Lightning (Bitcoin) Moves to Patch Unpaid Invoice Vulnerability
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00:00:01 --> 00:00:13 Welcome to Crypto Talk Radio, the podcast for everyday investors like you. Visit us on the web@CryptoTalkRadio.net and now here's your host, Leister.
00:00:13 --> 00:00:41 Thank you for that, Bailey, and welcome everybody out there. And Crypto Talk radio found@cryptotalkradio.net a reasonably slim trim update today as the market turns slightly blood red. Coming up on Halloween, one of the worst holidays, quote unquote holidays that there is where there's a risk that your kids get poisoned by bad actors. I don't want to put a negative Nancy on it, but let's be honest, that's really the risk that you're taking.
00:00:41 --> 00:00:47 I know we should trust. I, I don't. Because it's a risk and I don't want your kids to be harmed.
00:00:47 --> 00:00:55 And then you got, you know, slutty females out there tainting your kids psyche. It's a bad time. Halloween's not what it used to be. So I'm not really a fan of it.
00:00:55 --> 00:01:07 Let's start cryptocurrency. Get it out of the way. Won't take too long today. That rhymes.
00:01:07 --> 00:01:25 Coinmarketcap.com will zoom out to the month chart, starting with bitcoin, which has a pretty sharp downward trend currently hovering just shy of the $81 mark as I record it. And Ethereum with the same reasonably downward trend. But Ethereum had a bit of a dump off like a week ago. Ish.
00:01:25 --> 00:01:58 And then it followed suit, heading steadily downward just shy of $2. I record it. Recent news did not do anything to corral what's happening. The news that Ripple got approved to create a bank didn't really add any polish to anything. And there's reasons that I'm not going to focus on for today's episode because I want to let the dust settle on that a little bit. Right. Because any coverage on it, but that didn't have any positive momentum as well as strong inflows on the ETF side had no effect.
00:01:58 --> 00:02:09 This then lends to my first update that I wanted to talk about that I thought was fascinating only because it's something that I had told people listening to me here, crypto talk of him a little while ago.
00:02:09 --> 00:02:38 And that's that people had ran some simulations and they saw that bitcoin was not going to have the amazing run to a million dollars that some of the YouTubers were telling you. In fact, they're saying now the bitcoin is going to struggle to hold six figures. You might be stunned about that. Consider just For a moment, consider that everything that you saw in the unreasonable pumps of bitcoin were due to a number of different factors all at play. The poof hair, Sam Bankman free, the doe kwan doe rug pull.
00:02:38 --> 00:02:44 Other things that caused an extreme reaction. And then there's people that bought crazy back in.
00:02:44 --> 00:03:32 All that you're seeing with the price movement are basically sell orders at higher prices testing the market. You might have heard some YouTubers tell you that you're testing levels. You're testing levels because there's sell orders out there to see if there are buyers willing to pay those prices. And the truth is that the buyers willing to pay the higher prices has tapered off. Even microstrategy Michael Saylor has tapered off as well. Not because there's anything wrong per se, but simply because it was running too hot and the momentum isn't there. They're not seeing the strong positive reasons to buy that they might have seen before. A lot of those were fake, but they don't see them anymore. That rhymes. So they're now saying with these simulations that bitcoin is not even going to be able to hold the six figure mark in at least the short term.
00:03:32 --> 00:03:38 People think in the long term there's still some opportunity for bitcoin to run.
00:03:38 --> 00:03:50 But long term now takes on a different style. It's not the same as before where they told you a four year cycle. I'm sure you've heard this term four year cycle on various YouTube channels. The four year cycle is a myth.
00:03:50 --> 00:04:05 Not saying that. It's not that the price doesn't shift every four years because it kind of sort of does, but not to the constant upward. You might have seen them show you a graph that shows you a very predictable upward trend.
00:04:05 --> 00:04:32 It's not that it won't go up, it's simply that the predictable four years is a myth. It is that the upward is based on different factors than it was back then. Because back then you didn't have as many people vying for it that you do now. You also didn't have the same level of influence that you do now with some of the big players influencing its price in their general direction to where they're able to not only stack bags, but also convince people to pay higher and higher prices.
00:04:32 --> 00:04:39 It doesn't matter how many of those institutionals buy in because people are sitting on the sidelines watching and they're not biting.
00:04:39 --> 00:04:59 And I'm proud of you. If you're not one that's biting off the nonsense, I'm Proud of you. I expected $88. I got it wrong. I'm glad I was wrong because I saw that there was going to be a little steady up, but it was not going to be a clean sweep like it was expected to be. So when I saw the downward, it didn't surprise me. But I'm proud that I was wrong.
00:04:59 --> 00:05:23 I'm proud that to see that there's still some level headed people out there that are not falling for what's arguably an inflated price. It's arguably an inflated price. You will hear YouTubers tell you that I'm crazy, that it's not inflated, it's grossly underpriced. Consider that they may just want you to buy because it helps your bag. I'm not saying that's what's happening. I'm saying consider that that might be what's going on.
00:05:23 --> 00:05:30 I still say that the alternatives like Ethereum are the where the most of the money is going to flow in the short term.
00:05:30 --> 00:05:56 If there is going to be a recovery on the bitcoin side, I would expect it to be after Ethereum. So I would expect to follow Ethereum. I would expect to see Ethereum get back to like the 3 minimum, which is a bit of a jump, but 3 minimum and then watch and see if it goes on upward trend. But remember Ethereum, I don't think it ever got past 5 bucks. So it's got a ways to go and it's been suppressed for quite some time. I don't have a better answer for you right now.
00:05:56 --> 00:06:03 Speaking of bitcoin, some may not be familiar with some of the innards of bitcoin as a cryptocurrency.
00:06:03 --> 00:06:40 I'll try my best not to be overly technical on it. Suffice to say two things. One, bitcoin was never intended. I'm talking at its design core. It was never intended for speed per se. It wasn't designed to be the fastest protocol for transactions because it wasn't originally intended for payment type transactions. It was actually intended for a completely different purpose. Over time, the desire to have faster transactions became more of a reality. There's the infamous video. I believe it's President Trump then in his prior term, he had gone to a burger shop and he paid with bitcoin.
00:06:40 --> 00:06:50 It was pretty quick, pretty easy and it took like two minutes for the thing to resolve, which is embarrassing. But that's the reality. Bitcoin was not initially built for speed.
00:06:50 --> 00:07:09 It's gotten better now, but it wasn't built for it. There are different technologies that are layers. One of them is Lightning. Lightning was designed to help bridge the gap. Lightning is not really a fully on official protocol, but it's available for those that want to use it, that is support it and it, and not every wallet supports it.
00:07:09 --> 00:07:12 Some wallets do, some wallets don't.
00:07:12 --> 00:07:27 Lightning is all about invoices. You might have heard the term about an invoice for a Bitcoin. Lightning is all about invoices. It's all about the idea of you owe money, I pay, and it's quick and dirty because we understand how much is owed and we understand how much I need to pay you.
00:07:27 --> 00:07:39 Recently there were allegations of an attack and I want to describe the nature of the attack so you can kind of understand the challenges with trying to extend Bitcoin beyond its intended purpose.
00:07:39 --> 00:07:58 The nature of the attack actually is a throwback that rhymes to an older time when you were able to exploit certain mechanisms on the financial side. And I'm not going to be more specific, but suffice to say that I am directly aware of situations where you were able to directly exploit certain financial mechanisms.
00:07:58 --> 00:08:57 You might have heard stories about, if you're old enough, people in the olden days of ATM machines where they were able to do more withdrawals than they were supposed to be able to because of some flaw with the machine. Similar kind of concept here with what's going on with Bitcoin and Lightning, where the invoice would basically state reported as unpaid, which will allow multiple payments to go to it, which essentially could be a drain attack because it was not supposed to do that. So they were working to patch that and get that up to date and then deploy fixes and secure, but it caused a larger conversation about the inherent security, about what's going on. Now there's nothing that could have been done to avoid something like this because everything that allows digital transactions or Internet based transactions is subject to some sort of breach. Not really much you can do on that, especially if you're relying on an invoice based system. The invoice based system is only as good as the underlying technology.
00:08:57 --> 00:09:46 I'm saying there's no real way to completely avoid something like this. The awareness I want you to take away is simply be familiar with the challenges of trying to turn Bitcoin into a true payment system. It's not as straightforward as some YouTubers might have tried to sell you on. It wasn't designed for that. And Lightning is a layer over top of it. And every time you add layers to Something you're increasing the risk of some sort of a breach. That means that we would have to invent a truly unique and standalone payment system. And I'm not talking USDT or usdc. It would have to be something that's truly unique. I said that it should broker through the banks. I said that you should be able to walk into the bank and purchase cryptocurrency, or walk into the bank and turn crypto into cash, etc. As a normal transaction with no other overhead and no other oversight. We're never going to get to that world.
00:09:46 --> 00:09:59 But until we do, it's not going to change. This was the nice part about MoneyGram and Western Union, because that's essentially what you have. You can walk in with cash, fill out a little form, and the money shows up there in minutes to hours.
00:09:59 --> 00:11:19 Cryptocurrency was trying to tell the story that we can replace this with a better system. But cryptocurrency inherently is not as, let's say, robust as the MoneyGrams, as the Western unions. It hasn't been around as long, has been as evolved as long, and. And it doesn't have the same regulatory oversight or protections. It also doesn't have the same audit scrutiny that you would have with these other mechanisms. So when I saw Western Union do the wrong thing, which is to try to embrace cryptocurrency, to try to help some of its payment reconciliation, I was disappointed because Western Union, remember, it's the one that did the real telegram, not Telescam. We're talking the real telegrams, and they were the ones doing basically advanced technologies decades before now, and now they're essentially regressing. This isn't to say that someday that there would not be an opportunity to use cryptocurrency to help improve how we resolve payments, especially overseas. I'm saying that I don't think it's ready. I think we got a long way to go, and until we get there, there's gonna be a lot of people that are losing money along the way. And that's an unfortunate state of affairs in closing, because I said it was gonna be a short episode right now, and you might have heard it might be broken record by now, but right now it's a difficult time if you're trying to get into cryptocurrency for the first time, simply because the price looks kind of like, what the heck?
00:11:19 --> 00:11:57 I look at it as discounts, but the price is still inflated. It's running hot. It's been running hot for a while, and we're cooling down. And it has not hit a true bottom, not from what I see. I could be wrong, but I don't see that. So if you're on the sidelines debating whether you should get in or not, I can't tell you directly. I'm saying that right now the price being down is actually a good thing, but not necessarily if you're fresh, new to it. Because I think we have a little bit more ways down to go before everything starts to recover. And in the meantime, people would end up losing money if they were to get in under the current price structure. Based on what I see, if you're a long haul, then maybe that's not that big of a deal.
00:11:57 --> 00:12:16 If you're one that's bothered by it, it's just going to piss you off, trigger your fomo. You got to make smart decisions about what you do if you're new, if you're not new to it, and it's something where you're. You've been in it for a while, you've been watching from the sidelines, you're just kind of playing it by ear. Great. And I think that's the right thing to do right now.
00:12:16 --> 00:13:03 You can't really go wrong with precious metals, although they are kind of up in price a little bit right now. So I would wait for some discounts. If you are going to get into it and you can't go wrong with a diverse portfolio with different types, stocks, bonds and issuances, I would look into a diversity for your portfolio. Not to single asset. Single asset, to me is the worst thing to do right now. Especially right now. The economy is going to have some hard times leading up to the midterms. It's going to have some hard times with what's going on overseas and especially with what's going on Riyadh, I think that's causing a lot of sentiment shift as well. So to me, waiting out is still the best strategy. Unless you're a gambler, I can't help you. But if you're smart and you don't want to lose money in the short term, I think waiting out is the best thing you could do until all this passes. But I can't tell you when that's going to be.
00:13:03 --> 00:13:20 Probably not. Certainly not 2026, I don't believe. So I think it's going to be a long haul. So you've got other asset classes. You don't need to focus in crypto exclusively. You got other asset classes that you can get into in the short while you wait for this to pass. How long that may take.
00:13:20 --> 00:13:46 Sam.
00:13:46 --> 00:13:57 Sa.