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states max i've got some british comedy for you to set up the whole episode about security and security risks. this first one is very british comedy defense secretary of the u.k. says britain's new carrier umask queen elizabeth will sail to the pacific on its first mission reveals plans for a new r.a.f. squadron of swarm drones as he warns of russia and china of you case hard power right this is not a joke right this is the onion this is a real defense minister making these statements right yeah so some guy named gavin gavin williams said if you have a name like gavin you shouldn't be threatening china and russia with hard power and get some idea. well you know this is amazing we're witnessing something quite remarkable and one twenty nineteen we're watching a country britain that's been in

a nineteenth century bubble really for. almost two hundred years they're going to crash into the twenty first century as if they're just being teleported into the twenty first century the victorian age of britain we have lived there you've lived there i've lived there they still live in the victorian age the queen is still somebody of note there are there elites are still running the show and they think cornwall did a sorry crom well i'll get those two confused i love pasties. revolution and fifteen something or other and so they're going to be crashed into the twenty first century and are going to watch people like their g.p.s. monitors are showing you know playing the. in the wrong direction a whole nation of sixty five million people are going to be bumping into walls no medicine can eat it's going to be the most entertaining thing ever well my thought is that when you looked at kim jong il and before he got any attention from the united states he came on lobbying off missiles nobody would pay attention to him

under the obama administration whatever he did because everybody would instead focus on coffee because a coffee at oil went to north korea have a border with china and obama's like i ain't going there so then finally he got some attention by doing enough crazy stuff so nobody will pay attention to the u.k. right now and people don't care about it and they're like oh you know every once in awhile they show up in brussels and the like oh i thought we had it oh it's not done yet ok yeah fake negotiate no this is the best deal you get so nobody will pay attention to them just as they become like the crazy ex-girlfriend i want to keep leaving messages with brussels oh oh oh dear oh i still love you i still love you and i'm also so likely broke up it's all over so now brussels won't pay attention so they're going to china and you know pound your throne some hard maybe their hard power is like. tubs of marmite are a little bit hard i mean if you throw some are my garden at the jersey side maybe

they'll notice but you know the fact is the future might be eurasia so of course there's no there's all land from beijing all the way to paris we could have one land mass right and here is a headline about eurasia rising the road to superpower so bruno. his new book is a masterful overview of china's belton road project and a disturbing portrait of things to come the book is titled bell and wrote a chinese world order so he says the belton road is a phrase often heard but rarely understood understand that we must because if it succeeds and it may not certainly in its entirety at least it will be a once in a century. geo political initiative is nothing less than a network of chinese dominated trade routes designed to smother eurasia in this book belton road a chinese world order author proposes that this belt and road is china's plan

for super powered them and this is basically creating eurasia twenty first century stuff or as britain is still fighting the polio wars that the scuttlebutt in westminster this week is for trying the heroes of bragg's michael. boris johnson as players from the french revolution and that they're looking for who will be napoleon to save them in its own like you know understand we're in a new century now and you guys are about to be cut off from the grid are going to be in the new greece the bankers are going to look at you like a carve up they're going to destroy you for profit and you brought this on yourself because you're kind of racist and morons they have some right to be concerned about this because from world war one from the collapse of their empire leading up to world war one the fear always was germany and russia germany russia and china

working together towards a eurasia and this little tiny tiny tiny island out in the middle of the north atlantic has no power other than allying with the u.s. and the u.s. doesn't like to fight wars that could possibly lose i mean it's barely one in afghanistan it's still there so here what they're saying is that this will be a huge huge entity forget the e.u. as eurasia and as a mighty superpower china has been developing into a huge economic powerhouse but with this belt of the road so if belton road is about cementing chinese power globally how does that seek to do it practically the answer is superficially at least trade my she said. asked us to imagine belton road as quote nine arrows crisscrossing eurasia the landmass comprising europe and asia stretching from lisbon to shanghai and all directions six economic corridor wars on land and three sea routes whose final goal is to create

a new global economy and place china at its center might well they're going to be and are going to incorporate the you right so that means a ghost just one seventeen trillion dollar trading block to your asian e.u. trading block for us sixty percent of global g.d.p. is called forty trillion dollars and the u.k.'s made a decision to take themselves out of that grid and to be to do it alone by themselves in the middle of the ocean west no talent anymore it's all been lost all left banking centers leaving and they're going to just be like picked on by the big guys and only just try to be like greece in a london will be like athens within five years ok so the u.k. doesn't exist anymore what i'm talking about is you're asia and you're there your asian future so this is the future as he's presenting in this belton road the belton road it is the intention by china to create your asian economic superpower

with china at its center notice that they're doing it through trade not through threats not through threats to invade not through threats of throwing marmite jars at them and we have. our you know it's none of that is just trade the way the very old fashioned way the way the world used to work two thousand and three thousand four thousand years ago this means a system of very gated trade networks strafing the world a kind of twenty first century silk road the ancient network of trade routes that connected east and west and was immortalized in the works of the explore marco polo china is putting together nothing less. then an interconnected system of transport energy and digital infrastructure that would gradually develop into industrial clusters and free trade zones and then an economic corridor expanding construction logistics energy manufacturing agriculture and tourism culminating in the birth of

a large your asian common market to put it more simply chinese in americans out so to see this entire grid and network distributed sort of network instead of this old fashioned like where you can a we're the u.s. we're going to do an asia pivot we're going to center aircraft carriers which are giant vessels out in the sea like only a bowl like this is like a more integrated trade peace will sort of way by the u.k. masika or ferries into warships for example for i think that's going to work well ok the typical of the british empire was of the cities you know they control the seas the sun never sets on the british empire they have the royal navy is the sea based empire this is a land based empire this is an attempt to dominate the land which is different than we've seen in a while even though the america us as a sea based power in europe was a seam so this is

a land based power now you know china is broke at the moment they have huge debt problems and they probably couldn't shekels together but the ambitions nicety this is a land based empire that they're building but they do have three c. networks that they're also working around. but this points out that that's the thing is once you start with trade and financial flows or with giving countries what they saw early lack cultural and political influence surely follows this is the brilliance implicit with belton road indeed what forms its very basis at its heart is that vision deng xiaoping vision of a world organized. as the network in this case of production chains in understanding that power would eventually drift from rigid hierarchies like media monoliths or even governments to now digitally created and has networks dang as both an autocrat and a hyper capitalist was in more ways than one ahead of his time right now networks

are very powerful right their power of a network expands exponentially this is metcalf's law where you add another point to the network and the value increases by the square root of the network or something along those lines are going to look at data so yeah he's very right to say networks are going to rule the world over that day shouting said that forty years ago so this is what i meant but he's talking about a closed source network is worse as an open source that's why they're not going to win against bitcoin because bitcoin is open source network open source money and they're still top down hierarchical communist poland bureau central planning type of empire which is going to sell in the face of the true network of networks so pompei o hints at huawei ultimatum to countries buying equipment this is part of the china story because five g. and you should look into this go to the wikipedia the fact is as radically different from four g. these are entire networked mash grids essentially that what we cryer mesh grids

twenty gigabytes for second up and download speeds that will be dominated by china qual way has not only the best prices but the best technology at the moment and in the us is like joining with the u.k. throwing jars of marmite there's nothing else they could do except for try to threaten countries in this case secretary of state pompei a was in hungary who once five g. network i want to be part of this grid the bell and road initiative you know this is a hungry is in a crucial location historically the rich threat centuries and. threatening them we don't have anything to offer an exchange we just say don't join. the future just stay in this past where we have a queen we have some marmite and we have some dilapidated bridges in the united states and iran five g. is not censorship resistance it is censorship and it's anti american anti-constitution speeches for a free speech is guaranteed as an indelible right by the us constitution the

japanese chinese don't follow the us constitution but anyone who wants to. pursue the rights salable rights of free speech and better guaranteed they need to adopt the open source money of bitcoin and also to hoard gold and they shore or start learning chinese those are two options because chinese look at five g. because there are messed networks that will become local and and part of the grid feldman source of chinese yes control we've got to go back is this a message from where not only joking but stay right there we'll be back. in the lead the boys keep the slow you or me the focus on the so

do you still. want. to see the job pretty. good nobody. seems. to want to. join me every thursday on the alex salmond show and i'll be speaking to guest of the world of politics or business i'm show business i'll see you then.

welcome back to the kaiser report imax keyser time now have to turn to michael parklane he's the chief security officer at shapeshifts full disclosure my son is an investor in the kompany michael welcome to the kaiser report he's for having me ira now let's talk about quadro c.x. up there in canada first for those the audience who don't know the story please give us a brief outline a what happened sure so quickly c.x. was the largest exchange in canada and earlier this year in ounce that unfortunately their c.e.o. passed away in india and later it came out that the c.e.o. was the only person who had the it keys and the knowledge necessary to access their cold storage this meant that there were hundreds of thousands of canadians with deposits on downs after three guys that are now currently inaccessible to companies

now or credit protection and it's an ongoing story right this is a big story in a couple of space for sure and people are speculating that it's an exit scam that somehow this is a scam and this guy really did die or didn't die with his keys or thoughts on that likelihood and more importantly what should have been done differently in terms of exchange security if he really did die as they claim questions max first i think it's too early to come to any conclusion because there frankly isn't enough information out there to draw a proper conclusion as far as what the exchange should have done. every business who were old script of currency should be following the cryptocurrency security standard now well yes my day job i'm the chief information security officer and she shipped you know one of the leading to the last exchanges by night. and be president of see for the cryptocurrency certification to see for is

a nonprofit standards body that operates in the crypt a currency space and we provide a variety of standards against which people can measure things free of charge our most important standard i believe is the security standard that outlines thirty three different controls that every exchange every hedge fund and frankly every individual should be following when's designing systems to hold their currency all right now i know it's interesting is that if anyone is anywhere near this business going back to the mt gox catastrophe of twenty four today and there's been a growing awareness and a growing idea that you don't keep anything on an exchange ok per crypto on an exchange or take delivery of your crypto and put it into a hard or a cold storage etc so at this stage of the game michael why did that message i mean two hundred million dollars is lost i mean how can people don't do people down under and understand that mans are they're just engaging in risky behavior michael

when it comes to preparing a could trigger had operated for at least six years in this space and frankly he should have known better to make sure that there is always some kind of succession plan in case the sole person who was responsible for their cold storage passed away unexpectedly which is unfortunate fact with athan. as far as as everybody else for two currencies are still very new and while they have been around for ten years most people aren't as familiar with them as they are with say dollars in their bank account but over time i believe that education well will train people on how to deal with these just the same way that people deal with e-mail when the e-mail first came out not a lot of people really understood the nuances or or out if she feels were the c.c. field work etc so now you look back and it's common knowledge. and i strongly believe that as more and more people continue to use blushing based assets like

fruit of currencies in their daily lives this type of standard security knowledge will be found common knowledge now michael forensic examination of the block suggests that in the weeks leading up to the alleged death millions of dollars worth of big coing were transferred from quadriga wallops to several other exchanges including shapeshifter but mostly a bit the next now is this normal what do you make of this your thoughts i think this is absolutely normal every exchange including shapeshifts. maintains very least two separate bounces a wallet or a wallet or being sent to and received from very frequently and a cold while one that is kept offline where the majority of the funds are are sort . it every time you go from cold start a chance for some money from your cold storage to your hot story it's next time you

go to incidently involves multiple people need to coordinate to send it to double check the outer space and to get things moving if there are approximately out there who are waiting for is to drawls they don't have it's time to it's wait for problems post or sentence for this reason it is very common practice for exchanges to accept deposits from one past him or on to send out the same to foss it's another customer who's backing the wrong that doesn't mean that they're operating on a fractional reserve that just means that they want to minimise the interaction between their home while in their quote now it has happened in the past that students were already back to reserves and they didn't have enough deposits in their cool storage to fulfill drawls from from their presence. just because it has happened in the past doesn't necessarily mean that used what is now you will get we'll have to analyze all of your reviews and all. all of their transactions one back only to be

the open back in twenty thirty in order to know whether they were surely operating on a fractional reserve basis or if you had enough found now this industry the crypto astray of course that's not backed by say insurance there is no central bank it's just us you know we're out there we have a belief and this being truly hard money and away believe that the banks need to be disrupted and we have a great you know philosophical and moral obligation etc and we have to come up with solutions ourselves so in that vein block stream one of the big players a man astray has come up with a proof of reserves tool so that exchanges i think can it here to best practices or bring about a change in the industry are you familiar with that too or what are your comments on the tall michael i have through an excellent and i think it's very important for it seems that to take custody of other people's money to prove that they continue

to have custody of other people's money. be you know it's common advice eat your people given the correct occurrence of space is not your keys not your money if you are choosing to give your money to another entity like a stimulus change as long as they are holding it it's not your money and you hope that when you request withdraw it will be processed and you will get your money back but. frankly you're it's up to the whim of that exchange the river reserve to will have lots of this is a great tool and it goes in line with one of the thirty three controls that are mentioned in the c.c. s.s. group of reserve any company or any system that is going to be holding cryptocurrency is needs to have a way to prove to the world that the bill to currencies are still there the best way to do that is by by showing all the addresses on of a lot of change as one of the biggest benefits of public law chains is that you can all. always see exactly where the money is the next best thing you can do is to use

noncustodial it seems rather than giving your money to some other company intreating it back and forth and hoping that when you request withdraw they will give it to you you can use a noncustodial exchange such as the search of diodes change where you are always in control of your money up until the last second you need exchange very much like a. kiddie machines you put a dollar any get your m. and m's out. she just exchanged words very much like that oh yeah i've had a lot of conversations with the same shift about this i can a machine analogy and you know it's a wonderous piece of technology it is thought of as fast they now ironically gerald cotton the c.e.o. who allegedly died in india had been involved with creating industry security standards via air groups a for not going to comment on that is that what's going on there no out so gerald was an advisor to see for and he advised her very first

initiative is certified when professional certification is c.b.p. it is a personnel certification that is assigned to people who can demonstrate that they know and understand because when addresses when transactions and how to use because of their daily life gerald was not an advisor for the cryptocurrency security standard which is a systems certification. it's easy to get those two confused and i know that we we have a lot of that and suit or see if he deals with people he sees us as deals with systems are fair enough thanks for clearing that up now of course being they what's their official title over there and show us if they ration security office right and that's you know you've got a great ringside seat on the send astray and i say head in the twenty nineteen right now what do you see as being some of the transit we should look forward to now in twenty nineteen i'm seeing a lot. really interesting innovations with some new math or some some really

interesting we mathematically cryptographic techniques and these are you applied in a variety of different ways that are changing to christopher and his face even more than it has already evolved in the last ten years things like smart contracts that are able to make more advanced decisions rather than just basic decisions like the first generation of smart contacts things like multiparty computation which ally to store for currency finds without even story of the keys themselves. these pretty currency. the innovations are dramatically changing the landscape the concept of zero knowledge proofs and zero knowledge from taishan is that making it so that people can perform actions on hidden things without ever seeing those things in the past you would always have to decrypt the data work on that data and then really

prepped it by these types of zero knowledge rooms follower thinking friction and this new math as i like to call it we're seeing some really interesting innovations and i think twenty nineteen twenty twenty will be the years. of noncustodial systems and i think it's cryptographic systems why do you think as a lawyer last understand about this and a stray the technology or the economics i have to say that the technology the economics are fairly similar to traditional economics i give you that ten dollars worth of value and you receive ten dollars worth of valley. but the biggest hurdle of this industry has is education by far that's something that c four is tackling head first with b.c. he projects trying to get this certification in as many house as possible training people to understand fighting keys understand addresses and the relationship between understand that. at any point if you want proof that you have made or if

you want to double check that money has actually been sent to you we don't have to call a bank notes for private records you don't have to call a third party and hope and pray that they just close their private records we can just areas of public walk explorers and see exactly what happened and when and so this big downdraft and price it sounds like it has absolutely no impact on develop ours who are continuing to move this industry forward i would you agree with that only a five seconds i don't actually agree with that people build more in the group to which and they do crypto summer all right fair enough michael purple thanks for being on the kaiser report thanks for having me here and that's going to do it for this edition of kaiser report with me max kaiser and stacy herbert i just like michael proclaimed coming to us from denver where there are shakeshaft and if you want to catch us on twitter just look for kaiser report until next time by all.

numbers. they matter to us is over one billion dollars. more than ten white collar aren't happy. eighty five percent of you want to be. the. world market. there's only one hundred. thirteen protected and we rose to twenty thousand. china's building two point one billion dollars industrial park but don't let the numbers will be. the only number you need to remember one. board in this one and only.

i'm going to. go.