Stuff They Don't Want You To KnowIn the first part of this two-episode series, the guys interviewed tech expert Jonathan Strickland on the mechanics of bitcoin and cryptocurrencies. In this episode, Jonathan returns to field some of the weirdest, funniest and most disturbing conspiracy theories orbiting the world of digital currency.
Fellow conspiracy realist. As we said earlier this week, we're doing a couple of extra episodes. We went and went, did a cavalcade of podcasting team ups with our pals at Lava for Good, and we didn't ask them about cryptocurrency. But maybe we can get to that when we have them on for interviews.
Absolutely, that's coming very soon as well. But for now, let's get to cryptocurrency Part two with Jonathan Strickland or we talk a bit about the nuts and bolts of coins such as Bitcoin, the more popular ones, the advantages of the technology, and some of the flaws in the system that have really kind of borne out over time since these episodes were released back in twenty eighteen.
Yeah, let's see if we predicted it a thing. I think we got kind of close. Let's get to it.
From UFOs to psychic powers and government conspiracies, history is riddled with unexplained events. You can turn back now or learned this stuff they don't want you to know.
Hello, and welcome back to the show. My name is Matt, my name is Nol.
It's good to have you back.
Yes, agreed, they call me Ben.
We are joined with.
Our super producer Paul Decant. Most importantly, you are here. You are you that makes this stuff they don't want you to know. Cryptocurrencies Part two. I just followed through with that because it Rhyan had a bit of a flow. But we are not alone today. No, we are joined again with our longtime friend Slash, nemesis of the show, recurring guests who I think may have been on, may have been the guest with the most appearances on stuff they don't want you to know.
Yeah, we've got a jacket for you, Alla, SNL. It's really fun.
We get to go to the join the Five Times Club.
Yeah, you get to meet Steve Martin, but you have to also meet Chevy Chase, ladies and gentlemen. Jonathan Strickland.
Hey, and just like love, I was inside you all along. What Yeah, it's just dating.
I've been meaning to check that. I get that checked out.
Sorry, Yeah, are you doing a reference? What so so?
Jonathan, thank you so much, Thank you so much for coming back on the show. In our previous episode, we we discuss the nuts and bolts of cryptocurrency.
Yeah, and blockchain technology.
And one of the things that we agree would would probably be the best move for you listeners, friends, and neighbors. If you are not familiar with cryptocurrency, please check out episode one before you go to this episode, because we're gonna we're gonna cut past that. We're gonna cut past that blockchain drive.
Sure.
Yeah, and on other past episodes we've discussed some of the darker sides of what cryptocurrency might be, and you're here to really shine a light in some of that darkness. Let's see what's real it's not.
Yeah, I'm happy to at least to impart to you what I know, and I wholly admit there are things I do not know, but I don't know what those are. So here we are.
You got unknown unknowns. Yeah, so for a peak behind the curtain. Several weeks ago, Matt Nol and I began talking about doing something on cryptocurrency conspiracies, and I think a lot Noel you had come with this idea, and I think a lot of it was inspired by conversations we'd all been having, both together and as individuals, about speculation and booms and busts in cryptocurrency and the proliferation of non bitcoin cryptocurrency. And one of the things that we wanted to do with this episode is get your take on some of the allegations that Matt has mentioned about different well rumors, allegations perhaps stereotypes of cryptocurrency. The first one, which is probably the most apparent and something I think you've probably remarked upon in Tech Stuff as well, which is one of Jonathan's other podcasts available wherever you find your favorite shows. One of those topics is cryptocurrency and crime. So how much truth is there to the characterization of cryptocurrency as like a cash for criminals?
So there's certainly some legitimacy to that in the sense that the very nature of cryptocurrency allows you to make somewhat anonymous transactions. If you are super super deductive and you are really paying attention to patterns and you're really tracking which accounts are getting transfers at what time, you could probably draw some conclusions that could narrow you down to a specific person. But generally speaking, these are anonymous, right, So it's an ideal currency for someone who wants to purchase something that otherwise would be illegal because it's not easily going to be tied to that person.
When it's a currency that's used a lot on like the Dark Web, and drugs or anything like that.
Yeah, the Silk Road, which was, you know, one of the many black markets on the dark web, which has been shut down and opened up again and shut down repeatedly. That was one of the places known for accepting bitcoin currency from pretty much the start of bitcoin, once it really got going, So a lot of people immediately began to associate bitcoin with this concept of the currency you want to use when you want to do something illegal, whether that might be purchasing drugs or weapons, or paying someone to do something terrible to someone else. All of those were allegations.
Like pranking them or something more.
Pranking to death, Yes, pranking to death. He's been pranked to death. Yeah, it was a lethal banana pie to the face, except way more violent and splatting.
So is this like law and Order carrot top, Yes.
It's or Gallagher. Yeah, it was hit by the watermelon smashing mallet. So seriously though, that was certainly an element, and it very quickly got this reputation in those early days, and it's somewhat earned, not entirely. I would argue that bitcoin kind of falls victim to the same thing that peer to peer networks fall victim too. Which is that both technologies can have their uses in illegal activities, but that wasn't necessarily what they were made to do. Peer to peer networks were created so that would be easy to distribute files quickly across the network, big files, and that doesn't necessarily mean something like a movie that you don't have the rights to. It might be something that you can freely distribute. It's just that to do so in normal means would take too long.
Right.
It's just an efficient way of transferring files over the Internet that doesn't require a one to one transfer of a single file. It's just a little bit more efficient and makes best It makes better use of the pipeline.
And blockchain technology in general is a great way of keeping record of transactions because every single transaction becomes part of that shared ledger. It's part of that shared history and it's there forever right, so you can track ownership through blockchain technology if you want so. For example, if you wanted to use blockchain to keep a record of real estate deals, you would definitely know who owned that or at least what account own that last real estate deal. I'll own that parcel of real estate because it would be in that shared Ledger, there'd be no getting around. In fact, a lot of people have talked about using blockchain for stuff beyond just cryptocurrencies, So there are legitimate uses for it, but it's hard to escape that reputation once you get it. Certainly there are still people who are using bitcoin to do stuff that is extra legal.
Okay, So then if we were to say on the validity of this on a scale of one to ten, it sounds like it's about a five or six.
Yeah, I mean, it's certainly something that has been an issue, and you know, people who wanted to commit any kind of criminal act, whether it was purchasing something or paying someone to do something, certainly bitcoin would be an attractive alternative to using a currency that could be traced back to you. Really, it's not the currency so much that's traced back to you, it's the transaction itself, right, because often these transactions have to pass through a third party. It's that third party that is the barrier for a lot of people.
Isn't this a thing though, where like you know, with Facebook, you're constantly having to accept updated terms of service and things like that. Obviously, using something like bitcoin or being part of one of these exchanges, there's no such protection. So who are we to say that, you know, all of a sudden that anonymity goes out the window or something fundamentally changes about the way business is done.
I mean, it all depends on how you've set up your wallet, right, Like, if you've got your wallet with an exchange, then there are a lot of dangers there. There's the danger that you may your identity may never be revealed, but someone might get hold of your money. So it's a complicated affair. But that's the case with any kind of currency or commodity. I mean, there's always going to be some element of risk there because there's no such thing as a perfect system. Systems are being made by human beings, and so far we have not created the perfect human being.
Well, the most popular wallet is coin base, I believe, and they've been having they were having some troubles, I believe earlier this year.
Every single one of these these digital wallet companies have had some sort of issues. Sometimes they've been relatively minor, like people reporting that they suddenly could not access their wallets for a given amount of time. Other times it gets way worse, where people can't access their wallets and they find out two weeks later. The reason is all that information was stolen.
Nice, and it's because it's a unique thing it can be stolen to, meaning that it's not so like if your if you're quote unquote stealing a movie by you know, downloading it through a peer to peer thing. You're getting a copy of it, right, physically taking it, but the original still exists, right, But in this case, the original is long.
It's because what you what you have stolen is you have stolen the end point of the last transaction for that bitcoin, right, or that part of a bitcoin, depending upon how much was being spent. So what you are, what you're effectively stealing is the destination that bitcoin went to. So again, bitcoin coins do not exist in any sort of physical reality, right, You're what you're doing is you've got a record of transactions. It's and in fact, this isn't that hard to imagine. If you've dealt with money on any digital scale, like just regular cash dollars, if you do a transfer from your bank account to some other account, they're not sending suitcases filled with bills. They're wiring over a notification saying this transfer has taken place. This represents this amount of wealth going to this person. Same thing with bitcoin. So what you have done if you've stolen is that you've stolen that account saying you know you you now own the wallet where it says this is where those bitcoins went last. And because most people are using bitcoin anonymously, it gets really hard to say, well that that specific one doesn't belong to you. It's it gets real muddy.
Speaking of yeah, anonymity here one thing that's one thing that we discussed in previous episode was the identity or identities of the enigmatic Satoshi Nakamoto, yeah, pioneer of bitcoin. We also found some pretty interesting allegations or pretty interesting arguments that bitcoin some people believe may be a tool of intelligence agencies or state actors.
Have you heard this interesting? I had not specifically heard that. It's very interesting because the at least the stated purpose for bitcoin is so antithetical to that. But then you could argue, well, that's the perfect cover, right, the idea that oh, if I go out there and tell everyone, this is the perfect currency to adopt because it doesn't involve a state actor, it doesn't have any third party, it's all direct transfers between people within the system and therefore no one needs to know apart from the two parties involved, except for the fact that, of course every single trend action becomes part of this shared ledger.
Would that be like for off the books like black ops and things like that? Is that the idea here?
Yeah, well, it all originates from this person, Natalia Kasperski. She was giving a lecture at university in Saint Petersburg, and you know, somebody snapped photos, as you tend to do sometimes, of the slides as she was giving the presentation, and one of them was discussing bitcoin in particular. And this is just a quote that was taken from this. It was in Russian, or it was not written in English. This is a translation, but it was. Bitcoin is a project of American intelligence agencies which was designed to provide quick funding for US, British and Canadian intelligence activities in different countries. So the idea that you could wire money essentially not untraceable, but you could wire money easily that is not in the currency of some other country. Depending on where you're transferring it to, it doesn't need to be exchanged.
Its plausible deniability that if like saying, oh well, this actors who, for example, snuck into an Iranian nuclear facility and installed viral software upon centrifuges. They weren't paid in any any countries currency, so therefore it's harder to trace back something like that.
Yeah, and it's also interesting, so that would be really good cover for that kind of thing. And then also if you're having a very large transaction to maybe another intelligence agency or someone you're working in tandem with, you don't have to exchange you know, a huge transaction anywhere. It's only a couple of bitcoins really, or you know, one hundred bitcoins here, and you're like, that's a massive transaction.
Like the example I heard would be the CIA interacting with ISI to support something that would technically be US support of known terror groups.
Sure, so that yeah, kind of kind of also, like when you get into two past scandals like the the Iran contra, that sort of stuff. Well, let me say this, it wouldn't surprise me if there were various agencies intelligence agencies making use of cryptocurrencies for this sort of thing. I don't think they would have had a hand in creating them necessarily, but I certainly don't wouldn't find it surprising to hear about them leveraging it. You got to remember that ultimately, in order to get units of that currency in the first place, you either have to mine it, which means, assuming your system is on the up and up, you have to dedicate a lot of computing power to that. And knowing that once that secret is out, you know, once everyone knows, and you know, the system depends upon everyone knowing. Once everyone knows how the mining process works, there are going to be lots of people working very hard to be really good at that because that's how they earn money. Or you've got to actually exchange real world money for those units of currency, right, So, ultimately, if you get to a point where someone is exchanging large amounts of their current currency, their state sponsored currency, for bitcoin, that could be traceable. So you really all you've done is shifted things.
How can it be.
Traceable though, because you're actually going to have a budget item somewhere under someone's budget saying this X amount of money was spent from our budget.
Not if it's a black budget.
It's classified, Jonathan, Come on.
Yeah, that doesn't mean that it's not written down somewhere, buddy.
Sometimes it does, I would think so, and all I'm saying too is like, you know, in the same vein, sure as hell, it feels like a good way to launder money.
Oh sure, No, that's another element of the criminal aspect, is the idea of using bitcoin to launder money.
With a way more effective than a car wash. Also, you got to wonder what the rates are, you know, is it fifteen percent? Is it twenty? And then like at what point should you just pay taxes on it?
Yeah?
And are these criminals and order the government? Do they do you have to use a thing like coinbase or is there another entry way into this?
I mean, you can have a wallet on your hard drive. That's why people have their hard drives, and they lose them and they're like, I lost seven hundred million dollars on my hard drive. That can happen.
So we're going to follow up with more of this conversation after a word from our sponsors, assuming we don't get black bagged. Holy smoked, we made it.
Noel stole my bit.
I thout if we all did it, we just all had black bags on.
We could do it again.
No, no, no, I think we're good. Let's keep going.
I have four black bags in my bag. At all times.
I'm not at all surprised by that, and yet still terrified.
Look, it's it just it's like somebody using bitcoin. Just because I have that doesn't mean I'm a criminal.
One thing I want to refer back to in our previous little discussion, he said, ignoring the previous statement, right, is that is that just because there's someone who's giving a presentation doesn't necessarily mean that there's any actual evidence to back that up. I am highly skeptical of a presentation happening in Russia, in Russian to Russian audiences blaming United States intelligence agencies for the creation of cryptocurrencies, or at least the use of cryptocurrencies to fund black ops operations, because there may be and I hesitate to say this, but there may be a bias.
What.
Yeah, I'm really glad you made that point, because one thing that happens to depending on people's ideological viewpoints, is we will sometimes tend to pick on one organization over another that would do essentially the same thing. Sure, so it's a real tall milkshake to say that one intelligence agency did something and the other intelligence agencies A did not know about it, or B did know about it. And also didn't try to do something like it or.
See, yeah, it wasn't already doing exactly the same thing. Like it is not a stretch of the imagination to think that. Like I said before, I would not be shocked to find out that there had been use of cryptocurrencies for these sort of black ops operations, because by the very nature everything is being is trying to avoid detection from the get go. But I also would not be shocked to hear that, say, the KGB had used cryptocurrencies to pay I don't know, hackers in North Korea.
I'm trying to go out on a limon and say, there's no way that's not happening at least a little bit. Yeah, man, Like it just seems rife for that kind of stuff, And like, you know, that's what these black ops are all about, is that kind of freewheel and attitude where it's just like improvising and figuring out different ways to do things, and you know, it's all about being up on the latest technology. And I don't know, it just seems it rings true.
I mean, yeah, if they want to use the cryptocurrency spy cred, that would probably be.
In here's another aspect of this that I think argues in favor of this behavior. It's that we're now as a species and as a conglomeration as state actors, seeing a fundamental transformation in the nature of warfare. Right, we know that there is a ticking time limit to the usefulness or efficacy of cruise ships. Right, we know that for several decades, with great success, countries that would not normally be able to fight in a conventional war have successfully funneled time, blood, sweat and tears and plenty of R and D into asymmetrical warfare. Which is why we see you know, so called hacker or bought armies influencing opinion through soft power stuff like propaganda. The new war or the new theater of war. People the Pentagon are always said, is informational.
Well, I mean you've already seen over the past decade, we've seen numerous examples here in the United States of foreign actors who have infiltrated various information systems.
Oh, like Arnold Schwarzenegger.
That's more of an overt one, but I was thinking of things like in the electric grid, the power grid. There have been numerous occasions where security experts have looked at the different systems and various major power companies and throughout the power grid in the United States and said, there's evidence here of foreign hackers putting in code to help infiltrate the infrastructure. To what purpose, who's to say, but it's not a stretch to imagine that these are all kind of little trigger points that should should someone want to do serious damage to the United States. You flip a switch and you overload a power you make it so that it is going beyond its capabilities. You know, you could actually physically snap power cables if you're sending enough juice through you get to a point like that, you cripple the the infrastructure, and it creates enough chaos for you to get away with other stuff if you need to. So there's entirely that possibility. Now, the fact that nothing like that has actually happened, we haven't seen any you know, rolling blackouts due to this means that whatever they were trying to do, they had not actually you know, they hadn't actually pulled that switch, but they had started to lay the groundwork. Well, that stuff's happening all the time everywhere the United States. You know, obviously we're focused on it because we live here, but it's happening all over the world from various actors all working at cross purposes against each other and.
Sort of an ensemble cast.
Yeah yeah, I mean, you know, we've got we've got things like stocks net, which certainly seems to have the United States fingerprints on it. It would be hard to deny that based upon the code that was used in it.
Let's give us a little bit of a rundown on st Ducks.
So stucks Net was a virus specifically, all right, is a virus. So nuclear power plants one of the things they have are centrifuges that spend at a certain RPMs, right, and they spin at that certain RPMs because if you spend too slowly or too quickly, then things go wrong. And Stuck's net effectively, what it did was it made the centrifuges turn at a speed that was wrong, too fast for what it was supposed to do. The idea being that would cause failures in Iran's nuclear power capabilities, and it.
Kind of worked.
It's tough to do because these facilities mostly have air gaps. Air gaps are where you do not have a connection between your internal system and an external system, so it meant that you had to get physical access to the the the location.
In the form of a thumb drive.
You could do a thumb drive. Yeah, just do a thumb drive. And even if you're just doing a thumb drive where you're sending it to, you know, it doesn't necessarily have to have been someone on the inside who was compromised. You could send a thumb drive to let's say the person at the front desk and say, uh, there's a new update to the operating system. Just plug this in and that'll do it. And then it could infect the internal network, which could then go and affect whatever systems you need to compromise, but you wouldn't have.
Like remote control over it. Instructions that would like.
It's good, good old coding. You're just writing in the code like when this happens, do execute this line of code. So it's it's in some ways it's really sophisticated. In other ways it's very basic.
But it's it's brilliant in the in this simplicity of application. But there's a lot of very elegant code going in there.
Yeah, and the code, yes, it was definitely advanced and so that the people argue, because the advanced nature of the code, it narrows down the suspect list of who could have done it. And because the very nature of the code itself. A lot of people have said, this looks an awful lot like stuff that comes out of the United States.
Maybe, and also Israel, and also Israel. Israel and the US work together.
That's the that's the common thread. Yeah. So and you know, of course, no one's going to come forward and say, yeah, got us, it was us, But it does definitely seem to point that way. Now, does that mean that it's definitely US and Israel? Well, I mean, we we can't speak in certainties, but it seems fairly fairly sure like it's hard to deny it. Now in that world where we've got all these different parties working at cross purposes infiltrating different systems, plausible deniability very important, right, Like we've we're seeing it through everything from the accusations of interfering with election cycles to uh yeah exactly, to affecting entire systems, you know. And the usual suspects that pop up for things that are happening in the United States are Russia, North Korea, and China. Those are your three big ones, so you could you know, And then of course you've got the States saying it's not us, we didn't authorize this. If you use something like a cryptocurrency to pay the people who are actually creating the code and executing the code and overseeing the botnets and actually doing the work, then you've got that level of plausible deniability. You don't know who paid whom. It could be that you have an outside organization, someone who's not even remotely connected to the governments of those of those countries. They say, let's just make use of them, because one they have the technology, two they have the education and know how on how to do it, and three it takes all the heat off us because they'll never know it was. We were surprised as you are. Yeah, we just paid those guys, and we paid them with a type of currency that can't be traced back to us.
We're basically watching the sixth sense with you for the first time.
All we're doing is putting on all of those graphics processing units to work.
It's really interesting. Yeah, it's really interesting. You say this because one of the controversial practices in China that the governments of the United States and China disagree on is who's paying documented Chinese hacking forces because they're not government employees. And the Chinese position for some time has been this is just a group of idealistic national not very nationalistic people.
These are people who identify with China's philosophies, but they are not in any way sponsored by or endorsed by the government. For example, when Sony had their massive data breach where gigabye of data, mostly in the form of movies, but lots of other stuff too, including like records of executives and actors and all this other stuff that got leaked out. Uh, there were a couple of different arguments about where that came from. One was the possibility of it being from North Korean hackers, because it was in response to a film that was coming out that was The Interview. Yeah, it was the Interview. It was a little a little bit of a spoof on North Korea's leader, and North Korea had condemned it. So there was an argument like, well, clearly you had already said that, you know, you objected strongly, strongly to the movie. Apparently you objected strongly enough to fund hackers to attack and this this company, this global company.
Which the movie wasn't even very good.
It's not that good. I've seen it.
It was fine.
We did an episode on this that you appeared on, John that this, this idea of sophisticated coding and the separation of the true actor from the appearance of an actor leads us to another very strange question. So far, when we've been talking about hidden hands behind cryptocurrency, sure, we've been talking about humans.
Well, why are we going to talk about raccoons?
Yes, badgers.
Sticking badgers? Oh roh wo badgers?
What if? What if?
Okay, hear me out? Yeah, hit me?
What if a rogue artificial intelligence created bitcoin for the express purpose of siphoning electricity to feed its nefarious dark engines?
Wait wait, hold on, yeah it eats electricity.
Awesome.
Well, I mean, if it's an artificial intelligence, it's presumably on silicon based hardware and thus needs electricity to run. So electricity would mean power. Power is what allows it to process information.
It needs a lot of it.
I'm trying, I'm trying so hard to not just call nonsense on this.
But the reason, let's also use is an opportunity to talk about how much bloody power and energy that mining for bitcoin consumed. I think this is a good job.
Right well, well, and I mentioned in the previous episodes, So when you're when you're mining bitcoins, what you're really doing is you're trying to solve very difficult mathematical problems in order to validate past transactions, the ones that have just happened to add the next block to the blockchain. And if you managed to do that, you get rewarded not just with whatever coins are mined at that time, which is predetermined, and every few years the number has per block I think's mind.
Currently bitcoin miners generate around seventy five bitcoins per hour.
Every and when you look at that by per block, it breaks down even further obviously because it's every ten minutes is another block, right, right, So but every few years that number is cut in half until you finally get to the point where all bitcoins that'll ever exist are in the system. And at that point it's just transaction fees that keep things going.
While energy spent on mining bitcoins is increasing well to a point to a point.
So if you get to a point where the number of bitcoins you get per transaction completed is small enough, then you have to reconcile that with how much money you are spending on the electricity being used for the processing power. And if you're spending more money on electricity, then you're making money in the bitcoins you're mining as a losing proposition, and people are going to start to back off.
Here's a thing, though, to an article on Motherboard right now, with the trajectory of bitcoin value being what it is, they say it would be profitable for minors on the whole to burn through more than twenty four tarawatt hours of electricity in a year's time.
Sure, yeah, and that's but these are making lots of assumptions. Assumption number one is that the value of bitcoin is going to continue to be high enough for that to be true. And we don't necessarily know that, I suspect it is going to be true. But over time, that is, by the nature of what bitcoin is going to decrease. It has to, because that's just how unless bitcoin's value just continuously skyrockets and just keeps on building and never takes enough of a backtrack to settle back down to whatever, like ten thousand dollars per bitcoin, which is still a huge amount, no doubt about it. Then you do eventually get to a point where you're getting you're getting a decimal like like ten thousandth of a bitcoin when you successfully mine a block. It doesn't make sense for you to continuously use that much power because you will be spending more money than you get. That that's down the road though, because it's when you've gone a few years where this number keeps having until it gets down to this tiny, tiny number. But eventually you get to a point where it won't make sense to spend that much electricity. In the short term, however, you're seeing massive amounts of electricity being used to mine these coins.
That number I said is apparently about the amount of energy that Nigeria uses in a year, and that's the country of one hundred and eighty six million people.
Yeah, and it's it's not a surprise. But what will happen is you'll eventually, at least the idea is that you'll eventually reach a peak, you know, peak bitcoin, where assuming again, assuming the value of the bitcoin doesn't skyrocket again, that more and more people will start to back off, and once they back off, the difficulty of that problem will decrease, and people who are running more modest hardware will be able to mind bitcoins and it won't be as big of a yield per block mind. But at the same time, they're also not the ones who would otherwise be spending thousands of dollars just on electricity bills.
Until the machine consciousness is stated, at which point there would be no reason to continue this charade, right.
I find it very difficult to believe that an artificial intelligence is in fact responsible for this, but I will support that argument. After you take a break to thank your sponsors.
Who such cheek Jonathan, I am cheeky the sand Sorry, guys.
I saw an opportunity and I went for it, so I said that I was going to support my argument. So the biggest argument I would make is just that artificial intelligence is nowhere near the level of sophistication necessary to create a system anywhere close to that complicated. I mean, I follow the bleeding edge of artificial intelligence, and there's some amazing stuff in machine learning. There's amazing stuff in various aspects of intelligence, but they're all very very narrow applications. So, for example, image recognition we're getting really good at that voice recognition, We're getting really good at it. But these are all just tiny little slivers of intelligence. When it comes to innovation, we're really lagging behind as far as machine intelligence is concerned. And an example of this is if you ever try and use the tool chef Watson. Chef Watson uses the same platform as Watson that went on Jeopardy and that Jeopardy right, and the way it we're is that it was fed a whole bunch of different recipe books and then it takes all that information and it starts to really analyze it and try to figure out which cooking techniques go with which ingredients, which ingredients complement one another, based upon their appearance in various recipes. And then what you do is you tell it what kind of stuff you have at your disposal, and it suggests recipes for you to cook and they're Bonker's crazy.
What's an example.
So, for example, there's cauliflower fricacy. One of the optional ingredients in califlower frecacy is cauliflower. I'm serious, Like, I'm going through the list of recipes and this is cauliflower optional.
Like, so burning question. Yeah, I've always wondered what constitutes a frecacy.
You know, an excellent question that I am not prepared to answer, but I will tell you this that Chef Watson is. It's dynamically creating these recipes. So if you were to put the exact same recipes in or exact same ingredients in as I did, you would get a different recipe. If I did it twice in a row, I would get two different recipes, and there would be recipes that were created on the spot at that moment, not like stored in some database and then retrieved. So it's not like search results.
Just goes to show that Watson has moods.
Man, Well, my point being that Watson hasn't quite nailed it yet. Sure, this is about cooking a meal that is edible to human beings. Creating an entire cryptocurrency system in order to mask the consumption of energy is an order of magnitude more complicated, and I just cannot conceive of that being in the realm of possibility.
Well, of course not, man, you have a meat brain.
Yeah, maybe that's the problem.
What if said Tooshi Knakamoto, is working with the machines, is aiding the machines in this endeavor because he wants to be the number one meat bag and the takeover happens.
He doesn't want to get caught in that sky net.
It's made of lasers.
Yeah, we're doing references today, folks.
Sorry you invited me on the show.
I knew what happens, we knew what we were getting into, and we welcome it.
I think this is a fascinating idea, the idea that there could like. To me, this is on the same level as someone who suggested, and I mentioned this in our previous episode two, someone who suggested that the reason why the Large Hadron Collider suffered so many setbacks early on when it was first going to come online was that supposedly, uh, the someone from the future, some entity from the future was traveling back in time to sabotage the Large Hadron Collider because once it turned on, it would cause some sort of calamitous event that would perhaps extinguish the human race. And so there were Whether those were theories that were that were expressed in jest or seriously, I don't know. I mean, they seem tongue in cheek to me, but I can never tell if someone's being serious or not, which is why I am so awful whenever I go to stand up. But the fact that those were put forward, it seems very similar to this kind of suggestion. And while it's fun to think about, and I certainly think it's a great premise for like a science fiction story, is just not quite within the scope of what we're capable of doing.
Right now, what do you think that I think it's just hiding.
You just think the artificial intelligence is hiding.
Yeah, well, look at all this energy usage. I'm not in here, I'm not inside to what ends. Well, it's hiding till one day we get all of those slivers that we're talking about of innovation into one unique piece of just what it means to be a human.
Then it will know, and then it will become.
I think any artificial intelligence of that sophistication would be able to essentially and would have already infected all networks and distributed itself to a point where we are already superfluous. And uh, why did the lights just flicker? Okay, well, never mind. You know, I'm just gonna I'm gonna drop off. I'm going to drop off on that line of line of logic right now.
I'll tell you. The problem there though, is inherently artificial intelligences don't have hands what with to build stuff, right, so they need they need us for a time and then you know, it's lights out.
Until when they get better. Robus the robots.
These days, I mean, they they're hard pressed to, like, you know, walk across the room clunky.
That's again why I sit there and say that there our ability to create an artificial intelligence of sophistication that would be able to do this is kind of laughable because we're still at a point where a robot that is designed to learn how to open doors will sit and stare at a door for six hours and then reach out and pull a door that's meant to be pushed.
And I have a different hand.
I do that all the time.
Yeah, I literally ran into a door yesterday.
No.
Well, I also don't expect you to create a cryptocurrency to hide how much power you are consumer.
Hey, I make no secret about my yesh.
Don't sell it, don't sell. In short, so we are we've looked at three of or at least three of the really really big ideas right that somehow on this on this idea of artificial intelligence or machine consciousness. Maybe there, maybe there isn't some sort of proto sky net entity out there, But would you be as quick to dismiss the idea of, you know, the idea of some of the same lessons learned from high frequency trading or algorithm studies, like I know, sure is using algorithm I mean, sorry, bitcoin mining is using algorithms.
Yeah, absolutely, I mean that certainly people are using are the intelligence in order to work with bitcoin, But I don't think bitcoin itself is a product or is the is being manipulated that on that grand a scale by artificial intelligence. But yes, as you mentioned high frequency trading, that's where you've got computer algorithms that are making thousands of trades per second, really far faster than what any human can do, and you end up seeing little mini crashes and bubbles in the stock market as a result.
I can't believe we almost forgot in the first episode. We left off at the very end with something we need to get to, even if it's just at the end of this episode. Wales.
Oh so yeah, I'm happy to talk about whales because we you know, you guys were talking about different questions to ask and one of the questions you had was could there possibly be any entity or organization that could really work to leverage bitcoin in some way that could be harmful to others. That leads us to the discussion of wales. What are whales? Why do we call them whales? Wales? That's a term within the bitcoin sphere for organizations or people who own a large number of bitcoins. And it is estimated Bloomberg did a piece on this in twenty seventeen that one thousand people own forty percent of all the bitcoins out there.
There's already economic inequality.
Yeah, so you think about that forty percent, nearly half of all bitcoins belong to just one thousand people. So keeping that in mind, and remember bitcoin, don't I argue it's not really effective as a currency. It's more like a commodity. In my mind. Let's say that you got these one thousand people, and through their circles, they just have learned, even if it's only a portion of them, learn who the others are.
OK.
So it's a a loose confederation of bitcoin owners and they all watch very carefully as the value of bitcoin climbs, and they're thinking, all right, I feel like at let's say seventeen thousand dollars. That's going to be the peak before we hit the next plateau or maybe even a drop off. What we're going to do collectively so that we can really cash in is we're all agreeing at x amount of time, we're all going to liquefy our bitcoins so that we can maximize our profit and then get out before the crash. Which means that they would actually be causing a crash because they'd be dumping thousands, thousands, hundreds of thousands of bitcoins on the market simultaneously, which would devalue it suddenly. The demand would be far lower than the supply, right, It's typically the other way around, and you could see an entire market collapse. This is the same sort of concept as someone who's dealing with insider trading, right that they have the for knowledge that something big is gonna happen, and they either buy up a lot of stock or sell off a lot of stock before the announcement hits so that they can maximize their profit from it. That's the fear that this one thousand people who own almost half of all the bitcoins.
Which is about seventy four billion dollars.
Yeah, seventy four billion dollars worth could collectively make the decision to get out of the game and maximize their profits because I mean, you know, they could they could just convert it to whatever currency they wanted to, because I mean.
Surely they're in some kind of underground like torture club together.
There's probably a fight club, probably a bitcoin fight club.
I'm just saying, like you'd think players of that level, as anonymous as it all is, are more likely to be aware of each other than say some of the smaller players.
Well, there's certainly like they're online discussion groups about bitcoin where where people who adopted it early certainly know each other or at least know each other by handle, if not by name.
You kind of think there's some younger people, much younger than you would imagine, sure, being old enough to have that much money.
Yeah, yeah, I mean it's really it's especially for the early days again before the computing demands got so high, because the computational problems got so complicated, and obviously if you got in on the ground floor and you were constantly using at least some of your bitcoins to help supply the need for more advanced computing equipment. You could just continuously build out your your mining rig to mine more. So as long as you're mining more coins than you're spending on your mining rig, you're in the winning situation. Right. Well, if this group of people all decided that they were going to do that, it could be a total catastrophe for the currency as a whole. And there have been some folks who have said that bitcoin is in a bubble and that bubble is going to burst, And one of the things that could cause that is a tacit agreement among the whales to get out of the game rather than watch their investment balloon up in value and then deflate and then balloon up and deflate. I mean, I can't imagine what that would do to me. Like if I were sitting there looking at my digital wallet and thinking, all right, I've got twenty bitcoins. Wow, today it's two hundred thousand dollars and then the next ac no, it's down to twenty thousand dollars. I lost eighty grand overnight. Like, it would drive me crazy. So that is a real fear. Whether or not it would ever happen is a totally I mean, it's still a hypothetical. It's not like it's actually happened, but it's still a possibility.
Supposedly, there's a lot of work being done with neural networks being used to predict the change in bitcoin price.
Yeah, And honestly, now we're getting to a level of technology that is I mean, it's fascinating to me. Neural networks are amazing. I love neural networks. But you're getting to a point where you're taking technology, which is something I understand pretty well well, and you're applying it to market theory, which is something that is like witchcraft to me.
Even to the experts, it's like witchcraft. Yeah, I mean you have these like high level economists who just completely contradict each other all the time.
It makes me feel like string theory. Yeah, because you talk to someone who's an expert in string theory and you say, you keep asking questions, you will eventually get to a question where they say like, yeah, I the math tells me what it is, but I don't understand it.
That's the thing. When you're at the bleeding edge of something, to use the phrase you had established earlier, When you're at that edge, people are guessing and it becomes very close to ideology. They're economists that have clearly been demonstrably wrong over decades, and they're sticking to the model.
And the nature of an edge is that it's not that hard to fall off.
That's true.
That's true. It's really I like that. I want it on a bubber sticker.
So it just really fascinated something that I didn't understand before we did this episode. Yeah, that exactly how many cryptocurrencies exist, and you know, we keep saying that there are a lot of them.
Did you guys mention how many?
I just all I did was okay.
So according to coin marketcap dot com, which tracks all of them, and it gives you it gives you their market cap, it gives you the price of a single one, the volume, the circulating supply. It's really interesting. It gives you a change over time for a twenty four hour period. You can get really deep into it if you want to, the way you would a stock market. Just a currency exchange. It has almost fifteen hundred different currencies that are out there right now. That's that's insane to me. I was I would only I've only ever been aware of for I think right.
Like ethereum and bitcoin.
Yeah, that they're that many. And if you look through this list on this website, it's so much money just wrapped up in these ethereal things.
It's so much wealth.
Read those white read those white papers, Matt, sign up.
That's my thing that what makes one more attractive than another? Is it just that it has a cooler name, Like I don't know.
I mean it's it's honestly, when you when you really boil it down, it's it's the ones that people feel are valuable. Yeah, I mean it's the same thing as really any again, any currency. Like if we go way back in time where we get to bartering, then we can have little philosophical discussions like like, Ben, really, do you think that this laptop I have is worth only two chickens? I don't care how close you are to your chickens. I'm going to need more than two chickens for this laptop.
He's very close.
You don't even know their names, man, No, how dare you?
Yeah? Do you know my laptop's name?
Yes, Dell, it's actually Lappy.
I named him after Strong Bad's laptop. But no, it's yeah, it's a good point, but but we could You know that that gets to a point where you argue, all right, well how much how much is the thing that you make worth the thing that I make? Because I need what you have and you need what I have. And then the problem that came in is when let's say that I need a table and the guy the carpenter, Nole, you're the carpenter. I'm going to go to you, and I'm like, I need a table. I am a goat farmer. I can give you goat milk, and you're like, dude, I do not like goat smoke. Well, now I have to either find someone else who makes something you do need, trade the goat smoke for the thing that you like, nol, and then bring that to you and then get my table. Or we have to invent a currency because this is just too crazy. I need some other means of transaction.
Let's just start a cult.
Yes, and just last thing there right now, in all these different cryptocurrencies, there is over half a trillion dollars circulating in this just vapor somewhat vapor aware of money.
Yeah, I mean, I know it sounds crazy, but seriously, when you when you really look at all currencies, you realize that there's there's only like a half step of difference between the quote unquote real currencies of like dollars and pounds in euros and things like that, and digital currencies. It's it's it seems like there's more because you can hold things, you know, most of them have physical versions of them, like dollars you can buy you can get a dollar bill, and since you hold in your hand, it has permanence and you think of it as being a real thing. But when you really really look beyond that, you realize, wow, we're all just pretending. And as long as everyone keeps pretending, everything's fine. But if we ever come to a day where we decide to stop pretending, we're bone.
We're all we're all elmer FuG yeah, or Daffy Duck walking off the cliff right before they look down.
As long as you don't look down, you don't fall. Well.
But if you think about it, though, too, if you really want to go down that rabbit hole. It's like the reality that we all accept comes with kind of being part of a police state. Because as soon as you step outside of your lane and say, I don't accept this anymore. I want more, I should have this much money, I'm gonna take it, you get shot or you getting put in jail, Like, there are very real boundaries that force us to be a part of this system and accept it. So it's a lot easier to accept it knowing that if you don't, you're boned too. So it's kind of a boned if you do, boned if you don't.
What it comes down to is our confidence in the method of transaction, and if our confidence is sound, it doesn't really matter what we call it, or whether it's digital or physical, if we're confident in it that the thing that I have in my hand will be able to purchase the goods or services that I want, and then tomorrow it's just as good, and the next day and the next we're fine. It's when you sit there and say, this thing we've all been pretending has value, I just realized it doesn't, and now everyone else has realized that, and then suddenly the value just disappears because we've gotten rid of our shared delusion.
We did an episode asking whether money is a religion, and it's still One of the things we always took away from that and found interesting was that, you know, there's a reason genres of some religions and versions of some currencies are referred to as denominations. Yeah, it's not for nothing does etymology exist.
Also, remember it's not money that's the root of all evil. It's the love of money that's the root of all evil.
All right, Well, we have like three emotions a year, so you don't need to worry about that.
Speak for yourself, Toddy.
I found two currencies that are tracked on here.
Yeah.
The first one is called snake eyes okay, and it just goes by the handle snake. So you got I got like twenty snake man. I think that's awesome. That needs to catch on right now. It's like worthless, so I just need to get that back up.
I just see thousands of snakes wearing eye patches.
And this one it's just it says it gay money, that's what it says.
So you know, maybe more power.
Okay.
Well, if there's fifteen hundred of these, then I see no reason why we can't get n bucks on the board.
All right, and thank you so much.
Let's end with that.
How do you do it?
How do we go from bend bucks the notion to ben bucks the publicly traded tradeable available cryptocurrency we do have.
We do have tangible bend bucks by the way, well glad to make the switch.
Yeah, you definitely don't need tangible ones. So what you would need to do is you would have to set up a network. You would have to create the software that would allow you to create the blocks of transactions, just as Bitcoin and all these other cryptocurrencies use. So you would have this technology where it would be proprietary to bend bucks. Where you know, the method we use to create the math problem that the various computers on the network have to solve in order to verify transactions is unique and one that we could scale up or scale down.
We can't trade snake eyes for ben bucks.
You could, actually, I mean certainly there can be. I mean that's why exchanges exist, right The exchange exchange is purpose is to determine what is the relative value of all these different currencies so that you can make those exchanges. Although all it really means is that you're handing the units of bend bucks over to the exchange, The exchange hands units of equivalent or snake guys to you, and then the exchange has your bend bucks.
So this is totally possible.
Oh, it's possible, it would be. I mean, do we have any computers in the office that aren't currently being used for anything?
I hope those words taste good when you eat them later.
Because I'm just saying I mean, I mean, I got a gaming rig, which means that I can be like the number one minor of bit Bucks, which means I can be.
Getting in on the ground floor.
We're taking all our We're taking all our old gaming consoles, pulling a Pentagon and networking them together. Remember when the when the Pentagon brought like or do o D excuse me, got like two.
S the OLDPS two.
Contribute.
I haven't too let's so well.
You know, the thing was that Sony eventually made a change in the firmware that removed the ability to boot into Linux using PS twos. But they were actually being used as supercomputers when they were networked together by the US government and others. It's pretty cool we.
Could flash firmware or something, right.
Yeah, yeah, I think they might have finally lifted it. Honestly, I haven't kept up because PS twos are so twenty years ago.
So let's put an air gap in this conversation for now, thank you again so much for coming on the show and walking us through crypto conspiracies.
Jonathan, Now, thank you so much for having me. I am now going to go home look at my paycheck and wonder what is happening.
I think we're all going to do that.
You're all going to look at my paycheck. That's totally again company.
You get a check, weird? Yeah, I just get snake it.
Actually, I just get a guy at my door saying you're good, and then he walks away.
It's called pain for protection.
My man, Is that the guy who touches your face when he talks to you?
No, I.
Kid say to you on both cheeks.
I suspect that's Josh. He went from walking up behind me and inhaling deeply where he would take in my scent. This, by the way, totally not a joke. Josh Clark of stuff you should know, used to come behind me and sniff me. I think it might be him, but he just disguises his features, so it's just a guess at this point.
Speaking of fantastic segues, you can find Jonathan Strickland on tech Stuff. You can check out his excellent his excellent work on YouTube where he introduces you to concepts of everyday science and brain stuff, and where he gives you a much more optimistic look at the future than we do in his video series Forward Thinking.
Thank you if you.
Have any thoughts, and that's the end of this classic episode. If you have any thoughts or questions about this episode, you can get into contact with us in a number of different ways. One of the best is to give us a call. Our number is one eight three three st d WYTK. If you don't want to do that, you can send us a good old fashioned email.
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