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Speaker 1: Hey, welcome back. You are listening to the Mark Moa Show,

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Speaker 1: and we're talking about bitcoin. We're talking about cryptocurrencies, and

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Speaker 1: we are talking about the decentralized revolution. We are talking

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Speaker 1: about a revolution that is sweeping the world. And I'm

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Speaker 1: trying to bring this to you each end, every week.

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Speaker 1: It should be the most important part of your week,

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Speaker 1: the most powerful, the most profitable part of your week,

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Speaker 1: because you're literally witnessing, like I said, a revolution, a

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Speaker 1: decentralized revolution, a technological revolution that's literally going to change

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Speaker 1: the way the world works. We've had about five technological

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Speaker 1: revolutions over the last two d and fifty years. They

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Speaker 1: happen um about every fifty years, and we're witnessing one

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Speaker 1: right now. It's one of the key pivotal moments in history.

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Speaker 1: You know, when you study history like I do, you'll

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Speaker 1: see that. You know, history books are written about key

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Speaker 1: points right where history changes, and history books will be

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Speaker 1: written about this point in time. And while you know,

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Speaker 1: the future is uncertain and sometimes it's scary, UM, I

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Speaker 1: think it's scary anyway, UM, it can be overwhelming. Sometimes

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Speaker 1: I also like to step back and appreciate the fact

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Speaker 1: that we are literally witnessing this happening. We're living through it, um,

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Speaker 1: and we have massive opportunity in front of us. So, UM,

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Speaker 1: if you listen on a regular basis, thank you, welcome back.

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Speaker 1: I'm gonna make sure that I'm gonna make it a

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Speaker 1: priority to make sure it's the most important part of

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Speaker 1: the week. If you're new to the Markma Show listening

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Speaker 1: about bitcoin and cryptocurrencies, then UM, pull out your phone

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Speaker 1: if you're not driving, and put a calendar reminder for

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Speaker 1: this channel at this time to come back with me

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Speaker 1: each and every week. Now, I try to talk about

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Speaker 1: There's a couple of things that I'm trying to do. One,

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Speaker 1: I want to give you the education you need so

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Speaker 1: you understand what's happening with bitcoin and cryptocurrencies in this

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Speaker 1: decentralized revolution. You need to have the education, the education

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Speaker 1: what is going on? What is this? How does it work? How?

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Speaker 1: How can it make money for me? Right? How can it?

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Speaker 1: How can it saved the world? Right? So you need

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Speaker 1: that education base and education is so important. That's why

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Speaker 1: you know, you see people that win the lottery or

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Speaker 1: pro athletes that make a hundred million dollars, or you know,

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Speaker 1: rappers or musicians and they make all this money and

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Speaker 1: then they go broke. And the reason why they go

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Speaker 1: broke is because they got the money, but they didn't

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Speaker 1: have the education. And so if you want to participate

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Speaker 1: in this this revolution, in this wealth transfer, then you

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Speaker 1: have to understand what's going on. Now you can get lucky.

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Speaker 1: You can you can go buy some random meme coin

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Speaker 1: because one of your friends told you to, and you

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Speaker 1: might get lucky. And that's great and and I hope

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Speaker 1: it works out for you. You can also get lucky

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Speaker 1: buying lottery tickets, and you can also get lucky going

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Speaker 1: to Vegas as well. But it's not a good long

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Speaker 1: term strategy. You need to have the edge. You need

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Speaker 1: to have the education. And so I want to bring

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Speaker 1: you that education eagent every week and kind of kind

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Speaker 1: of help you build that base. I also keep you

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Speaker 1: up to date on the latest news and development, so

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Speaker 1: you know what's going on, so you know you're not

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Speaker 1: just being distracted by the price, but rather you know

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Speaker 1: what's going on. And I keep you have to date.

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Speaker 1: That way, when you you know you go to the

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Speaker 1: go to the cocktail party this weekend, you can talk

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Speaker 1: with your friends and you can sound like you're the

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Speaker 1: smartest guy in the room. I'm gonna I'm gonna be

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Speaker 1: that secret weapon for you. And then of course I

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Speaker 1: want to make it entertaining so it's fun while you're

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Speaker 1: learning these things. Today, I want to start off with

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Speaker 1: some good education that we have, and I want to

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Speaker 1: talk about some of the big differences that are happening

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Speaker 1: in the cryptocurrency space. And there's a big difference between

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Speaker 1: UM how they work and how they achieve this decentralization UM.

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Speaker 1: And there's two main ways that's done through proof of

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Speaker 1: work and proof of steak. So I'm gonna talk to

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Speaker 1: you a little bit about what those means so you

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Speaker 1: can understand what that is, the trade offs, the pros

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Speaker 1: and cons, what are the differences of there. I then

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Speaker 1: want to take that and I want to dig into

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Speaker 1: a little bit into UM the proof of steak and

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Speaker 1: then what kind of use cases it may have UM

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Speaker 1: ways to look at that, and then we're gonna dig

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Speaker 1: into a little bit of defy. We're gonna talk about

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Speaker 1: this decentralized finance UM, and then we'll even talk a

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Speaker 1: little bit about some n f T s. All Right,

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Speaker 1: it's a it's a it's a big subject to dive into.

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Speaker 1: And I don't have a lot of time, so I'm

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Speaker 1: gonna go through some of this a little bit faster,

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Speaker 1: and then if I get some good feedback from you guys,

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Speaker 1: we'll dig in a little bit more into each of

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Speaker 1: these subjects. All right. So that's what I thought we'd

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Speaker 1: cover today. Give you that foundation so you understand what

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Speaker 1: the heck is going on. Now if you're just tuning in,

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Speaker 1: you listen to the markma Show and we're talking about bitcoin,

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Speaker 1: and we're talking about cryptocurrencies, and we're talking about the

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Speaker 1: decentralized revolution. So when we say decentralized, what does that

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Speaker 1: even mean. Well, it's the opposite of centralized, right, So, um,

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Speaker 1: most databases are all data based up and down now

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Speaker 1: are centralized. So Facebook, Amazon, Netflix, these are giant databases.

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Speaker 1: It's a giant computer that stores all the data in

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Speaker 1: a centralized database. Everything in the world is a centralized database.

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Speaker 1: It's also why you see these major hacks happening, right.

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Speaker 1: Experience was hacked. Everybody's information got leaked onto the onto

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Speaker 1: the web. Facebook gets hacked. Um, even the n s

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Speaker 1: A was hacked. And when they hacked the n s A,

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Speaker 1: they stole the N s as hacking software, which is

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Speaker 1: why we have all these ransomware attacks today. They say

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Speaker 1: it's Bitcoin's fault, Cryptocurrenci's fault. No, no, no, no, it's

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Speaker 1: the NSA's fault. They're the one that got hacked. They

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Speaker 1: could have just told Microsoft to fix the patch, but

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Speaker 1: they didn't, and now we have this ransomware attack. But

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Speaker 1: that's a whole another story. Um. But so those are

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Speaker 1: centralized databases, and no matter if you have the best

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Speaker 1: security in the history of the world, like the n

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Speaker 1: s A UM in a in a secure building, with

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Speaker 1: the best I T team in the world, UM and

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Speaker 1: the best hypersecurity experts, you still get hacked. All right.

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Speaker 1: What we have the opposite is we have decentralized databases.

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Speaker 1: So Bitcoin was started as a decentralized database. So what

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Speaker 1: does that mean. It means that it's study and having

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Speaker 1: one computer with one database. Now you have hundreds of

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Speaker 1: thousands or millions of computers, each with their own copy

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Speaker 1: of the database. And then all of those computers, those

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Speaker 1: millions of computers be spread all around the world in

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Speaker 1: different locations, and they each run the exact copy of

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Speaker 1: the full database. And then in order for a transaction,

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Speaker 1: to happen, the databases have to achieve consensus. That means

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Speaker 1: they have to have fifty or more have to agree

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Speaker 1: that that is a valid transaction, and that's what creates

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Speaker 1: the decentralization. It would be kind of like if I

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Speaker 1: had a billion dollars. If I had a hundred billion

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Speaker 1: dollars sitting in a bank account, there would be a

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Speaker 1: lot of people that want to break into that bank account.

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Speaker 1: Bank robbers would be planning and scheming to break into

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Speaker 1: that bank. And and if it was a hundred billion dollars,

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Speaker 1: they could spend a lot of money and time trying

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Speaker 1: to break into that bank because the reward would be

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Speaker 1: so high. Right, But what if I had a hundred

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Speaker 1: billion banks that each had one dollar in them each?

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Speaker 1: Mm hmmm. See, now it wouldn't be worth anyone's time.

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Speaker 1: The cost to do the attack would be more than

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Speaker 1: the reward they could potentially get. Now you're starting to

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Speaker 1: get the idea. Now. Bitcoin is a lot of things,

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Speaker 1: and I talked about this on a regular basis. Um,

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Speaker 1: it's sort of like digital cash, it's sort of like

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Speaker 1: digital gold. Um, it's sort of like a lot of things.

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Speaker 1: But one thing we do know for sure is it's

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Speaker 1: the most secure computer network in the history of the world.

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Speaker 1: While all those other centralized databases have been hacked, the

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Speaker 1: Bitcoin network has never been hacked. As a matter of fact.

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Speaker 1: Unlike the n s A that has an cybersecurity team

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Speaker 1: and you know, impeneture walls and all these things protecting it.

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Speaker 1: Unlike that, the Bitcoin network is completely open. It's open source.

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Speaker 1: Anybody can see it, anybody can see the code. It's permissionless,

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Speaker 1: anybody can join it, anybody can build on it. And

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Speaker 1: there's a trillion dollars of value sitting there in an

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Speaker 1: open network that's not guarded, it's not protected, anybody can

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Speaker 1: start programming on it, and it's never been hacked. It's

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Speaker 1: pretty amazing. It's never been hacked. And the reason why

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Speaker 1: is because it's a decentralized database. All right, So that

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Speaker 1: sets the foundation. Now stick with me. I'm gonna I'm

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Speaker 1: gonna I'm gonna dig into a little bit of technical,

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Speaker 1: technical stuff, but I'll try to keep it simple. So,

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Speaker 1: how do these databases achieve consensus? Remember they all have

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Speaker 1: to achieve better well, with Bitcoin, it's done via a

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Speaker 1: proof of work protocol, a proof of work, all right,

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Speaker 1: So there's proof of work, and then there's a new

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Speaker 1: version that's come out with all these new protocols called

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Speaker 1: proof of steak, and there's a big difference, and you

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Speaker 1: need to understand what the difference is. Proof of work

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Speaker 1: is good for money. Proof of work is a decentralized database,

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Speaker 1: where proof of steak is more like equity. It's more

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Speaker 1: like a corporation um where you have these central players

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Speaker 1: that can control it. But I want to explain to you,

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Speaker 1: without going into super crazy detail, what the differences are,

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Speaker 1: what type of programs would work on each one, and

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Speaker 1: some pros and cons of each and then we're gonna

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Speaker 1: get them to defy. What defy is how it works,

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Speaker 1: some dangers that you need to be watching out for.

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Speaker 1: And then I'm gonna talk a little bit about about

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Speaker 1: n f t s and some some real dangers and

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Speaker 1: n f t s that you need to know about.

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Speaker 1: I get asked all the time, and I want to

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Speaker 1: bring this to you. You're listening to the markma Show.

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Speaker 1: Of course we're talking about bitcoin, we're talking about cryptocurrencies,

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Speaker 1: and we're talking about the decentralized revolution. Trying to give

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Speaker 1: you the information, the education you need to participate to

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Speaker 1: profit from the largest wealth transfer in history. We're talking

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Speaker 1: about proof of steak versus proof of work, and I'll

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Speaker 1: be right back. Hey, welcome back. You are listening to

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Speaker 1: the Markma Show, and of course each and every week

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Speaker 1: I'm talking about bitcoin and cryptocurrencies and the decentralized revolution,

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Speaker 1: which is the most important part of your week because

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Speaker 1: this is the biggest revolution that we're witnessing. All the

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Speaker 1: humanity is gonna be changed, that's how powerful this is.

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Speaker 1: And we're currently we're talking about UM. Why, well really

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Speaker 1: what bitcoin and how this decentralized UM technology works. And

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Speaker 1: I was explaining, how do you have all these individual

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Speaker 1: databases and they achieve consensus? So the network has to

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Speaker 1: agree with each other, and there's two main consensus protocols.

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Speaker 1: So Bitcoin uses something known as proof of work Ethereum

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Speaker 1: also uses proof of work, but then a lot of

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Speaker 1: these newer ones use something called proof of steak. Now,

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Speaker 1: people are proposing these proof of steak protocols because they

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Speaker 1: say they're more efficient. They don't use as much electricity

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Speaker 1: or energy that bitcoin does, and so supposedly that makes

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Speaker 1: them better. In my opinion, it doesn't. But what what

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Speaker 1: I think most people are lacking some context on is

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Speaker 1: that everything in life requires a trade off. Everything in

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Speaker 1: life has a trade off. Right, there's no such thing

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Speaker 1: as a free lunch. So in order to go from

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Speaker 1: a proof of work to a proof of steak, maybe

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Speaker 1: it is less energy efficient, but what are the tradeoffs?

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Speaker 1: What are you giving up? All? Right? So I think

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Speaker 1: I wanted to touch on that real quickly, and so

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Speaker 1: real quickly. Um, you hear the term blockchain, So blockchain

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Speaker 1: you could typically you could read any um it's called

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Speaker 1: a white paper, any white paper for any cryptocurrency that

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Speaker 1: there fifteen thousand of them, and as you're reading it,

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Speaker 1: you could just substitute the word blockchain for database. You

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Speaker 1: could read any of those papers and just substitute that

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Speaker 1: word blockchain for database, and it would read exactly the

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Speaker 1: same way. Now, in the Bitcoin white paper, they didn't

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Speaker 1: reference the word blockchain. But the blockchain is basically the

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Speaker 1: database and every tent on the Bitcoin blockchain, every ten minutes,

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Speaker 1: a new block is added, which has thousands of transactions

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Speaker 1: inside of it, and it adds one block onto the next,

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Speaker 1: onto the next, onto the next. That's how it works.

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Speaker 1: And what happens is you have all these computers that

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Speaker 1: are specifically made for this purpose. Um. They didn't used

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Speaker 1: to be in the beginning, you could do on your

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Speaker 1: home computer. But today they've gotten to be very powerful computers.

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Speaker 1: And this this powerful computer is now hooked in and

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Speaker 1: to the critics point, that uses energy, and it uses

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Speaker 1: quite a lot of energy. It could cost two hundred

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Speaker 1: bucks or three hundred bucks a month to run this computer.

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Speaker 1: And what what this computer is doing is it's solving.

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Speaker 1: These millions of computers that are supporting the Bitcoin network

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Speaker 1: are solving a puzzle, and they're trying to solve this

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Speaker 1: mathematical puzzle to create the next block. So there's like

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Speaker 1: this feedback and mechanism, and like I said, they're created

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Speaker 1: about every ten minutes. And regardless of how many miners

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Speaker 1: are on the network or not, it doesn't matter. The

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Speaker 1: same amount of rewards will be created and released. Um.

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Speaker 1: And what's important to understand about this is they all

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Speaker 1: do this in this decentralized way. Now, if a minor,

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Speaker 1: if one of these computers were to create an invalid block,

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Speaker 1: then nobody else, none of the other nodes in the

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Speaker 1: network would approve it, and that minor would have wasted

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Speaker 1: the electricity they paid for and so it's the incentive. Right,

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Speaker 1: Bitcoin changes the incentive structures. So UM show me the incentive,

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Speaker 1: I show you the outcome. That's what Charlie Monger says.

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Speaker 1: And so all of these miners are incentivized to be

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Speaker 1: good actors. I spent a lot of money on the computer.

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Speaker 1: I spent a lot of money on the electricity, and

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Speaker 1: so now I'm incentivized to put up good blocks, to

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Speaker 1: be a good actor on the network. If I don't,

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Speaker 1: then the electricity I paid for and the money I

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Speaker 1: spent on my mining computer would be wasted. All right.

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Speaker 1: This is what's called proof of work. Millions of machines

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Speaker 1: using electricity to apply processing power to guess the answer

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Speaker 1: to a cryptographic puzzle that was left by the most

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Speaker 1: recent block. Right, that's proof of work. It's a proof

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Speaker 1: of work. We know the work was done. There's proof

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Speaker 1: of it because they spent the money. Now this may

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Speaker 1: seem like a waste of energy, but this is what

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Speaker 1: keeps the system decentralized, all right, the work itself, the

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Speaker 1: cost of the work. It's the arbiter of truth, right,

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Speaker 1: because in this case, there's no central authority that decides

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Speaker 1: what a valid block is so there's nobody there, there's

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Speaker 1: no central authority that decides at Instead, it's the longest

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Speaker 1: blockchain that wins and is recognized as the truth by

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Speaker 1: the rest of the network based off that code. All right. Now,

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Speaker 1: the more energy that bitcoin network uses, the more secure

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Speaker 1: that its latest transaction is against attacks. So we we

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Speaker 1: don't want the bitcoin network to use less energy. As

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Speaker 1: a matter of fact, we want the bitcoin network to

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Speaker 1: use more energy. The more energy it uses, the more

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Speaker 1: resistant it is to attacks. Now, there's a lot of

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Speaker 1: uh tiny or actually say smaller block chains that are

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Speaker 1: not Bitcoin that have been victims to attacks. We call

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Speaker 1: them attacks. So a single entity could temporarily get control

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Speaker 1: of a bunch of processing power, so I can go

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Speaker 1: rent it. Right now, I can go rent the hash

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Speaker 1: power and for a few hundred thousand dollars or a

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Speaker 1: few hundred for a few million dollars, I could rent

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Speaker 1: that hashpower, that computer power, and I can attack a

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Speaker 1: smaller network by taking over majority of the processing power.

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Speaker 1: I could reorganize their blocks and do what's called a

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Speaker 1: double spend, basically, create my money, create money from than air.

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Speaker 1: All right, And and we've seen this happen over and

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Speaker 1: over and over with these smaller coins, all right, And

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Speaker 1: that's why this proof of work is important. And this

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Speaker 1: is also why there will never be another Bitcoin, all right.

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Speaker 1: And the reason why is because when other blockchains try

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Speaker 1: to start a proof of work and set up like

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Speaker 1: what Bitcoin has done, they don't have enough miners, enough

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Speaker 1: computers supporting the network. There's not enough energy being used

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Speaker 1: to secure it, and they get attacked all the time. Um. So,

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Speaker 1: Like one good example is if we look at Bitcoin

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Speaker 1: and then in two seventeen there was a fork of Bitcoin,

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Speaker 1: and so bitcoin cash was spun off of that, and

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Speaker 1: then bitcoin SV was spun off of that, and so

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Speaker 1: a lot of people are saying, well, bitcoin cash is

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Speaker 1: the real Bitcoin or Bitcoin SV, But both of those

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Speaker 1: other blockchains have one percent or less of bitcoin network

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Speaker 1: total processing power, all right, and they've both been hit

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Speaker 1: by these attacks by these reorganizations. In fact, if just

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Speaker 1: one percent of the Bitcoin miners decided that they wanted

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Speaker 1: to just one percent of the mining miners and Bitcoin

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Speaker 1: decided they want to attack on either of those two

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Speaker 1: hard works, they could totally do it. But it's not

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Speaker 1: true the other way. Bitcoin cash and bitcoin SV could

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Speaker 1: not attack Bitcoin because there're only one percent of that.

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Speaker 1: So that shows you the importance of the network effects.

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Speaker 1: So anyone could copy Bitcoin, sure, they could fork it,

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Speaker 1: no problem, but they can't replicate the network. They can't

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Speaker 1: get the mining power that secures the network. All right.

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Speaker 1: It would be like trying to copy, um, Facebook. I mean,

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Speaker 1: I could probably hire developer for you know, ten dollars

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Speaker 1: and build a very good copy of Facebook. But that

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Speaker 1: doesn't mean I would have any traffic. That doesn't mean

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Speaker 1: they can get all the users to come over, right. Uh,

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Speaker 1: it would just be an empty shell. All right. Now

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Speaker 1: let's compare that to a proof of steak. So that

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Speaker 1: was proof of work. Hopefully that makes sense. I wasn't

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Speaker 1: trying to go to too technical, but I want to

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Speaker 1: give you this rough overview. Now I do want to

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Speaker 1: say that this maybe doesn't matter that much. Um. Right now,

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Speaker 1: you're hearing my voice come over the radio. How how

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Speaker 1: is it that my voice from my studio is showing

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Speaker 1: up in your car or your headphones? Do you know

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Speaker 1: how that works? Of course the answer is no. Do

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Speaker 1: you know who the Do you know who the developer

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Speaker 1: is that designed this radio system? No? Of course you

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Speaker 1: don't know that either. So none of this really matters, UM.

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Speaker 1: But I think at a at a at an at

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Speaker 1: least at least a high level, it's a good idea

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Speaker 1: to understand this because there's a lot of confusion going

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Speaker 1: in into the space, and I at least want to

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Speaker 1: give you the two main you know, consensus mechanisms. You

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Speaker 1: can understand that by the way. You're listening to Mark

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Speaker 1: Moss the Mark mos Show. We're talking about bitcoin, we're

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Speaker 1: talking about cryptocurrencies, and we're talking about the decentralized revolution.

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Speaker 1: I'm explaining to you the difference of the two big

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Speaker 1: consensus mechanisms, the proof of work, which we just went

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Speaker 1: over with bitcoin, and then we're gonna talk about what

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Speaker 1: proof of steak is and what's being done with that

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Speaker 1: and how you should look at that UM again from

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Speaker 1: a high level. Then we're gonna talk about defy, and

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Speaker 1: we're gonna talk about n f T s and some

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Speaker 1: danger that you may not be aware of in the

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Speaker 1: n f T space, but I want you to be

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Speaker 1: aware of it. So don't go away. I'm gonna be

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Speaker 1: right back. Hey everyone, welcome back. You are listening to

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Speaker 1: the Mark Moa Show, and we're talking about bitcoin. Of course,

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Speaker 1: each and every week, and we're talking about cryptocurrencies and

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Speaker 1: we're talking about the de centralized revolution. Now I was

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Speaker 1: talking about how bitcoin, what what what what the decentralized

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Speaker 1: technology is, and I'm explaining the two basic consensus mechanisms.

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Speaker 1: Proof of work, which we just went over, which is

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Speaker 1: what bitcoin a ethereum used today, and now we're going

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Speaker 1: to talk about proof of steak, which is what a

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Speaker 1: lot of other blockchains are using. And Ethereum is trying

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Speaker 1: to transition from a proof of work to a proof

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Speaker 1: of steak. Now, as I explained before the break, I

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Speaker 1: said that proof of work is a system where miners

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Speaker 1: compete with electricity and processing power to build the longest blockchain,

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Speaker 1: which then becomes the accepted blockchain and the digital blockchain

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Speaker 1: via a proof of work. Right, proof of work because

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Speaker 1: they to prove their work by spinning that capital um.

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Speaker 1: And it's proof of work because it's connected to real

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Speaker 1: world natural resources. So they're taking a real world natural resource,

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Speaker 1: electricity and converting it into a virtual asset. It's the

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Speaker 1: only thing that's ever been done like this in the

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Speaker 1: history of the world. All Right. It's been operated as

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Speaker 1: proof of work since since it started in two thousand nine.

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Speaker 1: Now Ethereum is the second largest network out there, and

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Speaker 1: it's also operated proof of work as well since the beginning.

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Speaker 1: But as I said, a lot of new smart contract

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Speaker 1: block chains UM that have launched after that are now

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Speaker 1: using this proof of steak network. Now, proof of steak

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Speaker 1: is a system where holders of the cryptocurrency lock it

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Speaker 1: up or they quote unquote steak um not like you

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Speaker 1: eat but s T a k E. Steake their coins

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Speaker 1: and by staking their coins by locking them up, they

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Speaker 1: get to vote on the valid blockchain, and then they

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Speaker 1: get rewarded with more coins for successfully creating the new

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Speaker 1: blocks instead of like the proof of work, instead of

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Speaker 1: having to commit electricity, instead of having to actually put

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Speaker 1: money up for the electricity and the processing power to

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Speaker 1: create new blocks on the blockchain. Instead, all they're doing

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Speaker 1: is staking their coins. They're putting them up without actually

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Speaker 1: giving them up. All right, now, proof of proof of

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Speaker 1: work or simple right, there's no need to punish these

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Speaker 1: bad miners. Remember, they're incentivized to do good work UM

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Speaker 1: because if they do it wrong, they lose their UM,

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Speaker 1: they lose the money they spent on electricity. Okay, easy

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Speaker 1: um that they lose it they self inflict their own wound,

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Speaker 1: and and so that that doesn't ever happen because there's

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Speaker 1: a tangible connection between the blockchain and the real world

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Speaker 1: resource of energy. But proof of stakes way more complex,

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Speaker 1: way more complex than I can get into in this

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Speaker 1: short segment. But there's no connection to the real world resources.

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Speaker 1: There's a disconnect, and the system needs a way to

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Speaker 1: punish the stakers that would improperly vote on the wrong chain.

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Speaker 1: Now there's there's a very complex issue that doesn't have

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Speaker 1: any UM way to do it, and that's part of

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Speaker 1: the reason why Ethereum has been trying to move from

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Speaker 1: proof of work to proof of steak for the last

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Speaker 1: like four or five years and still hasn't been able

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Speaker 1: to do it. It's such a complex issue. There's obviously

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Speaker 1: other blockchains that are doing that, but they all have

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Speaker 1: their problems. I don't have the time to dig into

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Speaker 1: each one of those right now. But besides the larger

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Speaker 1: amount of complexity that's involved UM, the trust that you

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Speaker 1: have to give up so Bitcoin is what's known as

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Speaker 1: trust to lists. You don't have to trust anybody because

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Speaker 1: you can verify everything UM, but these are more complex.

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Speaker 1: They don't have the trust and they have a bigger

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Speaker 1: attack surface. Um, the bigger issue is that proof of

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Speaker 1: steak is that it can be prone to centralization. And

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Speaker 1: the entire revolution is decentralization. What is the problem we're

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Speaker 1: trying to solve. We're trying to solve centralization. That's it.

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Speaker 1: That's that's it. We're not trying to manage supply chains better.

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Speaker 1: We're not trying to find a better way to buy

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Speaker 1: tickets from ticket agencies. We're trying to solve centralization. And

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Speaker 1: so the problem with of of steak is that's easy

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Speaker 1: to be centralized. The proof of stake system basically says

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Speaker 1: the more coins that I have, the more voting power

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Speaker 1: I have, and those with the coins are also the

430
00:22:12,000 --> 00:22:15,600
Speaker 1: ones that are earning new coins from staking. Now, since

431
00:22:15,680 --> 00:22:18,960
Speaker 1: I don't need to expend any more resources to steak,

432
00:22:19,440 --> 00:22:22,560
Speaker 1: then I can simply just increase my overall staking amount

433
00:22:22,680 --> 00:22:26,960
Speaker 1: as I earn ongoing coins from my own staking rewards,

434
00:22:27,200 --> 00:22:31,359
Speaker 1: which then exponentially grows my influence on the network over

435
00:22:31,440 --> 00:22:36,520
Speaker 1: time and forever. And because of this, network dominance tends

436
00:22:36,560 --> 00:22:41,159
Speaker 1: to lead to more network dominance. All right, so let

437
00:22:41,160 --> 00:22:44,000
Speaker 1: me explain. Let me let me use an analogy. It'd

438
00:22:44,040 --> 00:22:47,440
Speaker 1: be like a political system. Imagine a political system where

439
00:22:47,480 --> 00:22:49,880
Speaker 1: you get a vote for every hundred dollars that you have,

440
00:22:50,680 --> 00:22:53,720
Speaker 1: and then you also get paid a dollar by the

441
00:22:53,800 --> 00:22:57,920
Speaker 1: government for casting each vote. So let's say that you're

442
00:22:58,400 --> 00:23:01,800
Speaker 1: a school teacher and you have thirty thousand dollars in

443
00:23:01,880 --> 00:23:04,639
Speaker 1: net worth, So you get three hundred votes and you

444
00:23:04,720 --> 00:23:08,240
Speaker 1: earn three hundred dollars from the government for voting. You

445
00:23:08,280 --> 00:23:10,240
Speaker 1: have thirty thousand, you get three votes, and you earned

446
00:23:10,240 --> 00:23:12,320
Speaker 1: three hundred bucks for those votes. But then you have

447
00:23:12,400 --> 00:23:16,280
Speaker 1: just Jeff Bezos with two hundred billion dollars in net worth,

448
00:23:16,400 --> 00:23:19,680
Speaker 1: so he gets two billion votes and he earns two

449
00:23:19,760 --> 00:23:23,600
Speaker 1: billion dollars from the government for voting. So now, in

450
00:23:23,640 --> 00:23:25,480
Speaker 1: this system and this type of a system, he would

451
00:23:25,520 --> 00:23:28,360
Speaker 1: be a more valuable citizen than the school teacher by

452
00:23:28,359 --> 00:23:31,359
Speaker 1: a factor of a million, and he would also be

453
00:23:31,440 --> 00:23:35,280
Speaker 1: getting paid more by the government for already being wealthy.

454
00:23:35,400 --> 00:23:36,800
Speaker 1: Does that sound like a system that you want to

455
00:23:36,800 --> 00:23:38,520
Speaker 1: live in, because it sure it doesn't sound like a

456
00:23:38,520 --> 00:23:41,680
Speaker 1: system I want to live in. The rich only get richer.

457
00:23:42,200 --> 00:23:45,879
Speaker 1: That leads to this centralization. Eventually, it would lead to

458
00:23:45,920 --> 00:23:50,000
Speaker 1: a consolidation of power where a handful of multibillionaires would

459
00:23:50,040 --> 00:23:53,000
Speaker 1: control all the vote votes and they would rule everything.

460
00:23:53,440 --> 00:23:57,280
Speaker 1: And if it gets too centralized, it kind of defeats

461
00:23:57,280 --> 00:24:01,280
Speaker 1: the purpose of a decentralized blockchain. Right now, who who

462
00:24:01,359 --> 00:24:04,600
Speaker 1: has the most coins to stake right now today? Well,

463
00:24:04,640 --> 00:24:07,199
Speaker 1: it's the people that create the blockchain, because they did

464
00:24:07,280 --> 00:24:09,960
Speaker 1: what's called a pre mind. So when they created the blockchain,

465
00:24:10,040 --> 00:24:14,320
Speaker 1: they gave themselves thirty, forty or seventy percent of the tokens.

466
00:24:14,359 --> 00:24:16,360
Speaker 1: So you might think you hold a lot of tokens,

467
00:24:16,440 --> 00:24:20,320
Speaker 1: but the creator might have. So guess what they're going

468
00:24:20,359 --> 00:24:23,320
Speaker 1: to stake the most, and guess what they're always going

469
00:24:23,400 --> 00:24:26,840
Speaker 1: to control the network? Sort of sounds like the central

470
00:24:26,840 --> 00:24:29,480
Speaker 1: bank system that we have today, doesn't it. Let's keep

471
00:24:29,520 --> 00:24:33,560
Speaker 1: going now, UM, I would That is why I would

472
00:24:33,640 --> 00:24:35,639
Speaker 1: kind of look at these as as different things. If

473
00:24:35,680 --> 00:24:37,919
Speaker 1: I was looking at a proof of steak model for

474
00:24:38,440 --> 00:24:41,760
Speaker 1: UM a corporation, I mean, it's kind of like how

475
00:24:41,840 --> 00:24:46,720
Speaker 1: corporation works. Right. If I buy stock in a corporation, UM,

476
00:24:46,760 --> 00:24:49,119
Speaker 1: I get a vote, and the more stock I have

477
00:24:50,080 --> 00:24:52,439
Speaker 1: than the more votes I get, and the more stock

478
00:24:52,520 --> 00:24:55,159
Speaker 1: I have, the more dividends I get paid on my stock,

479
00:24:55,400 --> 00:24:57,720
Speaker 1: which then means I own even more stock, which the

480
00:24:57,840 --> 00:25:00,440
Speaker 1: means I get even more votes. So like that works

481
00:25:00,480 --> 00:25:02,800
Speaker 1: pretty good. We kind of already have that model today.

482
00:25:02,920 --> 00:25:05,520
Speaker 1: I don't see what's revolutionary about that. I mean, instead

483
00:25:05,520 --> 00:25:07,520
Speaker 1: of a stock that I have in my E trade account.

484
00:25:07,520 --> 00:25:10,200
Speaker 1: Now it's a token, But isn't it the same sort

485
00:25:10,280 --> 00:25:13,560
Speaker 1: of a system? Sounds like it to me. Now. The

486
00:25:13,600 --> 00:25:16,920
Speaker 1: thing you have to understand about money, like commodity money,

487
00:25:16,920 --> 00:25:20,040
Speaker 1: like physical gold, um is a system that's always worked

488
00:25:20,080 --> 00:25:24,320
Speaker 1: because the money has a cost. Um. Money that doesn't

489
00:25:24,359 --> 00:25:27,440
Speaker 1: have a cost ultimately ends up being a being political

490
00:25:27,560 --> 00:25:30,399
Speaker 1: in nature, So the people that are closer to the

491
00:25:30,440 --> 00:25:33,680
Speaker 1: money have the most advantages, called the cancel on effect.

492
00:25:34,359 --> 00:25:39,080
Speaker 1: All right, that's a problem. Now, there's so much to

493
00:25:39,119 --> 00:25:41,560
Speaker 1: dig into here. I want to. I'd like to dig

494
00:25:41,640 --> 00:25:46,480
Speaker 1: into some of the importance of why this matters. But man,

495
00:25:46,560 --> 00:25:48,040
Speaker 1: we could just we could jump into so much some

496
00:25:48,080 --> 00:25:51,080
Speaker 1: of the technical difficulties here. There's a lot to dig into,

497
00:25:51,080 --> 00:25:52,280
Speaker 1: but I want to. I want to try to skip

498
00:25:52,320 --> 00:25:56,359
Speaker 1: ahead here a little bit. Let's talk about um I

499
00:25:56,359 --> 00:25:57,920
Speaker 1: want to. I want to. I want to cover some

500
00:25:58,040 --> 00:26:00,639
Speaker 1: stable Well, let's talk about the decentral as a first, right,

501
00:26:01,080 --> 00:26:05,600
Speaker 1: So how important is decentralization, Well, it depends right, Um,

502
00:26:05,640 --> 00:26:07,760
Speaker 1: in a ball market or in a time, in a

503
00:26:07,760 --> 00:26:09,640
Speaker 1: time when things are good and a time when there's

504
00:26:09,840 --> 00:26:13,560
Speaker 1: no regulatory crackdowns, when there's no drama any of that,

505
00:26:13,880 --> 00:26:18,160
Speaker 1: then it probably doesn't matter, right. Um. That's why Wall

506
00:26:18,200 --> 00:26:22,119
Speaker 1: Street loves defy right and from a tactical sense, because

507
00:26:22,240 --> 00:26:24,960
Speaker 1: they can understand the idea of leveraging liquidity. They can

508
00:26:25,000 --> 00:26:28,520
Speaker 1: management exchanging, arbitrage and all these inefficiencies. They don't care

509
00:26:28,560 --> 00:26:32,400
Speaker 1: about decentralization. They don't care about technical details, all right,

510
00:26:32,680 --> 00:26:35,680
Speaker 1: But for cipherpunks, the creators, for people that are sound

511
00:26:35,720 --> 00:26:41,000
Speaker 1: money advocates like myself, those who care about censorship, resistant immutability,

512
00:26:41,040 --> 00:26:45,399
Speaker 1: and they care about the money supply being assured over decades,

513
00:26:45,800 --> 00:26:49,360
Speaker 1: over centuries that I could keep my money. Um. Those

514
00:26:49,359 --> 00:26:53,560
Speaker 1: who care about security laws, well they notice I care.

515
00:26:53,680 --> 00:26:56,800
Speaker 1: So Wall Street probably doesn't care. I care. Um. As

516
00:26:56,800 --> 00:26:59,560
Speaker 1: I was saying that the blockchain is basically an inefficient

517
00:26:59,640 --> 00:27:03,679
Speaker 1: data base, and so some users are willing to trade

518
00:27:03,720 --> 00:27:10,560
Speaker 1: inefficiency to ensure decentralization. That's basically tradeoff. So the tradeoff

519
00:27:10,640 --> 00:27:13,520
Speaker 1: is do I want it to be decentralized or am

520
00:27:13,520 --> 00:27:15,520
Speaker 1: I willing to and and and am I willing to

521
00:27:15,520 --> 00:27:17,760
Speaker 1: be be inefficient or do I want to be efficient

522
00:27:17,800 --> 00:27:21,320
Speaker 1: and centralized? That leads us into defy and then that

523
00:27:21,480 --> 00:27:24,080
Speaker 1: leads us into n f t s. There's some danger

524
00:27:24,200 --> 00:27:26,119
Speaker 1: lurking and n f t s that probably you're not

525
00:27:26,160 --> 00:27:27,880
Speaker 1: aware of. And I want to explain to you what's

526
00:27:27,920 --> 00:27:31,479
Speaker 1: going on. So don't go away. I'm gonna be right

527
00:27:31,480 --> 00:27:33,800
Speaker 1: back after this break. All right, welcome back. You're listening

528
00:27:33,840 --> 00:27:35,800
Speaker 1: to the Mark Moss Show, and we're talking about bitcoin.

529
00:27:36,160 --> 00:27:39,520
Speaker 1: We're talking about cryptocurrencies. We're talking about the decentralized revolution,

530
00:27:39,520 --> 00:27:43,920
Speaker 1: and we're talking about the difference in what makes these decentralized.

531
00:27:44,040 --> 00:27:48,120
Speaker 1: We're talking about the consensus mechanism of bitcoin, and we're

532
00:27:48,119 --> 00:27:51,320
Speaker 1: talking about how Bitcoin and etherem today use what's called

533
00:27:51,400 --> 00:27:54,600
Speaker 1: proof of work, and how these new smart contract platforms

534
00:27:54,600 --> 00:27:57,159
Speaker 1: are using something called proof of steak. And I was

535
00:27:57,200 --> 00:28:01,040
Speaker 1: breaking those down for you. Now, if you've missed all this, UM,

536
00:28:01,160 --> 00:28:03,400
Speaker 1: just know that you can go catch it on the

537
00:28:04,400 --> 00:28:07,040
Speaker 1: catch the podcast this week you'll be be able to

538
00:28:07,080 --> 00:28:09,520
Speaker 1: hear this back. UM. You can just search Mark Moss

539
00:28:09,720 --> 00:28:11,639
Speaker 1: on my Heart and you can find the podcast. You

540
00:28:11,680 --> 00:28:14,040
Speaker 1: can listen to that. UM, because I've gone over some

541
00:28:14,080 --> 00:28:16,440
Speaker 1: important stuff, I can't recap it all. But I was

542
00:28:16,480 --> 00:28:20,520
Speaker 1: basically talking about the trade off of going fully decentralized

543
00:28:20,560 --> 00:28:24,040
Speaker 1: and being inefficient, and then being totally centralized and being

544
00:28:24,080 --> 00:28:28,200
Speaker 1: totally efficient, right, And so those are the two sides

545
00:28:28,240 --> 00:28:30,240
Speaker 1: of the coin, the two the two trade offs. There.

546
00:28:30,480 --> 00:28:33,200
Speaker 1: There's so much more we can dig into UM, but

547
00:28:33,280 --> 00:28:35,399
Speaker 1: we're kind of running out of time, and so I

548
00:28:35,440 --> 00:28:38,920
Speaker 1: want to jump into UM something else. I want to

549
00:28:38,960 --> 00:28:41,200
Speaker 1: jump into some DEFY. I want to jump into some define,

550
00:28:41,400 --> 00:28:43,520
Speaker 1: jump into some n f T s, and maybe I

551
00:28:43,560 --> 00:28:46,360
Speaker 1: may have to bring these back for another show and

552
00:28:46,920 --> 00:28:50,000
Speaker 1: UM depend on some feedback, maybe we'll digging deeper. All right,

553
00:28:50,320 --> 00:28:52,280
Speaker 1: So let's talk about D five for a second. So

554
00:28:52,640 --> 00:28:56,240
Speaker 1: UM DEFY as this stands for decentralized Finance, and then

555
00:28:56,240 --> 00:28:58,000
Speaker 1: there's also n f T s and so these are

556
00:28:58,000 --> 00:29:02,000
Speaker 1: probably the two most popular mark contract applications that are

557
00:29:02,040 --> 00:29:05,520
Speaker 1: happening on these proof of stake platforms. UM. These are,

558
00:29:05,760 --> 00:29:08,160
Speaker 1: you know, aside from just storing and transmitting value like

559
00:29:08,200 --> 00:29:12,680
Speaker 1: what happens on on Bitcoin, and DEFY includes decentralized exchanges

560
00:29:12,680 --> 00:29:16,000
Speaker 1: where then users can trade various tokens just between themselves,

561
00:29:16,560 --> 00:29:20,120
Speaker 1: and it includes UM, you know, decentralized platforms for leveraging

562
00:29:20,120 --> 00:29:23,200
Speaker 1: tokens UM, so then users can then earn yield by

563
00:29:23,320 --> 00:29:26,680
Speaker 1: lending them out or they can pay yield to borrow

564
00:29:26,680 --> 00:29:29,200
Speaker 1: with collateral and then UM. What we've seen is that

565
00:29:29,280 --> 00:29:32,320
Speaker 1: many of them still have these very centralized companies that

566
00:29:32,440 --> 00:29:35,320
Speaker 1: run them. So you might have heard of unite swap

567
00:29:35,480 --> 00:29:39,760
Speaker 1: or compound or those are like decentralized exchanges or ways

568
00:29:39,800 --> 00:29:42,600
Speaker 1: that you can earn like either loan out or earn yield,

569
00:29:43,320 --> 00:29:46,960
Speaker 1: But both of these are centralized venture capital backed companies.

570
00:29:47,200 --> 00:29:49,720
Speaker 1: Right now, they do have an open source code component

571
00:29:50,480 --> 00:29:53,600
Speaker 1: UM and you can kind of see that, but they

572
00:29:53,640 --> 00:29:58,040
Speaker 1: are backed by centralized VC companies. Now, n f t

573
00:29:58,280 --> 00:30:02,840
Speaker 1: s are what's called a non fungible token. So a

574
00:30:02,880 --> 00:30:05,360
Speaker 1: fungible token means one is worth one. So if I

575
00:30:05,400 --> 00:30:09,320
Speaker 1: have an old, torn up, marked up dollar bill, it's

576
00:30:09,360 --> 00:30:12,320
Speaker 1: worth a brand new dollar bill. One dollar bill is

577
00:30:12,320 --> 00:30:14,080
Speaker 1: worth the dollar bill, doesn't matter how old or what

578
00:30:14,120 --> 00:30:16,760
Speaker 1: condition it's in. One bitcoin is worth one bitcoin. One

579
00:30:16,800 --> 00:30:18,960
Speaker 1: ethereum is worth one ethereum. But an n f T

580
00:30:19,200 --> 00:30:21,680
Speaker 1: is a non fungible that that means one token isn't

581
00:30:21,680 --> 00:30:25,320
Speaker 1: worth one token. These are things like digital art UM,

582
00:30:25,480 --> 00:30:29,840
Speaker 1: unique game items, digital movie tickets, or UM. Things that

583
00:30:29,880 --> 00:30:33,520
Speaker 1: exist as unique items on a blockchain, and there's a

584
00:30:33,520 --> 00:30:35,840
Speaker 1: lot of nuance in there. I can give me some

585
00:30:35,880 --> 00:30:37,960
Speaker 1: feedback if I'm gonna dig into it more. UM. And

586
00:30:38,000 --> 00:30:42,240
Speaker 1: then we have things like digital art UM. So for example, UM,

587
00:30:42,320 --> 00:30:45,240
Speaker 1: digital art doesn't really exist on the blockchain, but rather

588
00:30:45,280 --> 00:30:48,760
Speaker 1: there's a pointer on the blockchain that links to where

589
00:30:48,800 --> 00:30:52,000
Speaker 1: the image is stored somewhere else. UM. It's kind of

590
00:30:52,040 --> 00:30:55,520
Speaker 1: like owning a signed receipt from the artist of that image.

591
00:30:55,520 --> 00:30:57,000
Speaker 1: So you've got a picture from an artist and then

592
00:30:57,000 --> 00:30:59,840
Speaker 1: he gives you a receipt somewhere. Then we have unique

593
00:31:00,040 --> 00:31:03,160
Speaker 1: game items, and these would be like digital pets or

594
00:31:03,200 --> 00:31:06,760
Speaker 1: in game items or in game land or property. UM

595
00:31:06,840 --> 00:31:08,560
Speaker 1: could be a skin for your gun or a new

596
00:31:08,600 --> 00:31:11,040
Speaker 1: backpack or something like that, and they can be that.

597
00:31:11,240 --> 00:31:13,440
Speaker 1: These can be owned, they can be sold to other players,

598
00:31:13,560 --> 00:31:16,040
Speaker 1: or even removed from the game potentially at some point,

599
00:31:16,400 --> 00:31:18,360
Speaker 1: and maybe they could even go into another game. I

600
00:31:18,360 --> 00:31:21,560
Speaker 1: think that's kind of where the future goes, all right.

601
00:31:21,560 --> 00:31:24,200
Speaker 1: But one of my concerns is that the biggest use

602
00:31:24,280 --> 00:31:26,520
Speaker 1: case for decentralized apps is that a lot of these

603
00:31:26,600 --> 00:31:30,480
Speaker 1: use case are are there. It's a circular economy, it's

604
00:31:30,560 --> 00:31:33,280
Speaker 1: all within itself. So let let's let let me give

605
00:31:33,280 --> 00:31:36,880
Speaker 1: an example. So Ethereum is heavily used for decentralized exchanges

606
00:31:36,920 --> 00:31:42,480
Speaker 1: of crypto tokens crypto stable coins that serve as units

607
00:31:42,520 --> 00:31:47,040
Speaker 1: of account for trading these crypto tokens, and then used

608
00:31:47,080 --> 00:31:51,320
Speaker 1: for lending and earning interest on crypto tokens, which is

609
00:31:51,320 --> 00:31:55,760
Speaker 1: a practice that is served as liquidity and borrowing sources

610
00:31:55,800 --> 00:32:01,080
Speaker 1: for traders of crypto tokens. So to lesser extent, it's

611
00:32:01,160 --> 00:32:04,160
Speaker 1: also used for gamified ways to earn or trade various

612
00:32:04,240 --> 00:32:08,320
Speaker 1: crypto tokens. So it's a big operating system powered by

613
00:32:08,320 --> 00:32:12,800
Speaker 1: crypto tokens for the purpose of moving around crypto tokens.

614
00:32:14,480 --> 00:32:17,560
Speaker 1: That makes sense. It's one giant circular economy. It's it's

615
00:32:17,560 --> 00:32:19,720
Speaker 1: an operating system powered by crypto tokens for the purpose

616
00:32:19,760 --> 00:32:22,960
Speaker 1: of moving around crypto tokens. That's it. Now, a healthy

617
00:32:23,000 --> 00:32:25,880
Speaker 1: banking system in the real world would consist of people

618
00:32:25,920 --> 00:32:29,880
Speaker 1: depositing money and the bank's making various loans for mortgages

619
00:32:30,000 --> 00:32:35,239
Speaker 1: or businesses that would generate real world utility, not just

620
00:32:35,760 --> 00:32:38,720
Speaker 1: system powered by cryptotkens for the purpose of moving around cryptotokens.

621
00:32:39,080 --> 00:32:43,720
Speaker 1: All right. According to the largest blockchain analytics firm called

622
00:32:43,800 --> 00:32:49,840
Speaker 1: chain Analysis, DEFY is almost entirely a trading, leveraging and

623
00:32:50,040 --> 00:32:56,400
Speaker 1: arbitrage environment for institutional scale traders and professional whales, with

624
00:32:56,640 --> 00:33:02,160
Speaker 1: hardly with almost no individual rate reta traders being in

625
00:33:02,160 --> 00:33:05,840
Speaker 1: the system. So while all these individual people thinking that

626
00:33:05,880 --> 00:33:08,240
Speaker 1: defies the coolest thing in the world, you probably don't

627
00:33:08,280 --> 00:33:13,040
Speaker 1: realize that. The largest analysts company, Chainalysis, said that all

628
00:33:13,120 --> 00:33:16,920
Speaker 1: of almost entirely all trading leverage and arbitroed is done

629
00:33:16,920 --> 00:33:21,760
Speaker 1: on an institutional scale and professional whales. Um. There's a

630
00:33:21,800 --> 00:33:23,360
Speaker 1: saying that if you're playing a game of poker and

631
00:33:23,360 --> 00:33:25,520
Speaker 1: you don't know who the sucker is the table, you're

632
00:33:25,560 --> 00:33:29,200
Speaker 1: the sucker. And unfortunately that's pretty much the case in

633
00:33:29,240 --> 00:33:33,960
Speaker 1: the DeFi space. You have institutions and professional whales that

634
00:33:34,000 --> 00:33:36,959
Speaker 1: are using this system and you're probably the sucker at

635
00:33:36,960 --> 00:33:39,120
Speaker 1: the table. So be aware of that now. The same

636
00:33:39,240 --> 00:33:41,960
Speaker 1: is also generally true for n f T s. There's

637
00:33:42,000 --> 00:33:46,080
Speaker 1: a huge um frenzy speculation around crypto punks. You might

638
00:33:46,080 --> 00:33:48,360
Speaker 1: have heard of that, for example, Uh, it's crazy that

639
00:33:48,400 --> 00:33:51,600
Speaker 1: everybody's all of a sudden and art collector everyone's in

640
00:33:51,640 --> 00:33:53,600
Speaker 1: art collector all of a sudden. But the key problem

641
00:33:53,640 --> 00:33:55,440
Speaker 1: is that these types of n f t s are

642
00:33:55,560 --> 00:33:57,920
Speaker 1: very easy to manipulate. And this is what you need

643
00:33:57,920 --> 00:33:59,800
Speaker 1: to be aware of. This is the danger. By the way,

644
00:33:59,800 --> 00:34:01,920
Speaker 1: you're into the Markmas show, we're talking about bitcoin and

645
00:34:02,120 --> 00:34:06,120
Speaker 1: cryptocurrencies and the decentralized revolution um and I'm just one

646
00:34:06,120 --> 00:34:07,680
Speaker 1: are the dangers of n f t s that they're

647
00:34:07,800 --> 00:34:11,680
Speaker 1: very easily to manipulate because each one has a unique price,

648
00:34:11,960 --> 00:34:13,640
Speaker 1: and because each one has a unique price, it's very

649
00:34:13,680 --> 00:34:16,160
Speaker 1: hard to establish what the real demand is, what the

650
00:34:16,200 --> 00:34:19,440
Speaker 1: real market value is. Now, there's two scams that can

651
00:34:19,480 --> 00:34:22,160
Speaker 1: be done very easily, and they're done on a regular basis,

652
00:34:22,200 --> 00:34:23,520
Speaker 1: And I want you to be aware of these two

653
00:34:23,560 --> 00:34:27,000
Speaker 1: scams right um and And they're done most easily because

654
00:34:27,000 --> 00:34:29,560
Speaker 1: it's not a fungible liquid asset. So the first scam

655
00:34:29,600 --> 00:34:32,160
Speaker 1: is to basically bit up buyer, bit up the asset prices.

656
00:34:32,440 --> 00:34:34,800
Speaker 1: So because I can create a bunch of a theory addresses,

657
00:34:34,880 --> 00:34:36,359
Speaker 1: I could buy an n f T, I can buy

658
00:34:36,360 --> 00:34:39,360
Speaker 1: crypto punk and I could I could buy it for

659
00:34:39,520 --> 00:34:41,040
Speaker 1: a hundred dollars and I could sell it to my

660
00:34:41,080 --> 00:34:44,080
Speaker 1: other address for five dollars, sell to my other edges

661
00:34:44,120 --> 00:34:46,600
Speaker 1: for a thousand dollars, my other address for a million dollars,

662
00:34:47,320 --> 00:34:49,160
Speaker 1: and then you buy it for me for one point

663
00:34:49,200 --> 00:34:52,120
Speaker 1: one million. But then there's no one else to buy it.

664
00:34:52,760 --> 00:34:55,400
Speaker 1: You're the unsuspecting newcomer. You're the sucker at the table

665
00:34:55,600 --> 00:34:57,719
Speaker 1: because I created a market, or me and a bunch

666
00:34:57,760 --> 00:34:59,920
Speaker 1: of friends created a market for this, and when we

667
00:35:00,080 --> 00:35:02,319
Speaker 1: finally sell it to you as an outsider, you find

668
00:35:02,320 --> 00:35:05,800
Speaker 1: yourself without a buyer. And it happens all the time.

669
00:35:06,880 --> 00:35:09,800
Speaker 1: So um, you can't know there's there's it's very difficult

670
00:35:09,840 --> 00:35:12,680
Speaker 1: to find out how this happens until you're the sucker.

671
00:35:12,719 --> 00:35:14,560
Speaker 1: You get stuck with this asset. So it's something to

672
00:35:14,600 --> 00:35:18,400
Speaker 1: be very very careful of. Another scam that happens is

673
00:35:18,440 --> 00:35:21,360
Speaker 1: to create a big loss to reduce tax liabilities in

674
00:35:21,360 --> 00:35:24,280
Speaker 1: a fraudulent way. Um. And so again you create several

675
00:35:24,280 --> 00:35:27,160
Speaker 1: wallets like I said, um, and you can link one

676
00:35:27,160 --> 00:35:28,719
Speaker 1: to your real name, and then all the other ones

677
00:35:28,719 --> 00:35:31,000
Speaker 1: are linked to an anonymous name. So then you buy

678
00:35:31,000 --> 00:35:32,840
Speaker 1: an n f T with an anonymous account that you

679
00:35:32,880 --> 00:35:35,320
Speaker 1: control for stay two hundred. You sell it to another

680
00:35:35,440 --> 00:35:38,000
Speaker 1: anonymous account for two and fifty. Then you sell it

681
00:35:38,040 --> 00:35:41,040
Speaker 1: to your real name account for five hundred thousand. Your

682
00:35:41,040 --> 00:35:43,120
Speaker 1: real name account then sells it to another one of

683
00:35:43,120 --> 00:35:46,880
Speaker 1: your anonymous accounts for two hundred thousand, which then locks

684
00:35:46,880 --> 00:35:51,640
Speaker 1: in a massive three hundred thousand dollar loss. Then with

685
00:35:51,680 --> 00:35:55,520
Speaker 1: that loss, you can write that off of your taxes.

686
00:35:55,840 --> 00:35:58,680
Speaker 1: Your anonymous account can then potentially sell it for roughly

687
00:35:58,719 --> 00:36:01,600
Speaker 1: what you paid for it the two since the market

688
00:36:01,680 --> 00:36:04,680
Speaker 1: value didn't change, but you can lock in that loss. Now,

689
00:36:05,239 --> 00:36:08,120
Speaker 1: to be clear, this is both illegal. I don't want

690
00:36:08,120 --> 00:36:10,600
Speaker 1: you doing either of these unless you like spending your

691
00:36:10,680 --> 00:36:14,439
Speaker 1: vacations in the prison with handcuffs on um. But these

692
00:36:14,440 --> 00:36:16,560
Speaker 1: are scams that are happening, and I want you to

693
00:36:16,600 --> 00:36:19,279
Speaker 1: be aware of them because I don't want you to

694
00:36:19,320 --> 00:36:23,560
Speaker 1: be the sucker at the table. Um. You might wonder

695
00:36:23,600 --> 00:36:25,359
Speaker 1: why some of these n f T s take off

696
00:36:25,440 --> 00:36:28,600
Speaker 1: like they do, and now you probably know why. Now

697
00:36:28,600 --> 00:36:30,600
Speaker 1: I'm not saying that all liquid and price action is

698
00:36:30,640 --> 00:36:32,680
Speaker 1: a fraud, but like I said, these are things that

699
00:36:32,719 --> 00:36:34,520
Speaker 1: you should be aware of. I'm just doing my best

700
00:36:34,520 --> 00:36:38,000
Speaker 1: to educate you. Here. Public service announcement. Now you're listening

701
00:36:38,040 --> 00:36:40,160
Speaker 1: to the Mark Moss Show. Of course, we're talking about bitcoin,

702
00:36:40,400 --> 00:36:44,400
Speaker 1: We're talking about cryptocurrencies, We're talking about the decentralized revolution.

703
00:36:44,719 --> 00:36:47,239
Speaker 1: We talked about the different consensus mechanisms of proof of

704
00:36:47,239 --> 00:36:50,040
Speaker 1: work versus proof of steak. We talked about defile a

705
00:36:50,080 --> 00:36:51,560
Speaker 1: little bit. We talked about n f t S a

706
00:36:51,560 --> 00:36:53,520
Speaker 1: little bit. If you want to hear more about any

707
00:36:53,560 --> 00:36:55,880
Speaker 1: of these topics and want me to dig in deeper,

708
00:36:56,120 --> 00:36:58,480
Speaker 1: make sure to give me some feedback than that you

709
00:36:58,560 --> 00:37:01,440
Speaker 1: listen to Mark Moss, and thanks for listening