Cryptocurrency Conspiracies, Part II

In 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.

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Episode Transcript

Speaker 1 (00:00):
From UFOs to psychic powers and government conspiracies. History is
riddled with unexplained events. You can turn back now or
learn the stuff they don't want you to know. Hello,

(00:24):
and welcome back to the show. My name is Matt,
my name is No. It's good to have you back. Yes, agreed,
they call me Ben. We are joined with our super producer,
Paul Decond. 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
at rhyme had a bit of a flow. But we

(00:46):
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 guests with the most appearances on stuff they don't
want you to know. Yeah, we've got a jacket for you.
I'll snl um. It's it's really fun. We get to

(01:08):
go to the joined 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,
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,

(01:32):
thank you so much, thank you so much for coming
back on the show. In our previous episode, we we
discussed the nuts and bolts of cryptocurrency yea and blockchain technology,
and one of the things that we agree would would
probably be the best move for you listeners, friends, and neighbors.

(01:55):
If you're 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 dive. Yeah, and on other past episodes, we've discussed
some of the darker sides of what cryptocurrency might be,

(02:16):
and you're here to really shine a light in some
of that darkness. Let's see what's real what'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 you've got unknown unknowns. So for a peek behind

(02:39):
the curtain of Several weeks ago, Matt Noel and I
began talking about doing something on cryptocurrency conspiracies, and I
think a lot no you would 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

(03:01):
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. Uh.

(03:28):
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 podcast 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?

(03:50):
So there's certainly some legitimacy to that in the sense
that the very nature of cryptocurrency allows you to make
uh somewhat anonymous trans actions 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,

(04:12):
you could probably draw some conclusions at 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

(04:32):
like the Dark Web and 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. Uh,
that was one of the places known for accepting bitcoin
currency from pretty much the start of bitcoin, once it

(04:54):
really got it got it got going. So a lot
of people immediately began to associate bit point 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 something more

(05:19):
pranking to death, Yes, pranking to death to death. Yeah,
it was a lethal banana pie to the face, uh,
except way more violent and splatting. So is this like
law and order carrot top, Yes, it's our Gallagher. Yeah,
it was hit by the watermelon smashing mallet. Uh So.

(05:39):
Seriously though, that was certainly an element, and it very
quickly got this reputation in those early days, and 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 to, which is that both
technologies can have their uses in illegal activities, but that

(06:01):
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. It's just an efficient

(06:23):
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.

(06:45):
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, or at least what account own
that last real estate deal, will own that parcel of
real estate, because it would be in that shared ledger.

(07:07):
There'll be no getting around it. 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. Uh,
certainly there's still people who are using bitcoin to do
stuff that is is h extra legal. Okay, So then

(07:29):
if we were to say on a 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 uh,
you know, people who wanted to commit any kind of
criminal act, whether it was purchasing something or paying someone
to do something. Uh, certainly bitcoin would be an attractive

(07:52):
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 it's self, 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? Or like
you know, with Facebook, you're constantly having to accept updated

(08:13):
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 who 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

(08:35):
you've got your wallet with an exchange, then there are
a lot of dangers there. There's the danger that you
make your your identity may never be revealed, but someone
might get a hold of your money. Uh So it's
it's it's a complicated affair. But that's the case with
any kind of 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

(08:57):
being made by human beings, and so far we have
not created perfect human being. Well, the most popular wallet
is um coin base, I believe, and they've been having
they were having some troubles, I believe earlier this 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

(09:18):
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. It's because it's a unique thing. It
can be stolen to the meaning that it's not so
like if you're if you're quote unquote stealing a movie

(09:38):
by you know, downloading it through a peer to peer thing.
You're getting a copy of it physically taking it, but
the original, right, But in this case the original, 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

(09:59):
was being spent. So what you are, what you're effectively stealing,
is the destination that bitcoin went to. So again, bitcoins
do not exist in any sort of physical reality, right,
You're what you're doing is you've got a record of transactions.
Um it's and in fact, this isn't that hard to imagine.
If you've dealt with money on any digital scale, like

(10:20):
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

(10:42):
what you have done if you've stolen is that you've
stolen that account saying, uh, 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 anonymity here. One thing that's one thing that

(11:07):
we discussed in previous episode was the identity or identities
of the enigmatic pioneer of bitcoin. We also found some
pretty interesting allegations, uh, pretty interesting arguments the bitcoin some
people believe maybe a tool of intelligence agencies or state actors.

(11:32):
Have you heard this interesting? I had not specifically heard that.
It's very interesting because the 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

(11:53):
involve a 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 transaction 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,

(12:15):
it all originates from this person, Natalia Kaspersky. She was
giving a lecture at university in St. 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

(12:36):
in Russian or um. 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
um essentially not untraceable, but you could wire money easily

(12:58):
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 these actors who, for example, snuck into an Iranian
nuclear facility and installed viral UH software upon centrifuges, they

(13:19):
weren't paid in 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,

(13:42):
or you know, a hundred bitcoins here, and you're like,
that's a massive transaction. Like the example I heard would
be the CIA interacting with I s I UM 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 uh scandals

(14:06):
like the the around contra that sort of stuff. Well,
let me say this, Uh, 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

(14:28):
certainly don't wouldn't find it surprising to hear about them
leveraging it. Uh. You've 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. Uh. And
knowing that once that secret is out, you know, once

(14:50):
everyone knows, and you know, the system depends upon everyone knowing.
Once everyone knows how the mining process works, there's gonna
be lots of people working very hard to be really
good at at because that's how they earned 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

(15:12):
current currency, their state sponsored currency, for bitcoin, that could
be traceable. So you really, all you've done is shifted things.
How could 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,

(15:34):
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 way more effective than a car wash. Also,

(15:56):
you gotta wonder what the rates are, you know, because
it's money, 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 coin base 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

(16:17):
hard drives and they lose them and they're like, I
lost seven 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 backed, holy spooked. We made it. No, I

(16:45):
thought 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

(17:05):
I want to refer back to in our previous little discussion,
he said, ignoring the previous statement. Um 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,

(17:28):
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

(17:51):
people's ideological viewpoints is um, we will sometimes tend to
pick on one organization over an other that would do
essentially the same thing. So it's a real tall milkshakee
to say that one intelligence agency did something and other
intelligence agencies A did not know about it, or B

(18:12):
didn't 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

(18:34):
is trying to avoid detection in the from the get go.
But I also would not be shocked here that, say,
the KGB had used cryptocurrencies to pay I don't know,
hackers in North Korea. I'm going to go on on
a limb and say, there's no way that's not happening
at least a little bit. Yeah, man, Like it just
seems right for that kind of stuff, and like, you know,

(18:55):
that's what these black ops are all about. Is that
kind of freewheel and attitude where it's just like improvising
and goring 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's it rings true
for me. If they want to use the cryptocurrency spy cred,
that would probably be Here's a Here's another aspect of

(19:15):
this that I think argues in favor of this behavior.
It's that we're now, as a species and as a
conglomeration of state actors, seen a a fundamental transformation in
the nature of warfare. Right, we know that there is
a ticking time limit to the usefulness or efficacy of

(19:38):
UH 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, UH
so called hacker or bought armies in fluencing opinion through

(20:01):
soft power stuff like propaganda, the new war or the
new theater of war. People at the Pentagon are always saying,
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,

(20:23):
like Arnold Schwarzenegger. There's that's a that's more of an
overt one that I was thinking of things like in
the electric grid, the power grid. There have been numerous
occasions where UH 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

(20:44):
of foreign hackers putting in code to help UH 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

(21:06):
switch and you overload a power grid, you make it
so that it is going beyond its capabilities. You know
you would you could actually physically snap power cables if
you're sending enough juice through UH. 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.

(21:27):
If you need to um 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

(21:48):
stuff is happening all the time everywhere the United States.
Obviously we're focused on it because we live here, but
it's happening all over the world from various actors all
working across purposes against each other there 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

(22:10):
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 the ducks. Stocks Net was a
was a virus? Specifically, all right, is a virus? Uh
So nuclear power plants. One of the things they have
are centrifuges that spending a certain RPMs, right, and uh

(22:31):
they spend 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
center if you just turn at a speed that was wrong,
too fast for what it was supposed to do. Uh.
The idea being that would cause failures in Iran's uh
nuclear power capabilities, and uh it kind of worked. It's

(22:55):
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 I
meant that you had to get physical access to the
the the location in the form of a thumb drive.
You can do a thumb drive. Yeah, just the 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

(23:16):
to have been someone on the inside who was compromised.
You could send a thumb drive to 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 would like it's good old, good

(23:40):
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 the people

(24:04):
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 as Israel and Israel and the US work together,
that's that's the that's the common thread. Yes, so, and

(24:25):
you know, of course, no one's going to come forward
and say you 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

(24:48):
that world where we've got all these different parties working
at cross purposes infiltrating different systems. Plausible deniability very important,
right like we we're seeing it through everything from uh
the accusations of interfering with election cycles to uh yeah exactly,
to to affecting entire systems, you know, and the the

(25:14):
usual suspects that pop up for things that are happening
in the United States are Russia and North Korea and China.
Those are your three big ones, so you could you know,
and then of course you've got the state saying it's
not us, we didn't we didn't authorize this. If you
use something like a cryptocurrency to pay the people who

(25:34):
are actually creating the code and executing the code and
overseeing the bot nets 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

(25:57):
make use of them, because one, they of the technology too,
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 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 cents with you for the first time. All we're

(26:19):
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

(26:40):
not government employees. And the Chinese position for some time
has been the this is just a group of idealistic
national not very nationalistic people. These are 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,

(27:02):
when Sony had their massive data breach where gigabytes of data,
like 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 of it being

(27:24):
from North Korean hackers because it was in response to
a film that was coming out that was the interview.
It was the interview. It was a little 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

(27:45):
to fund hackers to attack and this, this company, this
global company, which was the movie wasn't even very good.
It's not that good. I've seen it. It was we
did an episode on this that you appeared on. Uh. This,
This idea of sophisticated coding and the separation of the

(28:07):
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, we've been talking about humans. Well,
why are we going to talk about raccoons? Badgers? Oh? Row, wow, badgers?

(28:34):
What if? What if? Hear me out? Yeah? Hit me?
What if? Um? A rogue artificial intelligence created Bitcoin for
the express purpose of siphoning electricity to feed it's nefarious

(28:56):
dark engines. Wait wait, hold on, yeah, it eats electricity awesome. Well,
I mean, if it's an artificial intelligence, it's presumably running
on silicon based hardware and thus needs electricity to run.
So electricity would mean power. Power is what allows it

(29:17):
to process information. It needs a lot of It's trying,
I'm trying. I'm trying so hard to not just call
nonsense on this. But let's also use as an opportunity
to talk about how much bloody power and energy that
mining for bitcoin consumed. I think this is a good job.

(29:40):
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 mind at that time, which

(30:02):
is predetermined and every few years the number has per block. 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, So but but every few years

(30:25):
that number is cut in half until you finally get
to the point where all bitcoins that will 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 if you get to a point where
the number of bitcoins you get per transaction completed is

(30:48):
small enough, then you have to reconcile that with how
much money you are spending on the electricity being used
to for the processing power. And if you're spending more
money electricity, then you're making money in the bitcoins you're mining.
That's a losing proposition and people are going to start
to back off. Here's the thing, though, according to a

(31:08):
an article on Motherboard, right now, with the trajectory of
bitcoin value being what it is, they say it would
be profitable for miners on the whole to burn through
more than twenty four tarra watt hours of electricity in
a year's time. Sure. Yeah, and that's but these are

(31:29):
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

(31:52):
keeps on building and and never takes enough of a
backtrack to settle back down to whatever like ten dollars
per bitcoin um, 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 thousands of a bitcoin when you successfully mine a block.

(32:14):
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, uh, it
won't make sense to spend that much electricity. In the
short term, however, you're seeing massive amounts of electricity being

(32:38):
used to mind these coins. And the number I said
is apparently about um the amount of energy that Nigeria
uses in a year, and that's the country have a
d and eighty six million people and it's it's not
a surprise. But what will happen is you'll eventually, at
least the idea is that you will eventually reach a peak,
you know, peak bitcoin, where, assuming again, assuming the value

(33:00):
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

(33:22):
not the ones who would otherwise be spending thousands of
dollars just on electricity bills until the machine consciousness is saved,
at which point there would be no reason to continue
this char right. I I find it very difficult to
believe that an artificial intelligence is in fact responsible for this,

(33:42):
but I will I will support that argument. After you
take a break to thank your sponsors such cheek Jonathan,
I am cheeky and sorry, guys. I saw an opportunity

(34:04):
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

(34:24):
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,

(34:50):
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 works is that it
was fed a whole bunch of different UH recipe books

(35:13):
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

(35:34):
for you to cook, and their bunkers crazy. So, for example,
there's cauliflower frecacy one of the optional ingredients, and cauliflower
frecacy is cauliflower. I'm serious, Like, I'm going through the
list of recipes and there's this cauliflower optional Like, so
burning question. I've always wondered what constitutes a frecacy? Uh,

(35:57):
you know, an excellent question that I am not prepared
to answer her. But I will tell you this that
Cheff 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 will be
recipes that were created on the spot at that moment,

(36:20):
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. 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

(36:45):
is an order of magnitude more complicated, and I just
cannot conceive of that being in the realm of possibility
of a meat brain. Yeah, maybe that's the problem. What
if Santoshi Nakamoto is working with the machine, is aiding
the machines in this endeavor because he wants to be
the number one meat bag when the takeover happens. He

(37:09):
doesn't want to get caught in that sky net it's
made of lasers. Yeah, we're doing references today, folks. Sorry,
you you invited me on the show. I knew what happens,
we knew what we were getting into. We welcome it.
And 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

(37:32):
in our previous episode two. Uh, 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,

(37:54):
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 ingest
or seriously, I don't know that. 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

(38:16):
am so awful whenever I go to stand up. But
the the fact that those were put forward, it seems
very similar to this kind of suggestion. And 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 of what we're
capable of doing right now, what do you think that

(38:38):
I think it's just hiding. You just think the artificial
intelligence is hidings like, look at all this energy usage.
I'm not in here, I'm not inside. To what end, Well,
it's 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 be come.

(39:00):
I think I think any artificial intelligence of that sophistication
would be able to essentially and would have already infected
all networks, uh 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 gonna drop off. I'm gonna drop off on that

(39:21):
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 the robots these days, I mean
they they're hard pressed to, like, you know, walk across

(39:42):
the room. That's again why I sit there and say
that they are. 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 say and stare at the door for six
hours to reach out and reach out and pull a

(40:05):
door that's meant to be pushed hand. Yeah, I literally
ran into a door, yester. I also don't expect you
to create a cryptocurrency to hide how much power you
are consuming me, I make no secret about my and
don't don't sell it, don't sell them short. So we
are we've looked at three of or at least three

(40:28):
of the really really big ideas, right that somehow on
this on 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

(40:53):
some of the same lessons learned from a high frequency
trading or algorithm studies like I know, sure algorithm, I
mean sorry, bitcoin mining is using algorithms. Yeah, absolutely, I
mean that, certainly people are using artificial intelligence in order
to uh to work with bitcoin. But I don't think

(41:13):
bitcoin itself is a product or is the is being
manipulated that on that grand a scale by artificial intelligence.
But yes, as you as you mentioned high frequency trading,
that's where you've got computer algorithms that are making thousands
of trades per second really uh far faster than what
any human can do, and you end up seeing little

(41:33):
mini crashes and bubbles in the stock market as a result.
I can't believe we almost forgotten 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. Whales. Oh so yeah, I'm happy to
talk about whales because we you know, you guys were

(41:55):
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 bitcoins in
some way that could be harmful to others. That leads
us to the discussion of whales. What are whales? Why
do we call them whales? Whales? That's a term within

(42:16):
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 that one thousand people own
of all the bitcoins out there, there's already economic inequality. Yeah,

(42:38):
and so so you think about that nearly half of
all bitcoins belong to just one thousand people. So keeping
that in mind, and remember bitcoin, I 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've got
these one thousand people and through their circles, they just

(43:00):
have learned even if it's only a portion of them
learn who the others are, right, So so it's it's
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

(43:21):
next plateau or maybe even a drop off. What we're
gonna 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

(43:42):
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

(44:03):
concept as someone who's dealing with insider trading, right that
they have the for knowledge that something big is going
to 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

(44:25):
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

(44:45):
a bitcoin fight club. I'm just saying, like you would
think players of that level, as anonymous as it all is, are,
are more likely to be aware of each other than
say some of the smaller players. Well, they're certainly like
their online discussion groups about bitcoin, where people who adopted
it early certainly know each other or at least know
each other by handle, if not by name. You think's young,

(45:08):
younger people, much younger than you would imagine being old
enough to have that much money. Yeah, yeah, I mean
it's really it's especially for the early days again, before
before the computing demands got so high because the computational
problems got so complicated. Uh. And obviously, if you got
in on the ground floor and you were constantly using

(45:28):
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 mind. More so,
as long as you're mining more coins than you're spending
on your mining rig, you're you're in the winning situation. Right. Well, this,
if this group of people all decided that they were

(45:49):
going to 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 first And
one of the things that could cause that is a
a tacit agreement among the whales to get out of
the game rather than watch their their investment balloon up

(46:13):
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 dollars, and then the next dec Now
it's down to twenty dollars. I lost eighty grand overnight,
Like it would drive me crazy. So that is a

(46:37):
real fear. Whether or not whatever happened 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, I And honestly,
now we're getting to a level of technology that is
I mean, it's fascinating to me. Neural networks are amazing.

(46:59):
I love of neural networks. But you're getting to a
point where, uh, you're you're taking technology, which is something
I understand pretty 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. I mean you have
these like high level economists who just completely contradict each

(47:20):
other all the time. It makes me feel like a
string theory 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 have

(47:40):
established earlier. When you're at that edge, people are guessing
and it becomes very close to ideology. They're 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. It's

(48:00):
really I like that. I wanted a bumper sticker, so
when it just really fast. Something that I didn't understand
before we did this episode is that exactly how many
cryptocurrencies exist? And I know we keep saying that there
are a lot of them. Did you guys mention how many? Okay,
So according to coin market cap dot com, which tracks

(48:21):
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

(48:44):
to me. I was I would only I've only ever
been aware of for I think like ethereum and bitcoin, Yeah,
that they're 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.

(49:05):
That's my thing. That what makes one more attractive than another,
It's just that it has a cooler name, Like I don't.
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. Consensual delusion. 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,

(49:28):
then we can have a 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 gonna need more than two
chickens for this laptop is very close. You don't even
know their names, man, how dare you yeah, do you
know my laptops name. Yes, it's actually Lappy named him

(49:54):
after Strong Bad's laptop. But no, it's 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 uh, the guy the carpenter, Noll, you're

(50:15):
the carpenter. I'm gonna go to you. 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 smolk. 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, knowl
and then bring that to you and then get my table.
Or we have to invent a currency because this is

(50:36):
just too 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

(50:56):
somewhat vapor aware of 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 and euros
and things like that, and digital currencies. It's it's it

(51:19):
seems like there's more because you can hold the 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 it 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,

(51:39):
everything's fine. But if we ever come to a day
where we decide to stop pretending, we're we're all yeah
or Daffy Duck walking off the cliff right before they look.
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

(52:01):
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 get get 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

(52:22):
accept it knowing that if you don't, your boned too.
So it's kind of a boned if you do boned
if you don't. What what comes down to is our
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

(52:42):
hand will be able to purchase the goods or services
that I want, And then tomorrow it's it's just as good,
and the next day, in 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 we've gotten rid of our

(53:05):
shared delusion. We did we did an episode asking whether
money is a religion, and I 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,

(53:25):
it's not. Not for nothing does etymology exist. Also, remember
it's not 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 for yourself.
I found two currencies that are tracked on here. The
first one it's called snake eyes. Okay, uh, and it
just goes by the handle of snake, So you got

(53:46):
I got like twenty snake man. I think that's awesome.
That needs to catch on right now. It's like worthless.
You need to get that back up and just see
thousands of snakes wearing eye patches. And this one, uh,
it's just it says it's gay money. That's what it's as.
So you know, maybe uh more power. Okay, Well, if
there's fifteen hundred of these, then I see no reason
why we can't get bend bucks on the board, right,

(54:09):
and thank you so much that let's end with that.
How do you do it? How do we go from
bend bucks the notion to bend bucks the publicly traded,
tradeable available cryptocurrency. We do have, we do have tangibles, 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

(54:31):
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

(54:52):
order to verify transactions is unique, um, and one that
we could scale up or scale down. We can't trade
snake eyes for bend bucks. You could, actually, I mean
you can certainly there can be I mean, that's why
exchanges exist, right. The exchange exchanges purpose is to determine
what is the relative value of all these different currencies

(55:13):
so that you can make those exchanges. Um, 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 for snake guys to you, and then the
exchange has your bend bucks. Is totally possible. It's it's possible.

(55:33):
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 and bucks, which means
I can be You've been getting in on the ground floor.
We're taking all our We're taking all our old gaming consoles,

(55:56):
pulling a Pentagon and networking them together. Remember when in
depending on brought let or d O D excuse me,
got like two the old PS two because I can
contribute so well. You know. The thing was that Sony
eventually made a change in the firmware that removed the
ability to boot into Lenox using PS twos, But they
were actually being used as super computers when they were

(56:18):
networked together by the US government and others. It's pretty
cool we can flash firmware or something, right, Yeah, yeah,
I think they might have finally lifted it. Honestly, I
haven't kept up because PS two's are so twenty years ago.
So let's put an air gap in this conversation from now,

(56:39):
thank you again so much for coming on the show
and walking 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. You get
a check, weird. I just get I actually, I just

(57:01):
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 on both cheeks? I suspect that's Josh.
He went from 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.

(57:24):
You should know he 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

(57:46):
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 on everything we've discussed today
and in the previous episode, please write to us, talk
to us on social media. We are Conspiracy Stuff on
Twitter and Facebook. You can find us on Instagram at

(58:09):
Conspiracy Stuff Show. And if you don't want to do
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com