash keep. This cash key is the actual cause of the bug. The way this cash key was constructed allowed two different transactions to collide on their cash keep. Essentially one valid transaction or one LBTC in one LBTC out had the same cash key as an invalid transaction, one LBTC in and 4,000 LBTC out. And here's the hack. The attacker submitted the valid transaction first, liquid nodes verified this transaction successfully created a cash key called RECD and stored it in their cash. Then the attackers carefully crafted a second invalid transaction with the 4,000 Bitcoin going out of liquid that created the same cash key REC. Instead of validating the second transaction and realizing that it printed money at a thin air, liquid nodes found it in their cash and said, Hey, I saw this transaction before, everything is fine. And that caused the inflation. The attackers and took their 4,000 LBTC and withdrew 4,000 Bitcoin onto the Bitcoin based

10:27chain. No, they did kind of simplify this. But as we see here from Jockemon, he says, look, it's pretty much good enough to explain what's going on. Here's Jockemon's tween. It goes, your example of exploit or your example is exploiting a wrong balance and not rang range. So maybe improvable there, but pretty good explanation overall. I think some interesting details line when the bug was first discovered, where was it fixed? IE years ago in elements, but not GDPK or something like that when it was exploited first, was it bolts? We don't know. How was it fixed? Was it fixed incorrectly? Again, we don't have all the information yet. And how the fix was disclosed and propagated. So it looks as if this is a bug that's been sitting in a liquid code base for a few years. Again, we are all assuming that they use a new AI model to exploit this. Obviously, it does seem again to kind of spoil the ending of this. It does seem as if it was a white hat.

11:29And here is the conversation in regards to the back and forth between block stream and the white hat via opt returns. So hey, I know opt returns has been, if you're more, if you're more in the technical side of Bitcoin, I know opt returns has been one of the biggest discussions in Bitcoin over the last year. Well, I guess this version of it is not so much about spam and it's kind of like a happy ending here. Let me pull that up. Shops out to Galaxy research. They tweeted this and it goes, OK, so here's how it went. Liquid white hat say they'll return most of the 4,000 Bitcoin once liquid network bug is patch. Go on. Stupid question. Could you define what a white hat is for the. Well, I did essentially attackers that are the good guys that are exploiting the code, but essentially they're saying, look, we're not stealing this Bitcoin. We're not we're not exploiting the code for nefarious reasons. We're doing it too preemptively kind of protect you another coin from a bad hacker.

12:33Was that was that good enough? Lamin explanation of this. OK, strong one. OK, so then going on it goes, the hackers have been conversing with block stream via opt return messages and PGP encrypted text at block 965,822 block stream addresses sent 1000 sat with please contact security at blockstream dot com at block 965,865 an encrypted message addressed to the holders own key with a detached PGP signature and that signature verifies against the key published at blockstream dot com slash PGP dot tech. So they verified that it was the white hackers or white hackers verified that they were in fact talking to the block stream team going further block 965,865,860,000. The hacker replied by self spending their own balance, but sending a thousand sats to the federation's peg wallet and the text sending most back to the federation address is that OK and then at block 965,875, the answer again, a self spend with 1000

13:38sats peeled to the federation and an opt return reading. Please fix the bug first. The chain is under risk at latest commit right now. Make sure every notice patch, then we will transfer the money back safely after confirming the fix technical details follow as a PGP message encrypted to block stream published key so only blocks room can read it. So interesting back and forth through opt return and then actually the latest update right before we went live on the show what's this that apparently the white hack hackers return 3,400 Bitcoin to the liquid federation. It looks like as of now there's still 600 Bitcoin that stay behind. So maybe the white hat hackers are paying themselves, you know, a bounty fee of 600 Bitcoin for this, which is like 50 million dollars. Yeah, but you also can't make that assumption because you don't know what block, you don't know what block stream, let me be specific, you don't know what block stream said in that message.

14:38That's true. That is OK. That could have been a that could have been an agreement that they reached true true true they doing this for free. Now I think I think the the the equation it because like normally what happens guys when there's there's these types of critical bounties that are found. They companies pay a lot of money for them, right? So I don't know and the and think about the magnitude of this, right? This basically ended the liquid experiment, right? Dude, dude, go on, go on, what we'll discuss. So I don't know what the agreed upon, you know, like, hey, look, we found this bounty. I don't I don't know what the agreed upon bounty fee or rate was, right? But at the end of the day, look, they didn't have to return anything at all, right? So you know, the fact that they're doing this is I applaud them for that. Now obviously they're going to want to get paid in some regard.

15:41I don't know what that amount is, right? But again, there are some messages that were encrypted between the two. So I'm assuming that that was kind of part of the negotiation. But again, I'm speculating here because I don't know what that message is. Yeah, we don't have all the information. But they but they it is expected. It's the norm that there is some type of fee for finding this type of exploit. I think the question is on everybody's mind is what was that fee agreed upon. So and this also explains why they didn't want to communicate over email. Yeah. Because they push back on the email communication. Because initially block stream was like, hey, please email this address. And they were like, no, no, no, no, no, no, we're going to communicate via on chain, right? Which also on a little bit of a side note, that is so effing badass, right? So like all way but Nika they're spamming the Bitcoin network. So this is so badass because these are hundreds of millions of dollars that, you know,

16:45are under risk, right? They're just kind of out there. And this is all happening. This communication, this money being returned, this money being excluded. This is all happening outside of the traditional financial system, which is really, really cool. Optimum and pass it on to you. Okay. Well, Niko had to run off. We got a guest coming in studio right now. So I mean, Niko said this ends liquid, which I think maybe right now, you know, in the face, I think I think if I'm thinking of this in just a back in, I would say probably not, but I think considering that we saw the cold card wallet exploit and we are still kind of dealing with that. And the community has been pretty divided in terms of a cold card themselves as a company is like, should cold card be held responsible? It should cold card basically wrap up their services.

17:47Like I just saw on Twitter over the weekend and I tried to unplug this weekend guys. I have a whole rant on Twitter that maybe I'll do one day this week. It's like how much better I felt not being on Twitter, but that's what size of point. So I saw on Twitter, there's a little back and forth where I think cold card was saying that they have a lot of Bitcoin resellers and that they're still selling cold cards with the updated firmware. And the community has been divided on this is like, I've seen some people that I consider friends and that I consider, you know, relatively smart in terms of code and hardware and understanding the various trade-offs and they're like, cold cards probably the most battle tested wallet at this point. Everyone else is like, I'm never going to use cold card again. And so we're still dealing with the aftermath of that. Obviously, a lot of people lost their life savings. It's absolutely horrible. And so I think as we're still dealing with the, as everyone's been calling it, token wars or AIber's Bitcoin right now, you know, hackers using AI to exploit Bitcoin infrastructure,

18:51I think we're still as users, as individuals, as a community trying to understand how we feel moving forward after these exploits. Does this mean that liquid will be better off moving in the future? Or as Nico was kind of saying, does this mean that no one wants to use liquid anymore, that that experiment of liquid failed? I don't really know. Obviously, like I never really use liquid. I honestly, like I like the aqua wallet, but that whole swap from lightning into LBTC into liquid Bitcoin. It like I was like, uh, first it was one of the things that really made me not want to use the wallet. And then I used it and I was like, oh man, it's so simple. This, this works magically. And so what does this mean moving forward? Obviously to be completely clear. And I think this is a much needed clarification that we had to do during the cold card wallet exploit is that this has no fundamental effect on Bitcoin, the network as a base chain.

19:58This isn't a Bitcoin exploit. Bitcoin's not broken or anything like that. This was a layer to project with liquid. You know, that block stream created that was exploited. It looks as if now it's been patched. Most of the coin has been returned. We really don't know what's going on with that last 600 Bitcoin. But again, I think as we continue to go into this new AI experiment and how to deal with critical infrastructure and code, I think everyone's like, you know, what, what are we, do are we not using liquid? It's like the same. I was bringing up the idea of a with cold card, you know, are people still going to use cold carders? Everyone like, I'm never touching that again. This is going to keep happening. Think like, think God for that white hat. Oh, without a doubt. Think God for that white hat because this could have gone the other way, the which would have been catastrophic to say the least, right? Think about it. Think about like the time proximity of these exploits, right?

21:03You had the cold card exploit and then now you had this exploit coming on the heels of that. So if you're just like kind of like a Bitcoin layman, you're not like into the nitty gritty or into the technicalities and you're looking at this from the outside in, like, you're like dude, like, why should I just get the ETF? This is crazy talk. Like this is insane. Like nothing's protected anymore. Okay, British, British bit. Should I even should I even, should I even even like should I even use Bitcoin on chain? Right? And this is by the way, this is going to continue to accelerate these AI models, these LM models are going to continue to get better and they're going to continue to find vulnerabilities. So what that means it is on the developers, like if you're a Bitcoin developer, if you're a Bitcoin hardware wallet manufacturer, you should be stressed testing your products

22:03with these engines. The latest engine with the latest engines, you should be stressed testing your code because they're significantly faster than human review and they will find exploits as has been demonstrated over the last month or two. This is going to continue to happen. And this is just a foreshadowing of what will happen with the quantum stuff. And the quantum stuff gets to a point where they can essentially brute force a Bitcoin address. I better hope that first quantum attack or whatnot comes from a white hat, right? And remember, the chain is going to have to like in a way, it's going to have to hard fork in some type of sense. It could be a soft fork, but what happens to the people that don't switch to a quantum

23:05resistant Bitcoin address? What happens to that? And then there's like the other question, which is we don't know if addresses that haven't been spent from our quantum resistant themselves, we don't know that. We know that from a technical perspective, the addresses that have been spent from are not as quantum resistant. So we don't, there's a lot of questions here, but ultimately, and this weaves me into my main point, ladies and gentlemen, Bitcoin is software at the end of the day. It's software. So if you think that it's just as simple as buying the latest and greatest hardware wallet of your choosing, and then putting that into a drawer and just riding into the sunset,

24:09you are wrong. It's going to require you to stay on top of what is going on. It's going to require you to figure out what's going on. It's going to require you to put in the time, put in the energy, put in the work to make sure that your self custodial setup is good, and you could use the same analogy with gold, by the way. When you take personal responsibility of your wealth, think about it. Let's say you get a bunch of gold, that's how you store your wealth and you buried in the backyard. What if you have gardeners coming in that day? What if you move? What if there's a natural catastrophe? There's a hurricane. There's an earthquake. It takes constant surveillance or better said, constant awareness of what that custodial

25:14setup looks like. Because if not, you're going to have to outsource it to somebody else. And by the way, the person you're outsourcing it to, they're using the same tools you are. They're using a two of three multi-sig. They're using a three of five multi-sig. They're using the same thing. You can make the argument that there's more sophisticated setups and they're not really using hardware wallet. They're using dedicated devices, et cetera, et cetera. But they're all using the same Bitcoin protocol level tools that you can as an individual. So it's just a question of, have you put in the time? That's why when the cold card exploit happens, we detoured from our regular schedule programming to give you guys a full dose of how many different collaborative custody solutions you can use.

26:20Of course, our favorite is all in one. The Bitkey has multi-sig built in. It makes it feel like you're spending from a single-sig address. Then there's the collaborative custody companies like Cossah and Unchained. Then there's the open source versions like Lyanna. Then we had BitVolt not BitVolt as in my handle, but BitVolt as in VALUT, which uses the time locks. That has to be that utilizes the time locks that are inherently built into the Bitcoin protocol. So again, there are no perfect solutions here. There are just trade-offs. And you need to find the rate trade-off for where you currently are in your Bitcoin journey. Because again, if you hold a token amount of Bitcoin and you have it on a single-signature device, okay, great. But if you have your life savings in Bitcoin and you have it on a single-signature device,

27:25the day of infamy, which was July 30th, proved at least in my case that that model, I know that this is unpopular. I know I've heard other people say this, but to me, you cannot rely on a single point of failure, full stop. And you know what the ironic part is? I take a little bit of blame for this as well. Is that your favorite Bitcoin influencer, your favorite Bitcoiner. The person who's been advocating for self-custody, if they have a significant amount of Bitcoin, and if they're a Bitcoin influencer and they work in the industry, I'm assuming, I sold on my Bitcoin, I don't have any Bitcoin, I lost anybody accident, but I'm assuming they have a big portion of their net worth in Bitcoin, I guarantee you they've been using multi-sign this entire time. So it sucks because myself and the other creators, we were so hell-bent on pushing people toward

28:32self-custody, but at the same time, we were not advocating for what we were doing ourselves, which is utilizing multi-sign. Multi-sign protects you from single point of failure, and it actually protects you from physical attacks as well. multi-sign is fantastic, it's really not that complicated to use, especially if you use the collaborative custody services, but it should be the default if you hold your life savings in Bitcoin, or if you hold a significant portion of your net worth in Bitcoin, you should not be using a single point of failure, aka single-sign. If it's again, if it's a token amount, if you're using it for everyday spends and receives, it's fine, understandable. Multi-sign just adds a little bit more complexity, but if it's your long-term cold storage, multi-sign should be the default. What do you think, Opti? No, I'd still say the same thing, it depends on people's technical levels.

29:38I understand what you're saying, but my main pushback on this whole thing was it wasn't that single-sign or single-seag seed phrases were hacked. It was a faulty entropy from cold card. It doesn't matter. I know I can't point a failure, but I get that. Hold on, Nika, hold on. What you're saying, or rather, maybe it's just you need to update the way you're saying it, is when you went on that rant, you didn't say it's because of a single company. You're saying single-sigs themselves have been destroyed as an industry standard, but in fact, it was a company that messed up. Yes, but I'm thinking for saying that. It's just clarifying the rhetoric. No, no, no, no. Thank you for clarifying the rhetoric because it reinforces the rhetoric. I agree, but the way you're saying it is implying that single-sigs broke, which is not what happened. It's not broke, but the thing that you guys have to wrap your head around is, think about it this way, just a logical common sense, right?

30:41You're relying on 100 to 200 to $300 device to store your life savings. That is a single point of failure. That is what multi-sig removes, right? But that's why I caveated my take with it depend on the people's technical abilities. That's what that would be my biggest pushback. That's why the big key is fantastic. I agree, but because it has it, you are trusting Bitcoin. No, you're not, dude. You are, though. No, because one key lives on the Bitcoin, one key lives on your phone's secure element, and then one key lives on the block servers. I get that, but it's still you're trusting a company did code everything correctly. And that's a trade-off for some people. I'm not saying it's wrong. I'm just saying that's a trade-off. This goes back into the conversation of trade-offs. I agree. I'm just saying there is trade-offs to everything. It's what I'm saying, but single-sigs themselves did not break.

31:41No, no, no, no, no. A date, of course, it didn't break on a protocol level. Of course, 100%, opties 100% like on the dot there. But what I'm trying to say is if you hold a significant amount of Bitcoin, you should not have a single point of failure. I would agree with that. Because even if you had a cold card and you were using a cold card as part of your multi-sig setup, the exploit did not affect you whatsoever. If you use the cold card random number generator, someone in the chat. Even if you used all cold cards in your multi-sig setup and you used the random number generator to create the seeds of those for those for that multi-sig setup. Even if that were the case, you would still not have been initially affected by this exploit. So it bought you time to move or to update your setup, which again reinforces my point.

32:46Use multi-sig. Use it. Whether it's the Bitkey, which I recommend to my friends and family, or whether it's your own multi-vendor, multi-sig with a collaborative custody service, or you can go full tinfoil hat and set up a sovereign, multi-sig solution. It's totally up to you. But the point I'm trying to make, the big point I'm trying to make is guys, self-custody comes with personal responsibility, the cliche Spider-Man quote, right, with great power comes great responsibility, right? I think unfortunately, and again, there's no way you can't go back in time and say, oh, this was inevitably going to happen. No, it becomes obvious in hindsight, right? But like, think about it for a second. Think about it for a second. Was this obvious in hindsight? Of course it was obvious in hindsight, right? And I think the lesson here is no single point of failure if you're holding a significant

33:49amount of Bitcoin. If you're going to use a single sig with no passphrase, you better hope that that seed was generated with enough entropy. You better hope so. And my recommendation there is if you're going to go down the single sig route is create your own entropy using dice rolls. And don't just do it a hundred times, use it two, three hundred times, not because it's going to add more entropy, but just so that it adds more randomness to that seed creation or to ensure that it has enough randomness to that seed creation. So yeah, man, I mean, you can't go away from July 30th and say, hey, you know what, we're going to be fine. It's like when the Japanese attacked Pearl Harbor, it's like it was unimaginable. America didn't want to go to war after World War I.

34:50Like it was unimaginable that the United States was going to enter into World War II. It was so unpopular. The United States did not want to enter into World War II. And then Pearl Harbor happened. And then it's like, oh crap, like, you know, like not only do we have to enter into World War II, we have to make, we have to take a proactive stance and make sure that we have aircraft carriers all around the world to make sure that we don't get attacked again, right? Which you can make an argument was a little bit too much, right? But again, like it's not obvious until it happens and it happens. So what's the key takeaway here? What's the lesson here? If you don't learn for your lessons from the past, your destined to repeat them, the lesson is here. Don't rely on single points of failure. My rant is over. Hey, yeah, all right. Cool. I know we have a guest coming in in 10 minutes, but there was a pretty good discussion having happening in the chat about like what you said in terms of you can't just like hoddle and forget it and kind of brought like the idea in my head of that's like one

35:55of the selling points and big points. So I'm wondering, do we do the breaker just keep it running and discuss this? Let's hit the break and then discuss this and then we'll bring in the guest. Okay. Yeah. Maybe more value to chat about that than doing that kind of normal person. All right. Here we go. During your Bitcoin journey, you might find yourself in a situation where you need some cash. Maybe it's your family, a business expense, a tax bill, medical reasons, whatever it is, life happens. And that's exactly where lead income is in. Lead is the leader in Bitcoin back loans. They let you unlock the liquidity in your Bitcoin without ever having to sell it. Since 2018, they've issued $11 billion in loans to more than 10,000 customers worldwide. I love these guys. Not only do I have an account with lead in, I personally have a loan with them as well. And here's what really sets them apart. There are no monthly payments and you could pay back the loan at any time. You could also refinance it as well. Once you send your Bitcoin as collateral, you can have cash in your account within 24 hours. They don't relend or re-hypothicate your Bitcoin.

36:57It stays in custody. And they've never lost a single dollar or single sat of customer funds. So if you want to tap into the wealth of your Bitcoin without having to sell it, head over to learn.ledin.io. Slash simply today and you'll get 0.25% off to your first loan. Okay, okay, we're back. So, Nico had to go and get the gas real quick. So we have someone in the live. I mean, I'll pull up the numbers real quick and then I'll chat about this a little bit as we get the gas set up here in the studio. So currently, the Bitcoin price is $79,130, 37.3% discount from all time. Hi, we are at almost $1.6 trillion market cap, currently $1.59. And the block hide is $965,225. So I see some people on the chat and I'm not going to pick on Chandie here.

38:00Candy? I forgot who to mess up. Candy, I think. And she basically said, look, self custody now with what we saw with the code card stuff is either maybe it's too difficult or maybe you're just scared of it and you're much more comfortable going into like an ETF or a regulated custody. Now when I saw these comments in the chat, it was really making me think in terms of, you know, as all of us, we're all orange-pilling our friends and family. And for the longest time, it was like a pretty easy sell. Oh, I mean, it's not the easiest sell because we still argue with our friends and family about just buying Bitcoin and holding it, you know, what's you make the leap though? The sell was always essentially, hey, look, all you have to do is hold Bitcoin long term and you're good. Obviously, then the code card wallet exploit happened and we all realize, wait, that might

39:01not actually be the case that we will in fact have to in some sense be vigilant. Now obviously not everyone needs to be chronically online like we are. Not everyone either has to ban with or even the interest to be falling along on the Bitcoin discussion. They literally just want to hold something and forget about it. You know, Bitcoin and show you just buy it, hold it, store it and never really think about that more than that. Now obviously we are all, as I was saying a minute ago, while Nico ran off for a moment, it's like we are all I think as individuals with Bitcoiners and as a community, all still reeling after these exploits and wondering like, okay, how do we think about this? Can I even just hold Bitcoin and chill or am I constantly going to have to update my code storage every two years or something at this point? And obviously not to pick on British HODL, but he's been I think one of the main people

40:02proposing this idea is basically self custody is dead. This is why you need to go by the ETF. And now I have been I think very consistent on this idea for a while. That look. I may not hold ETFs. I may not think that Bitcoin treasury companies are something that I want to hold. But I do see that there is a need for the market or rather a more a want from the market to use these products. And I don't think necessarily I know we all have the classic memes and rhetoric. It's like not your keys, not your Bitcoin. I believe that I'm totally about that. But as we see, not everyone, you know, fits in the same box. There is no one size fits all here. And I think that is kind of what I don't want to say the beauty of all these products are or getting Bitcoin exposure quote unquote. And I'm not talking about paper Bitcoin here, but various vehicles for people to access Bitcoin and obviously get the gains. The number go up aspect of it.

41:05Maybe not so much the freedom go up aspect of it. I do, I think, start to see that there is a need for these products. So look, I say all that to essentially say, and I wish Nico's here, but we're getting our guest prepped to come on the show here. And it does kind of hurt me to say this. I'm not going to lie. So, you know, if I get clip, clip that a context, it is what it is. But I don't think that you should feel any less of a Bitcoiner per se if you are holding some of these ETF products or, you know, have your Bitcoin in a collaborative custody setup. Like I know that's blasphemy, but as we see, a lot of people aren't comfortable holding their well. And a lot of people aren't comfortable being their own banks. A lot of people aren't technical enough to do this. Though personally, I don't think it's that difficult. There just does come a certain amount of responsibility that comes with it with that being said, sorry, hair is crazy with that being said. I do think as a network, we will be losing out on something if everyone just goes into

42:08these ETFs. If self custody is in fact dead, which I don't believe it is, we are fundamentally losing a key ingredient of what makes Bitcoin Bitcoin. And that's a shame to see that we are even having these discussions. Obviously, we're all maturing as an industry or I'm maturing as Bitcoiners throughout this whole process. So look, do I think there's a use case for some people to go into the ETFs? You know, obviously the market proved that that is the case. Do I believe self custody is dead? Not at all. As you can tell, I was pushing back on Nika. It's like, like single sig past or seed phrases did not break. It was just a faulty company that really kind of hurt the narrative around Bitcoin. Obviously, you don't necessarily have to go as far as multi-sig on everything. There is past phrases on a single sig seed phrase, which as we all know, stop the cold card exploit from happening. There's dice rolls, etc, etc, etc. It's really more about the effort you put in before you send all of your Bitcoin to your

43:12seed phrase. Like, yes, you know, a lot of people trusted cold card for their seed entropy, their seed generation. It turned out to be faulty. But the people that put in the extra steps that did the dice rolls that added their own entropy to the seed phrase were in fact protected from this law. The people that did, I would say complicated past phrases, not just like a easy past phrase. On top of the single, we're also protected. People that did multi-sig were obviously protected or further, you know, a little easier. People that didn't use cold card were obviously protected from that exploit. But it did while that question was asked in the chat. It did kind of pop the question in my head, you know, like, I'm a propagandist. I'm a Bitcoin propagandist. I think we need more Bitcoin propagandist because people do not think about facts. I actually over the weekend, and maybe this is not the time to dive into this conversation. But I was thinking about like the dumb bar number, but in terms of information. And I think it's just a key insight into most of humanity.

44:16Like, most people cannot think through a lot of information. If you flood their brains with information, they're not going to get any of that. And I noticed that by just like, I had to take a mental health personal day on Friday. I was like, dude, I'm burnt out. I'm not going to work today, dude. Like, I'm not even going to do any work today. And then I realized just not going on Twitter was like the best thing I did for my mental. I jumped on Twitter and I could just feel my cortisol and anxiety spiking. And I was like, oh, it's Twitter. That's really messing me up. But anyways, it got me thinking in the chat. How we push Bitcoin on people. Obviously, we believe in Bitcoin. We're Bitcoiners. We believe in number go up. We believe in freedom go up. But now it does seem like we need to either update our propaganda because like if you were chilling cold card to all your friends and family, like it wasn't comfortable going to every person you've ever talked to and showed a cold card and be like, hey, look,

45:18actually you might be exposed and you might have lost all your Bitcoin. Like that's not comfortable. A lot of people are like, I'm never going to chill a hardware wallet ever again. I'm just not going to do that. I think that's also a disservice. It's like, look, we have new products. Yes, you know, it's a fast evolving industry and there is latest and greatest gear. And I know a lot of people in the chat are always like, oh, you're just chilling stuff. You guys, you know, you guys are just shilled. It's like, well, look, we want to make sure that people are protected that people are using the latest and greatest. And it's not necessarily doing like, oh, you need the iPhone 17 pro max to keep up with the Joneses. It's like, hey, look, there's just new products in the industry that I think you might like that I think might be a benefit to you as a Bitcoin or whether you are technical or not. But it does feel as if we can no longer just say, hey, buy Bitcoin, store it and chill and forget about it. Because I know I've done that. I literally like pretty much actually did that with that cold card exploit.

46:22I don't know if I've told the chat, but I use I had an MK2 cold card and I had an updated the firmware in a long time. Luckily enough, at the time of the exploit, I didn't really understand the entire details of the exploit. But I, you know, my seed generation, my entropy, at the time I wasn't, you know, I'm like, I see rolling dice like, no way I'm going to do that. So I did trust cold card with my entropy for my seed generation, but I used an MK2 model before that bug was introduced. So I was protected on that front. But I found it interesting because look, I had been planning to update this particular setup because again, I think one of the things that kind of protected me as well, even if I did, you know, worst case scenario, get wrecked, I didn't put all my eggs in one basket. I have coins split up in different setups for this kind of very reason. So if I got wrecked, it wouldn't have, you know, completely wiped me out. But at the time, I didn't understand it all.

47:24I just like, I almost slept on it. I was like, I don't know. I don't think I'd really have to do anything. And then finally the paranoia kicked in and I realized I hadn't updated this firmware on this MK2 for like, I don't know, six years. So I was literally that person, right? But now as we see, like we are in this area now with AI and this whole token wars exploits and then potentially in the future, you know, quantum where we all know there is going to be a Q day, a quantum day where something will happen and we as a network will have to update. So I'm going to be thinking through this, but you know, candy in the chat, it's like, I get it, you know, like, look, you just want the Bitcoin exposure. You want to protect your purchasing power, the store of value narrative of Bitcoin. I don't necessarily think that you are any less of a Bitcoiner if you do go into the ETFs. So I'm not the biggest fan of the ETFs, but there is a lot to think about.

48:29And there is a lot of trade offs that you have to think through in a personal level. You know, the other thing I think I did mention on the show, one of the things that I, that I kind of understood about myself is when I had to move my, my MK2, you know, during this, what was it, July 29th, X, well, if I wasn't as technical as I was, I was going through this process. I was like, dude, if, if I wasn't this technical, I would have not been able to move my Bitcoin at all. And I could have just wrecked myself on just that very idea. And that's why I honestly, and like a huge fan of the Bitcoin, I know a shilling the product that was sponsored by, but it was so easy. I was like, yeah, you know, I kind of like that. It's this easy. And it did make me nervous because it was so easy. I'm so used to going through the pain of storing my Bitcoin that when I used the Bitcoin, I was like, yo, I just, it doesn't feel safe.

49:30But it, I think it's a great trade off for me. Now obviously I'm going to split my set up. So it's not going to be all in one basket. But again, you do have to think through this. And this is part of personal responsibility. There is no one size fits all. And yes, unfortunately moving forward, it is going to be extremely hard to try to help your friends and family because they're obviously going to come to you as IT. They're obviously going to come, hey, you're the Bitcoin expert. What should I do? Now you don't want to be like chilling Bitcoin to your friends and family and then, and then then stopping at like, oh, yeah, but I'm not going to tell you how to secure your Bitcoin because I don't want to be responsible like bro, like, come on. If you're like mom or your brother comes to you, you're really going to be like, look, but put your life savings in Bitcoin. But I'm not going to tell you how to store it. It's like, no, let's live in the real world here. Okay. So I'll be thinking through this. Again, back to the dumb bar number of information.

50:32I might be rambling here, but I guess we'll get, we'll start moving. Okay. I found eventually in the last week realized like we need more propaganda in the sense of if you are talking about something that you like in particular, Bitcoin, it's like you're not going to win anyone over with facts and figures, dude. We know this and the fed stuff doesn't work. But don't care about privacy people. Don't care about freedom. They don't care about inflation and taxes and all that, you know, it's destroying your purchasing power. It's like, no, propaganda is Bitcoin. Get them emotional tied to it because the facts and figures don't work with the majority of people. So I'm doubling down on being a propagandist here. You know, hate me all you want, but it is, it is what it is. All right. We're going to do our job and continue to get views and continue to get more people on Bitcoin. And I will probably expand on that a little more, but today is not the day because we got a guest in here. So the filibuster is done. I am going to hit the chat and hopefully you guys in the chat, I'm not falling along in

51:35the discussion here, but okay, Candy's still. She's still crashing out. So I only gave up. I don't know people other than Bitcoiners. I talked to online or met because Bitcoin online. I don't know. I think that's a different discussion. All right. Last break and we will be right back with our boy Eddie in the studio. So give us one second as I shift out. Nico's going to shift in. So we'll be right back. You secured your Bitcoin, but did you secure your devices too? They're still broadcasting your location and digital footprint. GPS, Wi-Fi, Bluetooth, cell, 5G, EMF, all of it is leaking. Escape Zone fixes that. Your Faraday bags block every signal your device emits. So you decide when you're detectable, not the grid. Built for Bitcoiners who know sovereignty isn't just your wallet. It's your phone, your hardware wallet, your keys, and your entire digital life.

52:35Go to escapezone.com slash simply and use code simply for 10% off. That's escapezone.com slash simply code simply. I want to give a shout out to our partner, Hive Digital Technologies. Built by clean energy across three continents, Hive runs dual engines, Bitcoin mining, and AI compute. Their AI platform is ranked number one in the world for network performance. And it's doing something bigger than compute. It's accelerating human discovery, the science, the breakthroughs, pushing humanity further and faster. List it on the NASDAQ with the ticker Hive. Catch the latest buzz at Hive Digital Tech on X or Hive Digital Tech.com. Yeah, we're back. And we got our boy, Eddie, in the studio today. We got our boy, Eddie, in the studio today. And we're going to be talking about a conference that's coming up in Miami, ladies and gentlemen.

53:39First Eddie, how you doing? Good, man. Good. Great. It's a beautiful day in the good old Miami. It's always a beautiful day. But sometimes I'm not going to lie, it's hot as hell. It is hot. So ladies and gentlemen, let's jump straight into it. Eddie, you're throwing the first Bitcoin conference in Miami the last three years. There hasn't been a Bitcoin conference here. Could you talk to us a little bit about that? Yeah. Thanks for, first of all, thanks for having me. Really appreciate it. Yeah, we're calling it the sovereign summit. It is happening February 4th through the 7th, 2027. Yeah, Bitcoin is going to be definitely a big part of it. We're kind of building it as sovereignty at every scale across AI, energy, money, which is basically Bitcoin. But we're trying to basically appeal to a broader audience beyond just the kind of core

54:40Bitcoiners and trying to pull in people from all sorts of other areas and industries, because there's so much overlap and so much interest in a lot of those different spaces. But yeah, and we're also kind of including a beyond kind of catch all. We're trying to get some people in the wellness and longevity space. But all of it basically being around maximizing human potential and kind of knowing, I like to think that sovereignty is really about knowing all your options. Obviously, at the base layer, having control of your own privacy, of your own data is fundamental. But just like we're seeing with cold card, I think there isn't a one size fits off for everyone. And I think the way things are evolving so fast, I think they'll be, let's say, let's give, let's use AI as an example. I think at the core, hopefully down the line, most people are running things locally. But I think there's still going to be a use for frontier models for all these different

55:43other big companies as well. So the way those things interact, I think, is going to be really interesting and important. But yeah, sovereignty is about knowing all your options and basically knowing the trade offs and making a decision for yourself. Not everyone, you know, like in the Bitcoin world, necessarily is going to be holding their own keys and, you know, being self-sovereign in terms of self-custody. But you try to push that and then people have to make their own decision and do what's best for them. Absolutely. And the sovereignty movement, it goes hand in hand with Bitcoin, right? Because it's not only about sovereignty over your wealth, but it's sovereignty over your health, it's sovereignty over your communications, it's sovereignty over your jurisdiction, right? So it goes into the thesis of, as we talk so much about here on simply Bitcoin, it's the sovereign individual thesis, right? Which is, it goes hand in hand with the name of your summit, right?

56:43Which is the sovereign summit. So I'm really excited for that. What type of programming do you have in mind and then we'll get into the venue? Yeah. So it's going to be basically two days, two full conference days and then a before conference day and after conference day. So the February 4th is the Thursday before the conference, a day before conference and we're going to have a Bitcoin fundamentals class for basically for newbies to learn. And so how that kind of plays itself out, we're not necessarily sure yet, but it'll be an hour and a half basically content for beginners. And then that night, we're going to have a VIP welcome reception. I'm sure there's going to be other side events as we kind of build this out. But that's, this is what it's basically looking like for now. And then Friday and Saturday are going to be two full conference days with VIP parties on the Friday night and then Saturday night. We're going to have a fun after party.

57:44And then on the Sunday, a farewell brunch. That's what the programming looks like for today. But I think there's a lot of moving parts right now and that's that's subject to change in terms of more things being added to the. Absolutely. Absolutely. I can't wait. And let's talk a little bit about the venue because it's going to be hosted. If you are from Miami, you know this venue. I don't need to tell you what it is, but it's going to be hosted at the fountain blue hotel, which is a fantastic venue. If you've been to Miami, you've probably heard of it. It's super nice. It's has this beautiful view of Miami Beach. You can see the beach. You can see the ocean. It's beautiful. It's absolutely gorgeous. So the venue that you picked is incredible. You talk a little bit about what you have in mind, where the stage is going to be, what can you reveal? What is the inside baseball here, Eddie? So yeah, the event news was an important choice for me. I really did not want to do it in a traditional convention center space.

58:50So yeah, we from the get go, I knew I didn't want to do in a convention center. Then from there, I was like, you know, I really want it to be in a nice all in one kind of resort and found blue is the only one that really made sense. And so we picked found blue, which was, you know, a no brainer, amazing property on the beach, restaurants and everything on site. So the goal for the conference is everyone's going to be on site and hanging out. And if you're going to have dinner, if you're going to have breakfast, lunch or dinner, it's all going to be on site with your friends and partying afterwards with your friends on site. So parting at live. Potentially, potentially at live, cannot, cannot, cannot confirm or deny that the after party on Saturday might be a live. We don't, we don't know yet, but that's certainly a possibility. Oh, it's going to be lit, ladies and gentlemen. It's going to be, it's going to be great. It's going to be a good time. Good, good old Miami time talking about sovereignty. I absolutely love it.

59:51You touched upon this a little bit, Eddie, what makes this one different than all the rest, obviously being the first big major Bitcoin, big Bitcoin and sovereignty conference in Miami for the last two or three years now. But what are the, what are the, all the other differences as well? Because I think for a lot of us, Bitcoiners and a lot of us, sovereignty, Maxis, right? You've gone to so many Bitcoin conferences, you've experienced them. What makes this one stand out in particular? A couple of things. One is, you know, we really wanted it to be not too big, not too small in the right size. And so, yeah, for us, it's going to, the venue is basically capped at a thousand. And so we're going to have the plan is to have 200 capped, 200 VIPs, basically 750 GA and then 50 speakers. And so we're going to be a thousand total. So I think it's special to have something that's not too big. So it's, it's, it's, it's, it's an exclusive event.

1:00:53That's right. And it's just, honestly, more than that, it's, it's the right size. You know, when you get, when you go to like a big conference, get lost with the amount of people, everyone is doing something different. Everything is kind of, you got to drive somewhere off site. For us, it was like we want everything on site. We want it to be the right size, the right vibes. And then the other part of it is the time of year. We're doing it in February, best time of year in Miami. Everyone else is freezing there. They're, they're, they're asses off. And in Miami, you can have the weather is fantastic in February. There's only like two or three months in Miami where the weather feels really good. And it's December, January, February. So February is a fantastic date for that. Now, I do want to talk about, you know, some of the speakers that have been announced. There's much more speakers that are coming, ladies and gentlemen. But so far, you have the Chad sailor, Michael sailor, Natalie Bernal, you have Jeff Booth, you have Sam Callahan and many more speakers that are, that you know, that you guys know

1:01:54that are going to be confirmed. So it's going to be incredibly exciting. You want to get your tickets quickly because the prices do go up on Friday, ladies and gentlemen. Don't sleep on it. Why are you going to pay more sats to wait? That's not a good idea. So get your tickets tickets now before the price increases. Again, this is going to be an incredible Bitcoin sovereignty celebration here hosted in the beautiful, beautiful Miami Beach when the weather is going to be nice. So you're not going to want to miss it. It's going to be absolutely fantastic. There's also going to be some side events as well, Eddie. Do you want to talk a little bit about those? Yeah. And just really fast in terms of the speakers, you know, we're obviously myself and the organizers Neil being one of them, Neil Jacobs. He, you know, having Bitcoin speakers, is it going to be necessarily too much of a problem? Let's say, I think we're going to be, we're going to have great speakers on that end. But our goal is really to get great speakers that can speak on AI, they can speak on energy

1:02:57beyond just Bitcoin mining. So definitely stay tuned for other big speakers and kind of those industries as well beyond just the Bitcoin space. Yeah. Absolutely. Man, I'm incredibly excited. So the side events, talk to me about it. So the side events. So the side events right now, we basically just have VIP events that are planned, except for the after party, everyone's invited to VIPs. We'll just get a ticket automatically and there'll be a VIP area. But yeah, the side events we're going to have basically a rooftop party on the Thursday night before day one. That'll be a VIP only side event, which will be a lot of fun. And then on the Friday night, we're going to be doing an oceanfront VIP night at their restaurant La Cote. So those are the two things that are basically confirmed. The rest is kind of still up in the air in terms of actual venue, TBD, but yeah, everything

1:03:57is going to be on site. So it's going to be easy. And we also, another thing I should mention is we're getting a special room block rate at the fountain blue. And so for anyone coming from out of town, that'll be guaranteed lowest rate you'll find. And yeah, there's nothing better than just staying on site, partying on site, being all on site, hanging out with your friends and the networking, the networking with these awesome, awesome, brilliant minded people. Because it is such an exclusive event, not that many people are going to be going. It's a thousand people. You guys capped that on purpose. You're going to be able to talk to some of the brightest minds in the space. Yep, absolutely. That's definitely a big part of it. That's also why at a thousand people and 200 VIPs, you really get to know one another and get to really have fun together and not be overwhelming where you've got to rush around and meet everyone. So that's definitely by design. I absolutely love that. I can't wait for it. I have the website, by the way, guys, on the ticker right now, the SovereignSummit.com. Again, get your tickets quickly because the prices will increase and the tickets are

1:05:01cap ladies and gentlemen. If you don't get your ticket before that thousand people buy their tickets, you're not going to be able to get more tickets. You're not going to be, it reminds me of the of the live kind of a balancer type of thing, right? You know, where they don't want to let you in because there's no more space in the venue. It's the same type, same type. So you want to get your tickets now before they sell out when they sell out, you're not going to be able to get any more. And again, as I said, the prices do increase and you will get an exclusive rate at the fountain blue hotel. Absolutely beautiful. And I'm assuming it's a discounted rate as well, right? Yes, it's going to be the lowest, it should be the lowest advertised rate. Absolutely. Fantastic, fantastic. All right, everybody, get your tickets. I'm going to pull up the website one more time. Get your tickets to the SovereignSummit February 4th through the 7th, 2027. 2027 is going to be a bull market year, baby. Hopefully, let's see. Hopefully, I didn't just jinx it. But it's going to be a bull market year, meet the people, share it, shaping AI, energy,

1:06:04money, open systems and everything they make possible. Own your future, the Sovereign Summit February 4th through the 27th, 2027. Many more speakers to be announced very, very soon. So again, get your tickets quickly. Before we wrap up today's show, I do want to give a very special shout out to simply Bitcoin sponsors. Let me pull it up. I'm multitasking right now. Here we go. Of course, BitcoinWell.com, buy real Bitcoin. What makes BitcoinWell.com is the fact that when you buy Bitcoin on Bitcoin, well, I go straight to your self-custody Bitcoin wallet address. They don't allow you to leave your Bitcoin on the exchange. It's automatic self-custody. So you buy Bitcoin on Bitcoin well. As soon as the funds clear, it goes straight to your self-custody Bitcoin wallet address. So go to BitcoinWell.com slash simply today and you get, and you get just sats for signing

1:07:10up to the platform. It's awesome. And every time you buy Bitcoin on Bitcoin, well, you get rewarded with Bitcoin well points and you could use those points towards the Bitcoin wishing well contest or just to get more sats. It's great. Or when prizes is great. Also talking about sovereignty, I want to give a shout out also to Keats. Keats is a peer to peer communications app and it's absolutely free. Go to keats.io slash simply. What do I mean by peer to peer communication? And with signal, which is like the gold standard of privacy communication apps. The way that signal works is you send a message. It goes to the signal server and then it goes to your phone. So there's an intermediary and those intermediaries are usually the ones that get co-opted with key it fundamentally works different. It's peer to peer communication. So when you send a message, it goes straight to the person who you're sending a message to. Private chats and calls with key anywhere, anytime fantastic and it's absolutely free.

1:08:16Go to keats.io slash simply Bitcoin to get started. All right, everybody. That was today's show. If you guys enjoyed today's show, you know what to do. Smash that like button. Consider subscribing to simply Bitcoin and get your tickets to the sovereign summit February 4 through the 7th, 2027 in Miami Beach, Florida at the beautiful, beautiful fountain blue. Get your tickets before the prices increases. All right, everybody. We'll see you tomorrow for a brand new episode of simply Bitcoin live. This episode of simply Bitcoin live was brought to you by ledin. Don't sell your Bitcoin. Get a Bitcoin backbone at ledin.io.