Hash privately and store sats securely with BQA & Lili

Bitcoin is close to becoming worthless.

Let's go!

Now what's the Bitcoin? Bitcoin's like rat poison. Oh. The greatest scam in history. Let's get it! Bitcoin will go to fucking zero.

Alright, you ungovernable misfits. I'm your host, Max. Everybody knows that Bitcoin is useless, worthless, and doomed to fail. But what if everyone's wrong? What if it's the system that is doomed to fail?

Join me as I speak to some of the brightest people in the space, and slither to the deepest, darkest depths of the Bitcoin rabbit hole.

Welcome back to another day of Pleb Minor Month. This is the extended version, and we only have one more episode after this one. Today's episode is with Bitcoin Q&A and Lily. Both of them are return guests.

Both of them put out some of the best content out there. I decided to get them on to talk about privacy, security, and mining. We walk through every step of the way from buying a machine, plugging one in, to actually hashing away, choosing your pool, and storing those sat securely.

We also announced an incredible giveaway, and I want to say thank you so much to Foundation Devices for supplying two Foundation Devices passports for giveaways. I'm thinking I'm going to do these as separate giveaways, but keep an ear to the ground, look out on Twitter, and check the ungovernable misfits page.

Good luck to everyone who enters. I really hope you enjoy listening to this episode, and again, a massive thank you to Foundation Devices for supplying two Foundation passports, and also for supporting this show.

Bitcoin Q&A has kindly done a video and a walkthrough for one of the incredible features on the passport. I'm going to put a link in the show notes because I think this is a really important one.

Best of luck to everyone who enters, and also for anyone who wants to get a discount on Foundation Devices passports, you can go to foundation, devices.com, and you can use the code bit by bit for $10 off.

Enjoy the show. Can you hear it now? There we go. A second time to drum. Do you know what I was doing before that wasn't working? I know I don't, but I'm intrigued. Headphones weren't plugged in.

I was going to suggest something trivial like that, but I didn't want to demean you. Top quality as always. Well, thanks for joining this retard. I needed some help with the Bitcoin mining month and privacy and security, and I thought who better to have on than you two, and also a massive thank you from Foundation because the giveaways,

we've got two Foundation Devices passports that are going to be given away. So I thought it would be an opportunity to talk a little bit through what people can do with these devices, how it can help them keep their stats secure and all that good stuff.

Sounds good. I've been struggling to keep up with the rate of content that's coming out from you and John. It's been really great to hear, so I've got a lot to catch up on. Yeah, I really love that you guys are doing this in the bear market because it's the best time to mine really and pick up cheap basics.

Yeah, well, it's pretty crazy seeing like me and you were talking when I picked mine up and we were saying like how much these things can fluctuate and people sort of trade on the hardware, but it's been fucking brutal.

The price drops on these things, but if you're buying, it's great. Yeah, I mean, it's not just the price that affects profitability. It's the hash rate. Hash rate's gone going up and price has been going down.

So it's been hard and a lot of miners are retiring old hardware. Like I just unplug my S9s and my M20s. I can't run them anymore. What do you do with them? You just sell them on then? Well, I actually gave them away to two people that follow me on Twitter and they wanted to get into mining.

So I gave it to them for free, just so they could experiment with it and see if mining is feasible for them. 'Cause imagine paying so much for a machine and you have trouble maintaining it, you have trouble connecting it to mining for what's too expensive, it's too loud.

So it's always good to experiment and see if you can actually handle running a machine before committing to it. Yeah, I've been there, done that. (laughing) We know. So yeah, I mean, what I thought would be really good is like, obviously we've got so much content going out at the moment.

We've had quite a lot of new people reach out and say, I've been inspired, I'm gonna start getting into mining. We've had a lot of people who have won S9s and other machines that we've done on the giveaways.

I thought like to have some actionable advice for these people so that when they actually plug these things in, they're doing things right from the beginning. So a big thing we're pushing in this whole month is like, do this rather than DCA at fucking Swan or whatever other company go and actually do it with mining.

And so what I really wanna do is make sure that when people do it, they do it right and they don't trip themselves up. And yeah, I thought that's where you guys come in is like, keep them secure, talk us through maybe like VPNs or other options like that.

And then maybe how to actually keep their sat secure and private once they've mined as well. Imagine someone has a machine, they've got some power, they're gonna put it in the garage. What should they be thinking about next?

- Well, the first thing before even plugging in the machine, I would check with your electricity provider and see if you have the capacity in your home to actually run a machine. So you don't wanna be exceeding 80% capacity on your electrical circuit and risk frying your house and that.

So I would check to see your electricity usage, see where you stand and then see what capacity you have left. You can go on like asicminorvalue.com and check the machine that you plan on plugging in and see how much capacity that that takes.

And if that capacity is less than what you're using plus 80% are what you're using with less than 80% and that machine, then I would go ahead and like plug it in. - Okay. - But one thing to remember too is, it depends on how you wanna like, if you wanna mine for non KYC sets, you need to make sure that you're taking the right

Popsec precautions. You know, you don't want your ISP, your internet service provider to be stopping you. You don't want the mining pool to get information about you. And like that's where that VPN comes in.

Like you mentioned, using those VPN channels and like mining through that. The Conno Alchemist has a great guide for that. He shows you exactly how to set it up. Or if you're using brains, you can just use Stratum V2.

And Stratum V2 will protect you from snooping and potential like hashrate jacking. - Okay. Yeah. We just had Yarn on from brains a couple of days ago. He went quite deep into the Stratton V2 stuff, but he's a big brain and when he started talking, to be honest, I was struggling to keep up.

Some people will when they listen to that pod, but can you do like a bit of an overview of what that's doing and how it's protecting their privacy? - Yeah, sure. I can go ahead and cover that.

So the way that mining is now, is you can compare it to like HTTP websites. With HTTP, your internet service provider can see that you're on a specific site and they can see exactly what you're doing with that site.

So today, mining similar to that, where all that data being between a miner and their chosen mining pool is out in the open to see. What Stratum V2 does is it creates like a mask. It basically is the HTTPS of mining.

So it masks the activity that's happening between you and the pool, but it still shows that there is like a connection to a pool. So you're getting like an encrypted connection. - Okay, all right, that makes sense.

So everything else before is what like clear text and completely viewable. - Yeah, and what that does too, is it exposes you to hash rate jacking. So if somebody can like a very sophisticated neighbor or adversary can see that you're mining, they can actually steal your hash rate.

They know that it's there and they're gonna collect the payouts on your behalf instead of you. So running Stratum V2 is one of the easiest ways to protect yourself. So if you wanna go further and show that there is no connection to a mining pool at all, then I would use the multiple VPN tunnels, which I kind of alchemist describes

and what that does is it automatically routes mining traffic to the tunnel with the least latency. Latency is just like the speed. What happens is if there's too much latency between you and the mining pool, then you risk submitting stale shares and stale shares are shared submitted to a block after it's been mined.

So you don't get paid based on that. But if you're using this VPNs, then you're gonna reduce your latency and you're not gonna be submitting any stale shares. - Even if you're using that, is there sort of any stats on how much slower it is or how much of a problem it can cause?

Or is it just gonna be just as fast as a normal connection? - I guess it just depends on like where you're living. I guess that depends on your actual Wi-Fi connection. With this, if your Wi-Fi connection is good, it's gonna be very close to that original connection without the VPNs.

- Okay. - Because the VPN tunnels are routing to the right channels. If you're using just a regular VPN with nothing to account for latency, then it's gonna be significantly slower. Talking maybe a couple minutes, but that matters when you're mining.

It doesn't matter when you're browsing the internet. - Okay, cool. So, Econo Alchemist Guide. I think you just dropped a guide as well, haven't you? I know you sent me something that I haven't yet read.

- Yeah, so I just released the Bitcoin mining OppSec and Privacy Guide. And I actually go into what Stratton V2 is. I go into using proxies, using these multiple VPN channels. I link to Econo Alchemist Guide.

But this guide is four people who want to mine Bitcoin in the most OppSec conscious way possible. So I start from setting up how to identify scams when you're shopping for hardware, how to communicate with the hardware buyer, I mean, the hardware seller, best communication apps to use.

And then I talk about actually plugging in your miner, how to secure the site where you're gonna plug them in, how to reduce your power consumption, how to reduce your heat signature, how to handle noise pollution.

And then that data protection section is where I talk about Stratton V2 or using VPNs. And then I go into like pools, how to handle pool accounts, how to protect your information, how to handle payouts, how to store them, how to coin join them.

And then if you are someone who likes to use your Bitcoin for cloudized loans or you want to sell some of your Bitcoin to cover your mining expenses, I cover that. And then I cover social media use, you know, how to keep your information private online, which is useful for people like us who do mine, but we're, you know, more in the open.

So just to not show certain things online, I'm not talking about certain things. And then also web browsing privacy. If you're doing everything right with mining, your tracks are covered, but you're researching mining stats or you're checking your apps without a VPN, then your ISP can still see, okay, well, this person

has a mining pool account, we might not know where it is, but because they're logged into this app without a VPN, we know that it's there. - Okay, perfect. Well-- - And then the last section is just, yeah.

- There's the latency with my shitty Wi-Fi. I was just gonna say that we will share that if that's okay with you on Ungovernable Misfits and also link it at the bottom of the show just so anyone can have a read through.

- Yeah, I'd love that. I'm gonna release it today or I'm gonna announce it on Twitter. And then you can share it, I think it's a great guide and it's everything that I wanted in one place when I got started.

- Perfect, Q&A, do you wanna chime in and talk a little bit about why people should care about everything Lily's just said there and what your thoughts are maybe on this kind of DCAing the right way with a miner.

I don't think you've jumped into it at the same as me at this stage, but like your overall view of it. - Yeah, you broke up slightly, so I only caught half of the second question. What's wrong to your first question?

So just to chime in, just to cap off like the mining specific stuff that Lily's just spoken about, obviously she's far more exposed to this sort of stuff than I am living in the United Kingdom where energy prices are somewhat extortionate.

We, he's had a couple of mentions already economic arguments with this guide which I've got in front of me now and it's a 40 minute read so it's very in depth as a kind of an altruist likes to go.

I've just come in back about the latency thing. In his conclusion, he mentions that with his setup that obviously he covers in the guide, his latency improved when he was using the load balanced VPN tunnels versus not using them at all.

So not only has he gained privacy from his ISP, but he's also gaining marginal increase in manual revenue because of that reduced latency. So I thought I was really interested in it and not what I expected to see at all.

I guess that's where the kind of load balancing bit comes in that I think he's running five different VPN tunnels. So his presumably his setup will switch between the most optimal bonds so that he's always got that really quick connection to his pool so that he's maximizing or minimizing any rejected packets.

So I thought I just wanted to share that because I found it really interesting just to pick up on that. And yeah, I'm going to have to ask you to repeat your second bit of your question back to any course of a half of it.

(laughing) - The other question was with everything we've just gone through there, do you want to just do a bit of a rundown as a non-miner what your thoughts are on this idea of DCAing with mining and that being a way to accumulate SATs and your kind of thoughts of maybe things moving more towards that direction?

- Yeah, absolutely. So it doesn't take a genius to work out that all three of us on this podcast, but especially me are a massive staunch advocate of obtaining Bitcoin via no KYC sources.

That comes from plain and simple comes from my personal view of Bitcoin is that we are here to sort of separate money and state we hear that mentioned all the time in Bitcoin, especially on Twitter.

And I think a lot of people just pay lip service to it. But for me, the first step towards achieving that goal is to obtain this thing that we sometimes like to call for key money outside of the usual channels so that we're not having to ask for permission to buy Bitcoin or give our driver's license or our step sums middle name

or our heart rate at the time that we sign up to the exchange. (laughing) Obviously, I'm being a bit facetious here, but some of the information that you do have to provide from some of the regulated exchanges is quite horrifying to be honest with you.

So for me, the first step to go towards playing that part of separating money and state and having this fucking money is obtaining it privately. Now, there's loads of different ways that you can do that.

Lily's got loads of guides on it. I've got loads of guides on it. You've posted loads on Uncoverable Misfits as well. You've got Bitcoin ATMs. You've got Pid's Peer exchanges like Biz, Coddle Hoddle.

There's a new mobile uncle, Peach, where you can buy from all over the world from other privacy, respecting individuals. Little tangent, but yeah, I've actually, I've done a couple of trades on it and yeah, fantastic experience, so I can't speak highly enough of it.

So yeah, we've got ATMs, Pid's Peer exchanges. You've got cash trades. If you go to a Bitcoin meetup, there's always a couple of OGs there that wanna offload some Bitcoin for some fiat because they need to pay some bills.

Another good incentive to get involved into the community. And then that leads us on to mining as well. Mining is arguably the easiest way to auto DCA privately as much as I hate the term auto DCA.

So you're gonna have a little bit of a hurdle to get over in terms of obtaining the miner. Obviously you can have some capital cost up front. That's pretty obvious. You're gonna need to check out the power arrangements in your house like Lily alluded to earlier.

You're gonna need to know what to do with your networking. We've spoken about economist earlier and he demonstrates the absolute perfect way to do it. I would argue that you shouldn't sort of rush to do that straight away, better to just get hashing first.

But once you've gone over those three main hurdles, that device or multiple devices just sit there, hashing away earning you small amounts of Bitcoin regularly without any further input. All you've gotta do is keep that miner fed and watered with some electricity and make sure that you're cool in it

adequately and it's kind of there just stacking Bitcoin on your behalf. So as a way to, a hands off way to obtain Bitcoin privately, I think it's arguably the best and I'm a little bit salty that I can't really get my hands feasibly on a miner and mine, even at a slight loss, it would be catastrophic

for me to pull the miner in at my energy costs. But yeah, from an OKOIC, you know, obtaining Bitcoin in an OKOIC method, mining is way up there with one of the best ways to do it. - Yeah, agreed.

Okay, cool. So it's got the nod from all of us. Lily, do you wanna dive in now that we've gone through the sort of the ways to set up in terms of VPN and all these kind of things? But actually in terms of setting the machine up, thoughts around different pools as options.

Obviously we've had brains on, we've had Medion as well because they've now got this option to use bit 47, which is really cool. Any thoughts around that? Presumably that's like kind of the next thing you have to think about.

- Yeah, for sure. I think it's cool that Lincoln pool is offering that because I've been pestering brains to offer it for probably over a year now and like they haven't implemented the bit 47.

But if you're not using a pool that supports bit 47, you just need to make sure to constantly update that mining pool address because you don't wanna reuse addresses that can degrade your privacy.

I think with respect to actually choosing a pool and payout system that works for you, I personally enjoy the paper last year's N, which is PPLNS. The reason for that is because the fees are so much cheaper versus a full paper share pool or paper share pool.

And the difference is there with the PPS, the paper share pools is that you outsource or you give the variance risk to the pool, which means that you know what your payouts are gonna be every single time.

You get paid out proportionate to the hash rate that you contribute to that pool. Regardless if that pool finds a block or not, which is good, but that puts all the risk on the pool, which means that you're paying a higher fee to get that structured and guaranteed payout with a pool like /pool, which is PPLNS that paper last N shares.

Structure, you're assuming that variance risk and what that means is in one period, you might, one day you might find a block, one day you might find seven blocks, the next day you might not find any blocks.

So if the pool doesn't find any blocks or if they find one or two, you're getting less rewards. But to be honest with you, like that doesn't matter long term. Like if you're playing to be a minor long term, that variance risk actually flat lines and it's the same for PPS pool or a pool like /pool,

which is PPLNS and I'm always for maximizing your reward. So I would go for a pool like that and pay lower fees. Okay, so presumably someone who wants PPLNS, anyone who's looking to hold those SATs and they're not too highly leveraged, where like not finding a block for a few days and being able to sell that Bitcoin's gonna mess them up,

then you'd say that's probably best for most people. - Yeah, for sure. And like PPLNS that also encourages loyalty to the pool and discourages pool hopping, which some minors do, like they go from one pool to another to try to maximize their profits, because if a minor disconnects from a PPLNS pool, all the shares that they contributed

before a block finder lost. So the minors are incentivized to stick with that pool and I think that makes the pool stronger to have that. - Outside of brains then, any others that you suggest or is that sort of the favored pool for people at the moment?

- That's the one that I've been using since I started, but I know F2 pool is also a solid pool. They have great service. They have a lot of hash rate. But I've never, I can't endorse another pool that I haven't used.

- No, of course, yeah. - You know, like that's not something I can do, but always, you know, do your own research, see if that pool has a reputation, see how much hash rate they contribute.

What I will say though is I would not recommend a pool that engages in hash rate management. Some pools do this and they hide that they do that, which is when they switch between mining, Bitcoin to mining, Ethereum to mining, Litecoin or BSB or whatever it is, they're basically trying to mine the coin

that's giving them the highest profit at that time. But what happens with profit switching is you're like disconnecting from the Bitcoin pool and connecting to the Ethereum pool or whatever pool and you're losing that time when you're disconnecting and reconnecting that actually reduces your rewards over time.

So even if that algorithm is saving you money in the short term, it's not gonna be doing that in the long run. - I'm gonna quickly switch seats to the interviewer seat here because as a non-manner, I have a question I'm curious about that's fairly topical.

Between the different pools, do you know if there's differences in withdrawal, frequency and limits that the user can define? - I think you, from what I know is like, you can change that payout address and frequency as much as you like.

Some people can even choose to get paid out daily. Like Sledgepot doesn't have like limits. - I feel like maybe there are though, not that I know fuck all about any of this, but I did a pod the other day with someone who has one S9 that's under clocked because he's running it on solar just like five hours a day.

And he was saying something about, he's actually solo mining, or part of a solo mining pool or whatever. I can't remember what it was exactly, but because the limit was, I wanna say like a hundred thousand sats or a million sats, it was something like that.

And he was like, I don't know if I'll ever even hit that. - Oh, yeah, there's like amounts. I thought you met you changing the frequency of your payout. Like if you wanna do once a week or every other week.

- Yeah, the question was on both as to whether there's differences across the pool. So whether brains pool says that you've got to get to a minimum of a million sats and you've got to wait at least a week between withdrawals and whether a link on pool does something completely different.

I just didn't know whether that was a decided factor when you're choosing a pool. - Yeah, I think that's a deciding factor if the hash rate that you have to contribute is really small. You know, my thing is you should take custody like early and often with your payouts.

So if there's a pool that's restricting you once a month or more, I wouldn't really recommend using them. - Yeah, and I tell you the reason why I bring this up because just last week we had the mining pool that's called pooling that's been discovered to be insolvent essentially and they suspended withdrawals to all of their miners.

Now, what that's gonna do is incentivize any miner that's got their head switched on in a different pool to start withdrawing as frequently as they can, which makes perfect sense. Now, if you take that to the extremes and they start withdrawing maybe daily, then I think there's gonna be a potential issue

in the future where lots of miners are gonna have wallets with a shit on of fairly small UTXOs which in the current state of the memo where one's up per byte pretty much gets you into the next block most of the day, that's not really an issue.

But when we run into, we've seen upwards of 200 sets per byte before, there's a distinct potential that some of those really small UTXOs where they're withdrawing daily 'cause they wanna take self custody might not be feasible to spend.

So I think that miners looking forward if they do take that approach, they're gonna have to start looking at some active UTXO management and doing some consolidations to prevent or to mitigate the risk of a high fee environment where they may be effectively priced out of their own UTXOs, that kind of makes sense.

- Yeah, that makes a lot of sense. And I agree with you, it's gonna become more of a problem down the line as the price changes and like the payout rules change. But I think that's why it's important too for them to understand like you said UTXO management but also spending how to spend that Bitcoin after it's paid out.

Because you can't, if you want maximum privacy, you can't just spend it like after you get a payout. You need to coin join it. - Okay, yeah, sorry Max, go on. - I was actually just gonna say, should we dive into coin join implementations and best practices for people so that they can protect themselves once they withdraw from the pool?

- Yeah, so that's a good point that you make. So let's say that you've been auto DCAing, I said it again, what am I doing? You've been mining regularly with Brainsport for six months and you've got loads of UTXOs.

Obviously by the very nature of Brainsport being the pool operator, they know that all of those UTXOs belong to the same person. Now, depending on how you're connected to Brains and depending on what information you have opted to share with them, they may or may not know exactly who you are, they may know roughly where you live.

If you haven't mastered your IP address when connecting the pool, that might prompt you to try and get some privacy from them. In general, mining via, sorry, stacking via mining is pretty private, but there's one, the kind of the weak link is that the pool has most of the information on you.

So coin join is a great option where you can perform what's essentially a collaborative transaction with loads of other privacy preserving Bitcoiners and to obfuscate the way your Bitcoin goes after that transaction so that the pool can kind of see, okay, well, I know Lily's mining with Brainsport

and we've paid her out over the last six months to these 100 different addresses. So we know that Lily owns this much Bitcoin. If Lily was to then merge some of those UTXOs, she might do 10 at a time, she might do 50 at a time or she might do five at a time.

It doesn't, you know, that sort of number is fairly trivial. She could combine them into a Whirlpool coin join via Samurai or Sparrow Wallet and that would essentially put a brick wall in the trail.

The trail of where her Bitcoin goes on the output side of that transaction would kind of go cold. So if the pool decided to get a bit snoopy and try and find where Lily spent in a Bitcoin, if she's using a proper coin join implementation like Whirlpool, then it's going to be very, very difficult for anybody on Jane, especially the pool,

to distinguish where her coins have gone on the output side of that transaction. Fortunately with Whirlpool, the incentive structure is built such that remixing is completely free. So once you've paid for your first mix, as long as you keep your Whirlpool client online, you can sit there forever and a day

and continue to get remixed after remix and your anonymity set, which is kind of the size of the crowd that you would be hiding in, starts to grow exponentially with every remix that you and/or your partners get from any of your mixes.

So it's a beautiful incentive structure, getting really easy to use, particularly now, in a desktop environment with Sparrow. So all of that to say that if Lily was to take those steps, which would take 30 minutes and then she just got to leave a Whirlpool client online, after that first transaction,

Brainspool or whoever's poor she's mining with, would not have a clue where her Bitcoin have gone thereafter. So she's kind of got the best of both worlds there where she's mining via no KYC.

So she hasn't got like a single large tech conglomerate that knows that she bought this much Bitcoin at this time. And here's her ID and here's her date of birth, et cetera. She's not only she's not got that, but now the person, sorry, the entity that the mining poor that she's connected to also don't know where there's Bitcoin have gone.

So the best of both worlds really. - Yeah, I also think there's a huge misconception among new miners that think they don't have to coin join. I don't know who started this rumor or where it came from, but they say it's like fresh Bitcoin and they don't have to coin join.

That's only true if you're solo mining, if you're getting paid directly from the Coinbase, which is not the case for miners joining a pool. It's probably the case for very, very, very few people, isn't it really?

And like you know, it's just said, like you're giving your information to a mining pool. So they have your information. It's still better though, isn't it? It's still a lot, it's a lot better to say alternative.

It's just we're talking about like how to protect yourself in the best way. And so one thing when you're talking through using world pool, I was thinking, well, if you're a smaller miner and best practices for every withdrawal, do you use a fresh address?

So if you do that and it's still smaller amounts, and then you've got all these separate UTXOs with smaller amounts, does that not get very expensive then to put into world pool? Is there a more efficient way of doing it without fucking up your privacy?

Like what are the options? - Yeah, so one of the key trade-offs, you're absolutely right, if you're taking regular smaller withdrawals, obviously that's better from a custodial perspective because you're in control of it as the maximum amount of your mined Bitcoin at any one time.

That is gonna create lots of small outputs that you are gonna have to pay to spend. So it's definitely a trade-off and kind of something that if you are a home miner to consider what do you value more, are you happy with a little bit more third party risk than leaving, having less frequent withdrawals

so that you need to pay less miner fees thereafter? Or would you like to self custody the maximum amount as soon as possible? Then if you wanna take that approach, then you're gonna have to be prepared to do some UTXO management and potentially be prepared to pay some more fees.

I would err on the side of the latter and be prepared to pay for pay slightly more fees. And I say that from a place of, obviously the memo for at least the last couple of months has been pretty much dead.

There's always been at least a couple of times a day where one's up by get you into the memo. So you can again have the best of both worlds by having more frequent withdrawals. And then what you can do is to, as a double whammy, you can do some UTXO consolidation at the same time as entering Whirlpool.

So let's go back to the analogy of Lily who's mining with brains pool and she's got loads of, she's got 100 small withdrawals to 100 different UTXOs. She could, at the end of that six months that she's in full control of all of those, she's just got loads of UTXOs in her spiral wallet, let's say.

She could wait for a quiet time in the memo. And then she could send all of those, combine all of those UTXOs in one single transaction. She can pay slightly more fees, but she could do that in the middle of the night when it's once up a bite.

And she can combine all of those UTXOs into Whirlpool and then have Whirlpool output one or just a couple of larger UTXOs. So not only is she gaining privacy from the pool, but she's performing some UTXO management and combining those in a privacy preserving way, such that on the output side of the transaction,

she got good privacy and she's only got a handful of UTXOs to manage. So again, it's the best of both worlds. You're gaining privacy and you're managing the wallet at the same time. - Good point.

Any thoughts on that, Lily? - I'm with him. I completely agree. Like that's the best way to manage this. And it's worth dealing with because you're getting those private stats and it's easier to deal with that versus dealing with the tax nightmare that is KYC.

- Yeah, and I guess not just the tax nightmare, but also the potential for $5 venture tax or other knocks at your door or whatever else could happen in the future. - My thing is if you can anticipate a risk and like work to prevent it, why wouldn't you?

That's all mining. It's mining is the best way to prevent that KYC risk. I mean, if you see Bitcoin as free to money, some people don't see it that way. Some people just see it as an asset and that's okay.

- I think it makes sense to do it that way. What would you say for everyone? And there are lots of them, surprisingly, who will say, well, what about just using the same address every time?

I'll just leave it in and use the same one for the mining pool. 'Cause if I'm going to coin join it anyway, why not? - Well, that's not really like a good practice because the mining pool can like build that, like understanding of you and find out that, you know, you're the one that's mining that and you know--

I think the trade-off here is that obviously the mining pool knows every address that they're paying out belongs to the same person. And again, we've covered that they may or may not know exactly who you are or you may just be an IP address to them.

So you kind of can't get away from the fact that the mining pool knowing that information, that all of those addresses be that one address that's paid to 100 times or 100 different addresses that are paid to once.

But what you are showing is to anybody else on the blockchain that that one address that you're reusing for 100 times is owned by the same person. So I could look at your address and then I would know.

So it's not only that the fact that the mining pool has that information on you, you can't get away from that. Everybody else that has access to a mempool.space or similar can also see that information as well.

So you're exposing that address is owned by the same person. Instead of it being for one entity, you're showing the whole Bitcoin network. - Yeah, makes sense. Okay, so someone has chosen their pool, they plugged their machine in, they have withdrawn, they've decided to go through Whirlpool.

What's next in terms of storage, labeling, everything else? Is there anything that you can share that foundation devices is working on or any tips and tricks to make sure that when people put all this work in, they don't lose their stats?

- Yeah, I think, well, obviously it depends on what the miner, what the intentions the miner has for those stats after they've coined joined them. If this is somebody that's living on Bitcoin, then they're probably gonna wanna keep at least the portion of that in some form of mobile wallets

so that you can use it to spend or buy gift cards or pay bills, et cetera. But inevitably there's gonna be a portion of that that they're gonna wanna save. And presumably they would, or I would advise, that they do that to a cold stories device like Passport, obviously that disclosure Lily and I

work for foundation devices, so we are somewhat biased to say that we think it's the best one. So, yeah, one of the new exciting features that ties in nicely to the conversation that we just had is we're adding with the next firmware update, which is currently in live open beta, so you can actually get your hands on it now if you want it.

If you wanna wait for the main release, it'll probably be out in about seven days. It's called the PostMix extension. Essentially what that is, is a really one-click way to add the PostMix Whirlpool account to your Passport cold storage seed.

So what that enables you to do is use something like, let's say Sparrow is this great function called Mix2, where you can, if you're using Sparrow as your Whirlpool client, you can tell Sparrow to mix directly to an external wallet that it is also managing.

So that could be your Passport hardware wallet. So you can tell Sparrow to say right after these UTXOs that I've just mined have five Whirlpool rounds. On the next round, I want you to send each UTXO on its own to a fresh address in my Passport wallet.

By doing that, not only is it a hands-off way to do it, Sparrow will look after it for you. You don't incur any additional minor fees because the send from the Whirlpool round to your cold storage wallet, it's the same transaction, so you're not, you're doing that completely for free as well.

There's no minor fees involved. - You missed that extra hop. - Exactly, so if you've got a lot of UTXOs, that's a fairly big save in if minor fees do increase. That's one of the benefits.

And then if you do that to the PostMix account that we've added into Passport, it's just a generic account, the same as all the others, it's just as a unique account number. You can interact with it and spend from it in the exact same way that you would, you know, a normal account, there's no different in that respect.

But what you can do then is store those sat for say, one year, five years, 10 years, however long that you want. But because they're in the PostMix account, which is a specific derivation path for the more technical listening to this, is that you can then, at any time in the future, make that seed hop by importing it

into another Whirlpool client, so Samurai or Sparrow, and then continue remixing for free, no fees whatsoever. And then because that seed is then online, you can also make use of the spending tools with Insparo and Samurai, such as Stowaway, Stonewall X2, all of the collaborative transactions like that.

So it's kind of a foolproof way so that you can mix that into call storage, store for an indefinite amount of time, and then if you choose to in the future, make that seed hot and then continue remixing for as long as you want, no extra fees, you've already paid the fees, you know,

however many years before when you entered that first mix. So yeah, a really great way to do that if you want to take some sort of risk off the table in terms of having some funds hot so you can get them away into your passport.

But then also know that, you know, in a couple of years time, if I want to continue remixing and continue to increase my anonymity set, then I can also do that as well. - That's really interesting.

How does that look for someone using the device? It sounds relatively technical. Is it gonna be something that's complicated to set up? - Not at all, that's, so we've built this new extensions menu.

So what you do is go into the settings of passport and there's currently two extensions in there. These are just like add-ons if you like. One is the CASA app. So if you want to use passport with CASA, the collaborative custody solution, and the other one is post-mix.

All you need to do is literally just turn it on, it's just a toggle. When you turn it on, it will add a new account screen to your passport, and then you would just pair that with any wallet of your choice.

You know, obviously we're using Sparrow as an example because it's a Whirlpool client. So you would just pair that in the exact same way that you would a typical account within passport. So just buy a little QR code exchange, and that's it.

That's literally it. That's the only interaction with passport that you need to do. The rest of it's done within Sparrow where you kind of dictate after five mixes, send these UTXOs to that post-mix account that's completely cold storage.

At SelfShill, we have already done a tutorial video on this, which is gonna be dropping the exact same day that the 2.0.4 firmware goes live. So yeah, particularly for people who value privacy, especially the miners as well, that might have a lot of UTXOs to manage.

I think this is a really great way to not only gain your privacy, but to do so in a secure way so that you can, like I say, take some risk off the table if you're not comfortable with having large amounts of funds kind of sat within a Sparrow hot wallet.

One caveat I will say is obviously I mentioned like, you know, in five years time, if you wanted to then make that seed hot to continue remixing or to make use of the collaborative transaction spends like Stonewall X2 and Stonewall Y.

Obviously, if you've got all of your Bitcoin in this account and you might only want to spend a little bit, then you're gonna have to make the whole seed hot just to spend like five million sat to just to continue remixing a small portion.

The better option is to make a new seed on passport so that you just use that as your mix too. So let's say you make a decision that, right, I wanna put away 50 million sat into the post-mix account and I'm happy to leave that there, knowing that I might want to remix that in a couple of years time, five years time, whatever,

but then also know that that might be sort of, I don't know, 5% of your stash and the other 95% of your stash can live in a normal account on a different seed which is also controlled by passport.

So it makes sense to segregate those seeds so that in the future, when you want to continue remixing, you don't have to bring your whole stash hot just to spend a small portion of it. - Cool, any other security tips that people should be taking into account when they're storing their sats, any more tips, tricks, any more features,

because obviously we're giving two of these passports away for lucky listeners so someone listening to this is likely to get their hands on one. What should they be looking out for? - Yeah, I think it's worth mentioning Envoy our mobile companion app that we recently released.

So Envoy is kind of a watch-only wallet tailored specifically towards passport. It doesn't currently work with any of the hardware wallets. So for people who kind of don't want the hassle of, say they don't want to do a coin drawing or they don't like using a computer and they just want to manage their cold storage

from their mobile phone or interface with their cold storage from their mobile phone, we've purpose built Envoy to make that as simple as possible. So it's essentially a mobile application that you pair or connect passport to, again via that simple QR code exchange.

And that will allow you to then receive into your cold storage without needing to interact directly with passport. You can keep that locked in your safe. You only need to then bring that out to if you want to make any spend transactions.

So for the vast majority of people who are just using Bitcoin as a more as a savings vehicle, then I think Envoy is a really great option for that. And we purposely made it sort of without most of the bells and whistles that advanced users might come to expect just to make it a really frictionless experience.

Such that it's kind of like the least stressful mobile wallet experience that you'll ever have. I think to tie it back into mining as well, if you do use a pool that requires manual address changes, then doing that from your phone, you could do that anywhere.

You don't need to interact with your cold storage device. So you could just open Envoy, tap on receive and then just copy and paste that straight from your phone into your mining pool dashboard.

And so if you're one of the more frequent, or one of the miners who benefits from more frequent withdrawals, then you could do that in 30 seconds from directly from your phone. And I suppose also on the privacy standpoint, we default Envoy to connect over tour.

So literally from the moment that you open the device before you even connect a passport, foundation doesn't learn anything about you that all the connection default over the tour network.

So there's no IP address login. There's no Xbox login. Basically, we learn absolutely Jack about who's using Envoy. And that's by design, you know, we wanted that to be, wanted it to be simple and we wanted the guide rails to be high so that even somebody who doesn't care about privacy or doesn't yet care about privacy,

should I say, we've built those guide rails high enough such that when they come to realize further down the line that they value that, they'll look back and think, oh, actually, they made some good design decisions here, such that when it didn't matter to me or I didn't know any better, they were kind of looking out for me.

- Very cool. All right, guys, well, unless there's anything I have missed, I think we've covered quite a lot there. I just wanted to say thank you for jumping on the pod and giving everyone the advice is really, really helpful.

And also a massive thank you to Foundation for giving these two passports away. I want on myself, they sound fucking awesome. And yeah, I look forward to giving them away to some lucky pleb.

- I've got one here for you, by the way. - Oh, do you? - Oh, that's nice. - You just made my day. - No, I'm jealous. - You surely have got one. - I still don't have one. - Oh, for fuck's sake, Foundation, you need to sort your lives out.

- Left out. - Well, I feel sort of sorry for you, but I also, I'm so happy for myself that I can't really feel sorry for you. I've got a big smile on my face. - Oh, okay. (laughing) - I'm just gonna take those free passports back.

(laughing) - So anything that we missed, Lilly, on the mining side, anything that you can think of that would be helpful for people? - Yeah, just like two small points. The first thing is a lot of miners check their payouts and stuff on their phone.

So when they're using those apps, just to make sure to turn on a VPN or use Orbot so that they can protect their activity. 'Cause the last thing they want to do is just give that away at the last second.

And then if you're like a larger scale home miner and you want to hedge yourself against price declines, there's like hedging strategies that you can implement. And I know this is like more advanced and I did write about this.

And one thing I do is I use crypto mining stocks to hedge my Bitcoin rewards, which has paid off a lot in the seller. So what I do is to hedge against those Bitcoin price declines, I buy put options on these stocks.

So if the Bitcoin price declines, I'll profit from that regardless of whether or not the option is in the money or not. This is really good for people who have a financial background or their electricity price is really high and they're kind of towing the line between being profitable

and not being profitable depending on the Bitcoin price. And I'm happy to help anyone with that if they want to reach out for your DMs. - Perfect, yeah, well, there's a lot of people who will be needing something like that.

As you say, especially for like a bigger miner, it's really important. - Totally. - If that's everything covered, thank you both once again. Lily, I feel really sorry for you. Maybe enter under a name to win your own prize.

So give us the prize and then win the prize back. - All right, Max, game one. (laughing) All right, thanks so much and we'll share that article and everything else and Q&A maybe let me know when that video drops and I'll share that as well.

- Yeah, she'll be next week but I'll ping you, yep. - Nice one. All right, cheers guys, speak soon. - Cheers guys, bye. - Thank you. - Thanks for listening and thank you to everyone who's been showing support for bit by bit and also for the plebminer month.

Everyone who's been streaming Sats, everyone who's been sending messages, testing the website, buying merch and everything else, I really do appreciate it and thank you so much. If you haven't already checked out the website and all of the incredible content we have there, go to ungovernablemisfits.com and if anyone has any questions,

do feel free to reach out and I'll answer anything I can or put you in touch with anyone for the things that I can't help with. Catch you on the next one.