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June 12, 2023 - Health Ranger - Mike Adams
32:24
Tips, Tricks and Traps: Under the hood of PRIVACY CRYPTO
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Alright, welcome to this special report, Tips, Tricks and Traps Under the Hood of Privacy Crypto.
This is Mike Adams here.
Thanks for listening.
Got a lot of great tips for you.
Some good solutions and some wisdom that you will absolutely need to know.
I just spent the weekend actually doing a deep dive into a lot of this.
And just got a very somewhat costly education.
It all came out fine in the end, by the way.
But I learned some critical things that I want to pass along to you and that you absolutely will need to know as the world moves into digital money.
I mean, this is happening.
Whether you like it or not, the governments are trying to get you into CBDCs.
They want you to be a victim of the digital Federal Reserve notes, whatever those turn out to be.
And the alternative to that is the world of cryptocurrency.
And as you know, the world of crypto is under extreme assault right now by the SEC. I'll talk about that later in the broadcast.
But even though they assault it, they can't destroy it because it is decentralized.
It is peer-to-peer.
But there's some things about it that you need to know that I need to know and some things I did not know until this weekend.
And I was aided in my education by some really incredibly bright, qualified people.
I want to thank them.
I don't know that they want to be named, but they deserve credit for helping me out.
And I'm going to pass that knowledge along to you.
So first thing you need to know, and perhaps this is self-evident, but a lot of people may not have thought of this.
So I'll mention it.
The easiest and most secure way to send somebody money in the crypto space that is never on the blockchain is not to use the blockchain.
Not to send somebody, you know, X number of BTC or X number of Monero or whatever the case may be.
Rather, the most private way to send money in crypto is to simply put money in a crypto wallet, you know, create a separate standalone wallet.
And then put whatever money in that that you want to send to somebody.
And then you tell them the seed phrase for the wallet so that they can qualify.
quote, recover the wallet from wherever they are.
And they type in the 12 words or the 24 words, you know, it depends on the wallet, depends on the coin.
And then Shazam, their full balance of all the coins is right there under their control.
And then you simply abandon the wallet on your side.
And that's it.
There's no record of that in the blockchain.
No record of any transaction because no transaction took place for you to send it to them.
So you understand how powerful that is?
It's kind of like what some people have done in the past to send email messages to each other in a way that, like without actually sending the email, was they would use an online email system like, let's say, Hotmail.
They would create a Hotmail account, and then they would share the password with their friend, and then they would go on and compose an email message in Hotmail, but never send it.
They would just save it as a draft.
And then their friend would log in and view the draft and read the message.
But that email was never sent, you see, so there's no record of that email going through an email server, even though both parties are able to view that message effectively creating a communication system.
Now that's not highly secure, by the way, because emails are not necessarily stored in an encrypted format on the email server providing that service, but you get the idea.
Effectively, you can transfer any amount of cryptocurrency to anybody else By simply handing them the keys to the wallet.
They restore the keys, they restore the wallet, and they're back in business.
I mean, they have full control, and at that point, they would probably transfer all those coins out of that wallet, especially if they didn't trust you, because Well, you still have the keys and you could also transfer them out, but it just comes down to who does it first because, of course, you can't spend the same coins twice on the same blockchain.
So it's pretty much whoever moves them first gets them, right?
But control over a wallet is the same as owning it.
Ownership is control.
And so that's one way to accomplish that.
Now, with that in mind, it's also worth pointing out that there was a widely publicized hack of the Atomic Wallet And the Atomic Wallet is one of the wallets that I've installed and played with a little bit.
Played with a lot of wallets.
There's Cake Wallet, Atomic Wallet.
There's a privacy-oriented wallet called Stack Wallet.
There's the Monero Wallet.
There's the Epic Pay Wallet, which I'll talk about here in a second.
Learn some interesting things about that.
All kinds of different wallets.
Exodus Wallet.
And anyway, the Atomic wallet was hacked.
There were allegations that it was the developers involved.
I don't think that's been proven.
I'm not sure I would even believe that.
But somehow, $35 million worth of crypto was stolen out of the wallets of users.
That, according to, well, the FBI. And that happened, I don't know, a week or two ago.
And set off a lot of panic.
So...
It underscores the idea that even if you have your coins in a wallet, they can still potentially be vulnerable if there are hackers or if there's bad code.
This happened after an update.
Apparently people downloaded the update and then the next time they logged in, well...
The wallet just transferred all their crypto somewhere else.
At least that's the way I understand it.
I'm not casting blame on the developers here, just to be clear.
But somehow something got hacked and people lost a lot of money.
But that's also why people have cold storage devices, such as the Trezor device, which can keep your crypto offline.
You can also do that yourself by just having your wallet offline, although I guess potentially the minute you bring it online, it could potentially be hacked.
We have to be very, very cautious about this, but offline storage is the safest way to store crypto.
And there are a number of strategies for achieving that.
I'm not going to go into that detail right now.
I will say, though, by the way, I remember last week I was talking about this wallet scrambler for Bitcoin called Wasabi Wallet.
And they're found at wasabiwallet.io.
And I did download and install that wallet, and I sent some coins to it.
And I let it run for over 48 hours.
And after 48 hours, it achieved exactly a 0% privacy score, according to the software itself.
And I'm thinking, man, this thing can't achieve privacy, not even 1% privacy in 48 hours?
I'm not sure that it's very practical for me.
I'm not sure that I can wait however long, I don't know, weeks, for coins to be made more private.
I don't know.
So I kind of gave up on that concept of the wasabi wallet.
But I did try it.
It just didn't seem to work.
Whatever.
I mean, I don't know why, but it just wasn't working for me.
I don't know.
Too slow, basically.
And then something else happened, which is actually the main point of this little special report.
I want to share it with you.
It's about understanding what are called UTXOs.
And remember that TX means transaction.
And so a UTXO is an unspent, that's what the U is, transaction output.
UTXO. And this is a well-known concept in blockchains.
It's actually part of the original Bitcoin.
And so it's part of Monero and it's part of Zcash and it's part of all these blockchains that are based on Bitcoin.
And it's also part of...
Epic Cash, which is based on the MimbleWimble protocol, which does not store wallet IDs.
And as a result, the MimbleWimble blockchain requires the sender and receiver to handshake.
Kind of a one, two, three, back and forth handshake situation in order to allow the transaction to take place.
So in other words, the sender and receiver have to be online at the same time.
That's the way Mimblewimble works.
Whereas with Bitcoin, you can just send Bitcoin out into the cosmos using whatever address you want to send it to, and that's it.
It's like fire and forget.
And then on the other side, when the receiver, when they come online and their wallet scans the blockchain and they're like, oh, I got some more Bitcoin.
Look, it's for me.
It's my wallet ID. It's mine.
Then they claim it at that point, but they don't have to be online at the same time that you're online sending it.
That's Bitcoin.
And most blockchains, you don't have to be online.
The sender and receiver don't have to be at the same time.
But with Mimblewimble blockchains, the sender and receiver have to be online.
And typically they work through, or at least in the case of Epic, they work through kind of what's called an Epic box, which is a server in the middle that essentially helps achieve the handshake between the sender and the receiver.
So, I ran into a very interesting issue with this.
I publicly posted this on the Epic Telegram channel.
Now, it's been resolved, by the way.
It's been resolved with the help of some really bright people.
So, I do know the resolution now.
But let me tell you what it appeared like.
It appeared like...
My wallet had been frozen, paralyzed, that I couldn't send any coins out of this wallet.
No sends would work.
They would appear to send at first, and the receiving wallet would appear to receive them, but both of them would be waiting on confirmations, and the confirmations would never happen.
And as a result, there was a massive lockup of a large number of coins.
And that's because of the UTXO issue that I'm trying to get to here.
So let me explain how this works.
Well, actually, let me back up.
We were acquiring many thousands of Epic Cash coins.
And by the way, we've acquired many thousands of dollars in Monero and other coins as well because we're going to do a really fun giveaway on Brighteon.com.
Once we actually launch the wallet tipping system on Brighteon, which should begin soon, The first X number of people who launch their receiving wallets on Brighteon, which only requires people to go into their dashboard and enter their receive address there, like, oh, here's my Monero receive address, here's my Epic Cash receive address, and so on.
Then we're going to give away thousands of dollars of coins to the first X number of people.
don't know the final number, but the first X number of people that do this are going to get some free coins from us.
And we still plan to do that by the way.
So, you know, watch for announcements.
That should be fun.
Be nice to just get free coinage for doing nothing, right?
I mean, we're just trying to demonstrate this technology and create some excitement about the platform using it.
Okay.
That's, that's what this is about.
So we had acquired some thousands of, of coins of Epic cash.
And I had transferred them to a more permanent wallet that would be accessible by our devs or developers.
And I made one transfer.
And let's just say the transfer was 10,000 coins.
So boom, there's a 10,000 coin transfer to this new wallet.
The wallet's sitting there with basically one transaction of 10,000.
Now, and this could happen to you.
Maybe you start up a new wallet.
Somebody sends you $10,000 or somebody sends you $1,000 or $500 or whatever it is.
But let's say it's $10,000.
Let's say it's you with a new wallet.
So you now have a wallet, and according to the blockchain, you have exactly one $10,000, we'll call it a dollar bill, although this is not dollars, but just for simplicity, we'll call it $10,000 bill, even those 10,000 coins.
Well, if you try to send, let's say, five coins to a friend, you don't have five coins.
You have a 10,000 coin bill.
That's it.
So what has to happen, and this is the way UTXO works across most blockchains, is your wallet has to send the 10,000 coin bill into the blockchain, essentially, I'm simplifying it, And the blockchain has to make change.
It has to actually chop off the five dollars, essentially, or split it, let's say, and it has to send the five, well, five coins, not dollars.
It has to send the five to the receiver, and then it has to send 995 back to you.
And that process of making the change...
During that process, which could take 20, 30 minutes, depending on the blockchain, depending on how fast it is, you know, what's the block time, and how many miners are working on it, and so on and so forth.
But during that time, your entire balance of 10,000 coins would be locked up and unusable.
So imagine what this looks like from your point of view.
You're a user.
Somebody sent you 10,000 coins.
You're like, yeah, I have 10,000 coins.
And you want to send five coins to a friend.
So you type in five, you type in your friend's address, or you paste it in, and you hit send.
And then a minute later, your wallet says your available balance is zero.
But it says you have 10,000 coins locked up.
Well, actually, I think I made a numerical mistake earlier.
It should have been 9,995.
Yeah, if we're going, if we're basing it on 10,000.
But anyway, you get the point.
Sorry if I'm making this more confusing than it needs to be.
The point is that even by sending a small amount, it can lock up the entire balance of your wallet If it's a relatively new wallet and you had only received one transaction, the entire wallet is no longer usable until the blockchain confirms this and splits up that money and sends you back the change from your original $10,000 bill,
let's say, or $10,000 coin bill.
During this process, if you don't know that this is going to happen, it can freak you out.
You're like, wait a second, where did all my coins go?
Why are they no longer usable?
Why are they locked up?
What's going on, right?
So that can freak people out.
But normally, most people are sending and receiving smaller amounts of coins.
And so in their wallet, they may have a lot of different UTXOs.
Not just one transaction for 10,000 coins, but they might have 100 transactions.
Some are for 20 coins, and some are for 5, and some are for 50, and some are for 2, whatever.
And so...
In that case, your wallet can basically make the change that it needs to send the amount, and thus, it's not going to have to lock up some giant 10,000 coin bill, you see?
And thus, a lot of people that use these blockchains, they never see this problem.
You won't see it unless you do something like what I did.
But here's where it gets even more freaky.
So when you combine this UTXO issue with the Mimble Wimble blockchain, which is what Epic Cash uses, well, let me show you this diagram.
This is really instructional.
So if you take a look at this diagram here, and this is how Epic Cash works, there's a sender on the left, the receiver's on the right, and there's an Epic box in the middle.
And this is what has to happen for a send, or a transaction, to actually go through from your wallet to the receiver's wallet.
As you can see, there are nine steps.
You know, step one, your wallet, the sender's wallet, talks to the Epic Box, and then step two, the Epic Box...
It's basically pinging the receiver's wallet.
And in step three, the epic box is talking to the receiver and saying, hey, is your wallet open?
You ready to receive a transaction?
And the wallet says, yes, that's step four.
That's the receiver's wallet.
And then the epic box at step five says, okay, let me tell the sender that you're ready.
And then that's step six, telling the sender, yeah, they're ready to send, ready to go.
Everybody's online.
We're going to do this.
Step 7, then the sender has to post this transaction to the blockchain by basically submitting it to the node where the miners go to work on it, which is step 8.
And the miners confirm everything using math, right?
And this takes a little while.
Confirming transactions, you need 10 confirms.
Let's say it takes 10 minutes in this case.
And then step 9 is then...
From the nodes, from the mining, the result is that the blockchain now has a record that says that the receiver now has a spendable UTXO in the amount that was sent, which, let's say, is five coins.
So step nine is the receiver gets five coins.
And at the same time, by the way, there's There's essentially another step here that's not really shown.
You could call it step 10.
Step 10 is the change, like the leftover money goes back to the sender through another UTXO that's on the blockchain.
So that's what mining does.
That's what the nodes and the miners are working on.
So this process, as long as all 10 steps succeed, normally would take less than 30 minutes, maybe as little as 10 minutes, and it's all cool.
But during the process, of course, you can have some coins locked up.
However, for whatever reason was happening on my system that I had this on, step seven was failing.
Step seven is where the sender posts it to the nodes for the miners to work on it so that the blockchain can be updated appropriately.
Well, when step seven fails, for whatever reason, I'm not even clear why it happened.
The devs are looking at it.
I'm sure they'll solve it.
But step seven failed, even though steps one through six had all worked fine.
Step seven failed, which meant that as a sender, my wallet had locked up all these coins.
And yet this transaction failed to go to the blockchain, which meant that there was never any success of this transaction, which meant that those locked up coins never got unlocked.
And the only way to get those coins back was to cancel the transaction from the sender's side.
Cancel it, and then a minute later everything comes back.
Oh, you're all good.
It's all spendable again.
But every time I tried to send it, it would lock up for hours later.
I tried it once for 12 hours.
It's like nothing.
It's not going to happen.
And again, step number seven was failing.
Now, if in your wallet, you actually, if your sum total of coins available to you is a result of numerous smaller transactions, then your locked up number of coins might have been very small.
It might have been two or seven or nine.
But in my case, it was like close to 10,000.
So I would send some small amount, 10,000 coins to get locked up, right?
And they would never come back until I canceled the transactions.
So I reached out and I got some help on this issue.
It took quite a lot of investigation in order to resolve it, but there are some very competent people that helped me resolve it.
And I came away with some knowledge to share with you that is very practical.
So, number one, is if this ever happens to you, simply cancel the send of the transaction and the money, the coins, should come back to you and your control.
Step two, one way...
To avoid this kind of big lockup issue is that if somebody sends you a large amount of coins, let's say 5,000 or 10,000, then what you can do is you can make your own change in your own wallet by sending smaller amounts to a second wallet that you set up.
For example, you could set up Wallet B, and then you could just send 500 coins at a time 10 times in a row to Wallet B, And then have wallet B send them back to wallet A, again, 500 at a time, 10 transactions.
And now you're going to have the same total number of coins in your wallet, but it's going to be in smaller denominations.
It'll be in 500 coin increments instead of one 5,000 coin increment.
And that way, if you send somebody, let's say, 499 coins, You're only going to get 500 locked up instead of 5,000 locked up.
And that way, if that transaction ultimately fails or has problems, you still have access to all the other coins.
Does that make sense?
I know this can be tricky.
It took me a while to fully grasp this myself.
Now, the third thing that you can do, and this is true across many different types of crypto, not just Epic Cash, by the way, but if you think your wallet is all jacked up, and I've seen it, I've seen it happen, I mean, I experienced it myself.
Like, this wallet's all jacked up.
The numbers are all wrong.
You know what you can do is you can just clobber the wallet, but not before you write down the seed phrase, and then you go restore the wallet on another system.
When a wallet is restored from seed, the seed phrases, it scans the entire blockchain and determines the total number of spendable coins that it possesses, which, by the way, is the aggregate of all the UTXOs, you know, added together.
And that will be a fresh scan of the blockchain.
Now, in the Epic wallet, there is a feature that says rescan the blockchain, but I couldn't get that to work.
It kept saying error.
So, whatever.
The way around that is to just clobber it and restore the wallet using the seed phrases.
You do have the seed phrases, right?
You did write those down and put it in a safe place, maybe more than one place, because That's the ultimate control over your wallet.
If you lose that seed phrase, you're toast.
Your coins are forever inaccessible.
So make sure you have a handle on that seed phrase.
For whatever reason, just reboot everything.
If you're having trouble, reboot everything.
Reboot your computer.
Reboot your router.
That may or may not matter, but...
I did it.
I rebooted everything and things worked better.
So I don't know exactly why, but you know how computers are.
You know how routers are.
You just have to reboot stuff every once in a while.
I mean, everybody knows that.
Even in Linux.
You just reboot.
So if it's not working, reboot it and try again.
But, you know, cancel the transaction first, then reboot everything, and then try again.
So the bottom line is, in the MimbleWimble blockchain...
You're never really supposed to be able to lose coins.
That is, they've never vanished, but they can be locked up.
And they can theoretically be locked up forever.
And the way that could happen is if there's a failed send, which I just described, that is never canceled.
Then there's never any change made out of locked up coins, and those coins become unusable essentially forever until that transaction is cancelled.
So there is a scenario where you can lose coins on MembleWimble, but they're not technically lost, they're just not usable, which in a practical sense is the same thing.
Whereas on a non-MembleWimble blockchain like Bitcoin, if you send coins to the wrong address, You typo the address or something and it goes, then they're gone.
They went into the cosmos.
They went into the vacuum of outer space.
Those coins are never to be heard from again.
And that has happened to a lot of people.
So be careful about pasting in addresses from Bitcoin or, frankly, any blockchain, even Monero or what have you.
But on Mimblewimble, you're supposed to never be able to lose coins, although I managed to find a scenario where you can.
Where you can lose the functionality of the coins.
Under certain circumstances, it is possible.
And I've been told that I am particularly skilled at being able to break code.
So, I don't know.
It doesn't mean I'm a code breaker.
I'm not a code breaker.
I'm not an encryption or decryption specialist.
But I do manage to break systems, which makes me a good tester for our own platforms.
Usually my devs give me something.
They're like, here, we're done.
It's all tested.
It's ready to go.
I'll spend two minutes and break it.
And I'll give it back to them.
Nope, it's not ready.
Like, man, how'd you break it so fast?
We were testing for 12 hours.
Yeah, well...
I have a lot of experience testing the boundary conditions of different pieces of software and, you know, trying out different things.
And what happened to me with Epic Cash, you know, kind of found a scenario where the coins are paralyzed.
But in any case, I'm not panicked about this.
I'm not overly concerned about this.
It's not a bug.
It's something...
Let's say there may be something in the software that is having difficulty posting under very rare conditions, posting to the blockchain, but it can still somehow receive transmissions from the Epic Box server.
It can talk to the nodes in some ways, but can't talk to the node in some other way.
I'm not sure what's behind that, but I'm confident the devs are looking at it.
They're going to find it.
They're going to update code or whatever is necessary, and this is not a showstopper.
Most other people have never seen this happen.
It's just that I'm rather skilled at bringing these issues up somehow.
And by the way, Monero also uses UTXOs in pretty much the same way, except it has ring signatures, instead of using the MemoWemble blockchain.
And Monero, I have also experienced some temporary lockups of coins in Monero, which is, again, not a bug.
It's a function of the mathematics of blockchains.
You may have seen this in Bitcoin or Litecoin or whatever.
It's not like this in Ethereum.
That's different.
But in a lot of the Bitcoin related blockchains, it always functions like this.
So it's not an error.
It's just an artifact of a certain set of conditions.
But you need to be aware of this in case you encounter this.
I mean, we're all going to have to be competent, I think, in digital money.
And we need to be able to troubleshoot.
Right?
We need to understand, like, oh, where'd my coins go?
That it's not the end of the world, necessarily, unless you've been using the atomic wallet, in which case they probably are gone.
But other than that, there are a lot of situations where you might panic, but you actually don't need to, and let's just methodically solve the problem and find the solution, and the solution is readily available.
So...
Bottom line, if you're using crypto, if you're getting into crypto right now, understand there are risks in every asset.
You know, there's risk in the banking system.
Banks are collapsing.
The dollar is losing value with certainty.
There are risks in every investment in stocks and bonds, and there are most definitely risks in cryptocurrency.
The SEC is at war with crypto.
And crypto has fallen quite a lot, maybe 20 plus percent over the last few days.
There seems to be an effort to try to really bring down the entire industry by the SEC, so we'll see if they succeed at that or not.
There could be more downside yet to come, so just keep that in mind.
But long term, Long term, I believe that peer-to-peer digital currency is going to be used by the vast majority of the people in the world who use money, let's say.
I think it's going to go digital, and I think a lot of people will reject the central bank digital control systems, the Orwellian grid of surveillance and social engineering.
I think a lot of people will reject that.
And so, gaining the skill set and competency in peer-to-peer, decentralized money, I think it's a really important skill set to have.
And that's why I'm sharing this with you.
I'm sorry if it got too geeky or if I misstated some numbers along the way because I wasn't...
I'm not reading from notes here.
But that's my understanding of how this works, and that's what I think you need to know.
It's a different world, folks.
It's not like writing a check.
It's not like logging into a bank and they always have your balance.
Because those are centralized ledger systems.
And those can be hacked too.
As we've seen.
And those can go down too.
So if you want 100% reliable money that never vanishes, it's called gold and silver, folks.
Gold and silver.
And that's one reason why I have gold and silver.
And that's why I've said the money that I believe in from here forward is gold and silver and decentralized finance.
And in that order, actually.
So, if you want money, for sure, for sure, for sure.
It doesn't need a password.
Works when the grid goes down.
Doesn't matter, you know, it can't be hacked.
All these things, that's physical gold and silver under your control.
And there's a role for that in everybody's portfolio, in my opinion.
But do your own research and decide what's right for you.
I just, you know, if it all comes crashing down, I definitely want to have some gold and silver.
Because who knows what they're going to do to the power grid along the way here.
But on the other hand, I also want digital money that's really portable.
Because you never know when you're going to end up being a refugee in some war zone these days, right?
So you need to have portable money too.
So anyway...
We'll talk about all that more later.
Thanks for listening.
Mike Adams here, brighteon.com and naturalnews.com.
Take care.
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