Brandon: Well, hello, hello everybody, and welcome to Good for Bitcoin, your weekly pulse on Bitcoin innovation. We are live on goodforbitcoin.com. Thank you everybody for tuning in live. And Kate, it's been a pretty crazy couple of weeks, hasn't it?
Kate: my god. I know we've been talking
Brandon: We
Kate: like this last week, just being like, Are you good? Like, is everything okay on your end?
Brandon: Yeah.
Kate: I obviously like the cold card is like the major thing that's been happening, which is pretty devastating for a lot of people in the Bitcoin community. so obviously we're gonna get into that pretty seriously, but oof, it's tough. It's tough to like be preaching self custody, doing all the things right and then this happens. so
Brandon: Yeah. yeah, we we took last week off not because of the incident, but we were planning on taking last week off. And then by Thursday, everything seemed pretty chill, and I was like, okay, it was kind of just like a slow newsweek anyway, so like no big deal. And then everything just hit the fan on Friday. And yeah, we will we will definitely get into all the stuff with cold card. I don't know, it feels feels weird just like being like, but first let's talk about the public companies that are buying Bitcoin, but I guess we gotta gotta keep that up. So we'll start with that. We'll
Kate: You know, that's as
Brandon: yeah, check in on your fellow Bitcoiner though, I guess is is what's going on. There's we're gonna get into it. There was like another like hack thing that happened this morning. it's crazy, crazy time to be you know, self custodying your own your own Bitcoin. but we're gonna get into all the stuff going on with cold card and yeah talking more also about like Okay, well, now what? Like, what do you do with your Bitcoin? How do you keep it safe? And I have some suggestion. We both have some suggestions on that. So we'll get into that. but yeah, let's start with public company news. So strategy, they sold Bitcoin this week. They sold 1637 BTC for around 104 million dollars. They also did another ATM offering, basically meaning that they created new MSTR shares and then sold them on the market. So they kind of diluted the you know the cost of MSTR. With the proceeds, they're they have increased their USD reserve by $250 million. And they also bought back $81 million of STRC. they did an STRC buyback last week too. so with all these Bitcoin sales, they now hold $842,138 BTC. And STRC is at $95 today and continues to rise by like a dollar or two every day, over the past couple of weeks. So I guess they're, you know, recovering over there and We'll probably see STRC back at a hundred dollars pretty soon, from what it looks like.
Kate: We'll see. I think Strategy's currently doing like their holdings call or some kind of earnings call right now. at least I saw a clip
Brandon: Yeah.
Kate: of it. I I didn't really watch it, so I don't know if it's happening live, but yeah, they're reporting on a lot of their numbers, which is which is cool. and then we have Strive, they bought twenty Bitcoin and they now hold twenty thousand and twenty. A lot of numerology there.
Brandon: Lots of yeah, I like that. block revealed it is kind of yeah, quarterly filings season. So block revealed that they have an additional eighty-five BTC in their treasury. They now hold 9,117 bitcoins.
Kate: And then we have the American Bitcoin Corp. They bought two hundred and ninety eight Bitcoin and they now hold eight thousand and three hundred in total.
Brandon: Orange BTC bought thirty Bitcoin. They now hold three thousand nine hundred and forty eight BTC.
Kate: And then capital B bought one Bitcoin. They now hold three thousand one hundred
Brandon: The board.
Kate: and forty.
Brandon: Smarter Web Company bought 12 BTC. They now hold 2712 Bitcoin.
Kate: And then Cypher Digital sold 470 Bitcoin, which brings them down to 646. they've been selling off their Bitcoin since their high of 1500 in total last October. So
Brandon: And yeah, Saquon also they continue to liquidate their position, selling three hundred and forty four BTC. They now just have three hundred and fourteen Bitcoin left. So lots of movement this week. I feel this is like the most companies that we've mentioned in this segment in quite a while.
Kate: Yeah. I've also seen that like whales are still accumulating. So like with all of this getting sold off, it seems like people are well, our BTC whales are picking them up.
Brandon: For for somebody to sell, you gotta have somebody on the other end to buy. There you go.
Kate: Era parte.
Brandon: okay, so let's let's get into what happened with cold card. So
Kate: Yeah.
Brandon: it's kind of crazy because we had just mentioned cold card on the show like a week prior to this happening. in response to Zach XBT, who was talking about how he was recommending like iPhone as like the most secure. Like hardware wallet for your Bitcoin, which we thought
Kate: Yeah.
Brandon: was like a crazy thing to say. And now it's like in retrospect, maybe that wasn't so crazy.
Kate: Yeah.
Brandon: but yeah, anyway, if you haven't been paying attention, so cold card is a hardware wallet, usually recommended as kind of the it's what's in the name, it's a cold Bitcoin wallet. So it's a way of being able to store and manage your Bitcoin without having it. be connected to the internet or connected to like a device at all. Like everything happens like on the device itself. I have one right here. I own one. this is a Mark IV version four. and I for a while I was telling Kate this off stream. For a while, like I had all my Bitcoin on this, which is really crazy to think about considering what what happened recently. So yeah last week basically it was revealed that there was This huge vulnerability in pretty much every cold card. some of the newer ones, I I guess were a little less vulnerable. And depending on how you set up your seed, maybe it was a little less vulnerable. But I think I think just given everything going on, like I would not consider any cold card safe at this point to to
Kate: Yeah.
Brandon: store your Bitcoin. but anyway, even if you never had connected your cold card to the internet, even if you never had, you know. broadcasted your seed to the internet, your you you might have had all your Bitcoin on a cold card and you might have just gotten all your Bitcoin drained, which is super sad for you know any Bitcoiner that was using cold card is their their self-custody hardware, you know, wallet of choice. and it really was surprising because it's it's not, you know, something that you think about. You think, it's like it's a disconnected from the internet. It's a truly cold, you know, hardware wallet, totally offline, like can never get hacked. Like that was the the thought process, right? For for a lot of people, that's how it was kind of sold to people. was that it was like this truly offline device.
Kate: Yeah.
Brandon: yet, you know, thousands of Bitcoin has been lost. It's been kind of people have been tracking it on chain over a hundred million dollars that pri that caught like amount has probably gone up since then,
Kate: Yeah.
Brandon: has been lost due to this hack. So how how could this have happened, I guess we're gonna, I'm gonna do like a quick, a quick explainer. not being like, you know, a a huge expert myself. But this is how I kind of understand it it to be. So when when you're creating a new Bitcoin wallet from scratch, right? your wallet needs to generate a new, a new seed phrase, a new private key. And of course, you want the generation of that private key to be random. you don't want it to be like a predetermined key or predetermined seed phrase. you want it to be truly random. And it turns out that generating a truly random number is actually kind of difficult for computers to do. it has gotten easier and better over the years. and basically all of these major hardware wallets, including cold cards. Know everybody like let Ledger, Trezor, like all the other, you know, hardware wallets, they all ship with these dedicated little chips inside of them that have random number generators in them or RNGs. You'll probably see RNG on the on the timeline a lot with people talking about this. And that's all that the chip does, is it just generates a random number. And the the cold card mark three, which is the main device that was I think the weakest from from this hack, but all the others had a version of it as well. The Mark IV had it and and some of the others. it had it had one of these. It had an RNG in it. it actually was it shipped with two different secure chips inside that were capable of of generating a random number. the primary chip that the Mark III shipped with was called an STM32. which is considered a T RNG, which is a true random number generation. And the issue was that the secure elements RNG was not actually actively used for C generation on Mark III era firmware. Basically, there was this code that lacked this proper path to pull randomness from it for that purpose. And so it it ended up Basically not using it. So in 2021, there was this firmware update that that they put out for the cold cards that introduces bug, which basically made the seed generation silently fall back to using like a software-based version instead of like the hardware-based version. And the hardware-based version is like super secure. And if they had just used the hardware-based version, there wouldn't really have been this problem. but the issue was that it sort of silently fell back to this software-based random number generator. And that software-based random number generator wasn't really designed ever to be like secure as like, you know, generating a Bitcoin seed. It was just like for really basic random number generation. and basically how the software-based version works is it takes the cold card's unique ID, think of it like the cold card's like serial number, and it looks at like what time it is like on an on an RTC kind of scale. And it uses those like inputs to generate a random number. So this basically collapsed the effective entropy, which is like the randomness, how random it is, to roughly around 40 bits, which is far below the intended 128 bits for like a 12-word seed phrase. so because of these factors, you know what the inputs were, To generate these random numbers. this made it possible to reverse engineer seed generation on these devices. So even though these devices were not connected to the internet, you could kind of extrapolate like these are kind of the serial numbers or the IDs, you know, that that these cold cards use. you could just try a bunch of different, you know, dates and times and stuff like that, and effectively just like brute force your way through reverse engineering seed generation. And if you can reverse engineer the way that cold cards generate seeds, you can you can get into Bitcoin wallets that might have, you know, used that seed generation. So that's that's what happened basically. So it's pretty crazy. I think like in retrospect it seems like pretty like obvious that this like is a potential path to like getting your Bitcoin like hacked. the Bitcoin network, of course, didn't get hacked, but like, you know, it's the seed generation itself. But I think like, you know, a couple of weeks ago, like none of us would have really thought about the fact that even though your your hardware wallet was completely disconnected from the internet, that somebody could still like hack your wallet and and take your Bitcoin and steal your Bitcoin. So yeah, everyone you know, with just that just generated like a seed phrase, like using cold card. And nothing else. pretty much all of those wallets, unless you were really fast, got drained. not everyone with a cold card had their funds taken yet, because cold card also has the option of providing additional entropy in the form of dice rolls. You'd see people saying, like, well, I rolled I rolled a dice a hundred times and you know, my bitcoin is still safe. you also can add like a 13th word onto your seed phrase that's known as like a passphrase. so Basically, if you're rolling dice, that is another way of generating, you know, random numbers. And if you roll dice enough times, like a hundred times, that is kind of a way to, you know, more closely approximate like true randomness. so for people that did that with their cold cards, their Bitcoin is a little safer. but I would still basically I I think it's just safe to say like stop using your cold card. Like it's it's just not worth it at this point.
Kate: Yeah.
Brandon: to just continue using it when there's like so many better hardware wallet options out there. But yeah, I don't know. Did that explainer help or like anything else I should add to like what happened and and why these cold cards got exposed the way that they did?
Kate: Mm. I think like the technicality of it, like you did a really good job. It's just like this like weak entropy is really like the it's kind of like one of the oldest failures of like wallets that happened. So like you did a really good job explaining it. I think like what's crazy is you know, you like you consider cold card to be like open I mean I I guess like open source is the right word, or like, you know, at least you can like go review it, but Like the bug wasn't private. It wasn't like you know, it it's not like it was malicious. I mean maybe they had this like big long plan implemented years ago to sell funds. I don't know, just kidding. But
Brandon: No, no, no, don't don't don't spread those kinds of I don't think it was intentional, but it was certainly maybe a little negligent.
Kate: Yeah. At the at the end of the day it's like open source like only works if like you're actually auditing it and you're like going through it consistently. so you know, sitting there for like five years on this bug is just kind of like mind blowing to me. but I don't know, it's cra it's
Brandon: Yeah. Yeah, that's a that's a good point to highlight is that this bug has existed for like five years. and yeah. Exactly.
Kate: Yeah. And it's like with AI really that a lot of this has been like uncovered, right? which is like also something we're gonna talk about later, is just like so many it's just like accelerating the rate at which like AI attackers are yeah, like outpacing like teams and and companies
Brandon: Yeah.
Kate: and you know, you can still have all of these like security practices in place, but there's like there is a lot of vulnerabilities out there. Which are being exposed and it's just so unfortunate how this one this one happened. I've been I've been seeing that like the amount of like cold wallet transfers is hitting like all time highs right now. basically like since FTX, people are just like obviously trying to like move their funds. and it's hard to know like whether it's being stolen or whether it's someone just like moving, you know, to their
Brandon: Yeah.
Kate: own custody again, but yeah.
Brandon: Yeah, my hot take post that I that I made last week was your Bitcoin would have been safer on FTX than it would have been on a cold card. Which is a crazy thing to say.
Kate: I was telling you, like there were only Yeah. And we were talking offline about this and I was like, honestly, like my laziness saved me here. Like I had a cold card
Brandon: Yeah.
Kate: and I'd been planning to use it for years, and I just like it was this whole process of understanding like how air gapping works that like seemed kind of daunting to me, and I just never ended up doing it. and why
Brandon: Yeah.
Kate: Yeah. I mean it's I mean
Brandon: Yeah, I I had I had my Bitcoin on this thing for probably a couple of years. and the reason that I switched off of it was because I just it felt like it was a single point of failure that you
Kate: Yeah.
Brandon: know I just didn't want to yeah, I wanted to, you know, have have a better better solution for. So yeah, there was people on on I can't remember who it was, somebody there was a post about how Talking about how like we all, you know, in retrospect, it's pretty stupid that we were plugging these things into like nine volt batteries to avoid plugging them into computers, to,
Kate: Yeah.
Brandon: you know, not connect them to the internet. And then meanwhile, like they were just they were so insecure. yeah, it's it's pretty crazy. but you know, this I mean this will never hold Bitcoin again, I think for me, but
Kate: Yeah.
Brandon: It's like a little relic now that I have in my my growing supply of like failed Bitcoin products.
Kate: That's funny. there you go. my god. Yeah,
Brandon: Put it next to my BlockFi credit card.
Kate: that's so good. Just a shrine of failed Bitcoin
Brandon: Yeah.
Kate: memorabilia.
Brandon: So, how should you secure your Bitcoin now? I already mentioned like one point of failure, right? We don't want all of your eggs in one basket. So I would recommend personally, like if you have anything on a cold card, even if you rolled dice. look into other options. there's so many options that are out there. we're gonna get into some of them. my recommendation though, as you're thinking about like, okay, I had a cold card. What do I do with my Bitcoin? where do I where do I put my Bitcoin? Is number one, don't put all your eggs in one basket, right? Put them in different places. how I personally think about it, and this is what prompted me to look into BitKey and other options like that that are more multi-sig. is what a lot of people like I used to work at Microsoft and in IT and Microsoft, I learned about this three two one rule. It's a three to one backup rule. And really what that means is you have three copies, three of a backup, two different types, two different media types, right? Whether that's like a backup on a CD, backup on a hard drive, whatever, and one copy off site. So applied to Bitcoin, that means you have three wallets like a multi-sig. you have a mixture between hardware and software wallets. And then one of those wallets is off site. So you don't have all three wallets all in your, you know, desk drawer, right? You have them around in, you know, other locations, outside of your house, you know, outside of your home, to to keep your Bitcoin secure. So if you keep all your Bitcoin on a single hardware wallet, doesn't really matter what type, it could be a ledger, it can be a Trezor, cold card, whatever, right? Then your Bitcoin really isn't like that secure because it's just a single point of failure. So if you have any amount of Bitcoin that, you know, would be life-changing or life altering for you to lose, I think absolutely a bare minimum is you should be looking into multisig as an option. there's a lot of great multisig options out there. BitKey is one that I've talked about a bunch on the show. you have one key on the device, you have a second key on your phone, a third key that BitKey holds themselves that's, you know, off site, right? Casa and Unchained are both also really good options if you want someone to help you manage your multi-sig self-custody. but honestly, multi-sig, you know, custody or just self-custody in general isn't for everyone.
Kate: Yeah.
Brandon: right. If you were not on Twitter all day on, you know, Thursday and Friday and not paying attention, like I don't blame you. Right. We're not all on Twitter all day, every day,
Kate: Yeah, yeah. Yeah.
Brandon: you know, looking for people tweeting about. like zero day incidents. So River, we've talked about on the show before, Fidelity, we've talked about on the show before, Bitgo, Anchor Watch. There's all these really great, really trusted options that are out there that they manage your keys for you. and that's totally acceptable, you know, as an option if you don't want to deal with you know, self custody on your own. there's a lot of great options. And we're we're gonna talk more about Anchor Watch, but Anchor Watch is also offering as kind of a response to this cold card stuff. They're offering free, no obligation custody for 60 days. So if you need a safe haven to store your BTC and reevaluate your options, Anchor Watch is a really great option there. And yeah, there's no side one size all fit solution to, you know, to the answer of like how should I secure my Bitcoin and how should I keep it safe? But most likely you'll have a combination of different hardware and software wallets and, you know, I have some Bitcoin on leather and I have some Bitcoin on a BitKey and I have some Bitcoin and, you know, self some self custody options. And just don't put all your eggs in one basket, I think is the
Kate: Yeah.
Brandon: the main takeaway there.
Kate: Yep. And just to touch on multi sig, I feel like sometimes that's a term that gets thrown around and is not like fully like it's a very simple concept, but I think like just to explain multi sig, it's basically like you have multiple keys that are required to input into your wallet in order to move any funds. So, you know, most wallets right now you just have one one private key. And if you have access to that, you can move all of the funds with a multi-sig, multi signature. You have multiple keys, usually it's like two or three. or it's usually three, right? And then you need like at least two of those keys in order to move the funds. and
Brandon: Yeah. Yeah, there's there's two of three, there's like three of five, there's there's you can have more, you know, I but it's odd
Kate: Yeah. Yeah, that's true.
Brandon: numbers like yeah, generally.
Kate: But it just goes back to this like no point of central failure. which is like again the whole ethos of Bitcoin. So, you know, I guess apply that to
Brandon: Yeah.
Kate: your keys, it just makes a lot of sense. so I think that that's a pretty big wake up call for a lot of people. A lot of Bitcoiners, yeah.
Brandon: Yeah. you mentioned AI. I wanted I was gonna skip ahead and talk about AI before we get to maybe the good news or why this is good for Bitcoin. yeah, there certainly appears to be like an AI security arms race that's happening between the bad actors and the good actors. So some more stuff dropped this week. So bolts, which is a non custodial atomic swap lightning provider. They announced on Monday, this Monday, that their swap services would be unavailable until further notice, which also took down a bunch of other services. They were kind of used as the back end for a lot of other services and providers. in their update, they shared that. so quote: Over the past months, we have seen a steady rise in automated AI-assisted probing of our infrastructure, and we have dealt with several exploits. Each was contained, but the pattern is clear. Attackers now iterate faster than a team our size can find and patch. In the past few days alone, we saw a drastic acceleration. And we do not believe that asymmetry will reverse. After reviewing the results of our own report security scans, we cannot responsibly re-enable swaps, especially as we are being actively targeted by what appear to be multiple resource groups while we race to deploy fixes. So another example, cold card was a similar one, small team. Bolts is also like a small team, and they just can't keep up currently with you know, with the the onslaught, I guess, of of AI. penetration that's happening on in their systems.
Kate: And then there was also Zeus. they announced on Thursday that they were also temporar temporarily shutting down their infrastructure because of a security incident. They said the attack was mitigated and that no customer funds were lost. And they also did say that their like lightning node and LSP channel services would be scheduled to come back in the coming days. But just an another example, yeah, of of AI penetration.
Brandon: Yeah, lots of lots of lightning providers. this morning, BTC Pay server, which also yeah provides like lightning payment infrastructure, they announced that there was a critical vulnerability that was being actively exploited, which can result in a loss of funds. they issued an update. but you know, if if you didn't see that, right, and you're still running an old version of BTC Pay server, like you're exposed literally right now, if you, you know, haven't updated. So yeah, it's just it's crazy. There's all these all these exploits and all these vulnerabilities that are being discovered through the use of AI. And to I guess put a more positive spin on it, like why is all of this good for Bitcoin? I think it's been pretty cool to see Bitcoiners rallying around things that actually matter, like security, you know, security of user. wallet security of like users Bitcoin and not talking about like you know spam which is already like solved through transaction fees. so that's that's been cool. the one thing that's really been highlighted through all this too is codex and Claude both basically refuse to do security audits of anything that's related to crypto
Kate: Yeah.
Brandon: which has caused everyone to turn to like using open models like Kimmy and and Quen. Wanted to highlight specifically Rob Hamilton from Anchor Watch, who has been leading the charge and helped create this red team initiative, which is now being led by Cali from Cashew. And they've been basically been spending probably upwards of like $10,000 of a day in in credits on open weight open weight models like like Kimmy and Quen to find more vulnerabilities in Bitcoin infrastructure. I think the the BTC pay server one was like actually like discovered through the red teaming. so that's been really huge. in an update yesterday, Callie shared that they had scanned 425 projects so far. and they had of those 425 projects, they have produced over a thousand high or critical findings that they're reporting, you know, to the to those teams. So wanted to give a shout out to OpenSats. if you have the means, OpenSats has established a red team fund. to help pay security researchers and reimburse the LLM costs that they've been burning through. So opensats.org slash funds slash red is the URL. wanted to give them a shout out. But the reason that this is all good for Bitcoin is this is it's it's forcing, you know, kind of this wake up call of like, we really need to like make sure that all of our Bitcoin infrastructure is is hardened. You know, Bitcoin itself has not been hacked, but there's all these, you know, all these different infrastructure providers that are getting hacked and you know, I think I I'm I'm still like pretty hopeful that these types of things will be able to be patched faster than they can be exploited. And we're gonna see, you know, a few things of maybe some of these services temporarily shutting down while that kind of transition happens. But I'm still pretty I don't know, hopeful, I guess, that that this is all gonna be good for Bitcoin in the end. and it's just gonna, you know, make all of our Bitcoin more secure.
Kate: You know. But again to those, you know, who might have been affected by this, like it's a seriously tough time. I can't even imagine. So let's hope it's good
Brandon: Yeah, I know.
Kate: for Bitcoin in the end and hope that like yeah, it just like strengthens and hardens the network as as we ki continue to go through a lot of AI and quantum and stuff like this. So yeah.
Brandon: Yeah. Well said.
Kate: Should we get into some bankruptcy now?
Brandon: Yeah like yeah.
Kate: Take it away.
Brandon: yeah, decentralized crypto project storage has filed for chapter 11 bankruptcy. so storage labs, which is the company behind the decentralized cloud storage network storage. I think it's storage storage, has
Kate: Yeah, I think so storage. Yeah.
Brandon: filed for chapter 11 bankruptcy protection to restructure their legacy debt while keeping the network fully operational. the company previously raised around $35 million, including roughly $30 million through its 2017. Token sale. their token, which is S T O R J storage, has nearly halved in the past two weeks to just four cents and is now down basically 99 cents from the all-time high of three dollars and eighty cents in 2021. to four cents. It's crazy. so yeah, our RIP to storage, I guess. I don't know how decentralized you can call it if you're, you know, filing for bankruptcy.
Kate: Yeah.
Brandon: It's interesting, interesting way to put it. but my recommendation if you're looking for a great decentralized storage option is is ordinals, like Bitcoin ordinals. Put it on the put it on Bitcoin. and you'll never have to, you know, it's it's on there and it's permanent. So that's my my recommendation if you're looking for an alternative, I guess.
Kate: Yeah. One time fee. and then we can get into some good news. just kidding, it's not good news. The next
Brandon: Yeah.
Kate: story we have is around a French tax agent who allegedly sold personal data of crypto users to criminals. And so in this story, there is a French tax agent who is identified as Galia C. and they've been accused of accessing and selling sensitive information from internal French tax authority databases and then selling that to criminals who are then using this data. and I think there was at least one violent home assault on a prison officer and his wife. it kind of stemmed from like a dispute over smuggled mobile phones in a prison cell. but yeah, regardless, it's enabled a home invasion and, you know potentially some wrench attacks here. So Gallia, who is this tax agent, also queried details on those known to be involved with crypto who would be suspected of having substantial holdings of, you know, Bitcoin or other crypto assets and potentially setting them up for, yeah, wrench attacks where basically the person who's doing the attack uses like physical force to like a wrench, you know, it's like imagine taking a wrench that's worth five dollars and like extracting, you know, a lot of bic Bitcoin or like digital assets from someone who who is holding them on their hardware device. So yeah, not good.
Brandon: Yeah. This a another another like reason to like do multisig as well and
Kate: Yes.
Brandon: have like wallets like not in your home. cause like basically like if if somebody broke into your home and held you at gunpoint and was like, give me all your Bitcoin, like if you have a proper good multisig setup, like that should actually not even be possible. Like you should
Kate: Yeah, exactly.
Brandon: not even be able to do that.
Kate: Yeah.
Brandon: You know, depending on how much Bitcoin you have, if if if you care about that stuff. So yeah, that's that's another reason to look into some of these other services like Unchained, Casa, for for multi sig. 'cause yeah, it's just another way of like further securing your Bitcoin.
Kate: It's also like an a knock on like how KYC and like these mandatory like reporting structures are
Brandon: Yeah.
Kate: potentially very dangerous for crypto holders. And like even, you know, France had some like crypto kidnappings last year. I think the ledger CEO. Yeah,
Brandon: Yeah. Yeah, I wonder if these were related to that.
Kate: I don't know. but it's like Yeah, it's called this like honeypot effect, right? It's like all of this like super valuable information. Like imagine like you look look at like ledgers, like imagine they have a Shopify store and you access that. Now you have like everyone who potentially has assets. And so it's like a it's very tough. And it it like it it goes to show like why a lot of Bitcoin holders are very private, don't
Brandon: Yeah.
Kate: like to like share much about themselves or yeah, it's It's a tough situation 'cause you really don't want
Brandon: Yeah.
Kate: to be linked to it, right?
Brandon: Yeah, I mean there you mentioned like ledger, like ledger's had like their email databases like you know hacked multiple times, I think, in the past. if you order, you know, if you order a hardware wallet from one of these guys and their like databases get hacked and suddenly the hackers know the addresses of all the users of ledger, like that's a potentially really bad thing.
Kate: Yeah. Mm-hmm.
Brandon: right. Like you you hear sometimes like abdicating like go to go to Best Buy, you know, and and buy your ledger there. and pay cash and
Kate: Yeah.
Brandon: you know, do all the things to try to like disconnect from you know
Kate: Yeah.
Brandon: from that as much as you can
Kate: Yeah.
Brandon: to to not connect your identity to to the hardware wallet. yeah, it's just these things that you have to think about these days. It's it's pretty crazy.
Kate: Or just yeah, go store it on FTX, you know.
Brandon: I guess after you know those users were made whole through their
Kate: Yeah.
Brandon: they were one of the main investors in anthropic and you know look at them now. Yeah.
Kate: That's so good.
Brandon: some cool news. we've been we've been pretty bleak so far. Some cool news.
Kate: Yeah.
Brandon: So Wiz from mempool.space, creator founder of of of mempool.space, he shared his intent to file for dot bitcoin as a TLD with ICANN. This is really cool. So posted about it. we can share the link in the show notes. But basically said for the first time since 2012, ICANN is accepting applications for new generic top-level domains in the DNS route. So a TLD is like dot com dot net. and then you know, we don't have.bitcoin yet, but this is an application to potentially have that in the future. So he basically shared that there's no successful community priority application for this. so he is going to basically take charge and submit this application on behalf of the community. if he doesn't do this, he says the Bitcoin TLD would most likely go to auction and be sold to the highest bidder, potentially falling into the wrong hands, completely outside the reach of the community. So you know, we don't want that, right? We want we want the dot bitcoin to be you know, go to the Bitcoiners. so he basically shared that ICANN's community priority evaluation examines whether the application has support. From the intended identified community. So for the application to succeed and for the dot bitcoin TLD to not get auctioned off to the highest bidder, he needs written statements from relevant operators, projects, organizations, things like that. So go find the post from Wiz. you know, voice your support, I guess. And maybe we'll all have dot bitcoin handles in the near future. We'll see.
Kate: Pretty cool.
Brandon: Yeah.
Kate: All right, well let's get into some quick headlines. we have some some fun ones, but we have quite a few to
Brandon: Yeah.
Kate: get into. so the first one is for anyone who's listening who's a Stacks user. you'll be hearing us preach this quite a bit, but you have to re-stake your STX. And we're trying to switch from stacking to staking. This is like this is the even for STX, yes. I think
Brandon: Okay, even for STX. Okay.
Kate: it's just gonna be easier to just use one terminology and staking is one that like people, you know, across the crypto universe understand. but basically with POX, this is the hard fork that happened on stacks last week. it is a consensus upgrade. So every STX position that was currently stacked becomes unstacked and now needs to be re-staked with the with the upgrade.
Brandon: Mm-hmm.
Kate: So Whether you're using, you know, a pool in leather or you're using Xverse or Sacking Dow, or even Ryder, you will need to restake. And if you don't, you will miss out on Bitcoin rewards. the current cycle will pay out normally as as it does, but you need to re I think it's there is comms about it. I think it's Bitcoin block like nine hundred and sixty thousand and fifty maybe. I think it's scheduled for around August twelfth. but you just need to make make sure that you're restaked before then in order to enter into the next cycle. otherwise, yeah, you will miss out.
Brandon: I did that myself yesterday. I went on stacking Dow and
Kate: Nice.
Brandon: and re re-staked. Restacked. So yeah. Yeah, so by August 12th, I guess do it to avoid interruption. Cause if you don't do it by then, then you'll have to wait another two weeks and you'll have like two weeks without rewards. So yeah.
Kate: Exactly. Yeah. All right.
Brandon: We've feel like we've been talking a lot about this lately over the past few weeks. we've got another another one bites of dust, I guess. Crypto Exchange
Kate: Yeah.
Brandon: Bitmart has announced that they are winding down. trading stops at the end of this month and everything shuts down at the end of January. but I think they said that withdrawals will continue past then. So you're not gonna be out of your, you know, of having access to your your crypto, but RIP Bitmart.
Kate: RIP and another RIP. Do you remember PoApps? Yeah. So
Brandon: I do. Yeah.
Kate: they announced after five years they're winding down too. So PoApp stood for proof of attendance protocol. It was built on Ethereum. And their whole thing was like allowing you to mint memories, digital memories, and they would call them POAPs. So it was kind of like a digital stamp of like, you know, if you attended an event or I don't know, any like virtual event,
Brandon: Yeah.
Kate: in person event, there was a a lot of people that like were really excited about them. They were kind of almost yeah, they're just like an NFT basically. to like prove
Brandon: Mm-hmm.
Kate: that you attended something, you were there, you accomplished something, whatever it was, memory, stuff like that. But yeah, they were just saying crypto's funding cycles and distribution dynamics made it hard to build a sustainable company without cannibalizing the ethos that made PoAP mean something. that was from their founder, but there was a lot of people who were like very happy to see PoApp shut down. They were basically just like, I don't understand why this ever had product market fit and I'm excited to see projects fail that don't have PMF, so harsh words.
Brandon: I think the I the idea of them is interesting. I
Kate: Wow.
Brandon: think what what like upsets me about it is just like I guess they weren't just weren't decentralized, right? Like how how can you shut down? Like
Kate: Yeah, I know.
Brandon: if you were like it's just another like I guess I'm just so my thought process about like NFTs is so like ordinals focused that I'm like, how
Kate: Yes. Yes.
Brandon: how is this like how is it shutting down? What does that even mean? Right? Does
Kate: Yeah.
Brandon: that mean that like suddenly all my all my JPEGs are pointing to nothing? I guess that's what that means.
Kate: Yeah. Yep. Yep.
Brandon: I don't know. I it it's it's weird that we have all these things that say that they're decentralized and they're just clearly not whatsoever decentralized.
Kate: At all. Yeah.
Brandon: but the idea is cool, right? If I like go visit go to like an event, I think I have a couple of Po apps I've gotten from like going to like ETH Denver and stuff like that. I've I've received a few. it's cool to have like a little digital like trinket thing
Kate: Totally.
Brandon: in your wallet when you go and you know, you
Kate: Yes.
Brandon: have like proof. pro literally proof of attendance, right? in in your wallet. So like the idea behind it is is interesting. I just don't understand how it can shut down if it was like marketed as being this decentralized I just I don't know. I guess I'm just too too much of a Bitcoiner or too much of an ordinals
Kate: No, I feel you.
Brandon: you know, maxi, I guess, to to understand how this is a thing.
Kate: Yeah, I agree. People love badges and all of that stuff. But yeah, like you don't need to be decentralized. or like Don't just don't claim you're decentralized if you're not. Like just be what you are. You're like, Yeah,
Brandon: Yeah.
Kate: we create cool N NFTs and we go away, so do they.
Brandon: Yeah. I also saw people joking about the fact that I don't know this girl. Is Isabel is her name.
Kate: I don't either.
Brandon: she like she like posted like the announcement like that PoAps was shutting down or they were winding down Pops and it was like, you know, a few paragraphs long and then she like also posted like a selfie with it and it's just like, what are you doing? Like this is a weird, weird way to announce.
Kate: Yeah. Yeah.
Brandon: I don't know. Maybe maybe they had already let go of their comms team by then or something. A lot of a lot of comms failures over the past couple of weeks. Cold card too. They they just have been absolutely terrible.
Kate: Seriously. Yeah. Yeah. Yeah.
Brandon: anyway. That was what upset me most, I think, was how it was announced that that Poops were shutting down.
Kate: That's funny. Love the analysis.
Brandon: You you mentioned already in in the stacking news, but support for staking STX is now available on Rider One. So we wanted to shout out our friends over at Rider.
Kate: Yeah.
Brandon: that's powered by fast pool. So if you have a rider one hardware wallet, you can you can stake your STX, which is is very cool.
Kate: Yeah, congrats to them. I'm excited that you put this one in here. So TikTok. We covered this that there was like Bitcoin gift cards available for sale on TikTok. And I was I'd asked, like, I wonder if they're on a discount because there's lots of websites where you can sell gift cards, you know, for anything. And people usually sell them at a discount because they just want cash. They don't really want the money to wherever it is. And you're confirming Bitcoin gift cards are selling at a discount on TikTok. They're full.
Brandon: Yeah, I don't know if it's I don't know if it's still live, but the the CEO of Fold, which is like who powers the Bitcoin gift cards,
Kate: Yeah.
Brandon: tweeted about this, that yeah, they they were on sale. I guess, yeah, they're you could buy like a twenty-five dollar Bitcoin gift card for twenty one dollars and twenty-five
Kate: Yeah.
Brandon: cents, which is like a pretty decent discount.
Kate: Pretty decent deal. But people he was kinda getting rinsed in the comments because people were saying like, well, there's a premium that you have to pay and like s I don't know if Fold takes a fee. I'm not sure what it was, but you were still getting it at a discount. It was just like he was claiming it was fifteen percent and like with the fee that you were paying it was ended up being like seven or eight percent, which still cheaper, but
Brandon: Yeah. Yeah, I don't everyone takes like always takes a little spread on the back end. So who knows like how much the actual savings is, I guess. I haven't done the math.
Kate: little fun and then we have a W for the solo miners so I think on Monday we had another solo miner who was able to mine a Bitcoin block. the reward is was a 3.157 BTC which is roughly around 200k and that's three weeks after another solo miner hit a block and took home like roughly the same amount. But three weeks ago it was he was using a Bit Axe, which is basically like an it's an open source miner that's like so small it literally fits in your hand and costs like a few hundred dollars. and the odds of hitting a Bitcoin block using that are like one in billions.
Brandon: Yeah.
Kate: but I guess it's like the year of the solo miner because this is like now 13 solo blocks this year that have been Yeah, one by solo minors, which is usually there's like maybe one a year. I don't know what's happening.
Brandon: Mm-hmm. Yeah. I feel like we have mentioned this a few times this year on the show.
Kate: Yeah.
Brandon: that that this happened. So yeah. I yeah, it's it's called like lottery mining, basically. It's like it's
Kate: Yes.
Brandon: like the risk of, you know, the risk of the draw, whatever what's the what's the phrase? But yeah, like the the chances of you actually mining a Bitcoin block are really, really low. But if you do, you'll win, you'll win big. It's
Kate: Yeah. You would like. Yeah.
Brandon: pretty cool. lastly, there were reports yesterday and it seems like it's confirmed today that the US Senate has postponed the Clarity Act vote to September when they return from their August recess. So not happening anytime soon, I think is the the consensus with Clarity.
Kate: Well are we surprised? No. No. Yeah, there you go.
Brandon: Not entirely. I mean Bitcoin already has clarity, so it's good with us.
Kate: That should be your new campaign. Bitcoin doesn't need clarity, it already has it. Yeah.
Brandon: Exactly. okay. I think that wraps it up for the week. long episode. we had a
Kate: Thank you. Yeah.
Brandon: lot to go through, a lot of important stuff to talk about with this cold card stuff. hopefully none of our listeners were affected by the cold card stuff. If you do, or if you were, we're we're really sorry. yeah, that's crazy. but you know, hopefully, you know, brighter things to come. Hopefully all these all these security holes get patched. before the hackers, you know, find them. And we'll all be better off from that. But yeah, thank you to everybody for tuning in. catch all of our episodes on goodforbitcoin dot com. We stream live every Friday at two PM Eastern and we will see you all next week.
Kate: Awesome. See you guys.
Kate: my god. I know we've been talking
Brandon: We
Kate: like this last week, just being like, Are you good? Like, is everything okay on your end?
Brandon: Yeah.
Kate: I obviously like the cold card is like the major thing that's been happening, which is pretty devastating for a lot of people in the Bitcoin community. so obviously we're gonna get into that pretty seriously, but oof, it's tough. It's tough to like be preaching self custody, doing all the things right and then this happens. so
Brandon: Yeah. yeah, we we took last week off not because of the incident, but we were planning on taking last week off. And then by Thursday, everything seemed pretty chill, and I was like, okay, it was kind of just like a slow newsweek anyway, so like no big deal. And then everything just hit the fan on Friday. And yeah, we will we will definitely get into all the stuff with cold card. I don't know, it feels feels weird just like being like, but first let's talk about the public companies that are buying Bitcoin, but I guess we gotta gotta keep that up. So we'll start with that. We'll
Kate: You know, that's as
Brandon: yeah, check in on your fellow Bitcoiner though, I guess is is what's going on. There's we're gonna get into it. There was like another like hack thing that happened this morning. it's crazy, crazy time to be you know, self custodying your own your own Bitcoin. but we're gonna get into all the stuff going on with cold card and yeah talking more also about like Okay, well, now what? Like, what do you do with your Bitcoin? How do you keep it safe? And I have some suggestion. We both have some suggestions on that. So we'll get into that. but yeah, let's start with public company news. So strategy, they sold Bitcoin this week. They sold 1637 BTC for around 104 million dollars. They also did another ATM offering, basically meaning that they created new MSTR shares and then sold them on the market. So they kind of diluted the you know the cost of MSTR. With the proceeds, they're they have increased their USD reserve by $250 million. And they also bought back $81 million of STRC. they did an STRC buyback last week too. so with all these Bitcoin sales, they now hold $842,138 BTC. And STRC is at $95 today and continues to rise by like a dollar or two every day, over the past couple of weeks. So I guess they're, you know, recovering over there and We'll probably see STRC back at a hundred dollars pretty soon, from what it looks like.
Kate: We'll see. I think Strategy's currently doing like their holdings call or some kind of earnings call right now. at least I saw a clip
Brandon: Yeah.
Kate: of it. I I didn't really watch it, so I don't know if it's happening live, but yeah, they're reporting on a lot of their numbers, which is which is cool. and then we have Strive, they bought twenty Bitcoin and they now hold twenty thousand and twenty. A lot of numerology there.
Brandon: Lots of yeah, I like that. block revealed it is kind of yeah, quarterly filings season. So block revealed that they have an additional eighty-five BTC in their treasury. They now hold 9,117 bitcoins.
Kate: And then we have the American Bitcoin Corp. They bought two hundred and ninety eight Bitcoin and they now hold eight thousand and three hundred in total.
Brandon: Orange BTC bought thirty Bitcoin. They now hold three thousand nine hundred and forty eight BTC.
Kate: And then capital B bought one Bitcoin. They now hold three thousand one hundred
Brandon: The board.
Kate: and forty.
Brandon: Smarter Web Company bought 12 BTC. They now hold 2712 Bitcoin.
Kate: And then Cypher Digital sold 470 Bitcoin, which brings them down to 646. they've been selling off their Bitcoin since their high of 1500 in total last October. So
Brandon: And yeah, Saquon also they continue to liquidate their position, selling three hundred and forty four BTC. They now just have three hundred and fourteen Bitcoin left. So lots of movement this week. I feel this is like the most companies that we've mentioned in this segment in quite a while.
Kate: Yeah. I've also seen that like whales are still accumulating. So like with all of this getting sold off, it seems like people are well, our BTC whales are picking them up.
Brandon: For for somebody to sell, you gotta have somebody on the other end to buy. There you go.
Kate: Era parte.
Brandon: okay, so let's let's get into what happened with cold card. So
Kate: Yeah.
Brandon: it's kind of crazy because we had just mentioned cold card on the show like a week prior to this happening. in response to Zach XBT, who was talking about how he was recommending like iPhone as like the most secure. Like hardware wallet for your Bitcoin, which we thought
Kate: Yeah.
Brandon: was like a crazy thing to say. And now it's like in retrospect, maybe that wasn't so crazy.
Kate: Yeah.
Brandon: but yeah, anyway, if you haven't been paying attention, so cold card is a hardware wallet, usually recommended as kind of the it's what's in the name, it's a cold Bitcoin wallet. So it's a way of being able to store and manage your Bitcoin without having it. be connected to the internet or connected to like a device at all. Like everything happens like on the device itself. I have one right here. I own one. this is a Mark IV version four. and I for a while I was telling Kate this off stream. For a while, like I had all my Bitcoin on this, which is really crazy to think about considering what what happened recently. So yeah last week basically it was revealed that there was This huge vulnerability in pretty much every cold card. some of the newer ones, I I guess were a little less vulnerable. And depending on how you set up your seed, maybe it was a little less vulnerable. But I think I think just given everything going on, like I would not consider any cold card safe at this point to to
Kate: Yeah.
Brandon: store your Bitcoin. but anyway, even if you never had connected your cold card to the internet, even if you never had, you know. broadcasted your seed to the internet, your you you might have had all your Bitcoin on a cold card and you might have just gotten all your Bitcoin drained, which is super sad for you know any Bitcoiner that was using cold card is their their self-custody hardware, you know, wallet of choice. and it really was surprising because it's it's not, you know, something that you think about. You think, it's like it's a disconnected from the internet. It's a truly cold, you know, hardware wallet, totally offline, like can never get hacked. Like that was the the thought process, right? For for a lot of people, that's how it was kind of sold to people. was that it was like this truly offline device.
Kate: Yeah.
Brandon: yet, you know, thousands of Bitcoin has been lost. It's been kind of people have been tracking it on chain over a hundred million dollars that pri that caught like amount has probably gone up since then,
Kate: Yeah.
Brandon: has been lost due to this hack. So how how could this have happened, I guess we're gonna, I'm gonna do like a quick, a quick explainer. not being like, you know, a a huge expert myself. But this is how I kind of understand it it to be. So when when you're creating a new Bitcoin wallet from scratch, right? your wallet needs to generate a new, a new seed phrase, a new private key. And of course, you want the generation of that private key to be random. you don't want it to be like a predetermined key or predetermined seed phrase. you want it to be truly random. And it turns out that generating a truly random number is actually kind of difficult for computers to do. it has gotten easier and better over the years. and basically all of these major hardware wallets, including cold cards. Know everybody like let Ledger, Trezor, like all the other, you know, hardware wallets, they all ship with these dedicated little chips inside of them that have random number generators in them or RNGs. You'll probably see RNG on the on the timeline a lot with people talking about this. And that's all that the chip does, is it just generates a random number. And the the cold card mark three, which is the main device that was I think the weakest from from this hack, but all the others had a version of it as well. The Mark IV had it and and some of the others. it had it had one of these. It had an RNG in it. it actually was it shipped with two different secure chips inside that were capable of of generating a random number. the primary chip that the Mark III shipped with was called an STM32. which is considered a T RNG, which is a true random number generation. And the issue was that the secure elements RNG was not actually actively used for C generation on Mark III era firmware. Basically, there was this code that lacked this proper path to pull randomness from it for that purpose. And so it it ended up Basically not using it. So in 2021, there was this firmware update that that they put out for the cold cards that introduces bug, which basically made the seed generation silently fall back to using like a software-based version instead of like the hardware-based version. And the hardware-based version is like super secure. And if they had just used the hardware-based version, there wouldn't really have been this problem. but the issue was that it sort of silently fell back to this software-based random number generator. And that software-based random number generator wasn't really designed ever to be like secure as like, you know, generating a Bitcoin seed. It was just like for really basic random number generation. and basically how the software-based version works is it takes the cold card's unique ID, think of it like the cold card's like serial number, and it looks at like what time it is like on an on an RTC kind of scale. And it uses those like inputs to generate a random number. So this basically collapsed the effective entropy, which is like the randomness, how random it is, to roughly around 40 bits, which is far below the intended 128 bits for like a 12-word seed phrase. so because of these factors, you know what the inputs were, To generate these random numbers. this made it possible to reverse engineer seed generation on these devices. So even though these devices were not connected to the internet, you could kind of extrapolate like these are kind of the serial numbers or the IDs, you know, that that these cold cards use. you could just try a bunch of different, you know, dates and times and stuff like that, and effectively just like brute force your way through reverse engineering seed generation. And if you can reverse engineer the way that cold cards generate seeds, you can you can get into Bitcoin wallets that might have, you know, used that seed generation. So that's that's what happened basically. So it's pretty crazy. I think like in retrospect it seems like pretty like obvious that this like is a potential path to like getting your Bitcoin like hacked. the Bitcoin network, of course, didn't get hacked, but like, you know, it's the seed generation itself. But I think like, you know, a couple of weeks ago, like none of us would have really thought about the fact that even though your your hardware wallet was completely disconnected from the internet, that somebody could still like hack your wallet and and take your Bitcoin and steal your Bitcoin. So yeah, everyone you know, with just that just generated like a seed phrase, like using cold card. And nothing else. pretty much all of those wallets, unless you were really fast, got drained. not everyone with a cold card had their funds taken yet, because cold card also has the option of providing additional entropy in the form of dice rolls. You'd see people saying, like, well, I rolled I rolled a dice a hundred times and you know, my bitcoin is still safe. you also can add like a 13th word onto your seed phrase that's known as like a passphrase. so Basically, if you're rolling dice, that is another way of generating, you know, random numbers. And if you roll dice enough times, like a hundred times, that is kind of a way to, you know, more closely approximate like true randomness. so for people that did that with their cold cards, their Bitcoin is a little safer. but I would still basically I I think it's just safe to say like stop using your cold card. Like it's it's just not worth it at this point.
Kate: Yeah.
Brandon: to just continue using it when there's like so many better hardware wallet options out there. But yeah, I don't know. Did that explainer help or like anything else I should add to like what happened and and why these cold cards got exposed the way that they did?
Kate: Mm. I think like the technicality of it, like you did a really good job. It's just like this like weak entropy is really like the it's kind of like one of the oldest failures of like wallets that happened. So like you did a really good job explaining it. I think like what's crazy is you know, you like you consider cold card to be like open I mean I I guess like open source is the right word, or like, you know, at least you can like go review it, but Like the bug wasn't private. It wasn't like you know, it it's not like it was malicious. I mean maybe they had this like big long plan implemented years ago to sell funds. I don't know, just kidding. But
Brandon: No, no, no, don't don't don't spread those kinds of I don't think it was intentional, but it was certainly maybe a little negligent.
Kate: Yeah. At the at the end of the day it's like open source like only works if like you're actually auditing it and you're like going through it consistently. so you know, sitting there for like five years on this bug is just kind of like mind blowing to me. but I don't know, it's cra it's
Brandon: Yeah. Yeah, that's a that's a good point to highlight is that this bug has existed for like five years. and yeah. Exactly.
Kate: Yeah. And it's like with AI really that a lot of this has been like uncovered, right? which is like also something we're gonna talk about later, is just like so many it's just like accelerating the rate at which like AI attackers are yeah, like outpacing like teams and and companies
Brandon: Yeah.
Kate: and you know, you can still have all of these like security practices in place, but there's like there is a lot of vulnerabilities out there. Which are being exposed and it's just so unfortunate how this one this one happened. I've been I've been seeing that like the amount of like cold wallet transfers is hitting like all time highs right now. basically like since FTX, people are just like obviously trying to like move their funds. and it's hard to know like whether it's being stolen or whether it's someone just like moving, you know, to their
Brandon: Yeah.
Kate: own custody again, but yeah.
Brandon: Yeah, my hot take post that I that I made last week was your Bitcoin would have been safer on FTX than it would have been on a cold card. Which is a crazy thing to say.
Kate: I was telling you, like there were only Yeah. And we were talking offline about this and I was like, honestly, like my laziness saved me here. Like I had a cold card
Brandon: Yeah.
Kate: and I'd been planning to use it for years, and I just like it was this whole process of understanding like how air gapping works that like seemed kind of daunting to me, and I just never ended up doing it. and why
Brandon: Yeah.
Kate: Yeah. I mean it's I mean
Brandon: Yeah, I I had I had my Bitcoin on this thing for probably a couple of years. and the reason that I switched off of it was because I just it felt like it was a single point of failure that you
Kate: Yeah.
Brandon: know I just didn't want to yeah, I wanted to, you know, have have a better better solution for. So yeah, there was people on on I can't remember who it was, somebody there was a post about how Talking about how like we all, you know, in retrospect, it's pretty stupid that we were plugging these things into like nine volt batteries to avoid plugging them into computers, to,
Kate: Yeah.
Brandon: you know, not connect them to the internet. And then meanwhile, like they were just they were so insecure. yeah, it's it's pretty crazy. but you know, this I mean this will never hold Bitcoin again, I think for me, but
Kate: Yeah.
Brandon: It's like a little relic now that I have in my my growing supply of like failed Bitcoin products.
Kate: That's funny. there you go. my god. Yeah,
Brandon: Put it next to my BlockFi credit card.
Kate: that's so good. Just a shrine of failed Bitcoin
Brandon: Yeah.
Kate: memorabilia.
Brandon: So, how should you secure your Bitcoin now? I already mentioned like one point of failure, right? We don't want all of your eggs in one basket. So I would recommend personally, like if you have anything on a cold card, even if you rolled dice. look into other options. there's so many options that are out there. we're gonna get into some of them. my recommendation though, as you're thinking about like, okay, I had a cold card. What do I do with my Bitcoin? where do I where do I put my Bitcoin? Is number one, don't put all your eggs in one basket, right? Put them in different places. how I personally think about it, and this is what prompted me to look into BitKey and other options like that that are more multi-sig. is what a lot of people like I used to work at Microsoft and in IT and Microsoft, I learned about this three two one rule. It's a three to one backup rule. And really what that means is you have three copies, three of a backup, two different types, two different media types, right? Whether that's like a backup on a CD, backup on a hard drive, whatever, and one copy off site. So applied to Bitcoin, that means you have three wallets like a multi-sig. you have a mixture between hardware and software wallets. And then one of those wallets is off site. So you don't have all three wallets all in your, you know, desk drawer, right? You have them around in, you know, other locations, outside of your house, you know, outside of your home, to to keep your Bitcoin secure. So if you keep all your Bitcoin on a single hardware wallet, doesn't really matter what type, it could be a ledger, it can be a Trezor, cold card, whatever, right? Then your Bitcoin really isn't like that secure because it's just a single point of failure. So if you have any amount of Bitcoin that, you know, would be life-changing or life altering for you to lose, I think absolutely a bare minimum is you should be looking into multisig as an option. there's a lot of great multisig options out there. BitKey is one that I've talked about a bunch on the show. you have one key on the device, you have a second key on your phone, a third key that BitKey holds themselves that's, you know, off site, right? Casa and Unchained are both also really good options if you want someone to help you manage your multi-sig self-custody. but honestly, multi-sig, you know, custody or just self-custody in general isn't for everyone.
Kate: Yeah.
Brandon: right. If you were not on Twitter all day on, you know, Thursday and Friday and not paying attention, like I don't blame you. Right. We're not all on Twitter all day, every day,
Kate: Yeah, yeah. Yeah.
Brandon: you know, looking for people tweeting about. like zero day incidents. So River, we've talked about on the show before, Fidelity, we've talked about on the show before, Bitgo, Anchor Watch. There's all these really great, really trusted options that are out there that they manage your keys for you. and that's totally acceptable, you know, as an option if you don't want to deal with you know, self custody on your own. there's a lot of great options. And we're we're gonna talk more about Anchor Watch, but Anchor Watch is also offering as kind of a response to this cold card stuff. They're offering free, no obligation custody for 60 days. So if you need a safe haven to store your BTC and reevaluate your options, Anchor Watch is a really great option there. And yeah, there's no side one size all fit solution to, you know, to the answer of like how should I secure my Bitcoin and how should I keep it safe? But most likely you'll have a combination of different hardware and software wallets and, you know, I have some Bitcoin on leather and I have some Bitcoin on a BitKey and I have some Bitcoin and, you know, self some self custody options. And just don't put all your eggs in one basket, I think is the
Kate: Yeah.
Brandon: the main takeaway there.
Kate: Yep. And just to touch on multi sig, I feel like sometimes that's a term that gets thrown around and is not like fully like it's a very simple concept, but I think like just to explain multi sig, it's basically like you have multiple keys that are required to input into your wallet in order to move any funds. So, you know, most wallets right now you just have one one private key. And if you have access to that, you can move all of the funds with a multi-sig, multi signature. You have multiple keys, usually it's like two or three. or it's usually three, right? And then you need like at least two of those keys in order to move the funds. and
Brandon: Yeah. Yeah, there's there's two of three, there's like three of five, there's there's you can have more, you know, I but it's odd
Kate: Yeah. Yeah, that's true.
Brandon: numbers like yeah, generally.
Kate: But it just goes back to this like no point of central failure. which is like again the whole ethos of Bitcoin. So, you know, I guess apply that to
Brandon: Yeah.
Kate: your keys, it just makes a lot of sense. so I think that that's a pretty big wake up call for a lot of people. A lot of Bitcoiners, yeah.
Brandon: Yeah. you mentioned AI. I wanted I was gonna skip ahead and talk about AI before we get to maybe the good news or why this is good for Bitcoin. yeah, there certainly appears to be like an AI security arms race that's happening between the bad actors and the good actors. So some more stuff dropped this week. So bolts, which is a non custodial atomic swap lightning provider. They announced on Monday, this Monday, that their swap services would be unavailable until further notice, which also took down a bunch of other services. They were kind of used as the back end for a lot of other services and providers. in their update, they shared that. so quote: Over the past months, we have seen a steady rise in automated AI-assisted probing of our infrastructure, and we have dealt with several exploits. Each was contained, but the pattern is clear. Attackers now iterate faster than a team our size can find and patch. In the past few days alone, we saw a drastic acceleration. And we do not believe that asymmetry will reverse. After reviewing the results of our own report security scans, we cannot responsibly re-enable swaps, especially as we are being actively targeted by what appear to be multiple resource groups while we race to deploy fixes. So another example, cold card was a similar one, small team. Bolts is also like a small team, and they just can't keep up currently with you know, with the the onslaught, I guess, of of AI. penetration that's happening on in their systems.
Kate: And then there was also Zeus. they announced on Thursday that they were also temporar temporarily shutting down their infrastructure because of a security incident. They said the attack was mitigated and that no customer funds were lost. And they also did say that their like lightning node and LSP channel services would be scheduled to come back in the coming days. But just an another example, yeah, of of AI penetration.
Brandon: Yeah, lots of lots of lightning providers. this morning, BTC Pay server, which also yeah provides like lightning payment infrastructure, they announced that there was a critical vulnerability that was being actively exploited, which can result in a loss of funds. they issued an update. but you know, if if you didn't see that, right, and you're still running an old version of BTC Pay server, like you're exposed literally right now, if you, you know, haven't updated. So yeah, it's just it's crazy. There's all these all these exploits and all these vulnerabilities that are being discovered through the use of AI. And to I guess put a more positive spin on it, like why is all of this good for Bitcoin? I think it's been pretty cool to see Bitcoiners rallying around things that actually matter, like security, you know, security of user. wallet security of like users Bitcoin and not talking about like you know spam which is already like solved through transaction fees. so that's that's been cool. the one thing that's really been highlighted through all this too is codex and Claude both basically refuse to do security audits of anything that's related to crypto
Kate: Yeah.
Brandon: which has caused everyone to turn to like using open models like Kimmy and and Quen. Wanted to highlight specifically Rob Hamilton from Anchor Watch, who has been leading the charge and helped create this red team initiative, which is now being led by Cali from Cashew. And they've been basically been spending probably upwards of like $10,000 of a day in in credits on open weight open weight models like like Kimmy and Quen to find more vulnerabilities in Bitcoin infrastructure. I think the the BTC pay server one was like actually like discovered through the red teaming. so that's been really huge. in an update yesterday, Callie shared that they had scanned 425 projects so far. and they had of those 425 projects, they have produced over a thousand high or critical findings that they're reporting, you know, to the to those teams. So wanted to give a shout out to OpenSats. if you have the means, OpenSats has established a red team fund. to help pay security researchers and reimburse the LLM costs that they've been burning through. So opensats.org slash funds slash red is the URL. wanted to give them a shout out. But the reason that this is all good for Bitcoin is this is it's it's forcing, you know, kind of this wake up call of like, we really need to like make sure that all of our Bitcoin infrastructure is is hardened. You know, Bitcoin itself has not been hacked, but there's all these, you know, all these different infrastructure providers that are getting hacked and you know, I think I I'm I'm still like pretty hopeful that these types of things will be able to be patched faster than they can be exploited. And we're gonna see, you know, a few things of maybe some of these services temporarily shutting down while that kind of transition happens. But I'm still pretty I don't know, hopeful, I guess, that that this is all gonna be good for Bitcoin in the end. and it's just gonna, you know, make all of our Bitcoin more secure.
Kate: You know. But again to those, you know, who might have been affected by this, like it's a seriously tough time. I can't even imagine. So let's hope it's good
Brandon: Yeah, I know.
Kate: for Bitcoin in the end and hope that like yeah, it just like strengthens and hardens the network as as we ki continue to go through a lot of AI and quantum and stuff like this. So yeah.
Brandon: Yeah. Well said.
Kate: Should we get into some bankruptcy now?
Brandon: Yeah like yeah.
Kate: Take it away.
Brandon: yeah, decentralized crypto project storage has filed for chapter 11 bankruptcy. so storage labs, which is the company behind the decentralized cloud storage network storage. I think it's storage storage, has
Kate: Yeah, I think so storage. Yeah.
Brandon: filed for chapter 11 bankruptcy protection to restructure their legacy debt while keeping the network fully operational. the company previously raised around $35 million, including roughly $30 million through its 2017. Token sale. their token, which is S T O R J storage, has nearly halved in the past two weeks to just four cents and is now down basically 99 cents from the all-time high of three dollars and eighty cents in 2021. to four cents. It's crazy. so yeah, our RIP to storage, I guess. I don't know how decentralized you can call it if you're, you know, filing for bankruptcy.
Kate: Yeah.
Brandon: It's interesting, interesting way to put it. but my recommendation if you're looking for a great decentralized storage option is is ordinals, like Bitcoin ordinals. Put it on the put it on Bitcoin. and you'll never have to, you know, it's it's on there and it's permanent. So that's my my recommendation if you're looking for an alternative, I guess.
Kate: Yeah. One time fee. and then we can get into some good news. just kidding, it's not good news. The next
Brandon: Yeah.
Kate: story we have is around a French tax agent who allegedly sold personal data of crypto users to criminals. And so in this story, there is a French tax agent who is identified as Galia C. and they've been accused of accessing and selling sensitive information from internal French tax authority databases and then selling that to criminals who are then using this data. and I think there was at least one violent home assault on a prison officer and his wife. it kind of stemmed from like a dispute over smuggled mobile phones in a prison cell. but yeah, regardless, it's enabled a home invasion and, you know potentially some wrench attacks here. So Gallia, who is this tax agent, also queried details on those known to be involved with crypto who would be suspected of having substantial holdings of, you know, Bitcoin or other crypto assets and potentially setting them up for, yeah, wrench attacks where basically the person who's doing the attack uses like physical force to like a wrench, you know, it's like imagine taking a wrench that's worth five dollars and like extracting, you know, a lot of bic Bitcoin or like digital assets from someone who who is holding them on their hardware device. So yeah, not good.
Brandon: Yeah. This a another another like reason to like do multisig as well and
Kate: Yes.
Brandon: have like wallets like not in your home. cause like basically like if if somebody broke into your home and held you at gunpoint and was like, give me all your Bitcoin, like if you have a proper good multisig setup, like that should actually not even be possible. Like you should
Kate: Yeah, exactly.
Brandon: not even be able to do that.
Kate: Yeah.
Brandon: You know, depending on how much Bitcoin you have, if if if you care about that stuff. So yeah, that's that's another reason to look into some of these other services like Unchained, Casa, for for multi sig. 'cause yeah, it's just another way of like further securing your Bitcoin.
Kate: It's also like an a knock on like how KYC and like these mandatory like reporting structures are
Brandon: Yeah.
Kate: potentially very dangerous for crypto holders. And like even, you know, France had some like crypto kidnappings last year. I think the ledger CEO. Yeah,
Brandon: Yeah. Yeah, I wonder if these were related to that.
Kate: I don't know. but it's like Yeah, it's called this like honeypot effect, right? It's like all of this like super valuable information. Like imagine like you look look at like ledgers, like imagine they have a Shopify store and you access that. Now you have like everyone who potentially has assets. And so it's like a it's very tough. And it it like it it goes to show like why a lot of Bitcoin holders are very private, don't
Brandon: Yeah.
Kate: like to like share much about themselves or yeah, it's It's a tough situation 'cause you really don't want
Brandon: Yeah.
Kate: to be linked to it, right?
Brandon: Yeah, I mean there you mentioned like ledger, like ledger's had like their email databases like you know hacked multiple times, I think, in the past. if you order, you know, if you order a hardware wallet from one of these guys and their like databases get hacked and suddenly the hackers know the addresses of all the users of ledger, like that's a potentially really bad thing.
Kate: Yeah. Mm-hmm.
Brandon: right. Like you you hear sometimes like abdicating like go to go to Best Buy, you know, and and buy your ledger there. and pay cash and
Kate: Yeah.
Brandon: you know, do all the things to try to like disconnect from you know
Kate: Yeah.
Brandon: from that as much as you can
Kate: Yeah.
Brandon: to to not connect your identity to to the hardware wallet. yeah, it's just these things that you have to think about these days. It's it's pretty crazy.
Kate: Or just yeah, go store it on FTX, you know.
Brandon: I guess after you know those users were made whole through their
Kate: Yeah.
Brandon: they were one of the main investors in anthropic and you know look at them now. Yeah.
Kate: That's so good.
Brandon: some cool news. we've been we've been pretty bleak so far. Some cool news.
Kate: Yeah.
Brandon: So Wiz from mempool.space, creator founder of of of mempool.space, he shared his intent to file for dot bitcoin as a TLD with ICANN. This is really cool. So posted about it. we can share the link in the show notes. But basically said for the first time since 2012, ICANN is accepting applications for new generic top-level domains in the DNS route. So a TLD is like dot com dot net. and then you know, we don't have.bitcoin yet, but this is an application to potentially have that in the future. So he basically shared that there's no successful community priority application for this. so he is going to basically take charge and submit this application on behalf of the community. if he doesn't do this, he says the Bitcoin TLD would most likely go to auction and be sold to the highest bidder, potentially falling into the wrong hands, completely outside the reach of the community. So you know, we don't want that, right? We want we want the dot bitcoin to be you know, go to the Bitcoiners. so he basically shared that ICANN's community priority evaluation examines whether the application has support. From the intended identified community. So for the application to succeed and for the dot bitcoin TLD to not get auctioned off to the highest bidder, he needs written statements from relevant operators, projects, organizations, things like that. So go find the post from Wiz. you know, voice your support, I guess. And maybe we'll all have dot bitcoin handles in the near future. We'll see.
Kate: Pretty cool.
Brandon: Yeah.
Kate: All right, well let's get into some quick headlines. we have some some fun ones, but we have quite a few to
Brandon: Yeah.
Kate: get into. so the first one is for anyone who's listening who's a Stacks user. you'll be hearing us preach this quite a bit, but you have to re-stake your STX. And we're trying to switch from stacking to staking. This is like this is the even for STX, yes. I think
Brandon: Okay, even for STX. Okay.
Kate: it's just gonna be easier to just use one terminology and staking is one that like people, you know, across the crypto universe understand. but basically with POX, this is the hard fork that happened on stacks last week. it is a consensus upgrade. So every STX position that was currently stacked becomes unstacked and now needs to be re-staked with the with the upgrade.
Brandon: Mm-hmm.
Kate: So Whether you're using, you know, a pool in leather or you're using Xverse or Sacking Dow, or even Ryder, you will need to restake. And if you don't, you will miss out on Bitcoin rewards. the current cycle will pay out normally as as it does, but you need to re I think it's there is comms about it. I think it's Bitcoin block like nine hundred and sixty thousand and fifty maybe. I think it's scheduled for around August twelfth. but you just need to make make sure that you're restaked before then in order to enter into the next cycle. otherwise, yeah, you will miss out.
Brandon: I did that myself yesterday. I went on stacking Dow and
Kate: Nice.
Brandon: and re re-staked. Restacked. So yeah. Yeah, so by August 12th, I guess do it to avoid interruption. Cause if you don't do it by then, then you'll have to wait another two weeks and you'll have like two weeks without rewards. So yeah.
Kate: Exactly. Yeah. All right.
Brandon: We've feel like we've been talking a lot about this lately over the past few weeks. we've got another another one bites of dust, I guess. Crypto Exchange
Kate: Yeah.
Brandon: Bitmart has announced that they are winding down. trading stops at the end of this month and everything shuts down at the end of January. but I think they said that withdrawals will continue past then. So you're not gonna be out of your, you know, of having access to your your crypto, but RIP Bitmart.
Kate: RIP and another RIP. Do you remember PoApps? Yeah. So
Brandon: I do. Yeah.
Kate: they announced after five years they're winding down too. So PoApp stood for proof of attendance protocol. It was built on Ethereum. And their whole thing was like allowing you to mint memories, digital memories, and they would call them POAPs. So it was kind of like a digital stamp of like, you know, if you attended an event or I don't know, any like virtual event,
Brandon: Yeah.
Kate: in person event, there was a a lot of people that like were really excited about them. They were kind of almost yeah, they're just like an NFT basically. to like prove
Brandon: Mm-hmm.
Kate: that you attended something, you were there, you accomplished something, whatever it was, memory, stuff like that. But yeah, they were just saying crypto's funding cycles and distribution dynamics made it hard to build a sustainable company without cannibalizing the ethos that made PoAP mean something. that was from their founder, but there was a lot of people who were like very happy to see PoApp shut down. They were basically just like, I don't understand why this ever had product market fit and I'm excited to see projects fail that don't have PMF, so harsh words.
Brandon: I think the I the idea of them is interesting. I
Kate: Wow.
Brandon: think what what like upsets me about it is just like I guess they weren't just weren't decentralized, right? Like how how can you shut down? Like
Kate: Yeah, I know.
Brandon: if you were like it's just another like I guess I'm just so my thought process about like NFTs is so like ordinals focused that I'm like, how
Kate: Yes. Yes.
Brandon: how is this like how is it shutting down? What does that even mean? Right? Does
Kate: Yeah.
Brandon: that mean that like suddenly all my all my JPEGs are pointing to nothing? I guess that's what that means.
Kate: Yeah. Yep. Yep.
Brandon: I don't know. I it it's it's weird that we have all these things that say that they're decentralized and they're just clearly not whatsoever decentralized.
Kate: At all. Yeah.
Brandon: but the idea is cool, right? If I like go visit go to like an event, I think I have a couple of Po apps I've gotten from like going to like ETH Denver and stuff like that. I've I've received a few. it's cool to have like a little digital like trinket thing
Kate: Totally.
Brandon: in your wallet when you go and you know, you
Kate: Yes.
Brandon: have like proof. pro literally proof of attendance, right? in in your wallet. So like the idea behind it is is interesting. I just don't understand how it can shut down if it was like marketed as being this decentralized I just I don't know. I guess I'm just too too much of a Bitcoiner or too much of an ordinals
Kate: No, I feel you.
Brandon: you know, maxi, I guess, to to understand how this is a thing.
Kate: Yeah, I agree. People love badges and all of that stuff. But yeah, like you don't need to be decentralized. or like Don't just don't claim you're decentralized if you're not. Like just be what you are. You're like, Yeah,
Brandon: Yeah.
Kate: we create cool N NFTs and we go away, so do they.
Brandon: Yeah. I also saw people joking about the fact that I don't know this girl. Is Isabel is her name.
Kate: I don't either.
Brandon: she like she like posted like the announcement like that PoAps was shutting down or they were winding down Pops and it was like, you know, a few paragraphs long and then she like also posted like a selfie with it and it's just like, what are you doing? Like this is a weird, weird way to announce.
Kate: Yeah. Yeah.
Brandon: I don't know. Maybe maybe they had already let go of their comms team by then or something. A lot of a lot of comms failures over the past couple of weeks. Cold card too. They they just have been absolutely terrible.
Kate: Seriously. Yeah. Yeah. Yeah.
Brandon: anyway. That was what upset me most, I think, was how it was announced that that Poops were shutting down.
Kate: That's funny. Love the analysis.
Brandon: You you mentioned already in in the stacking news, but support for staking STX is now available on Rider One. So we wanted to shout out our friends over at Rider.
Kate: Yeah.
Brandon: that's powered by fast pool. So if you have a rider one hardware wallet, you can you can stake your STX, which is is very cool.
Kate: Yeah, congrats to them. I'm excited that you put this one in here. So TikTok. We covered this that there was like Bitcoin gift cards available for sale on TikTok. And I was I'd asked, like, I wonder if they're on a discount because there's lots of websites where you can sell gift cards, you know, for anything. And people usually sell them at a discount because they just want cash. They don't really want the money to wherever it is. And you're confirming Bitcoin gift cards are selling at a discount on TikTok. They're full.
Brandon: Yeah, I don't know if it's I don't know if it's still live, but the the CEO of Fold, which is like who powers the Bitcoin gift cards,
Kate: Yeah.
Brandon: tweeted about this, that yeah, they they were on sale. I guess, yeah, they're you could buy like a twenty-five dollar Bitcoin gift card for twenty one dollars and twenty-five
Kate: Yeah.
Brandon: cents, which is like a pretty decent discount.
Kate: Pretty decent deal. But people he was kinda getting rinsed in the comments because people were saying like, well, there's a premium that you have to pay and like s I don't know if Fold takes a fee. I'm not sure what it was, but you were still getting it at a discount. It was just like he was claiming it was fifteen percent and like with the fee that you were paying it was ended up being like seven or eight percent, which still cheaper, but
Brandon: Yeah. Yeah, I don't everyone takes like always takes a little spread on the back end. So who knows like how much the actual savings is, I guess. I haven't done the math.
Kate: little fun and then we have a W for the solo miners so I think on Monday we had another solo miner who was able to mine a Bitcoin block. the reward is was a 3.157 BTC which is roughly around 200k and that's three weeks after another solo miner hit a block and took home like roughly the same amount. But three weeks ago it was he was using a Bit Axe, which is basically like an it's an open source miner that's like so small it literally fits in your hand and costs like a few hundred dollars. and the odds of hitting a Bitcoin block using that are like one in billions.
Brandon: Yeah.
Kate: but I guess it's like the year of the solo miner because this is like now 13 solo blocks this year that have been Yeah, one by solo minors, which is usually there's like maybe one a year. I don't know what's happening.
Brandon: Mm-hmm. Yeah. I feel like we have mentioned this a few times this year on the show.
Kate: Yeah.
Brandon: that that this happened. So yeah. I yeah, it's it's called like lottery mining, basically. It's like it's
Kate: Yes.
Brandon: like the risk of, you know, the risk of the draw, whatever what's the what's the phrase? But yeah, like the the chances of you actually mining a Bitcoin block are really, really low. But if you do, you'll win, you'll win big. It's
Kate: Yeah. You would like. Yeah.
Brandon: pretty cool. lastly, there were reports yesterday and it seems like it's confirmed today that the US Senate has postponed the Clarity Act vote to September when they return from their August recess. So not happening anytime soon, I think is the the consensus with Clarity.
Kate: Well are we surprised? No. No. Yeah, there you go.
Brandon: Not entirely. I mean Bitcoin already has clarity, so it's good with us.
Kate: That should be your new campaign. Bitcoin doesn't need clarity, it already has it. Yeah.
Brandon: Exactly. okay. I think that wraps it up for the week. long episode. we had a
Kate: Thank you. Yeah.
Brandon: lot to go through, a lot of important stuff to talk about with this cold card stuff. hopefully none of our listeners were affected by the cold card stuff. If you do, or if you were, we're we're really sorry. yeah, that's crazy. but you know, hopefully, you know, brighter things to come. Hopefully all these all these security holes get patched. before the hackers, you know, find them. And we'll all be better off from that. But yeah, thank you to everybody for tuning in. catch all of our episodes on goodforbitcoin dot com. We stream live every Friday at two PM Eastern and we will see you all next week.
Kate: Awesome. See you guys.
