Nic and Matt cover an insane week of deals and market turmoil. In this episode: 

• The Biden admin freezes the Treasury guidance on unhosted wallets
• Treasury Secretary Janet Yellen expresses her concern about cryptocurrency for terrorist financing
• Bitcoin as a monetary escape valve
• The real reasons behind Treasury’s concern about Bitcoin
• The prospects for monetary repression in the US
• Prospects for Chris Brummer as the new head of the CFTC
• Blackrock warms to Bitcoin
• Our point by point ‘debunking’ of the anonymous blog post on Tether
• Why Tether critiques are so popular
• Why a Tether implosion would emphasize Bitcoin’s value proposition
• We explain the Bitcoin ‘double spend’
• How Bitcoin settlement is probabilistic

Content mentioned in this episode: 

• Nic in NYMag, What Explains Bitcoin’s Resurgence?
• On The Brink, Interview with Ganesh Viswanath-Natraj
• The Bit Short: Inside Crypto’s Doomsday Machine
• Kraken, On Tether, Journalists Defy Logic

Check out this episode!

Iain Murray, VP of Strategy at the Competitive Enterprise Institute, joins the show to discuss the history of Operation Choke Point, a 2011-2015 program used to exclude legal businesses from banking led by the DoJ and FDIC. In this episode: 

• How Iain Murray came to be one of the main historians of Operation Choke Point
• The roots of Choke Point in the crackdown on poker sites in 2011
• How Choke Point was started on a whim by two midlevel DoJ lawyers in 2011
• How OCP targeted completely legal but politically disfavored industries
• How mechanically the DoJ was able to get banks to comply with their informal guidance
• Why the closed nature of banking means that alternatives financial service providers for these industries couldn’t be created
• How bank consolidation meant that OCP was easier to instrumentalize
• How successful was Choke Point in marginalizing targeted industries?
• Did OCP have buy-in from the highest levels of the Obama administration?
• How regulations should have implemented the rules they sought to create with Choke Point – and why they chose not to
• How OCP was an end-around the administrative procedure act, and why it was done covertly
• Was there any accountability for the individuals behind OCP? Was anyone fired?
• Why individuals on any side of the political spectrum should be concerned about OCP
• Did Choke Point ever really end?
• The long term enduring effects of OCP
• How the Wyoming SPDI is a reaction to Choke Point
• Whether Iain agrees with the OCC’s ‘Fair Access’ rule

Content mentioned in this episode: 

• Iain Murray at CEI, Operation Choke Point: What it is and why it matters
• OCC, ‘Fair Access‘ rule 

Check out this episode!

Nic and Matt return for another explosive week. In this episode:

• The bike saga enters its final chapter
• Sci Hub tries Handshake
• Is Choke Point returning?
• We break down the Bakkt SPAC
• FinCEN extends the comment period for its notice of proposed rulemaking
• Gemini announces a credit card with crypto rewards
• What Gary Gensler as SEC Chairman means for the industry
• Prospects for a Bitcoin ETF under a Gensler SEC
• The OCC creates a national crypto bank charter
• One reason why Miami could make it as a tech hub
• We discuss the latest NYT article on losing coins

Content mentioned in this article

• Nic Carter in Coindesk, Twitter, Trump, and the ‘Private Company’ Fallacy
• FinCEN extends its comment period
• OCC, OCC Conditionally Approves Conversion of Anchorage Digital Bank
• Brian Brooks in the FT, Get Ready for Self-Driving Banks

Check out this episode!

Nic and Matt return for another week of ATHs. In this episode: 

• Coindesk acquires Tradeblock
• The OCC says that banks can use public blockchains and stablecoins
• We digest the OCC letter
• Potential drawbacks to the new OCC guidance
• Has Brian Brooks had the most successful regulatory term in recent memory?
• The Treasury’s comment period expires
• Does the Treasury even have the authority to pass these new rules?
• Our favorite comment letters in response to the Treasury rules
• Does JPM’s price call make them hypocrites on the topic of Bitcoin?
• Ripple’s series C lead investor is suing Ripple
• Strike announces Strike Global
• How crypto-based fiat-to-fiat remittances work
• Our favorite quarterly investor letters

Content mentioned in this episode: 

• Coin Center, Supplemental Comments to FinCEN
• Neha Narula and Patrick Murck, Letter to FinCEN
• Fidelity Digital Assets, Letter to FinCEN
• Bill Miller, Q4 2020 Market Letter
• Stone Ridge, 2020 Shareholder Letter
• Matt Hougan and David Lawant, CFA research brief on Cryptoassets

Check out this episode!

Travis Schwab, the founder and CEO of Eventus Systems, a company specializing in trade surveillance, joins the show. In this episode we discuss:

• Travis’ entrepreneurial journey and path to starting Eventus Systems
• How he came to see cryptoassets as a market opportunity
• Thoughts on current market structure, the role of exchanges, and the institutional readiness of this market
• How trade surveillance directly impacts the prospects of a Bitcoin ETF
• 2021 predictions

To learn more about Eventus visit their website.

Sponsor notes:

Withum is a forward-thinking, technology-driven advisory and accounting firm committed to helping our clients be more profitable, efficient and productive in today’s complex business environment. Our Digital Currency group is proud to partner with members of the cryptocurrency community. Get to know us at withum.com/crypto.

Check out this episode!

Matt and Nic return for the first roundup of 2021. In this episode: 

• Why some funds might be buying Bitcoin at year end
• Are Ripple fans buying Bitcoin?
• Are fair launches obsolete?
• Vaneck files for a new Bitcoin ETF
• CME futures are officially the most liquid futures market
• BitGo pays a fine to OFAC
• Exchanges start delisting XRP
• Will exchanges face repercussions for listing securities?
• Why being a security dooms the cross-border settlement use case for XRP
• Which Bitcoin skeptic we’d like to flip the most

Check out this episode!

Craig Warmke is an assistant professor of philosophy at Northern Illinois University. He has written several papers on the subject of Bitcoin, both pertaining to the question of what Bitcoin actually is. We cover Craig’s papers (linked below) and explore the role for philosophers in Bitcoin.

• How Craig realized there was an opportunity for philosophy in Bitcoin
• Other philosophers writing about Bitcoin
• Why philosophers don’t take Bitcoin seriously
• The Bitcoin-related questions where philosophers can weigh in
• The risk of epistemic trespassing
• Why Satoshi may have been wrong when they defined an electronic coin as a ‘chain of digital signatures’
• How Satoshi made a critical engineering decision which differentiated Bitcoin from prior e-cash systems
• Why units of Bitcoin cannot be tracked over time through the ledger – and why this matters
• Why Bitcoin tracks quantities of a substance, rather than discrete, individual units of Bitcoin
• Craig’s stylized model of Bitcoin
• Why Craig describes Bitcoin as ‘fictional substance in an ongoing and massively coauthored book’
• Why Bitcoin being ‘fictional’ does not delegitimize it at all
• How Craig’s model extends to stablecoins
• Why Bitcoin’s liability-freeness is so important, and distinguishes it from other monetary assets
• The practical significance of determining what Bitcoin is
• How Craig’s analysis helps demystify chain splits
• How ETH 2.0 sheds light on the debate over Bitcoin’s identity
• The greatest threat to Bitcoin
• Is Bitcoin the protocol a democratic phenomenon?
• Are there knowable facts about what the nature of Bitcoin is?

Referenced in this episode:

• Craig Warmke, What is Bitcoin, forthcoming in Inquiry
• Craig Warmke, Electronic Coins
• George Selgin, Synthetic Commodity Money
• Martin Glazier, In Blockchain We Trust?

Check out this episode!

Brian Venturo is the CTO of CoreWeave, the largest North American GPU miner, which also doubles as a cloud infrastructure firm for general computation. In this episode: 

• How Brian went from hobbyist Ethereum mining to wielding a fleet of 50,000 GPUs
• How Core Weave was able to cheaply acquire GPUs from insolvent mining farms
• The implications of the Ethereum DAG file growing beyond 4 GB and its effect on miners
• The effect of the looming PoS transition on miner decision-making
• Why Core Weave specifically limited their GPU fleet to NVIDIAs with more memory
• Brian’s stance on Ethereum’s transition to Proof of Stake
• Are miners pro-cyclical or counter-cyclical?
• Does Core Weave hold inventory in the coins they mine or do they divest them immediately?
• Brian’s options based model for pricing hardware
• The mini gold rush happening in publicly traded mining firms
• Brian’s opinion on hashrate swaps or derivatives
• How Core Weave is transitioning from purely mining based to public cloud services
• The feasibility of GPU miners moving into cloud computing
• Core Weave’s plans to train an open source version of GPT-3
• Brian’s view of the role of miners in the Ethereum ecosystem
• The motivations behind monetary-related EIPs in Ethereum
• Brian’s analysis of incentives to make Ethereum deflationary
• Why Proof of Work is an underrated distribution method
• Brian’s position on increasing the gas limit
• Why tinkering with the fee market is counterproductive in terms of transactional efficiency
• The relationship between blockspace and fee revenue for miners
• Brian’s thoughts on EIP 1559 and whether it increases Ethereum’s security
• Brian’s view on the pace of ethereum development
• Why Proof of Work launches are preferable to liquidity mining launches
• The current state of the ASIC v GPU debate
• Brian’s retrospective on the Grin launch
• Why Core Weave is not interested in miner-extractable value (MEV)

Sponsor notes: 

Withum is a forward-thinking, technology-driven advisory and accounting firm committed to helping our clients be more profitable, efficient and productive in today’s complex business environment. Our Digital Currency group is proud to partner with members of the cryptocurrency community. Get to know us at withum.com/crypto.

Check out this episode!

Nic and Matt return for a special Christmas episode of OTB. In this episode: 

• Jay Clayton steps down and Elad Roisman takes over as interim SEC Chair
• We analyse the Treasury’s proposed rule on VASPs and crypto transactions
• Why the FinCEN rule imposes greater demands on crypto transactions than cash as far as surveillance is concerned
• Are the proposed workarounds between VASPs and defi asset pools viable?
• Our book recommendation on the politicization of the Treasury
• Our analysis of the SEC complaint against Ripple
• How bad is the SEC complaint for Ripple?
• Some of the most damning quotes from the SEC complaint
• The significance of the SEC extending the statute of limitations with Ripple
• Our theory for why the SEC waited so long to sue Ripple
• Implications for exchanges facilitating the trading of XRP
• A development on 15c3-3
• We revisit our predictions for 2020 and issue new predictions for 2021

Content mentioned in this episode: 

• The Treasury’s proposed rule on crypto wallets
• The Presidential Working Group’s statement on stablecoins
• The SEC complaint against Ripple Labs
• The Tokendaily 2021 Crystal Ball

Sponsor notes: 

Withum is a forward-thinking, technology-driven advisory and accounting firm committed to helping our clients be more profitable, efficient and productive in today’s complex business environment. Our Digital Currency group is proud to partner with members of the cryptocurrency community. Get to know us at withum.com/crypto.

Check out this episode!

Matt Hougan, the Chief Investment Officer at Bitwise Asset management joins the show. In this episode we discuss:

• Bitwise’s new OTC trust product “BITW”
• The state of play for cryptoasset adoption in the RIA channel
• The evolving thesis for Bitcoin and other cryptoassets
• Prospects for a Bitcoin ETF in 2021

To learn more visit Bitwise Asset Management and follow Matt on Twitter.

Sponsor notes:

Withum is a forward-thinking, technology-driven advisory and accounting firm committed to helping our clients be more profitable, efficient and productive in today’s complex business environment. Our Digital Currency group is proud to partner with members of the cryptocurrency community. Get to know us at withum.com/crypto.

Check out this episode!

Compliance expert Amber Scott joins the show to explain why crypto-firms are systematically excluded from the bank sector in Canada. In this episode: 

• Our objective in launching a series on bank suppression of the crypto industry
• The current bank landscape in Canada
• Why crypto firms struggle to get access to banking in Canada
• Why money transmitters face a more burdensome treatment from banks
• What derisking is and why it is so common
• Whether MSBs and crypto firms deserve the treatment they get from banks
• Why derisking often forces crypto firms into using grey market payment processors, exposing them to the risk of fraud
• The underlying reasons for reluctance on the part of banks to bank crypto firms
• Why informal guidance from regulators is so critical
• How US regulations are structurally imported into Canada
• How a service provider called Central One imports US policy for thousands of credit unions

Follow Amber on Twitter and learn more about Outlier Canada. 

Check out this episode!

Matt and Nic return to cover a blockbuster week of ATHs. We invite a pseudonymous bond trader to give a rebuttal to our somewhat misguided take on the Microstrategy bond offering on last week’s episode. Also in this episode: 

• Our take on the STABLE Act (again)
• Are balances on the Dunkin and Starbucks apps stablecoins
• Paxos raises a $142m Series C
• SBI acquires B2C2
• The BITW premium explodes
• Ruffer’s telling reasons for investing $740m in Bitcoin
• The CME announces ETH futures
• … three years to the day since the CME Bitcoin Futures launch
• Did the CME futures pop the 2017 Bitcoin bubble?
• We screwed up with our take on the MSTR bond offering
• We revisit the MSTR convertible note
• Who is buying the MSTR fixed income offering?
• Coinbase inches towards an IPO
• ErisX introduces sports-based futures contracts
• Why onions aren’t a commodity
• Bitcoin values are American values

Content mentioned: 

• Nic in Coindesk, Nationalizing Stablecoins Won’t Improve Financial Access

Check out this episode!

Muneeb Ali, cofounder of Blockstack, joins the show to talk about the launch of Stacks 2.0 and its evolution from a securities offering to a freely tradable instrument in the U.S.

• New developments with Stacks and a novel legal opinion
• What constitutes sufficient decentralization and how Blockstack took cues from regulators
• Why Blockstack felt empowered to list their token on public US exchanges
• The current state of Blockstack governance
• Reflections on Ethereum’s purported transmutation
• How Blockstack did the first reg A+ securities offering for a cryptoasset
• Why securities registration is worthwhile for token issuance
• Whether the SEC disclosure framework is suitable for the issuance of a token
• Alternative disclosure and securities offering frameworks for registered token issuance
• Whether Blockstack was willing to treat Stacks as a security in perpetuity
• Why security tokens haven’t taken off in the US so far
• The evolution from Stacks 1.0 to Stacks 2.0, and the differences between the two
• Why Blockstack chose to build on Bitcoin, and how they managed to do so in an efficient manner
• Why Blockstack chose not to build a distinct chain in its own right
• Why Bitcoin’s inflexibility as a base layer makes it a suitable underlying protocol
• How Muneeb thinks about Stacks value accrual
• Blockstack’s transaction-based consensus mechanism relying on Bitcoin
• Why Blockstack chose not to use OP_RETURN
• The relationship between Blockstack usage and BTC value accrual
• Muneeb’s response to the criticism of their regulated token issuance model

Key readings:

• Wilson Sonsini’s Summary of Memorandum Regarding the Status of the Stacks Tokens Upon Adoption of Stacks Blockchain 2.0

Sponsor notes:

Withum is a forward-thinking, technology-driven advisory and accounting firm committed to helping our clients be more profitable, efficient and productive in today’s complex business environment. Our Digital Currency group is proud to partner with members of the cryptocurrency community. Get to know us at withum.com/crypto.

Check out this episode!

Nic and Matt return to cover an avalanche of news and deals. In this episode: 

• Blockstack’s transmutation
• Bitso raises $62m
• Matt breaks down the Microstrategy bond offering
• Mass Mutual buys $100m worth of Bitcoin through NYDIG
• A bipartisan group of Representatives asked Jay Clayton for clarity on broker dealer custody for cryptoassets
• The looming crackdown on noncustodial wallets from Treasury
• The effect of requiring transactional metadata for on-chain transactions
• More comments on the STABLE Act
• Matt’s plan to primary Stephen Lynch via Dunkin talkin points
• Would the STABLE Act kill Dunkin Donuts?
• Why Bitcoin is pristine collateral
• Fidelity Digital Assets partners up with BlockFi for Bitcoin-backed loans
• Bitwise launches their index fund
• Square goes carbon neutral
• Standard Chartered launches a crypto trading service
• Singapore’s DBS bank launches a crypto exchange
• Paxos and BitPay file for national bank charters
• The Financial Times changes their tune on BTC
• Our call for data portability legislation

Check out this episode!

Mustafa Yilham, VP of global business development at Bixin, joins the show. Bixin is an early Asia-based Bitcoin miner; they operate a popular wallet app, and they run a Bitcoin-denominated quant fund of funds. We cover prevailing myths around industrial Bitcoin mining and the reality of sourcing energy at competitive prices for mining. In this episode: 

• The story behind Bixin’s Bitcoin-denominated quant fund
• How Bixin’s fund of fund employs a Bitcoin benchmark
• Why Bixin as a firm is not market neutral and does not hedge their mining operation
• Whether miners have a procyclical or countercyclical effect on the price of Bitcoin
• Whether or not miners are fundamentally long Bitcoin
• The key considerations for finding a good source of electricity for mining
• Why Central Asia, Russia, and North America are promising locations for mining
• Why Mustafa expects more hashpower to end up in North America in the near term
• The factors leading Mustafa to expect less hashrate concentration in China in the future
• Whether the CBECI mining map is a reliable guide to where mining is located
• Miner attitudes to Iran and OFAC
• Current electricity prices required to competitively mine
• What sold out hardware means for the price of Bitcoin
• Was the hashrate drop earlier this year was due to the seasonal migration of hashpower in China?
• Bixin’s approach to seasonal electricity costs
• Whether the withdrawal issues at Okex and Huobi prevented miners from selling and ’caused’ the recent Bitcoin rally
• Mustafa’s take on the “China controls Bitcoin” narrative
• Why Bitcoin mining is getting progressively more decentralized
• Why Bitcoin miners are positively disposed towards Bitcoin
• Whether Bixin plans to support Taproot
• Mustafa’s view on who controls Bitcoin
• Mustafa’s experiences in Turkey and why it is so popular there
• Why central asian and post-Soviet households like gold

Sponsor notes: 

Withum is a forward-thinking, technology-driven advisory and accounting firm committed to helping our clients be more profitable, efficient and productive in today’s complex business environment. Our Digital Currency group is proud to partner with members of the cryptocurrency community. Get to know us at withum.com/crypto.

Check out this episode!

In this week’s episode, Nic and Matt torch the STABLE Act cosponsored by their local representative Stephen Lynch (MA-8). Also covered: 

• Stephen Lynch and Rashida Tlaib’s STABLE Act
• What the STABLE Act requires of fintech providers hosting user balances
• What stablecoin issuers are not like banks
• Why the STABLE Act would be disastrous for competition in the Fintech space
• Why the moral positioning for the bill is internally inconsistent
• The prospects for the STABLE Act
• Why legislation like the STABLE Act will likely become
• USDC partners with Visa, and what it means for the industry
• Why the USDC-Visa partnership solves a critical issue that the industry has had for years
• BlockFi announces a Bitcoin-back credit card
• Larry Fink starts to shift his tone on Bitcoin
• Garry Cohn’s bizarre new Bitcoin critique
• Our takeaways from the BCAP Bitcoin survey
• Will Bitcoin outlive the Euro?

Content mentioned in this episode: 

• Spencer Bogart, Bitcoin is (Still) a Demographic Mega-Trend
• Niall Ferguson, Bitcoin Is Winning the Covid-19 Monetary Revolution
• The STABLE Act press release
• Coin Center, The Unintended (?) Consequences of the STABLE Act 

Check out this episode!

Mathias Imbach, cofounder and CEO of Sygnum Singapore, joins the show. In this episode: 

• How Mathias came to cofound Sygnum
• The state of affairs in Crypto Valley in Switzerland today
• Why crypto banks are necessary and useful
• Why the company is split – cofounders, offices, and investors – between Zurich and Singapore
• Why Switzerland and Singapore are suitable venues for a crypto bank
• The case for convergence between traditional financial infrastructure and the crypto industry
• Sygnum’s product lineup
• Current regulatory attitudes towards the crypto industry in Switzerland in Singapore
• How Sygnum compares with the entities receiving crypto-focused bank charters in the U.S.
• Switzerland’s treatment of the Travel Rule for crypto exchanges
• The current state of EU regulations for crypto service providers
• How Sygnum created a tokenized Swiss Franc backed directly by central bank liabilities
• Differences between tokenized base money and a state-issued CBDC
• Mathias’ explanations for the renewed enthusiasm for Bitcoin in the market
• Why Bitcoin and gold decoupled earlier this year – and how Bitcoin stopped being a rates bet
• How Sygnum’s clients are an indication of the changing nature of Bitcoin investors

Check out this episode!

Pelle Brændgaard, the cofounder and CEO of Notabene, an enterprise software company building compliance tools to enable trusted cryptoasset transactions between financial services firms, joins the show. In this episode we discuss:

• Pelle’s early work in distributed systems and pre-bitcoin cyber-cash projects
• His path to cofounding Uport and his views on decentralized identity systems
• The vision of Notabene how the firm is addressing the compliance needs of financial institutions and crypto exchanges and brokerages
• His views on the travel rule and how this will impact market participants
• The unhosted/hosted wallets debate

Learn more about Notabene here.

Sponsor notes:

Withum is a forward-thinking, technology-driven advisory and accounting firm committed to helping our clients be more profitable, efficient and productive in today’s complex business environment. Our Digital Currency group is proud to partner with members of the cryptocurrency community. Get to know us at withum.com/crypto.

Check out this episode!

Nic and Matt return with a special Thanksgiving issue of OTB. In this episode: 

• How Castle Island VC was almost Brink VC
• The difference between financialized walled-garden gold and its Bitcoin equivalent
• How USDC is being used in Venezuela via AirTM
• How stablecoins are now tools of geopolitical power projection
• Vaneck lanches an ETN on the Deutsche Bourse
• Is GBTC the cause of the rally
• The OCC proposes fair access to banking services
• A few people and organizations that we’re thankful for
  • Chaincode Labs
  • Bitcoin Optech
  • Greg Schvey and Adam Ludwin
  • Caitlin Long
  • John Pfeffer
  • Fidelity Digital Assets
  • Coin Center
  • Three Arrows and CMS Holdings
• Should thanksgiving turkey trots be cancelled?

Content mentioned in this episode: 

• Jeremy Rubin’s collegiate BTC sweater
• Adventures in Capitalism, Why this Reflexive Ponzi Scheme will Continue
• Office of the Comptroller of the Currency, Proposed Rule Would Ensure Fair Access to Bank Services, Capital, and Credit

Sponsor notes:

Withum is a forward-thinking, technology-driven advisory and accounting firm committed to helping our clients be more profitable, efficient and productive in today’s complex business environment. Our Digital Currency group is proud to partner with members of the cryptocurrency community. Get to know us at withum.com/crypto.

Check out this episode!

John Newbery, Bitcoin Core developer and founder of Bitcoin Optech, announces an independent nonprofit organization to support Bitcoin development, Brink. Donate here.

In this episode, we discuss the formation and mandate of Brink, as well as the developer funding context that we find ourselves in. Covered in the episode: 

• John Newbery’s core developer story and how he came to found Brink
• Why John left Chaincode and struck out on his own
• Brink’s mandate and foundational purpose
• Lessons learned from the Bitcoin Foundation
• The future of Bitcoin Optech
• The state of funding for Bitcoin development
• The accessibility of Bitcoin protocol development today
• Does the existence of financial incentives cannibalize the intrinsic motivation to work on open source?
• Why John works on Bitcoin
• Why ossification might be more remote than we expect
• Whether Bitcoin’s developer funding model exposes it to corporate capture
• The political implications of Bitcoin having a sole reference implementation
• The importance of distinguishing the validation element of Bitcoin Core from the other components
• Is Bitcoin protocol dev meritocratic or technocratic?
• Why the structurelessness of Bitcoin core dev raises the barriers to entry
• Is Bitcoin protocol development adequately funded right now?
• Does developer funding equate to influence in the Bitcoin protocol development
• The dispersion of Bitcoin protocol development influence

Content mentioned in this episode:

• Joseph Jacks on On The Brink
• Bitmex Research, Who Funds Bitcoin Development?
• Nic Carter in Coindesk, Bitcoin’s Patronage System is an Unheralded Strength

Check out this episode!