Ep. 41 Artisanal Hashing

In this episode of The Unhashed Podcast: Grayscale controls over $2 billion in BTC assets. What are the ramifications of such a large holding and how might Grayscale leverage that power? Someone has put an old Nasa guidance computer from the moon landings to good use mining Bitcoin. But are hand calculations going to be the latest trend in artisanal hashing? And...use of Bitcoin to purchase illegal goods is up from last year according chainalysis. But does anyone really care at this point?

Weekly News Wrap Up:

  1. Blockstream is doubling down on their own Liquid network with two new software releases. The first is an update to the 2-of-2 multisig wallet Blockstream Green. It now supports the ability to transfer L-BTC and other Issued Assets over the Liquid network, which finally makes it easy for non-technical users to send and receive via Liquid. A Liquid Bitcoin torch is currently being passed around on Twitter, so see if you can catch it. The second release is the Liquid Swap Tool, a more advanced tool that allows users to trade two assets on the Liquid network in a single atomic transaction. While the tool is fully functional, it is still quite basic, and requires a lot of care in order to use safely, so caution is advised.

  2. Fortress Investment Group is buying bitcoin (BTC) claims from Mt. Gox creditors, according to a report by CoinDesk on July 8. As per the report, Fortress executive Michael Hourigan has sent out a letter to creditors detailing the buyback offer. According an apparent copy of such a letter, Fortress has offered to buy the bitcoin claims back at approximately double the bankruptcy value, or $900 per Bitcoin (source)

  3. Grayscale Investments has resumed private placement of Grayscale Bitcoin Trust (GBTC) shares, according to a press release on July 8. As per the report, the GBTC shares are designed to let investors put money into bitcoin (BTC) via a traditional investment structure. The shares are intended to correlate closely in value to BTC, but they are shares held in an investor’s name rather than the cryptocurrency itself. The announcement states that a share of GBTC currently represents 0.00097876 Bitcoin. At press time, GBTC reportedly holds over $2.66 billion in assets under management, a notable uptick from just months previously. In May, Grayscale reported that, out of its total $2.1 billion in assets under management, $1.97 billion were in its Bitcoin Trust. (source)

  4. Ken Shirriff has reconfigured an old Apollo guidance computer to mine Bitcoin, poorly. In a blog post, Shirriff notes that after getting the GDC up and running (the only one currently operational anywhere, he says), he decided to give it a more modern task: mining Bitcoin. Implementing the Bitcoin hash algorithm in assembly code on a 15-bit computer from the 60s took some elbow grease to get working, he says. The AGC doesn’t actually have a microprocessor, since it was built years before microprocessors were even developed. As such, it’s not going to rival, say, the latest $120,000 oil-submerged bitcoin mining rig any time soon. In fact, it’s not going to even mine a single block, well, ever (source). 

  5. Update on the Binance Bitcoin Hack: More than $8 million worth of Bitcoin stolen from cryptocurrency exchange Binance has suddenly moved.Earlier today, a combined 707.1 BTC was sent from one of the hacker‘s Bitcoin wallets to a separate pair of addresses. The two transfers, for 706.1 BTC ($8 million) and 1 BTC ($11,384) respectively, were detected by Twitter-based transaction monitor @whale_alert. In June, the hackers mysteriously moved portions of the stolen 7,000 BTC in a strange series of transactions, albeit after splitting their loot across seven separate Bitcoin addresses, as detected by blockchain analytics firm Chainalysis. But with 10 percent of the stolen funds now shifted, all eyes are on the Bitcoin addresses of cryptocurrency exchanges across the internet — as the hackers are likely hunting an avenue to launder (and cash out) their digital loot. (source)

  6. Leaders of the G20 economic bloc formally announced their support for the FATF cryptocurrency guidelines at a conference in Osaka, Japan, last week. The G20 leaders, who represent the 20 largest economies in the world, believe these guidelines can help regulate fraudulent uses of cryptocurrencies, such as money laundering, terror financing and other nefarious activities. The FATF, an international regulatory organization that makes formal policy recommendations to various nations and their economic regulators, went live with the guidelines on June 21, 2019. (source)

  7. This story: https://bitcoinmagazine.com/articles/ciphertrace-shyft-team-id-protecting-solution-fatf-crypto-guidance

  8. The University of Cambridge’s Judge Business School just released what might be the most statistically sound and feature-rich model on Bitcoin’s power consumption to date. The Cambridge Bitcoin Electricity Consumption Index (CBECI) provides estimates for Bitcoin’s real-time and annual electrical appetite with a live data feed that updates every 30 seconds. These data points are divided into three categories: upper bound, estimated and lower bound consumption. Together, they give a liberal, average and conservative spread for Bitcoin’s actual power use. CBECI’s team provide all three figures in order to weigh all possibilities, crunching a hodgepodge of various network and mining data. The estimated figure — currently at 7.5 GW for real-time and 53 TWh for annualized consumption — is the tool’s best guess for an accurate appraisal of Bitcoin mining’s electrical cost. (source)

  9. A report by Chainalysis estimates that $1 billion dollars will be spent on illegal businesses on the dark web in 2019, but that the proportion of bitcoin transactions that involve illegal activity has declined. This analysis was delivered in the form of a webinar, laying out some of the basic terminology, methodology and results of the study. Chainalysis, a company that analyzes broad developments in the crypto and blockchain sphere, claimed that the total dollar value of illegal bitcoin activity has gone back on the rise after a general decline in 2018. One significant finding in the Chainalysis report, however, is that the proportional amount of illegal bitcoin transactions has gone down even as the dollar value has risen dramatically. While criminal deals made up 7 percent of bitcoin transactions in 2012 when Silk Road was still fully operational; currently, this type of activity accounts for less than 1 percent of bitcoin transactions. (source)

Listener Questions:

“Not Peter McCormack” Asks - “Hey can you guys discuss bip 39/ potential lack of entropy in seed phrases?”  

Price Analysis:

Number go up!

Shout Outs: 

Colin: Ken Shirrif’s video on using the old guidance computer to mine btc
Bryan: CBECI Bitcoin Power Consumption Estimator Tool  
Mario: Whitepaper TP
Ruben: Seoul water gun festival and go catch the L-BTC torch on Twitter!

One Final Note:

Make sure you are storing your crypto on something secure like a Ledger and backing it up on something sturdy like a Billfodl. If you buy these items through the links above, we do take a cut of the profits but it also helps support the show - a win/win for all involved.

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Colin aulds