Feed InformerBitcoin News www.bitcoins.amBitcoin News www.bitcoins.amRespective post owners and feed distributors2014-09-02T09:31:46-04:00Feed Informer http://feed.informer.com/http://feed.informer.com/digests/I2GGLAVR70/feederEl Salvador Moves Bitcoin Reserves to Cold Storage VaultEl Salvador has officially taken self custody of a large portion of their national Bitcoin treasury.<figure>
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<p>On March 14, 2024, El Salvador’s president-elect, Nayib Bukele, unveiled a historic bold maneuver that echoed across the Bitcoin world: <a href="https://twitter.com/nayibbukele/status/1768425845163503738">El Salvador confirmed the transfer of a substantial portion of its Bitcoin holdings into cold storage</a>, securely kept within a vault in its national borders. This strategic decision marks a pivotal juncture in El Salvador's Bitcoin journey since the introduction of the Bitcoin Law, which has drawn both admiration and skepticism worldwide.</p><p>Amidst a cacophony of critiques ranging from allegations of human rights violations to inadequate modern infrastructure, El Salvador has stood committed, weathering storms of disapproval from traditional finance stalwarts and even fervent Bitcoin maximalists on Twitter (X) Spaces. The veil of ambiguity surrounding the size of El Salvador's Bitcoin reserves, a point of contention and criticism for many, has now been decisively lifted, ushering in a new era of transparency and confidence in the nation's commitment to fostering a thriving Bitcoin-friendly ecosystem.</p><p>With this groundbreaking move, Salvadorans and Bitcoin enthusiasts worldwide have the ability to audit El Salvador's Bitcoin reserves and can see all inbound and outbound transactions. This audacious step wasn't mandated but was taken willingly, embodying El Salvador's commitment to its citizens' trust and the global Bitcoin community's ethos of openness. Unsurprisingly, shortly after Bukele announced <a href="https://mempool.space/address/32ixEdVJWo3kmvJGMTZq5jAQVZZeuwnqzo">El Salvador’s Bitcoin address</a>, Bitcoiners began to<a href="https://twitter.com/Crypto_Mags/status/1768478266762150214"> send donations to the wallet</a>, with nearly 6 Million Sats in transactions as of this writing. To date, plebs can track El Salvador’s <a href="https://mempool.space/tx/c3d23497dcf67f5d179ef2f1d43d61b5d746007a70a09797aef95332f82f8543">daily 1 bitcoin DCA purchases</a>. In this historic moment, El Salvador not only charts a new course in financial governance but also silences its critics by setting a precedent of leading by example in responsibly disclosing and managing its modest but modern sovereign Bitcoin wealth reserves. </p><p>With 5,689 Bitcoins—valued at $385,111,456 USD as of this writing—El Salvador has secured its digital wealth and aptly navigated the treacherous waters of international politics. The decision to shift its Bitcoin holdings from <a href="https://www.forbes.com/sites/jonathanponciano/2021/09/07/el-salvador-taps-billionaire-backed-bitcoin-unicorn-in-the-cryptocurrencys-historic-legal-tender-debut/?sh=138d59264fac">Bitgo</a>, an American custodian, to a vault within its sovereign borders wasn't just a public relations masterstroke; it was a strategic imperative. Given the strained relations between the American government and El Salvador over the Bitcoin Law, the mounting holdings under Bitgo's custody risked becoming entangled in potential sanctions and regulatory quagmires. This decisive action safeguards El Salvador's financial autonomy and showcases a shrewd understanding of the intricacies of the American regulatory landscape.</p><figure>
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<p>While the disclosure of the reserves has garnered widespread approval, there may have been compelling and strategic reasons behind the nation's initial reluctance to divulge its complete holdings. Nayib Bukele's affirmation that only a <a href="https://twitter.com/nayibbukele/status/1768425845163503738">“big chunk”</a> of the total Bitcoin reserves has been transferred to cold storage underscores a nuanced understanding of the country’s strategic financial management. In the complex realm of nation-states navigating the uncharted waters of a Bitcoin Standard, maintaining a degree of opacity can be a prudent strategy. El Salvador, in its quest to carve a distinct path in the world, has tactically kept some cards close to its chest, waiting for the opportune moment to unveil its Bitcoin wealth in a calculated move. This wise approach reflects a careful balancing act between transparency and strategic advantage in the dynamic landscape of geopolitics.</p><p>Bukele shed light on El Salvador's Bitcoin holdings in <a href="https://twitter.com/nayibbukele/status/1767323587071947195">earlier tweets</a>, surpassing their earlier acquisition strategies and dollar-cost averaging efforts. Contrary to speculations circulating on social media, Bukele revealed a multifaceted approach that had propelled the nation's Bitcoin reserves. Beyond mere purchases, El Salvador's innovative visa program, profits from Bitcoin-to-dollar exchanges held in escrow, revenue from government services, and mining endeavors have collectively contributed to a handsome Bitcoin treasury. This revelation further dispels misconceptions propagated by armchair quarterbacks and highlights El Salvador's innovative courage in leveraging diverse avenues to bolster its growing Bitcoin wealth.</p><p>Disclosing El Salvador's Bitcoin reserves represents a significant stride toward transparency and accountability for its citizens. Yet, it's crucial to recognize that there will always be a segment of critics who demand more and complain about every detail in an attempt to find fault. However, it's essential to remember that these measures are not solely aimed at appeasing detractors. Instead, they serve as a foundational step in creating a positive business environment where Bitcoiners can confidently establish their ventures, knowing that the country is dedicated to their success.</p><p>The ultimate goal for Bukele and El Salvador extends beyond merely silencing critics; it's about transforming the nation into a prosperous hub of opportunity for Salvadorans. In a stroke of genius, El Salvador has built its own digital Fort Knox, with the exceptional feature that citizens can verify the existence of the funds. The Salvadoran government aims to nurture a culture of trust and investment in the country's future by rewarding proof-of-work and low-time preference. This vision encompasses building a new El Salvador where citizens can thrive, seize opportunities at home, and contribute to the nation's growth, rather than seeking elusive promises abroad. As El Salvador continues its journey toward economic empowerment and progress, these strategic moves serve as foundational pillars for a brighter and more prosperous future.</p><p><em>This is a guest post by Jaime Garcia. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.</em></p>2024-03-18T15:32:02Zurn:uuid:58d40a3d-7393-44ac-a159-4159696aa4eaJaime Garcíadefault_a_vault_in_the_mountains_in_el_salvador_0Mercury Layer's Lightning Latch Swap ProtocolThe new atomic swap protocol developed by Commerceblock for their Mercury Layer protocol begins the process of stitching the Lightning Network and statechains together to function as a singular system. <p>Commerceblock has released a <a href="https://github.com/commerceblock/mercurylayer/blob/dev/docs/atomic_transfer.md#lightning-latch-transfer">new atomic swap protocol</a> for use with statechains on their <a href="https://bitcoinmagazine.com/technical/mercury-layer-a-massive-improvement-on-statechains">Mercury Layer protocol</a>. The HSM server has introduced functionality to support atomically swapping two statechains, as well as enforcing an atomic exchange of a statechain for a Lightning payment. This is the first example of concretely defined and built interactions between statechains and the Lightning Network. Synergy between both protocols has been postulated since the concept of a statechain was originally proposed by Ruben Somsen, specifically as a way to solve the limitation of having to transfer a whole statechain UTXO at once.</p><h2>Basic Statechain Swaps </h2><p>In order to support the new swap protocols, the HSM server needs to add some new fields to its database entries tracking each statechain it is facilitating. To facilitate the statechain to statechain swap, the server needs to track:</p><ul><li>Batch_id: a value to associate statechains being swapped in a group.</li><li>Batch-time: a time that starts a counter after which the statechains can be “reclaimed” if the swap fails.</li><li>Locked: a value indicating whether or not the statechain is locked and restricted from regular transfers. </li></ul><p>This allows the HSM server to track and enforce all the variables necessary to ensure a safe atomic swap. When initiating a swap, users have to communicate with each other directly in order to establish a shared batch_id between them. From this point they trade all the necessary information required to facilitate a normal statechain transfer, and send that information plus the batch_id and batch-time to the server. They essentially start the regular transfer process, but also attach the variables to connect the individual statechains as participating in a swap together and how long the timeout period is for that. </p><p>The server at this point will apply a lock to every statechain using the same batch_id in the transfer process. Until the timeout expires, or all of the statechains in its database using the same batch_id have been unlocked by the current owners, the server will not approve any transfers. A neat thing about the way the HSM enforces the swap logic is that it doesn’t matter who contacts the server first. When the server gets a message using a batch_id, it checks every statechain in its database and if there is a pre-existing batch-time for that batch_id it sets it as the same. This ensures that no matter who registers the swap first they all use the same time value for the timeout function. </p><p>Each client involved in the swap at this point checks for and downloads the messages that initiated the transfer protocol, and upon verifying they’re correct sends a message to the server to unlock their statechain, removing the transfer restrictions. Whenever anyone attempts to finalize a transfer on the receiver side of any of the statechains involved in the swap, the server checks to make sure all of the statechains with the same batch_id are unlocked. If even a single one with the related batch_id is still locked the server will finalize a transfer for none of them. If a swap doesn’t succeed before the timeout, the server will continue restricting the finalization of the swap transfer, but will let the current owners initialize a new transfer to themselves to effectively cancel the swap. </p><h2>Lightning Latch</h2><p>The Lightning Latch functionality, swapping a statechain for a Lightning payment, works very similarly to the statechain to statechain swap. Here are the new fields the server must track for the Lightning swap:</p><ul><li>Batch_id: a value to associate statechains being swapped in a group.</li><li>Batch-time: a time that starts a counter after which the statechains can be “reclaimed” if the swap fails.</li><li>Pre-image: the preimage of the Lightning payment, which is generated by the HSM server.</li><li>Locked_1 and locked_2: there are two lock fields for the Lightning swap, one authorized by each user involved.</li></ul><p>Just like with the statechain to statechain swap, the users establish and share a random batch_id. The current statechain owner then messages the server with the batch_id and statechain involved and requests it generates a hashlock preimage for a Lightning payment. This user then generates a Lightning invoice using this preimage, and the second user contacts the server to confirm it generated the preimage. The current statechain owner then begins the statechain transfer process and uploads the transfer message to the server. </p><p>After confirmation of that, the second user trying to swap for the statechain initiates the Lightning payment. At this time the server is the only one with the preimage, so the statechain owner cannot finalize the payment yet. The current owner after verifying the pending Lighting payment sends the server an unlock message to remove the first lock on the statechain. The receiver finally verifies the transfer message, and if valid messages the server to remove their lock as well. </p><p>Now with both locks removed, the HSM server will release the preimage to the current statechain owner to finalize the Lightning payment, and will finalize the statechain transfer to the receiver. </p><p>This scheme does require trusting the statechain operator to function honestly, but that is fundamentally not a change to the pre-existing trust model of using a statechain in general. At no time does the operator have control over users’ funds, nor do they learn anything about the Lightning payment details. </p><h2>What Is This Good For?</h2><p>This scheme is a far cry from the originally posited interaction between statechains and Lightning channels, stacking one on top of the other, but even as a simple starting point this presents functional utility for existing Lightning users. Rebalancing channels is a necessary thing for many nodes, if the capacity is entirely pushed to one side or the other the utility of that channel is limited for routing payments. Many businesses and users have started experimenting with using Liquid as a mechanism for this due to on-chain fees rising and making swaps into and out of the Lightning Network more expensive. </p><p>Statechains offer an alternative mechanism to a federated sidechain to alleviate some of the fee expenses associated with channel balance management. Instead of having to swap out to the mainchain directly, or use a sidechain, funds can be swapped to a statechain and held there until they are needed for swapping funds back into a channel. Similar savings in fees can be had while still maintaining the ability to unilaterally claim your funds on the mainchain. </p><p>Another potential use case (TRIGGER WARNING) would be the possibility of more efficient marketplaces for trading ordinals. Since ordinals are simply an index scheme tracking paths backwards in the transaction history to specific satoshis, they can easily be lifted off-chain onto a statechain. That dynamic in combination with Lightning Latch could allow cheaper and faster off-chain purchases of ordinals. Someone could build a marketplace where they can be sold instantly off-chain over the Lightning Network. </p><p>It’s even possible one day if Lightning clients could become aware somehow of which statechain operators specific Lightning nodes trust that Latch could be used to help route payments by passing statechains around between different nodes instead of using conventional Lightning channels. </p><p>On the front of pure statechain to statechain transfers, this offers the potential for a message passing layer to recreate coinjoin like system mixing coins off-chain, similar to the <a href="https://bitcoinmagazine.com/technical/a-new-privacy-tool-for-bitcoin">original mixing functionality</a> in Commerceblock’s first statechain implementation. </p><p>While it is a very simple starting point, Lightning Latch and the statechain swap functionality crack open the first door of statechains integrating into the existing Lightning Network – and other similar layers to come in the future – in a way that lets them all integrate seamlessly and function as a singular network in terms of payment routing and liquidity management. Even while we debate the need for and usefulness of covenants, there is still quite a lot of room to continue building with what we already have. </p><p>You can listen to the Commerceblock team explain the logic beyond the protocol here: </p><blockquote class="twitter-tweet"><p lang="en" dir="ltr">Chatting with the Dr <a href="https://twitter.com/TTrevethan?ref_src=twsrc%5Etfw">@TTrevethan</a> about why to build lightning latch on <a href="https://twitter.com/mercurylayer?ref_src=twsrc%5Etfw">@mercurylayer</a> <a href="https://twitter.com/hashtag/bitcoin?src=hash&ref_src=twsrc%5Etfw">#bitcoin</a> <a href="https://twitter.com/hashtag/layer2?src=hash&ref_src=twsrc%5Etfw">#layer2</a> <a href="https://t.co/CKVG9aHTQ6">pic.twitter.com/CKVG9aHTQ6</a></p>— Nicholas Gregory (@gregory_nico) <a href="https://twitter.com/gregory_nico/status/1768698677521195512?ref_src=twsrc%5Etfw">March 15, 2024</a></blockquote>
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<p>And for a more technical explanation, here: </p><blockquote class="twitter-tweet"><p lang="en" dir="ltr">Going through the technicals of how lightning latch will work with <a href="https://twitter.com/TTrevethan?ref_src=twsrc%5Etfw">@TTrevethan</a> on <a href="https://twitter.com/mercurylayer?ref_src=twsrc%5Etfw">@mercurylayer</a> <a href="https://twitter.com/hashtag/bitcoin?src=hash&ref_src=twsrc%5Etfw">#bitcoin</a> <a href="https://twitter.com/hashtag/layer2?src=hash&ref_src=twsrc%5Etfw">#layer2</a> <a href="https://t.co/aQIcjh2ukq">pic.twitter.com/aQIcjh2ukq</a></p>— Nicholas Gregory (@gregory_nico) <a href="https://twitter.com/gregory_nico/status/1768865239297110037?ref_src=twsrc%5Etfw">March 16, 2024</a></blockquote>
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2024-03-18T14:30:00Zurn:uuid:8184564f-e5d9-745d-7f16-457dc76fb06eShinobidefault_a_digital_key_latch_connected_to_a_glowing_line_of_dat_0$150,000: Standard Chartered Bank Raises Bitcoin Price Forecast for 2024The success of the Bitcoin ETF has prompted Standard Chartered to increase its year-end price forecast and 2025 price projections.<p>Global banking giant Standard Chartered has upped its bitcoin price prediction for the end of 2024 to $150,000, a significant increase from its previous forecast of $100,000.</p><p>In a new report, Standard Chartered analysts cited strong inflows into recently launched spot bitcoin ETFs in the U.S. as a primary driver of their bullish outlook. The bank believes these "sticky" institutional flows will continue propelling Bitcoin's price.</p><p>Standard Chartered has emerged as one of the more Bitcoin-friendly legacy banks, with an active research team covering Bitcoin. Previously, the bank's analysts had predicted Bitcoin would reach $100,000 by the end of 2024.</p><p>But with Bitcoin's strong performance in early 2024, the team is now forecasting that it will hit $150,000 within the next nine months. </p><p>Standard Chartered Bank analysts led by Geoffrey Kendrick wrote: "For 2024, given the sharper-than-expected price gains year-to-date, we now see potential for the price to reach the $150,000 level by year-end, up from our previous estimate of $100,000."</p><p>They expect the rally to continue into 2025, with Bitcoin potentially trading as high as $250,000 next year before settling around $200,000.</p><p>The updated price prediction comes as spot bitcoin ETFs got approved in the US earlier this year. Standard Chartered believes these regulated investment vehicles are bringing significant institutional demand.</p><p>Combined with Bitcoin's fixed supply and other positive fundamentals, the bank sees room for substantial additional upside. Based on increasing mainstream adoption, Standard Chartered expects new highs.</p><p>Their bold call illustrates a growing willingness among major financial institutions to make ambitious bitcoin price forecasts. If achieved, a climb to $150,000 would mark a 120% gain from current levels near $68,000. For Standard Chartered, bitcoin's status as "digital gold" continues to strengthen.</p>2024-03-18T13:13:47Zurn:uuid:6f6e25f0-81c0-d218-8e0c-3693622a4832Vivek SenstandardCraig Wright’s Long-Running Satoshi Claim, Analyzed and Debunked UK Courts firmly reject Craig Wright’s claim of being Satoshi. A chapter closes in Bitcoin’s history. <p><strong><em>The below is an excerpt from a recent edition of Bitcoin Magazine Pro, Bitcoin Magazine's premium markets newsletter. To be among the first to receive these insights and other on-chain bitcoin market analysis straight to your inbox, </em></strong><strong><em><a href="https://bmpro.substack.com/">subscribe now</a>.</em></strong></p><figure>
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<p>After a lengthy legal dispute, London’s High Court of Justice has formally determined that Australian computer scientist Craig Wright is not Satoshi Nakamoto, the pseudonymous creator of Bitcoin.</p><p>One of the great mysteries of the Bitcoin community since its inception has been quite related to the inception itself: who is Satoshi Nakamoto? This pseudonym is all we have to go on for the identity of that developer or developers who created Bitcoin: writing its <a href="https://bitcoinmagazine.com/culture/reflecting-on-satoshi-white-paper">white paper</a>, mining the Genesis Block, carrying out transactions, and correspondence with persons in the pre-Bitcoin cryptographic community. And yet, when Bitcoin began receiving the tiniest bits of recognition from the broader world, he formally relinquished any authority over Bitcoin as a project and <a href="https://bitcoinmagazine.com/technical/what-happened-when-bitcoin-creator-satoshi-nakamoto-disappeared">vanished</a>. In the years since, there have been many attempts to determine Satoshi’s identity, but nothing has borne fruit. </p><p>However, members of the community have not only tried to unmask Satoshi from an outsider’s perspective. There have additionally been efforts from various people to publicly claim that they, in fact, are the true creators of Bitcoin. A particular standout in this respect has been the software developer Craig Wright, who made this bold statement in 2016 and has faced <a href="https://bitcoinmagazine.com/industry-events/vitalik-buterin-and-joseph-poon-call-out-craig-wright-deconomy-2018">years</a> of ridicule from prominent members of the Bitcoin community. Although Wright has fought back against his detractors through <a href="https://bitcoinmagazine.com/culture/craig-wright-threatens-libel-suit-in-letter-to-bitcoiner-demands-apology">litigious</a> action, he has faced <a href="https://bitcoinmagazine.com/legal/hodlonaut-wins-defamation-case-against-craig-wright">repeated</a> <a href="https://bitcoinmagazine.com/culture/judge-rules-against-craig-wright-criticizes-credibility-in-court-decision">defeats</a> on this front. Still, the threat of libel suits has been an ongoing specter over media coverage of Wright’s 8-year claim, and many of his actions have gone underreported as a result. </p><p>Eventually, this stifling atmosphere led the Cryptocurrency Open Patent Alliance (COPA) to take a bold step in 2021 when it <a href="https://bitcoinmagazine.com/business/copa-suing-craig-wright-over-bitcoin-white-paper-claims">sued</a> him in British courts to obtain a ruling over whether Wright has copyright ownership of Bitcoin’s white paper. This legal battle has not surfaced much in public discourse since this first filing, for understandable reasons, even as British courts <a href="https://bitcoinmagazine.com/legal/court-rules-craig-wright-has-no-bitcoin-copyright">ruled</a> against Wright’s Satoshi claims in suits unrelated to COPA. Although <a href="https://bitcoinmagazine.com/legal/dr-craig-wright-offers-settlement-to-copa-in-legal-confrontations-over-bitcoin">settlement</a> options were pitched by Wright’s legal team, ultimately COPA refused all of them, under the logic that such a settlement would require tacitly accepting his claim. If Craig Wright was only a fraud, after all, he would have no power to offer any concessions on the nature of Bitcoin’s ownership. After years of an apparent holding pattern, the trial <a href="https://bitcoinmagazine.com/legal/the-trial-that-could-end-craig-wrights-satoshi-claim-for-good-started-today">began</a> in February 2024.</p><iframe height="320" width="480" src="https://bmpro.substack.com/embed"
frameborder="0" scrolling="no"/></iframe><p>A particularly noteworthy <a href="https://www.bbc.com/news/technology-68567320">tactic</a> used by Wright’s team “repeatedly” was that, if Wright was not truly Satoshi Nakamoto, then the real Satoshi would have to unmask himself to disprove the claim definitively. More than anything else, this particular claim has unearthed a large volume of interest in Satoshi’s true identity. For example, as the trial was approaching in January 2024, nearly $1 million worth of Bitcoin was <a href="https://www.forbes.com/sites/digital-assets/2024/01/07/satoshi-woke-up-legend-of-bitcoins-mystery-creator-satoshi-nakamoto-suddenly-deepens/?sh=3da2da6b51ae">transferred</a> into Satoshi’s wallet from an anonymous source, arousing coverage from major media sites that Bitcoin’s creator might reveal himself. The hubbub from this event led to rampant <a href="https://www.reddit.com/r/Namecoin/comments/1at960e/there_is_a_claim_that_satoshi_nakamoto_is_hal/">speculation</a>, as image macros began circulating claiming that characters from the two simplified Japanese scripts, katakana and hiragana, would be pronounced as “Satoshi Nakamoto” while resembling the English letters to the name of popular Satoshi candidate Hal Finney.</p><p>Even if Bitcoin was created by enthusiasts in the codebreaking and cryptography scene, this claim is somewhat dubious, as it would require mixing and matching two different Japanese scripts in a haphazard manner. For example, the syllable “to” in Satoshi is a different alphabet than the same syllable in Nakamoto, and there seems to be no steady rule for when these two writing systems alternate. Still, Hal Finney has been dead since 2014, which would explain why Satoshi has remained silent as Bitcoin blossomed to the extreme extent it has in the last ten years. </p><figure>
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<p>If nothing else, renewed speculation of this nature was a clear sign that the trial had captured Bitcoiners’ collective imagination on the subject. It was a major point of interest then, when multiple early <a href="https://bitcoinmagazine.com/technical/bitcoin-adam-backs-complete-emails-satoshi-nakamoto">developers</a> and Bitcoin <a href="https://bitcoinmagazine.com/culture/newly-revealed-satoshi-email-correspondence-with-martti-malmi">collaborators</a> began submitting private correspondence with Satoshi into the public record to be used as evidence. Adam Back, developer of the 90s “Hashcash” protocol that directly inspired Bitcoin’s mining algorithm, revealed a brief email correspondence initiated by Satoshi where the two discussed Hashcash’s relevance to Bitcoin. Early collaborator Martii “Sirius” Malmi, on the other hand, released a much larger tranche of emails on a broad range of looser topics, totaling 120 pages in all. These emails gave new insight into the personality of Bitcoin’s creator and likely would never have surfaced without the criminal proceedings.</p><p>In any event, as soon as the proceedings had concluded, Justice James Mallor <a href="https://bitcoinmagazine.com/legal/craig-wright-is-not-the-inventor-of-bitcoin-judge-rules">cited</a> the “overwhelming evidence” as he made an immediate ruling against Wright’s claims. COPA <a href="https://www.opencrypto.org/2024-03-13-12-reasons-why-Craig-Wright-is-not-Satoshi-Nakamoto/">released</a> some of the evidence against Wright independently, including the particularly damning accusation that Wright has used ChatGPT to forge documents “on an industrial scale." Their legal team accused Wright of a “massive campaign of dishonesty and forgery” that “stray[ed] into farce," going so far as to claim that Wright was actively fabricating new documents during the course of the five-week trial. Mallor claimed he would give a more detailed account of his reasons at a later date, but the actual verdict is clear: Craig Wright is not Satoshi, is not the author of the white paper, and did not create Bitcoin or its software. </p><p>The importance of this ruling is clear for two main reasons: not only does it prevent Wright from continuing his years-long practice of initiating defamation lawsuits against individuals and media outlets that deny his Satoshi claim, it also prevents him from suing <a href="https://bitcoinmagazine.com/legal/jack-dorseys-bitcoin-legal-defense-fund-prepares-for-tulip-trading-case">developers</a> on the basis of copyright infringement. This “chilling effect” on active Bitcoin developers is a major reason why COPA decided to take on this battle. If nothing else, a firm legal precedent will make it substantially easier to dismiss similar claims in the future. COPA has filed a purely civil suit against Wright, which is unlikely to lead to any sort of direct monetary reparation and certainly will not result in incarceration. Still, the full written judgment has yet to be released. </p><p>Craig Wright’s extended campaign to prove that he is the true Satoshi Nakamoto has turned into one of the long-running features of the Bitcoin space, even as he spent long periods of time under the radar. Around half of Bitcoin’s entire lifespan has included Wright as a figure, resurfacing from time to time to aggressively defend his “reputation and intellectual property” as the true genius behind Bitcoin. It’s anyone’s guess as to how the man, personally, will take this new defeat in his mission. Will he quietly retire from the scene? Will he continue seeking other legal battles on the subject in different jurisdictions? Will the British legal system somehow censure him over this behavior?</p><p>It’s unclear whether or not we can definitively close the book on Craig Wright after this defeat. Still, it’s important to consider how the whole affair has sparked interest in Bitcoin’s origins. Bitcoin has grown to an unimaginable degree since Satoshi Nakamoto first disappeared, and the question of his true identity may seem totally sidelined next to the billions of inflows for the new Bitcoin ETFs or other decidedly 2024 market factors. The early days of Bitcoin still clearly hold sway over our community, however, and this trial has created an opportunity for enthusiasts to scrutinize and debate a wealth of new material from Satoshi.</p><p>The question, then, is less “who is Satoshi Nakamoto” and more “where did Bitcoin come from”? Understanding Bitcoin’s humble origins is very important for understanding its bright future, after all. Even if the world of Bitcoin has been irrevocably transformed by new acceptance from the financial establishment, there are still fundamentals to remember. Bitcoin will always be decentralized, and it will always be a currency. Our goals are not merely to make speculative investments and gain fiat currency, but to radically upset the world of fiat altogether. As long as we can keep our eye on the ball, there’s no telling how far Bitcoin can progress.</p>2024-03-18T12:01:49Zurn:uuid:6bc523a6-b790-d7af-05fb-611b9a662d4eLandon Manningdefault_a_british_high_court_judge_1<em><a href="https://www.investopedia.com/articles/forex/121815/bitcoins-price-history.asp">Source</a></em>Four Case Studies: Should You Hold Bitcoin In A Roth IRA?Bitcoin is generational wealth, but does it make sense to hold bitcoin in your IRA? Unpacking the tradeoffs and advantages of different methods for holding bitcoin for retirement.<p>Whether you’re young, mid-career, or playing the back nine, Roth IRAs can be an important tool for your financial goals. Four case studies below will illustrate how by combining Roth IRAs with bitcoin, you can save for retirement, optimize for your personal tax situation during retirement, and leave your bitcoin for the next generation.</p><p>These are hypothetical case studies based on our experiences, not real people. They’re intended to help you better understand how bitcoin Roth IRAs can fit into many types of retirement plans. Hence, they’re for educational purposes—you should discuss all personal situations with a financial, tax, or legal expert.</p><ol><li><a href="https://unchained.com/blog/four-case-studies-bitcoin-roth-ira/#sally">Sally the super stacker: Saving for retirement</a></li><li><a href="https://unchained.com/blog/four-case-studies-bitcoin-roth-ira/#rod">Rod is retirement ready: Entering retirement</a></li><li><a href="https://unchained.com/blog/four-case-studies-bitcoin-roth-ira/#larry">Larry wants to leave a legacy: Inheritance</a></li><li><a href="https://unchained.com/blog/four-case-studies-bitcoin-roth-ira/#wayne">“Why Would I?” Wayne: Reasons not to Roth</a></li></ol><h2>1. Sally the super stacker: Saving for retirement</h2><p>Sally is in her early 30s and has fallen down the bitcoin rabbit hole. Sally views bitcoin as the best savings technology given today’s current macroeconomic backdrop and bitcoin’s fixed supply of 21 million and is committed to a disciplined accumulation strategy.</p><p>She’s looking for a way to save her hard-earned money without suffering debasement over time. Ultimately, she would like to use her savings for major goals: a dream vacation, a house, starting a family, and maybe retiring someday. But retirement is a distant goal, and she thinks the United States could go through some significant changes before she’s ready to settle down.</p><p>Why would she even bother with the fiat-based American retirement system? The rules, limits, penalties, and potential changes aren’t worth it. Just keep your head down and stack sats, right? Not so fast, Sally.</p><h4>Importance of tax-free growth</h4><p>Like most bitcoiners, Sally is stacking bitcoin with money that has already been taxed. Her payroll taxes are withheld on payday, and she is paid the remaining U.S. dollars into her bank account. She then sends money to an exchange and purchases bitcoin. This is the typical way most people stack sats—post-tax.</p><p>However, just because the bitcoin is purchased post-tax does not mean it won’t be taxed again. Non-retirement bitcoin earnings are taxed as a capital gain when sold. Over her years of stacking, she will need to keep track of her cost basis and deduct that amount from the gross proceeds when selling.</p><p>It’s a simple formula: (final trade) minus (what you paid) equals (what you made). What you make is taxed as capital gains.</p><h4>Enter the Roth IRA</h4><p>This is where a Roth IRA savings vehicle adds value. If Sally were to contribute to a bitcoin Roth IRA, contributions would still be made post-tax—same as before. But the key difference is that qualified Roth IRA distributions are <strong>tax-free</strong>. She only pays tax once, not twice.</p><p>The potential implications of tax-free bitcoin are massive. If the dollar value of bitcoin exponentially increases as Sally expects, then reducing her potential tax burden becomes increasingly rewarding.</p><p>Let’s assume she starts saving $6,000 per year at age 30 until she reaches age 65, and bitcoin grows at 6% annualized (feel free to <a href="https://www.calculator.net/roth-ira-calculator.html">plug in your own assumptions</a>). At age 65, she will have accumulated $822,330. And if she had to pay an estimated 20% capital gains tax, it would amount to a bill over $117,000.</p><figure>
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<p>In this scenario, a Roth IRA saves her more than $117,000. The Roth becomes a vehicle to supercharge future purchasing power without changing her current taxation. Not having to pay tax on future gains has an exponential impact over time.</p><figure>
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<h4>Not just retirement: Withdrawing contributions</h4><p>Four years into maximizing her bitcoin Roth IRA contributions, Sally has contributed $24,000 (four years of $6,000 max) and experienced a rapid increase in bitcoin price—a common experience for many bitcoiners. Let’s assume a hypothetical balance of $100,000. To celebrate and reward herself, she has planned a Miami vacation. However, she can’t decide if she should sell her non-retirement bitcoin and pay gains tax or take it from her retirement account and pay penalties.</p><p>With penalty-free access to Roth contributions, Sally can take up to $24,000 (her total contributions) out of her Roth without incurring penalty or tax. In this imaginary scenario, let’s say she ends up pulling $10,000 from the Roth for her Miami vacation.</p><h4>More ways to maximize a Roth</h4><p>If Sally meets someone in Miami, she could pull $10,000 more from the Roth for an elopement wedding. And the house with the picket fence? The Roth allows for some flexibility in that, too: Roth IRAs allow for up to $10,000 of <em>earnings</em> to be withdrawn penalty-free if used for a first-time home purchase. With $4,000 of contributions left and an additional $10,000 in earnings for the first-time home purchase, Sally could combine forces with her equally-wise new spouse—who was also contributing to a Roth—and compile $24,000 for a down payment.</p><p>After the tax- and penalty-free spending spree has subsided, she and her spouse can continue to regularly contribute again, saving for the next big goal, and ultimately for retirement.</p><h4>Key takeaways</h4><p>The Roth account has more flexibility than just saving for the classic age 59 ½ retirement scenario. Tax-free growth is a powerful tool to grow wealth over time and should be strongly considered for any retirement plan. You can pull contributions tax- and penalty-free at any time, and earnings are tax-free at retirement age. Certain conditions even allow you to pull earnings from your Roth without a penalty.</p><h2>2. Rod is retirement ready: Entering retirement</h2><p>Rod has been diligently preparing for retirement. He’s mentally there, but financially not ready to take the leap. Still, bitcoin has become an increasingly important position in his portfolio. What started as a hedge (1-2%) has become a core component (+10%). He holds some bitcoin directly but has more exposure through bitcoin-adjacent assets (GBTC, MicroStrategy, mining stocks, etc.).</p><p>He’s not ready to go all-in on bitcoin because, although he believes in its importance, the volatility conflicts with his desire for financial stability during retirement. He has worked hard to earn his nest egg and would hate for it to disappear—especially to taxes. Within the next 5-10 years, he will transition out of his career and live off his 401k, investment account, real estate equity/income, and bitcoin. Any social security or pension are just a bonus.</p><h4>Brackets and buckets</h4><p>Rod needs to dive into his financial situation and see how his tax brackets will look. What will they look like the Monday morning after he retires? What will they look like after the pension or social security start? What about when the 401k required minimum distributions start at age 72? Knowing where the money is coming from, when it occurs, and how it’s taxed are critical components to retiring—and staying retired.</p><p>To make a plan, Rod needs to think about each account type as being in a different “tax bucket”. His taxable assets are taxed upon sale, and his tax-deferred accounts are taxed when he takes income from them. The Roth provides another bucket: tax-free income. If Rod were to add a Roth IRA, he could pull from different buckets depending on the plan and the need.</p><figure>
<img src="https://bitcoinmagazine.com/.image/c_fit%2Ch_800%2Cw_1200/MjA0MzAyMzgwMjIzNzAyMTIy/group-2085664143.png" height="630" width="1200">
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<p>For example, Rod can pull from the Roth in high tax years and keep his bracket from climbing too quickly. He can pull from taxable or Traditional IRAs in low tax years and accelerate that income at a lower marginal rate. More sophisticated strategies could include conversions, delaying income, gifting taxable assets, etc. The key point: Roth allows for diversification in “tax buckets” to optimize your tax bracket in retirement.</p><p>When Rod adds this tax-free bucket to his picture, he decides to fill it with high risk/reward assets like bitcoin. If the growth is tax-free, then it makes sense for it to grow as much as possible. He decides to sell his mining stocks, GBTC, and MSTR and convert that cash into a bitcoin IRA (<a href="https://unchained.com/blog/bitcoin-ira-comparison/">preferably one where he controls access to the keys</a>).</p><h4>Key takeaways</h4><p>What did your bracket look like this year? No, not the March Madness one. The un-fun IRS one. All retirees must consider their expected tax bracket throughout retirement, and tax bracket management is a science and an art. Specifics vary from person to person, but the main concept applies: The more diversified your “tax buckets,” the more flexibility and optionality you will have in any tax environment.</p><h2>3. Larry wants to leave a legacy: Inheritance</h2><p>Larry has been enjoying his time with his wife and grandchildren. He had a successful career and profitable investments that have sustained his lifestyle through retirement. Now, he thinks much more about the next generation and the challenges and struggles they will face. He wants to protect those he cares about and leave the world a better place.</p><p>At first, bitcoin didn’t make sense to him. He thought it was just another get-rich-quick scheme. But given the state of the world today and institutional financial foolishness taking place, he’s now open to seeing its long-term potential. Larry’s main goal is to leave bitcoin for the kids and grandkids. He thinks it could become meaningful for their future when he’s no longer with them.</p><h4>Inheritance and estate considerations</h4><p>When Larry sets up a Roth IRA, he does not ever have to take <a href="https://www.investopedia.com/terms/r/requiredminimumdistribution.asp#:~:text=A%20required%20minimum%20distribution%20(RMD)%20is%20the%20amount%20of%20money,plan%20participants%20of%20retirement%20age.">Required Minimum Distributions</a> from that account. He can leave the assets there to grow tax-free for the long term—perfect for bitcoin. Larry can easily add or modify beneficiaries to that IRA at any time, and beneficiaries will receive the Roth income tax-free upon his passing. He can accomplish his goal of passing bitcoin to his loved ones. (Estate taxes may still apply, Roth IRAs only avoid income tax.)</p><h4>Converting to a Roth IRA</h4><p>Larry was already retired when the Roth IRA came out in 1997, so he doesn’t have an existing Roth, and you need earned income to contribute. But even though he can’t add money directly to one, he can consider a Roth conversion.</p><p>He can take pre-tax 401k/IRA funds and convert them to Roth, allowing him to pay the tax now and turn it into a tax-free vehicle for future generations. As to whether this is a good idea for your beneficiaries, the math is fairly simple: if you expect your tax rate to be lower than your beneficiaries’ tax rate, then the Roth would make more sense.</p><figure>
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<figcaption>Source: <a href="https://www.kitces.com/blog/when-a-roth-ira-may-actually-be-a-terrible-asset-to-inherit/">When A Roth IRA May Actually Be A Terrible Asset To Inherit (Kitces)</a></figcaption>
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<h4>Key takeaways</h4><p>Larry has optionality. If the math makes sense, he could turn a portion of his portfolio into a bitcoin Roth IRA and leave the asset for future generations. It’s worth noting that holding your own keys in an Unchained IRA requires that you also do <a href="https://unchained.com/blog/how-to-inheritance-plan-unchained-vault/">proper inheritance planning</a>.</p><h2>4. “Why Would I?” Wayne: Reasons not to Roth</h2><p>Wayne is in his peak earning years and making really good money at his fiat job. He lives a simple life enjoying a lot of time outdoors, and expects not to need much income after he retires. He has many hobbies, one of which is mining bitcoin with a few machines from his home. It’s not a large-scale operation, just a hobby, but he would consider mining bitcoin with his retirement account if that were an option. Ultimately, he plans to leave all assets he owns to charities that he cares about.</p><h4>Brackets and buckets pt. 2</h4><p>Revisiting the brackets and buckets discussion from above, Wayne’s current income (high bracket) is much greater than his expected future income needs (low bracket). If he were to convert any of his existing retirement assets to Roth, he would be paying a higher rate than if he had just waited to pull it in retirement. From this perspective, it may be wiser to keep the assets in a Traditional pre-tax account and not convert to Roth.</p><h4>Death and taxes…</h4><p>You know the saying: nothing is certain in life but death and taxes. If that’s true, we can certainly add “death taxes” to the list. “Death tax” probably wasn’t too popular in opinion research studies, so “estate tax” is the politically correct term these days. In 2022, the estate tax kicks in around $12 million of net worth ($24 million for married couples). Over time, more and more bitcoiners will need to consider this threshold as it becomes relevant to their situation.</p><p>As Wayne considers a Roth IRA, he should note Roth IRAs do not avoid the estate tax, only the income tax. Wayne plans to leave all assets to charity. Assets left to qualified non-profit entities would avoid both estate and income tax. In his case, there is no benefit to the Roth over his current structure from a taxation-at-death standpoint. If it goes to charity, it avoids the death tax—a silver lining to say the least.</p><h4>Mining in a Roth?</h4><p>Now, let’s re-introduce Wayne’s bitcoin mining hobby. Mining bitcoin within an IRA is technically possible but highly advised against for the average investor. He should be aware of the tax nightmare often involved and consult a tax advisor regarding <a href="https://unchained.com/blog/bitcoin-mining-iras-tax-implications/#:~:text=Unrelated%20Business%20Income%20Tax%2C%20or,generated%20is%20subject%20to%20UBIT.">UBIT (Unrelated Business Income Tax) within IRA accounts</a>. Additionally, if Wayne wants to hold his mined bitcoin <a href="https://unchained.com/blog/collaborative-custody-is-private/">without revealing personal information to a financial institution</a>, Roth IRAs simply aren’t an option.</p><h4>Key takeaways</h4><p>When considering a financial strategy, no single tool works for every individual’s situation. Factors such as tax bracket, net worth, and charitable intent are all relevant considerations when evaluating a Roth IRA. Mining doesn’t tend to be well-suited for bitcoin IRAs because of UBIT. Due to these factors, a Roth IRA may not be the right route for Wayne.</p><figure>
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<h2>Wrapping up</h2><p>Hopefully, you’ve seen how versatile, flexible, and impactful the Roth IRA vehicle can be when combined with the best savings technology ever discovered: bitcoin. You’ve seen circumstances that may positively and negatively affect the suitability of a bitcoin Roth IRA for your financial picture.</p><p>When considering bitcoin in a Roth IRA, you should always consider who is controlling the keys. There are <a href="https://unchained.com/blog/bitcoin-ira-comparison/">tangible differences between the many approaches to bitcoin IRAs</a>, and there’s no reason to let an exchange hack or mistake jeopardize your wealth. The <a href="https://unchained.com/bitcoin-ira/">Unchained IRA</a> allows you to secure your financial future by holding your own private keys to your bitcoin.</p><p>Whether you’re planning for retirement, entering retirement, or planning your inheritance, the Unchained IRA team can help. To learn more, <a href="https://app.livestorm.co/unchained/">sign up for an upcoming Retirement and Inheritance webinar</a> or enter your email below to sign up for our newsletter.</p><p><em>This article is provided for educational purposes only, and cannot be relied upon as tax or investment advice. Unchained makes no representations regarding the tax consequences or investment suitability of any structure described herein, and all such questions should be directed to a tax or financial advisor of your choice. Jessy Gilger was an Unchained employee at the time this post was written, but he now works for Unchained’s affiliate company, Sound Advisory.</em></p><p><em>Originally published on </em><em><a href="http://unchained.com/">Unchained.com</a></em><em>.</em></p><p><em>Unchained Capital is the official US Collaborative Custody partner of Bitcoin Magazine and an integral sponsor of related content published through Bitcoin Magazine. For more information on services offered, custody products, and the relationship between Unchained and Bitcoin Magazine, please visit </em><em><a href="https://unchained.bitcoinmagazine.com/">our website</a>.</em></p>2024-03-17T14:00:00Zurn:uuid:542a75e2-ac79-dcff-3209-2a970eda72beUnchainedbm-x-unchained---roth-ira-case-studies----article-preview<em>Get $100 off Unchained IRA and receive 1-year free of Bitcoin Magazine Pro market research ($250 value). Visit </em><a href="https://unchained.com/bitcoin-magazine/?utm_campaign=btcmag-launch"><em>unchained.com</em></a><em> and enter code “btcmag” at checkout.</em>Multisig, Shamir's secret sharing, & MPC compared Taking a closer look at threshold security models for institutional-grade bitcoin custody.<p>For anyone with substantial bitcoin holdings, a custody structure that includes a single point of failure should be seen as unacceptable. If a wallet has a single component that—when lost or stolen—can lead to a permanent loss of funds, then it’s simply too dangerous to consider. Nobody wants to keep significant wealth teetering on the edge of catastrophe.</p><p>Individual bitcoin holders have numerous tools available that can help reduce the risk of loss or theft. <a href="https://unchained.com/features/singlesig-vs-multisig/?utm_campaign=btcmag-launch">In a previous article</a>, we covered some of these tools, highlighting modifications commonly applied to singlesig wallets. However, we also explained why these approaches fall short of removing single points of failure entirely.</p><p>For a business, government, or other institution that wants to secure a bitcoin treasury, eliminating single points of failure is not just a nice-to-have, but a prerequisite. The only custody models worth considering for these entities are ones that include a threshold requirement in order to access funds. A threshold requirement describes a structure that involves multiple, separately secured components, where a subset of those components are needed to approve any withdrawal. This is the only way of achieving institutional-grade security, with single points of failure eliminated completely.</p><p>In this article, we’ll cover how to apply threshold security using three different methods: script multisig, Shamir’s secret sharing (SSS), and multi-party computation (MPC). We’ll also dive into the tradeoffs associated with each approach, and how an institution can choose the best setup to meet their needs.</p><figure>
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<h2>What is multisig?</h2><p>If you aren’t sure what script multisig is, we recommend checking out our <a href="https://unchained.com/features/what-is-multisig/?utm_campaign=btcmag-launch">earlier article</a> dedicated to explaining how multisig wallets work and what they’re used for. As a quick review, a multisignature wallet involves multiple <a href="https://learnmeabitcoin.com/beginners/private_keys">private keys</a>, and can be configured so that a specific number (threshold) of those private keys are required to sign any transaction. The signatures can be produced at different times and locations, allowing each key to remain physically separated. Once a threshold number of signatures have been produced, they can be combined into a single bitcoin transaction capable of spending the funds.</p><figure>
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<figcaption><em>A 2-of-3 script multisig quorum, where a threshold of two unique signatures from two keys are required for withdrawals.</em></figcaption>
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<p>This relatively simple way of creating a threshold requirement is highly effective at removing all single points of failure. As long as the spending threshold is greater than one but less than the total number of keys, then any single key can become lost, stolen or destroyed without bitcoin becoming unrecoverable. The remaining keys could sign a recovery transaction moving funds to a fresh multisig setup.</p><p>Satoshi Nakamoto laid the groundwork for multisig when bitcoin was first released, anticipating that it could be a popular mechanism for securing funds. However, it wasn’t until the <a href="https://bitcoinmagazine.com/technical/the-battle-for-p2sh-the-untold-story-of-the-first-bitcoin-war">P2SH softfork in 2012</a> that multisig started to become a widely used tool. Multisig has since proven itself as a battle-tested security model for more than a decade, across several different <a href="https://unchained.com/blog/bitcoin-address-types-compared/?utm_campaign=btcmag-launch">address types</a>.</p><h2>What is Shamir’s secret sharing?</h2><p>Shamir’s secret sharing (SSS) is a secret sharing algorithm that was developed by renowned cryptographer Adi Shamir in 1979. It can be used as another way of introducing a threshold requirement for protecting bitcoin. SSS allows users to split a key into several distributed “shares,” with only a certain threshold of the shares needed to reassemble the key. This can be used to design quorums like 2-of-3 or 3-of-5, similar to multisig. </p><figure>
<img src="https://bitcoinmagazine.com/.image/c_fit%2Ch_800%2Cw_1200/MjA1MDUwNTgzMzkxNTQ1MDg0/image2.png" height="570" width="1200">
<figcaption><em>A 2-of-3 SSS arrangement, where any two shares, represented by the colored shapes, can reassemble the key to a singlesig wallet. The key can produce the single signature needed to withdraw funds.</em></figcaption>
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<p>However, this approach still leads to single points of failure at certain instances during its lifecycle. One example is when the key is initially split up into SSS shares. This operation is usually done on a single device at a single time and place. If an attacker compromises that device, the key generation process or the share creation process, they’ve compromised the key. Another example is whenever the user needs to reassemble the key to sign a transaction. A threshold number of shares must be brought together, once again on a single device at a single time and place, which an attacker could exploit.</p><p>A fairly simple and widely used method of implementing SSS technology for cryptocurrency custody is through the <a href="https://trezor.io/learn/a/what-is-shamir-backup">Shamir backup</a>, developed by Satoshi Labs in 2017. It can be found as an option in certain Trezor hardware wallet models.</p><figure>
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<h2>What is MPC?</h2><p>MPC, or multi-party computation, is a subfield of cryptography that <a href="https://en.wikipedia.org/wiki/Secure_multi-party_computation">traces back to the 1970s</a>. The goal of MPC is to allow multiple participants to jointly perform a computation, while each participant’s contribution to the computation is not revealed to the rest of the group and therefore can remain private. This allows for multiple parties to collaborate in <a href="https://en.wikipedia.org/wiki/Yao%27s_Millionaires%27_problem">various contexts</a> without needing to trust each other.</p><p>When applied to bitcoin custody, MPC involves distributed “shares,” similar to SSS. However, unlike SSS, the shares are not split from a private key nor used to rebuild a private key. Instead, multiple parties compute a single signature directly from a threshold of their shares.</p><figure>
<img src="https://bitcoinmagazine.com/.image/c_fit%2Ch_800%2Cw_1200/MjA1MDUwNTgzMzkxMTUxNzQ4/image4.png" height="570" width="1200">
<figcaption><em>A 2-of-3 MPC arrangement, where any two shares, represented by the colored shapes, can produce a signature directly without assembling a key first.</em></figcaption>
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<p>Unlike SSS, MPC does not necessitate a single point of failure. MPC shares can be generated separately from one another, and they never need to be brought together to operate the wallet. Information produced from a share can be communicated to the other participants, without the share itself being revealed.</p><p>Since bitcoin and other cryptocurrencies have primarily used a signature system based on ECDSA (Elliptic Curve Digital Signature Algorithm), MPC had to be adapted for this context. The first practical threshold protocols for ECDSA were published in 2018. [<a href="https://eprint.iacr.org/2019/114">GG18</a>, <a href="https://eprint.iacr.org/2018/987">LNR18</a>]</p><h2>What are the trade-offs between threshold models?</h2><p>With three different threshold security models to choose from, the next step is understanding the strengths and weaknesses of each option.</p><h3>Tradeoffs with multisig</h3><p>Script multisig is a standardized way of achieving threshold security, native to the bitcoin protocol. The structure is considered relatively simple and robust. The barrier to entry is also small—if a bitcoin user knows how to operate a singlesig wallet, then it’s not a large leap to learn how to set up and use a multisig wallet.</p><p>When a multisig wallet is initialized, the addresses produced for receiving bitcoin into the wallet have the threshold requirement built into them. Once a multisig address has been funded, the bitcoin is protected by an immutable contract that has essentially been written into the blockchain itself. The only way to alter the contract (such as changing the access control policy, adjusting which keys are protecting the bitcoin) is to move the bitcoin to a new address that was built with a different contract. For multiple parties who are collaborating to secure bitcoin, this ground-level immutable contract mechanism can provide the highest degree of reassurance that the money is secured according to how all parties have intended. If anything were to be fundamentally changed, it would become obvious to everyone by the occurrence of a public transaction, and the keys that approved the change would be known. This is why collaborative custody providers such as Unchained rely on script multisig for our products.</p><p>However, deploying contracts publicly on the blockchain comes with tradeoffs. As bitcoin is spent out of a multisig address, the access control policy for that address must be permanently published on the blockchain. Observers can then see the details of the multisig quorum that was being used. Although the remaining funds can be easily migrated to a new address going forward, the fact that past security arrangements are exposed isn’t ideal. Additionally, needing to move bitcoin from one address to another in order to adjust the access control policy means that transaction fees are always involved with the process (and the larger the quorum, the more expensive it will be).</p><p>For entities that value custodying altcoins, such as cryptocurrency exchanges, script multisig can pose more of a challenge than the other two methods of threshold security. This is because a multisig threshold quorum is imposed on the blockchain level, and different cryptocurrencies use different blockchains. Many cryptocurrencies don’t even support a native, robust multisig implementation at all. Meanwhile, SSS and MPC enforce threshold quorums at the key level, and look like singlesig transactions publicly. Since almost all cryptocurrencies support a similar standard for singlesig custody (the same key can be used across most cryptocurrencies), this allows SSS and MPC to be more cross-chain compatible.</p><h3>Tradeoffs with Shamir’s secret sharing</h3><p>SSS offers another way of designing a threshold requirement based on relatively simple and battle-tested cryptography. For the purposes of cryptocurrency custody, SSS also has a widely deployed method with a low barrier to entry (<a href="https://trezor.io/learn/a/what-is-shamir-backup">Shamir backup</a>). Once someone has experience using a conventional singlesig wallet, it isn’t a huge leap to use a Trezor to set up a wallet with a Shamir backup.</p><p>Unlike multisig, SSS operates completely outside of public-facing addresses and transactions on the blockchain. Instead, the threshold requirement is decided by how the private key is split into shares. This means that splitting a key into shares and later reassembling them can be done in private, so that only the people participating in the bitcoin custody arrangement are aware that SSS is being used. In addition to privacy advantages, keeping the threshold structure outside of the blockchain also means that SSS transactions won’t lead to increased fees, and it can be used to secure many different cryptocurrencies. Although most cryptocurrencies have their own unique blockchains, they can all share the same private key as an access point, and that key can in turn be split up using SSS.</p><p>The biggest disadvantage to SSS has already been mentioned above—the private key must exist in one place at one time, before it is first split into shares, and also when the shares are recombined for the purposes of approving a withdrawal. These vulnerabilities create temporary single points of failure, meaning that SSS by itself doesn’t offer truly institutional-grade security, unlike multisig or MPC.</p><p>Additionally, SSS doesn’t natively offer a method for adjusting the access control policy. Once a private key is split into a quorum of shares, those shares will always maintain the ability to reproduce that key. If a group is securing a treasury together using SSS and a member of the group leaves, revoking permissions for that individual in a secure manner can pose a challenge. Remaining members of the group could reassemble the key and then split it into new shares, but the old shares would need to be verifiably destroyed. Otherwise, the funds would need to be sent to an entirely new wallet protected by a different key.</p><h3>Tradeoffs with MPC</h3><p>Much like SSS, MPC enforces the threshold requirement at the key-level instead of the blockchain-level. This unlocks similar advantages, such as granting a higher capacity for privacy, avoiding increased transaction fees, and allowing for one MPC custody structure to be used across many different cryptocurrencies.</p><p>Importantly, MPC manages to avoid the temporary single points of failure that come with using SSS. By using a different cryptographic method, the key shares can exist separately from the moment the wallet is first created, and even remain separate while signing withdrawal transactions. Most MPC implementations also include a native method of adjusting the access control policy (creating a new quorum of shares) without having to send funds to a new wallet address.</p><p>However, MPC for threshold ECDSA is considered very complex cryptography, and there is not an agreed-upon standard for using it. There are many different protocols, with the first two being developed independently in 2018 by Gennaro and Goldfeder [<a href="https://eprint.iacr.org/2019/114">GG18</a>] and Lindell et al. [<a href="https://eprint.iacr.org/2018/987">LNR18</a>]. Since then, we’ve also seen protocols from Doerner et al. [<a href="https://eprint.iacr.org/2019/523">DKLs19</a>], Castagnos et al. [<a href="https://eprint.iacr.org/2020/084">CCL+20</a>], Damgård et al. [<a href="https://eprint.iacr.org/2020/501">DJM+20</a>], Canetti et al. [<a href="https://eprint.iacr.org/2020/492">CMP20</a>], Gągol et al. [<a href="https://eprint.iacr.org/2020/498">GKSS20</a>], Gennaro and Goldfeder [<a href="https://eprint.iacr.org/2020/540">GG20</a>], Canetti et al. [<a href="https://eprint.iacr.org/2021/060">CGG+21</a>], Abram et al. [<a href="https://eprint.iacr.org/2021/1587">ANO+21</a>], Doerner et al. [<a href="https://eprint.iacr.org/2023/765">DKLs23</a>], and perhaps others. While the newer protocols tend to make certain improvements upon the older ones, they may have had less opportunity for peer-review, audit, and other testing.</p><p>The higher level of complexity involved with MPC creates a widened attack surface. With additional components and procedures, there is more room for error and potential security vulnerabilities. Evidence of serious security flaws, including full private key extraction attacks, has already presented itself more than once, affecting some of the threshold ECDSA protocols listed above.</p><p>Examples include:</p><p><a href="https://eprint.iacr.org/2020/1052">AS20 vulnerabilities</a>, September 2020, affecting GG18 implementations</p><p><a href="https://eprint.iacr.org/2021/1621">Alpha-Rays vulnerabilities</a>, December 2021, affecting GG18 and GG20</p><p><a href="https://www.verichains.io/tsshock/">TSSHOCK vulnerabilities</a>, August 2023, affecting GG18, GG20, and CGG+21 </p><p><a href="https://www.fireblocks.com/blog/bitforge-fireblocks-researchers-uncover-vulnerabilities-in-over-15-major-wallet-providers/">BitForge vulnerabilities</a>, August 2023, affecting GG18 and GG20<br><br></p><blockquote><p>“Cryptography needs to pass the test of time to attain longevity, and these new protocols clearly didn’t pass the test of time[…] this research was not ready for implementation or widespread adoption. From my perspective, implementing and productizing such recent research is quite dangerous.” — Ledger CTO Charles Guillemet, December 2021 response to Alpha-Rays</p></blockquote><blockquote><p>“[MPC is] more complicated, more to get wrong. Advanced crypto protocols are fragile in the detail and in the implementation. I'd feel more confident in multisig, which is super simple and rock solid.” — <a href="https://twitter.com/adam3us/status/1612878274446639105">Post</a> by renowned cryptographer Adam Back, January 2023</p></blockquote><p>MPC is also limited by who can realistically use it in the first place. As previously mentioned, threshold ECDSA is very complicated. For the average individual, there are no tools available to safely or easily set up MPC independently. While some businesses offer collaborative custody MPC wallets that are fairly easy to use, those businesses offer no easy way for users to recover funds if the business disappears (or no way at all, in which case they are a single point of failure). Because script multisig is a simple and open standard, businesses who provide <a href="https://unchained.com/features/diy-vs-collaborative-multisig/?utm_campaign=btcmag-launch">collaborative custody solutions</a> using multisig can offer open-source and <a href="https://help.unchained.com/how-to-vault-external-recovery-caravan/?utm_campaign=btcmag-launch">easy-to-use recovery tools</a>. This creates a straightforward avenue for clients to recover their funds even if the collaborative multisig business were no longer available to assist.</p><h2>Which model is best?</h2><p>As we just covered, there are numerous tradeoffs between using multisig, SSS, and MPC. They can be arranged in a chart for a visual comparison:</p><figure>
<img src="https://bitcoinmagazine.com/.image/c_fit%2Ch_800%2Cw_1200/MjA1MDUwNTgzNjU5MzI1MDYw/image5.png" height="800" width="855">
<figcaption><em>This chart demonstrates the strengths (blue) and weaknesses (red) for each method of implementing threshold security. Gray could be a strength or weakness depending on one’s perspective.</em></figcaption>
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<p>If a business specializes in the custody of many different cryptocurrencies, they might be motivated to hire a team of professionals to carefully set up an MPC custody model. However, if a business or individual were looking for a simple and reliable way to secure bitcoin for the long term, using script multisig and accepting the privacy tradeoffs might be preferable. SSS is rarely used by itself due to its inability to enforce institutional-grade threshold requirements at all times.</p><h3>Combining models for collaborative custody</h3><p>While multisig, SSS, and MPC are often thought of as competing security models, it’s possible to incorporate more than one of them into an overall custody structure. As previously described, SSS and MPC allow a threshold of key shares to produce a signature for a transaction. If the signature was for spending funds out of a singlesig wallet, then nothing else would be required to complete the transaction. However, if instead the signature was for spending funds out of a multisig wallet, additional signatures from other keys could also be needed.</p><figure>
<img src="https://bitcoinmagazine.com/.image/c_fit%2Ch_800%2Cw_1200/MjA1MDUwNTgzMzkxNDc5NTQ4/image1.png" height="800" width="1130">
<figcaption><em>A 2-of-3 multisig structure, where one possible signature could be produced from a normal key, another possible signature could be produced from a key that is reassembled from 2-of-3 SSS shares, and another possible signature could be produced directly from 2-of-3 MPC shares.</em></figcaption>
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<p>While this combination of techniques may sound unnecessary and cumbersome, there are indeed some contexts where it makes practical sense. With the rise in popularity of <a href="https://unchained.com/blog/what-is-a-bitcoin-key-agent/?utm_campaign=btcmag-launch">key agen2024-03-16T13:00:00Zurn:uuid:c5e1ec60-ede0-576d-28d8-b73f4f1e962eUnchainedbm-x-unchained---institutional-custody-compared---article-preview<em>Visit <a href="https://unchained.bitcoinmagazine.com/#offers">our website</a></em><em> to get an annual Bitcoin Magazine subscription ($79 value) when you sign up for an Unchained vault.</em>How Miners Learned to Stop Worrying and Love the JPEGOrdinals make miners money, miners operate specifically to make money. A match made in heaven. From "The Inscription Issue".<p><strong><em>This article is featured in Bitcoin Magazine’s</em> <em>“The Inscription Issue”. Click </em><em><a href="https://store.bitcoinmagazine.com/collections/magazines/products/bitcoin-magazine-annual-subscription">here</a></em> to get your Annual Bitcoin Magazine Subscription.</strong></p><p><strong>Click <a href="https://inscriptionissue.bitcoinmagazine.com/we-can-be-so-back">here</a> to download a PDF of this article.</strong></p><p>Ordinals have been a polarizing phenomenon for most every subcommunity in Bitcoin — except for miners. </p><p>The meteoric rise of the new Bitcoin-native NFT standard dominated discourse for months as Ordinals flooded blockspace and buoyed transaction fees to multiyear highs. According to critics, these transactions are, at worst, an attack on Bitcoin that tainted the sanctity of scarce blockspace; at best, they are shitcoins, the play-things of gamblers that belong on casino chains like Ethereum.</p><p>Well, miners don’t give a shit if they’re shitcoins. They give a shit about making money, and Ordinals gave them a revenue boost at a time when mining income was at one of its lowest points ever. So many miners have embraced — or at the least, are ambivalent about — Ordinals/inscriptions, since they received a much-needed boost to Bitcoin mining profitability when many miners were nearly breakeven or unprofitable. </p><figure>
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<p><em>Hashprice is a measure of the USD (or BTC) amount miners can expect to earn from a unit of hashrate (for example, at $80/PH/day, a miner with 1 petahash of mining rigs — roughly 10 new-gen ASICs like the S19j Pro, for example — can earn $80 per day).</em></p><p>Given their positive impact on hashprice, Ordinals, a darkhorse technical advancement that few could have predicted last year, have found themselves at the center of discussions regarding Bitcoin mining economics, discussions that are more germane with each block that pulls us closer to Bitcoin’s fourth block subsidy halving.</p><figure>
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<p>I’m not writing this to proselytize anyone into becoming an Ordinals enjoooyer. I, for one, don’t really understand the appeal. But I do think that they’re important in the context of Bitcoin’s ever-dwindling block subsidy, so they’re worth studying to understand how they affect blockspace and mining economics — and what developments like them might mean in a future where miners subsist solely on transaction fees. </p><h2>WTF is an Ordinal, Anyway?</h2><p>In NFT parlance, folks use Ordinal and inscription interchangeably, but the individual terms refer to two different aspects of the NFT standard.</p><p>An inscription is a piece of art or digital media, while an Ordinal is technically the number prescribed to an inscription to mark its place in the grand scheme of all other inscriptions. Another way to view it is that the inscription itself is the NFT, while the Ordinal is the number used to identify an individual inscription. </p><p>The data for each inscription lives in the Segregated Witness section of a transaction. As such, unlike other NFT standards, the actual art, digital media, or data is uploaded directly to Bitcoin’s blockchain. Since the inscriptions are fully on-chain, you could argue that they are the purest form of NFT available as they benefit from the blockchain’s immutability. </p><h3>Not All Inscriptions Are Created Equal</h3><p>When you understand that inscriptions are actual on-chain data, you can appreciate some of the critiques and concerns from detractors; if a bunch of NFT degens are inscribing monkey JPEGs and dickbutts and God-knows-what-else on-chain, then this crowds out economic (and potentially necessary) transactions.</p><p>This concern was aggravated by the fact that the arbitrary data for each inscription benefits from a transaction fee discount. As a scalability measure, Bitcoin’s Segregated Witness upgrade modified the transaction structure so that the witness data for a private key signature and public key was moved from the transaction hash field to another part of the block. Bitcoin discounts SegWit data, so it requires fewer satoshis per byte in transaction fees to transact. The arbitrary data for an inscription lives in the SegWit field of a transaction, so it’s entitled to the SegWit discount. Cue the pitchforks. </p><p>This discount is why, despite the first wave of image-based inscriptions clogging block space in February/March/April, transaction fees did not meaningfully increase; block sizes swelled when trendsetting inscribers flushed the blockchain with thousands of JPEGs for the first inscriptions collections, but these all benefited from SegWit’s 4-to-1 data discount versus normal transactions. Perhaps intuitively, it wasn’t until less data-heavy, text-based inscriptions from BRC-20 tokens became the most popular inscription type that transaction fees soared.</p><figure>
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<p>So-called BRC-20s (a nod to Ethereum’s own ERC-20 token standard) are a loose form of token. I say loose because they are really just Ordinals in a series defined by Bitcoin’s OP_CODE function, where each “token” is itself an OP_CODE transaction that defines the token’s place in the specific BRC-20 series. It goes like this: Someone (God only knows who) publishes an OP_CODE transaction that defines the token series’ max supply, ticker, and the minting limit per transaction. Once publicized, anyone with the technical know-how can mint tokens in the series.</p><p>These OP_CODE transactions do not benefit from SegWit’s data discount, so they cost a pretty penny more than image-based inscriptions. But they also have a feature that image inscriptions don’t: the minting function, which brings Ethereum NFT-esque incentives to collecting these inscriptions. Ethereum NFT series typically have minting contracts where anyone can create new NFTs in the series by interacting with the contract. This is part of — if not the entire — appeal. Minting an NFT is like opening up a digital pack of Pokémon/baseball/Magic: The Gathering cards — maybe there’s a rare card in this next one! </p><p>And while there isn’t necessarily the opportunity to mint a rare BRC-20 (because they are all the same), there’s the chance to mint a bunch of NFTs in a hot new series. Why anyone cares about having ORDI/CUMY/RATS #1 or #100 or whatever, I don’t know. Perhaps it’s the greatest expression of the greater fool theory yet in Bitcoin. But the fact is, they do, and the minting incentives for BRC-20s precipitated the largest wave of Bitcoin transaction activity ever.</p><figure>
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<p>Through a combination of fee wars and the fact that these NFTs don’t benefit from the SegWit discount, BRC-20s have catered a veritable fee feast for Bitcoin miners, but not exactly in the way you might think.</p><h2>Quantifying Transaction Fee Collateral Damage </h2><p>The bulk of transaction fee increases in 2023 has not come directly from fees associated with Ordinals; it has come from indirect fee pressure on other transactions. </p><p>Per data from independent analyst Data Always’ Dune dashboard, as of November 12, 2023, miners have raked in $70.3 million fees from Ordinals. Seems bigly, but it’s only 19.4% of the $368.2 million in transaction fees that miners have earned in total since inscriptions debuted on December 14, 2022. To put this into further perspective, there have been 40.2 million inscription transactions, which equates to 30% of all transaction volume since December 14. So inscriptions have accounted for one-third of transaction volume over the last year but only one-fifth of all fees. </p><figure>
<a href="https://inscriptionissue.bitcoinmagazine.com/how-miners-learned" ><img src="https://bitcoinmagazine.com/.image/c_fit%2Ch_800%2Cw_1200/MjA1MDM5MDUxOTQwNjM2NDEy/harper3.jpg" height="791" width="1200"></a>
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<p>As for the other fees, many of them are the result of indirect fee pressure from inscriptions — that is, fees that do not come directly from inscriptions themselves, but from the pressure that inscriptions exert on the average transaction fee needed to clear a Bitcoin transaction in a reasonable time frame. </p><p>Galaxy Digital Research examines this dynamic in a report titled “Bitcoin Inscriptions & Ordinals: A Maturing Ecosystem”. Rampant inscription activity congests the mempool. This is particularly true during BRC-20 minting events, as the first-come-first-mint incentivizes bidding wars as inscribers gun to be the first to mint a series. This raises the floor for average transaction fees and, as Galaxy Digital Research points out, precipitates transaction fee “overpayment” from various transactors. They define overpayment as any fee in a block that is greater than that block’s median transaction fee. For normal transactions, this overpayment could come from transaction fee estimators in wallets or on exchanges or from general user ignorance regarding transaction fee structure and dynamics. Some users may also need to expedite transactions for any number of reasons, leading to overpayment. For inscription transactions, Galaxy Digital Research says that “voluntary overpayment” was commonplace during times of high activity and popular inscription mints.</p><figure>
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<p>This chart quantifies overpayment for inscription transactions and all other transactions to demonstrate the dynamics Galaxy Digital Research outlines in their report. When Bitcoin’s mempool became backlogged in April and May — the hottest time frame for inscription activity so far — a majority of the transaction fees during this time actually came from user overpayment for financial transactions, not inscriptions themselves. These users could probably make it easier on themselves by not using built-in transaction fee estimators with their wallets and exchanges.</p><h2>Blessing and a Curse</h2><p>Inscriptions are a blessing and a curse. They’re a godsend for miners, but they can be a pain in the ass for other Bitcoiners, particularly those who have to send transactions on the network every day. </p><p>That said, blockspace is an open market. So I don’t have to like Ordinals to recognize that it’s not my place to police someone else’s spending. Nor is it my place to censor a transaction that pays for blockspace on the f(r)ee market. That’s part of the point of a permissionless blockchain, after all: to make transactions other people don’t want you to make.</p><p><strong><em>This article is featured in Bitcoin Magazine’s</em> <em>“The Inscription Issue”. Click </em><em><a href="https://store.bitcoinmagazine.com/collections/magazines/products/bitcoin-magazine-annual-subscription">here</a></em> to get your Annual Bitcoin Magazine Subscription.</strong></p><p><strong>Click <a href="https://inscriptionissue.bitcoinmagazine.com/we-can-be-so-back">here</a> to download a PDF of this article.</strong></p>2024-03-15T15:03:43Zurn:uuid:cccdd25c-d82b-12d5-f0bf-0e488ce088b2Colin Harperharper1<em>Click the image above to subscribe!</em>MicroStrategy Increases Convertible Loan to $525 Million to Buy More BitcoinMicroStrategy has upsized its planned convertible senior notes offering to $525 million in order to purchase more Bitcoin.<p>The Michael Saylor-led software company MicroStrategy has upsized its planned convertible senior notes offering from $500 million to $525 million.</p><p>The company intends to use the proceeds to acquire more Bitcoin, as per their recent <a href="https://www.microstrategy.com/press/microstrategy-announces-pricing-of-offering-of-convertible-senior-notes_03-15-2024">press release</a>, following a strategy it has pursued since 2020.</p><p>MicroStrategy announced it had priced the 0.875% convertible senior notes due 2031 in a private offering to qualified institutional buyers. The notes will be sold at 100% of the principal amount with an annual interest rate of 0.875%, payable semiannually. </p><p>After March 2028, the company can redeem the notes in cash at 100% of the principal plus accrued interest if certain conditions are met. Holders can require MicroStrategy to repurchase the notes at 100% of the principal amount plus interest on September 15, 2028, or upon certain events constituting a fundamental change.</p><p>The notes will be convertible into cash, shares of MicroStrategy's class A common stock, or a combination of both at the company's discretion.</p><p>MicroStrategy estimates the net proceeds of the offering will be approximately $515 million after fees and expenses. </p><p>Led by founder and CEO Michael Saylor, MicroStrategy has been aggressive in its bitcoin accumulation strategy. The company now holds more than 200,000 bitcoins worth over $13 billion at press time.</p><p>Saylor has said he aims to position MicroStrategy as the world's first "Bitcoin development company," though details on the proposal have been scant. </p><p>In the past, MicroStrategy has released alpha applications, such as a tool for allowing businesses to reward employees using Bitcoin lightning payments.</p><p>As a publicly traded company using its balance sheet to acquire bitcoin at scale, MicroStrategy's plans illustrate growing corporate interest in Bitcoin as an emerging asset class and treasury asset, one that can hedge against debasement and inflation.</p>2024-03-15T12:44:05Zurn:uuid:75b02daa-e491-f0b6-bbe7-76b6e0249a91Reed Macdonald michael-saylor-max-keiser-bitcoin-2021The biggest Bitcoin event in history welcomed more than 12,000 enthusiasts to celebrate together in real life, proving that this decentralized, open-source software project is a cultural force to be reckoned with.Your financial plan may be riskier without bitcoin It might actually be riskier to not have bitcoin in your portfolio than it is to have a small allocation.<p><strong>This article originally appeared in the <a href="https://www.thesoundadvisory.com/blog/your-financial-plan-may-be-riskier-without-bitcoin?utm_source=btcmag&utm_campaign=taxseason">Sound Advisory blog</a>. Sound Advisory provide financial advisory services and specialize in educating and guiding clients to thrive financially in a bitcoin-powered world. Click <a href="https://www.thesoundadvisory.com/?utm_source=btcmag&utm_campaign=taxseason">here</a> to learn more.</strong></p><p><em>“Belief is a wise wager. Granted that faith cannot be proved, what harm will come to you if you gamble on its truth and it proves false? If you gain, you gain all; if you lose, you lose nothing. Wager, then, without hesitation, that He exists.”</em></p><p><em>- Blaise Pascal</em></p><p>Blaise Pascal only lived to age 39 but became world-famous for many contributions in the fields of mathematics, physics, and theology. The above quote encapsulates Pascal’s wager—a philosophical argument for the Christian belief in the existence of God. </p><p>The argument's conclusion states that a rational person should live as though God exists. Even if the probability is low, the reward is worth the risk. </p><p>Pascal’s wager as a justification for bitcoin? Yes, I’m aware of the fallacies: false dichotomy, appeal to emotion, begging the question, etc. That is not the point. The point is that <strong>binary outcomes instigate extreme results</strong>, and the game theory of money suggests that it’s a winner-take-all game.</p><h2>The Pascalian investor: A rational approach to bitcoin</h2><p>Humanity’s adoption of “the best money over time” mimics <a href="https://unchained.com/blog/bitcoin-obsoletes-all-other-money/">a series of binary outcomes—A/B tests</a>.<em> </em></p><figure>
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<p>Throughout history, inferior forms of money have faded as better alternatives emerged (<a href="https://www.jstor.org/stable/24481545">see India’s failed transition to a gold standard</a>). And if bitcoin is trying to be the premier money of the future, it will either succeed or it won’t.</p><p><em>“If you ain’t first, you’re last.” -Ricky Bobby, Talladega Nights, on which monies succeed over time.</em> </p><p>So, we can look at bitcoin success similarly to Pascal’s wager—let’s call it Satoshi’s wager. The translated points would go something like this:</p><ul><li>If you own bitcoin early and it becomes a globally valuable money, you gain immensely. 2024-03-14T17:00:00Zurn:uuid:6bdc032a-f237-855b-b0e8-3afdf250de6aJessy Gilgerbm-x-unchained---financial-plan-risk---article-previewStabilizing Forces: How Bitcoin ETF Inflows Counter Price VolatilityThe scale of inflows to the ETF could provide enough demand side volume to negate the traditional price volatility caused by increasing sell volume as price rises. <p>Eleven approved Bitcoin ETFs have painted the pioneering cryptocurrency with a fresh coat of legitimacy. By receiving an official blessing from the Securities and Exchange Commission (SEC), an institutional investing barrier has been lifted.</p><p>With this barrier gone, financial advisors, mutual funds, pension funds, insurance companies and retail investors can now receive Bitcoin exposure without hassling with direct custodianship. More importantly, a taint has been scrubbed off from Bitcoin, previously likened to “tulip mania”, “rat poison”, or “index of money laundering”.</p><p>Following the unprecedented domino of crypto bankruptcies throughout 2022, Bitcoin price reverted to November 2020 level of $15.7k by the end of that year. After that great FUD reservoir was drained, Bitcoin slowly recovered during 2023 and entered 2024 at $45k level, first visited in February 2021.</p><p>With the 4th Bitcoin halving ahead in April, and with ETFs setting new market dynamics, what should Bitcoin investors expect next? To determine that, one must understand how Bitcoin ETFs elevated BTC trading volume, effectively stabilizing Bitcoin’s price volatility.</p><h2>Understanding Bitcoin ETFs and Market Dynamics</h2><p>Bitcoin itself represents the democratization of money. Not beholden to central authority like the Federal Reserve, Bitcoin’s decentralized network of miners and algorithmically determined monetary policy ensures that its limited 21 million coin supply can’t be tampered with. </p><p>For BTC investors, this means they can be exposed to an asset that is not on an inherent trajectory of devaluation, which is in stark contrast to all existing fiat currencies in the world. This is the foundation for Bitcoin’s perception of value.</p><p>Exchange-traded funds (ETFs) present another democratization pathway. The purpose of ETFs is to track an asset’s price, represented by shares, and enable trading throughout the day unlike actively managed mutual funds. The ETFs’ passive price tracking ensures lower fees, making it an accessible investment vehicle.</p><p>Of course, it would be up to Bitcoin custodians like Coinbase to enact sufficient <a href="https://cast.ai/cloud-security/">cloud security</a> to instill investor confidence. </p><p>In the ETF universe, Bitcoin ETFs have demonstrated high demand for a decentralized asset that is resistant to centralized dilution. Altogether in the last 15 days, they have resulted in $29.3 billion trading volume against $14.9 billion pressure from Grayscale Bitcoin Trust BTC (GBTC).</p><figure>
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<figcaption><em>Image credit: Bloomberg Intelligence via James Seyffart</em></figcaption>
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<p>This is not surprising. As Bitcoin price moved up due to Bitcoin ETF hype, 88% of all Bitcoin holders entered the profit zone in December 2023, eventually reaching <a href="https://studio.glassnode.com/metrics?a=BTC&m=supply.LthProfitSum">90%</a> in February. In turn, GBTC investors were cashing out, placing a downward pressure worth $5.6 billion on Bitcoin price.</p><p>Moreover, GBTC investors took advantage of lower fees from the newly approved Bitcoin ETFs, shifting funds from GBTC’s relatively high 1.50% fee. At the end of the day, BlackRock’s iShares Bitcoin Trust (IBIT) is the volume winner at 0.12% fee, which will go up to 0.25% after a 12-month waiver period.</p><p>To place this in the context of the wider ETF universe, IBIT and FBTC managed to outpace iShares Climate Conscious & Transition MSCI USA ETF (USCL), launched in June 2023, within a month of trading. </p><figure>
<img src="https://bitcoinmagazine.com/.image/c_fit%2Ch_800%2Cw_1200/MjA1MDE3MTU4MDc2NjA2MjA0/image9.png" height="800" width="777">
<figcaption><em>Image credit: Bloomberg Intelligence via Eric Balchunas</em></figcaption>
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<p>This is particularly indicative given that Bitcoin’s history is one of attacks coming from the sustainability direction. It bears reminding that Bitcoin price fell 12%, in May 2021, shortly after <a href="https://twitter.com/elonmusk/status/1392602041025843203">Elon Musk tweeted</a> that Tesla no longer accepts BTC payments precisely due to eco concerns.</p><p>During January, IBIT and FBTC found themselves at 8th and 10th place respectively as ETFs with the largest net asset inflows, headed by iShares Core S&P 500 ETF (IVV), according to <a href="https://www.morningstar.com/etfs/etf-flows-investors-curb-their-enthusiasm-january">Morning Star report</a>. With daily ~10,000 BTC streaming into ETFs, this represents a greatly lopsided demand over <a href="https://earthweb.com/how-many-bitcoins-are-mined-per-day/">~900 BTC</a> mined per day.</p><p>Moving forward, as the GBTC outflow pressure wanes and inflow trend increases, the steady stream of funds into Bitcoin ETFs is poised to stabilize BTC price.</p><h2>The Mechanism of Stabilization</h2><p>With 90% of Bitcoin holders entering the profit zone, highest since October 2021, selloff pressures can come from many sources, institutional, miner and retail. The higher inflow trend in Bitcoin ETFs is the bulwark against it, especially heading into another hype event - <a href="https://bitcoinmagazine.com/technical/the-bitcoin-halving-why-this-time-could-be-different">4th Bitcoin halving</a>. </p><p>Higher trading volumes generate higher liquidity, smoothing out price movements. That’s because larger volumes between both buyers and sellers absorb temporary imbalances. During January, <a href="https://etp.coinshares.com/knowledge/market-activity/portfolio-dynamics-january-2024?utm_source=twitter&utm_medium=social&utm_campaign=Market_PortfolioDynamics_0124&utm_content=Portfolio-dynamics-Jan24">CoinShares’ report</a> showed $1.4 billion of Bitcoin inflows, together with $7.2 billion from newly issued US-based funds, against the GBTC outflows of $5.6 billion.</p><figure>
<img src="https://bitcoinmagazine.com/.image/c_fit%2Ch_800%2Cw_1200/MjA1MDE3MTU4MDc2NTQwNTQ4/image8.png" height="645" width="1200">
<figcaption><em>At $1.4 billion, Bitcoin represents 96% of total flows in the US. Image credit: CoinShares</em></figcaption>
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<p>In the meantime, large financial institutions are setting new liquidity baselines. As of February 6th, Fidelity Canada set up 1% Bitcoin allocation within its <a href="https://www.fidelity.ca/en/products/funds/ace/">All-in-One Conservative ETF Fund</a>. Given its “conservative” moniker, this signals even greater percentage allocations in future non-conservative funds.</p><p>Ultimately, if Bitcoin taps into 1% of the $749.2 trillion market pool of various asset classes, Bitcoin’s market cap could grow to $7.4 trillion, bringing Bitcoin price to $400k.</p><figure>
<img src="https://bitcoinmagazine.com/.image/c_fit%2Ch_800%2Cw_1200/MjA1MDE3MTU4MDc2NDA5NDc2/image5.png" height="800" width="998">
<figcaption><em>Bitcoin’s current market cap is within $0.85 - $0.9 billion range. Image credit: Blockware Solutions</em></figcaption>
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<p>Given that Bitcoin ETFs provide a consistent and transparent market price reference point, large aggregated trades reduce market impact on potential selloffs coming from miners. This is visible from <a href="https://www.falconx.io/newsroom/are-we-entering-a-new-market-regime-the-growing-influence-of-macro-on-crypto-prices">FalconX Research</a>, showing a great uptick in daily aggregate volumes, previously from average 5% heading into the 10 - 13% range.</p><figure>
<img src="https://bitcoinmagazine.com/.image/c_fit%2Ch_800%2Cw_1200/MjA1MDE3MTU4MDc2NDA5NTk2/image2.png" height="530" width="1200">
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<p>In other words, the new Bitcoin ETF-induced market regime is reducing overall market volatility. So far, Bitcoin miners have been the main price-suppressing driver on the other side of the liquidity equation. In Bitfinex’s latest weekly on-chain report, miner wallets were responsible for 10,200 BTC in outflows.</p><figure>
<img src="https://bitcoinmagazine.com/.image/c_fit%2Ch_800%2Cw_1200/MjA1MDE3MTU4MDc2NTQwNjY4/image6.png" height="713" width="1200">
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<p>This matches the aforementioned ~10,000 BTC inflows in Bitcoin ETFs, resulting in relatively stable price levels. As miners reinvest and upgrade mining rigs ahead of the 4th halving, another stabilizing mechanism could come into play - options.</p><p>Although the SEC is yet to approve options on spot-traded BTC ETFs, this development will further expand ETF liquidity. After all, the greater spectrum of investing strategies revolving around hedging increases liquidity on both sides of the trade. </p><p>As a forward-looking metric, <a href="https://thetradinganalyst.com/implied-volatility/">implied volatility</a> in options trading gauges market sentiment. But the greater market maturity that we will inevitably see following the introduction of BTC ETFs, we’re more likely to see a more stabilized pricing of options and derivative contracts in general.</p><h2>Analyzing Inflows and Market Sentiment</h2><p>As of February 9th, Grayscale Bitcoin Trust ETF (GBTC) holds 468,786 BTC. Over the last week, the BTC price went up 8.6% to $46.2k. Concurrent with the <a href="https://bitcoinmagazine.com/markets/bitcoin-etf-inflows-in-context-">previous forecast</a>, this means that BTC dumping is likely to spread out over multiple rallies ahead of the 4th halving and beyond.</p><p>By latest numbers provided by <a href="https://farside.co.uk/?p=997">Farside Investors</a>, as of February 8th, Bitcoin ETFs have racked up $403 million inflows, totaling to $2.1 billion. GBTC outflows totaled $6.3 billion.</p><figure>
<img src="https://bitcoinmagazine.com/.image/c_fit%2Ch_800%2Cw_1200/MjA1MDE3MTU4MDc2NDc1MDEy/image7.png" height="800" width="585">
<figcaption><em>Image credit: Farside Investors</em></figcaption>
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<p>From January 11th to February 8th, GBTC outflows have steadily decreased. Within the first week, they averaged $492 million. In the second week, GBTC outflows averaged $313 million, ending in $115 million on average during the third week.</p><figure>
<img src="https://bitcoinmagazine.com/.image/c_fit%2Ch_800%2Cw_1200/MjA1MDE3MTU4MDc2NDc1MTMy/image3.png" height="800" width="884">
<figcaption><em>Source: Farside Investors, image credit: Bitcoin Magazine</em></figcaption>
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<p>On a weekly basis, this represents a 36% reduction on sell pressure from week one to two, and 63% reduction from week two to three.</p><p>As GBTC FUD unfolded up to February 9th, crypto fear & greed index elevated to “greed” at 72 points. This represents a revisit to January 12th, at 71 points, just a few days after Bitcoin ETF approvals.</p><p>Looking ahead, it bears noticing that Bitcoin price is reliant on global liquidity. After all, it was the Fed’s interest rate hiking cycle in March 2022 that caused the avalanche of crypto bankruptcies, culminating in the FTX collapse. Current fed fund futures project the end of that cycle either in May or in June. </p><p>Moreover, it is extremely unlikely that the Federal Reserve will veer off the money printing course. And at such occasions, Bitcoin price followed suit. </p><figure>
<img src="https://bitcoinmagazine.com/.image/c_fit%2Ch_800%2Cw_1200/MjA1MDE3MTU4MDc2MzQzOTQw/image4.png" height="800" width="985">
<figcaption><em>M2 money supply measures how much money is available in an economy. Image credit: LookIntoBitcoin.com</em></figcaption>
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<p>Considering the insurmountable national debt of $34 trillion, while the federal spending keeps <a href="https://fiscaldata.treasury.gov/americas-finance-guide/federal-spending/">outpacing revenue</a>, Bitcoin is positioning itself as a safe haven asset. One that waits for capital inflows into its limited 21 million coin supply.</p><h2>Historical Context and Future Implications</h2><p>As a similar safe haven asset, Gold Bullion Securities (GBS) launched as the first gold ETF in March 2003 on the Australian Securities Exchange (ASX). Next year, SPDR Gold Shares (GLD) launched on the New York Stock Exchange (NYSE). </p><p>Within a week from November 18th, 2004, <a href="https://www.spdrgoldshares.com/usa/historical-data/">GLD’s total net assets</a> rose up from $114,920,000 to $1,456,602,906. By the end of December, this decreased to $1,327,960,347. To reach BlackRock’s IBIT market value of <a href="https://www.ishares.com/ch/professionals/en/products/333011/ishares-bitcoin-trust">$3.5 billion</a>, it took GLD up to November 22nd 2005.</p><p>Although not inflation-adjusted, this indicates Bitcoin’s superior market sentiment compared to gold. Bitcoin is digital, yet it is grounded in a proof-of-work mining network spanning the globe. Its digital nature translates to portability which can not be said of gold. </p><p>The USG showcased this point when President Roosevelt issued Executive Order 6102 in 1933 for citizens to sell their gold bullions. Likewise, new gold veins are frequently discovered which dampens its limited supply status in contrast to Bitcoin.</p><p>In addition to these fundamentals, Bitcoin ETF options are yet to materialize. Nonetheless, Standard Chartered analysts project $50 to $100 billion in Bitcoin ETFs by the end of 2024. Moreover, large companies are yet to follow MicroStrategy’s lead by effectively converting shares sales into a depreciating asset.</p><p>Even 1% BTC allocations across mutual funds are poised to skyrocket BTC price. Case in point, <a href="https://www.streetinsider.com/SEC+Filings/Form+497K+Advisors+Preferred+Trust/22582132.html">Advisors Preferred Trust</a> set up a 15% range allocation into indirect Bitcoin exposure via futures contracts and BTC ETFs. </p><h2>Conclusion</h2><p>After 15 years of doubt and aspersions, Bitcoin has reached the apex of credibility. The first wave of believers in sound money ensured that the blockchain version of it is not lost in the bin of coding history.</p><p>On the back of their confidence, up until now, Bitcoin investors constituted the second wave. The Bitcoin ETF milestone represents the third wave exposure milestone. Central banks around the world continue to erode confidence in money, as governments cannot help themselves but to indulge in spending.</p><p>With so much noise introduced into the exchange of value, Bitcoin represents a return to the sound money root. Its saving grace is digital, but also physical proof-of-work as energy. Barring extreme USG action to sabotage institutional exposure, Bitcoin could even overtake gold as a traditional safe haven asset.</p><p><em>This is a guest post by Shane Neagle. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.</em></p>2024-03-14T16:30:00Zurn:uuid:4a1ab734-f55a-e59b-b356-b8f25578f179Shane Neaglevolatile<em>Image credit: Bloomberg Intelligence via James Seyffart</em>Craig Wright Is Not The Inventor of Bitcoin, Judge RulesCraig Wright is not the author of the whitepaper or the creator of Bitcoin, declared the judge.<p>In a landmark ruling, a judge at London's High Court declared that Craig Wright, the Australian 'computer scientist' who has long claimed to be the elusive creator of Bitcoin, is not Satoshi Nakamoto. This decision came following a legal confrontation with the <a href="https://www.opencrypto.org/">Crypto Open Patent Alliance</a> (COPA), seeking to prevent Wright from suing bitcoin developers and requesting a ruling affirming that he is not Satoshi.</p><blockquote class="twitter-tweet"><p lang="en" dir="ltr">Judge: I will prepare a fairly long judgement<br><br>I have reached the conclusions the evidence is overwhelming<br><br>CSW is not the author of the whitepaper<br>CSW is not satsohi<br>CSW is not the creator of Bitcoin<br>CSW did not author the Bitcoin software</p>— BitMEX Research (@BitMEXResearch) <a href="https://twitter.com/BitMEXResearch/status/1768263295666938277?ref_src=twsrc%5Etfw">March 14, 2024</a></blockquote>
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<p>Judge James Mellor delivered the verdict on Thursday, asserting that Wright is not the pseudonymous inventor of the first and original cryptocurrency. The judge promised to provide detailed reasons for his decision at a later date.</p><p>The trial unfolded amidst ongoing legal battles between Wright and COPA, with Wright issuing a settlement offer to the alliance and other involved parties. In his proposal, Wright offered to waive his purported database rights and copyrights related to Bitcoin (BTC), Bitcoin Cash (BCH), and Bitcoin ABC (ABC) databases. However, COPA rejected the offer, emphasizing that it would imply acceptance of Wright's self-proclaimed identity as Satoshi Nakamoto.</p><p>Moreover, COPA presented new forensic evidence during the trial to discredit Wright's claim, including the discovery of a Chat GPT forgery by Wright, suggesting that the evidence he presented was fabricated. Despite Wright's persistent assertions, COPA remains steadfast in its position against recognizing him as Satoshi Nakamoto.</p><p>Last night, COPA <a href="https://www.opencrypto.org/2024-03-13-12-reasons-why-Craig-Wright-is-not-Satoshi-Nakamoto/">detailed</a> more reasons why Craig Wright cannot be Satoshi Nakamoto. "These points come in addition to a large number of arguments focusing on Wright’s <a href="https://www.opencrypto.org/2024-01-24-COPAvCraigWright/">fraud</a> and forgeries ‘<a href="https://www.opencrypto.org/2024-02-07-Trial-Recap-1/">on an industrial scale</a>’," COPA stated.</p><blockquote class="twitter-tweet"><p lang="en" dir="ltr">“12 reasons why Craig Wright is not Satoshi Nakamoto”<br><br>Our trial to prove that Craig Wright is not Satoshi Nakamoto closes this week. Throughout trial, we’ve exposed Wright’s serial forgeries and identified point after point that shows he is not the real Satoshi.…</p>— COPA (@opencryptoorg) <a href="https://twitter.com/opencryptoorg/status/1768060878480445472?ref_src=twsrc%5Etfw">March 13, 2024</a></blockquote>
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2024-03-14T14:36:58Zurn:uuid:d79f422b-c1bd-4a58-5f50-7612e8e5e05fNik Hoffmanhodlonaut-v-wright-day5_301_19_42_15still001Cypherpunk Legend Adam Back Says $100,000 Bitcoin Price is 'Overdue'One of Bitcoin's most significant contributors, Adam Back, believes the asset is currently undervalued, even at all-time price highs above $70,000.<p>Bitcoin pioneer Adam Back, one of the earliest cypherpunks who helped lay the ideological foundation for Bitcoin, believes that the bitcoin price is on its way to hitting $100,000, and that the move is "overdue." </p><p>Back has been involved with Bitcoin since its earliest days, contributing to technology like Hashcash, which influenced Satoshi Nakamoto's design of the proof-of-work system that secures Bitcoin and finalizes its transactions.</p><p>In a recent interview, Back explained his bullish perspective on Bitcoin's potential. "I think it's kind of overdue already," he said about Bitcoin reaching a six-figure valuation.</p><p>"Bitcoin has been performing quite well, and many new applications like Strike have come online, providing easy user interfaces. The fundamentals and price have diverged somewhat, so I think the price will catch up."</p><p>Back doubled down on his $100,000 prediction in a post on <a href="https://x.com/adam3us/status/1768083025126904249?s=46&t=qcJDE0RaWiQjEKjMZF2JjA">X</a> saying, "I think the reason things are muted is that $100k seems way overdue, for a few years now. There's not much bull market euphoria as the $1-5k green candles scroll by. Just tick tock $100k."</p><p>Back's comments come after Bitcoin rallied in 2023 following a brutal bitcoin winter in 2022. The approval of spot bitcoin ETFs in the U.S. in January has since reignited interest in the asset class. </p><p>The British cryptographer is one of the most respected veterans in the space, making his bullish price prediction noteworthy. </p><p>In addition to pioneering early digital currency and proof-of-work research, Back is the CEO of Blockstream, a Bitcoin technology company focused on development, but that also has significant investments in mining.</p><p>With Bitcoin trading around $72,600 when this article was written, a jump to $100,000 would represent a 37.7% gain from current levels. </p><p>While a six-figure bitcoin price remains controversial, Back believes the network fundamentals combined with increasing institutional adoption make it possible in the years ahead. </p><p>If the prediction comes true, it would represent a new all-time high for Bitcoin.</p>2024-03-14T14:06:15Zurn:uuid:25f0c554-6376-6736-b7f5-fc3719f1f1a3Reed Macdonald screenshot-2024-03-14-at-100201amSenator Marsha Blackburn to Speak on Importance of BTC, Digital Assets for US Economy at Bitcoin Policy Summit in Washington D.C.Tennessee's longest-serving Congressperson will attend the Bitcoin Policy Institute's annual summit to address critical importance of Bitcoin and digital asset policy.<p>Marhsa Blackburn (R-TN), the longest-serving United States Senator representing the state of Tennessee, will speak at the National Press Club in Washington D.C. for the second-annual <a href="https://www.btcpolicysummit.org/">Bitcoin Policy Summit</a> hosted by the <a href="https://www.btcpolicy.org/">Bitcoin Policy Institute</a> (BPI).<br><br>According to a press release sent to <em>Bitcoin Magazine</em>, Blackburn will participate in a fireside chat focused on the current landscape of digital asset policy, tackling commonly-held misconceptions, regulatory challenges, as well as the future direction of Bitcoin and digital assets in the United States.</p><p>Blackburn <a href="https://www.congress.gov/member/marsha-blackburn/B001243">served</a> as a U.S. House of Representatives member for Tennessee's 7th District from 2003-2019 and began her tenure as Senator in 2019 until the present. Blackburn is currently the state’s senior Senator and the dean of Tennessee's congressional delegation. In 2022, Blackburn <a href="https://techcrunch.com/2022/09/28/us-senators-aim-to-amend-cybersecurity-bill-to-include-crypto/">co-sponsored</a> an amendment to the <a href="https://www.cisa.gov/resources-tools/resources/cybersecurity-information-sharing-act-2015-procedures-and-guidance">Cybersecurity Information Sharing Act of 2015</a> alongside Senator Lummis (R-WY), a vocal Bitcoin supporter. The amendment sought to expand voluntary data reporting from crypto companies in order to facilitate identification and response to cybersecurity threats in the industry. </p><p>"Senator Blackburn’s participation underscores the growing importance of Bitcoin in the real economy and the necessity of getting its regulation right” Grant Mccarty, co-founder of BPI said in a statement to <em>Bitcoin Magazine</em>.</p><figure>
<a href="https://www.btcpolicysummit.org/" ><img src="https://bitcoinmagazine.com/.image/c_fit%2Ch_800%2Cw_1200/MjA1MDE0ODE5NzM1MDg2ODQ0/image1.png" height="300" width="1200"></a>
<figcaption>Interested parties may apply to attend the 2024 Bitcoin Policy Summit. Enter code “bmag21” for 21% off tickets. Click <a href="https://www.btcpolicysummit.org/">here</a> for more information.</figcaption>
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<p>The inaugural Bitcoin Policy Summit in 2023 featured prominent policymakers including Senator Ted Cruz (R-TX), Senator Cynthia Lummis (R-WY) and House Majority Whip Tom Emmer (R-MN). Bitcoin industry leaders and human rights activists were also in attendance – among them: Roya Mahboob (CEO and Co-Founder, Digital Citizen Fund), Alex Gladstein (Chief Strategy Officer, Human Rights Foundation) and Jack Mallers (CEO, Strike).<br><br>This year’s Summit will be held at the National Press Club in Washington D.C. and includes Avik Roy (President, Foundation for Research On Equal Opportunity), Mike Brock (CEO of Block’s TBD), Sarah Kreps (Director, Cornell Brooks Tech Policy Institute) and Matthew Pines (Director, Security Advisory at Sentinel One). The full speaker list can be viewed <a href="https://www.btcpolicysummit.org/2024-speakers">here</a>.<br><br><em>Bitcoin Magazine, </em>in collaboration with BPI, will livestream the Summit via social media including <a href="https://twitter.com/BitcoinMagazine">Twitter (X)</a> and <a href="https://www.youtube.com/@BitcoinMagazine">YouTube</a>.</p><p><br>To learn more about the Bitcoin Policy Summit, visit <a href="https://www.btcpolicysummit.org/">https://www.btcpolicysummit.org/</a>. </p>2024-03-14T14:00:00Zurn:uuid:e92ac29d-6751-6e17-ee3e-f291e09ef429Spencer Nicholsbps-2024--marsha-blackburn---article-previewInterested parties may apply to attend the 2024 Bitcoin Policy Summit. Enter code “bmag21” for 21% off tickets. Click <a href="https://www.btcpolicysummit.org/">here</a> for more information.Bitcoin Has No Top Because Fiat Has No Bottom: Understanding Monetary DebasementBitcoin has been touted as the solution to monetary debasement, but what is debasement really, and where does it come from? The second installment of “10 Steps to Self-Sovereignty” powered by Ledger.<h2>MONETARY DEBASEMENT</h2><p>Debasement refers to the action or process of reducing the quality or value of something. When talking about fiat currencies, debasement traditionally refers to the practice of reducing the precious metal content in coins while keeping their nominal value the same, thereby diluting the coin’s intrinsic worth. In a modern context, debasement has evolved to mean the reduction in the value or purchasing power of a currency — such as when central banks increase the supply of money, in the process lowering the nominal value of each unit.</p><h2>UNDERSTANDING DEBASEMENT</h2><p>Before paper money and coins made of cheap metals like nickel, currency consisted of coins made of precious metals like gold and silver. These were the most sought after metals of the time, giving them value beyond government decree. Debasement was a common practice to save on precious metals and use them in a mix of lower-value metals instead.</p><p>This practice of mixing the precious metals with a lower-quality metal means authorities could create additional coins with the same face value, expanding the money supply for a fraction of the cost compared to coins with more gold and silver content.</p><p>Today, coins and notes don't have inherent worth, they are simply tokens that represent value. This means debasement relies on supply: i.e. how many coins or notes the issuing body allows to circulate. Debasement went through different processes and methods over time; therefore, we can define old and new methods.</p><h3>TRADITIONAL METHOD</h3><p>Coin clipping, sweating, and plugging were the most common debasement processes used until the introduction of paper money. Such methods were employed both by malicious actors that counterfeited coins and by authorities that increased the number of coins in circulation.</p><p>Clipping involves “shaving” the coins’ edges to remove some of the metal. As with sweating, the resulting clipped bits would be collected and used to make new counterfeit coins.</p><p>Sweating involves shaking coins vigorously in a bag until the edges of the coins come off and lay at the bottom. The pieces are then collected and used to create new coins.</p><p>Plugging was a way of punching a hole out of the coin’s middle area with the rest of the coin hammered together to close the gap. It could also be sawn in half with a plug of metal extracted from the interior. After filling the hole with a cheaper metal, the two halves would be fused again.</p><h3>MODERN-DAY METHODS</h3><p>Money supply increase is the modern method used by governments to debase the currency. By printing more money, governments get more funds to spend but it results in inflation for its citizens. Currency can be debased by increasing the money supply, lowering interest rates, or implementing other measures that encourage inflation; they’re all “good” ways of reducing the value of a currency.</p><h2>WHY IS MONEY DEBASED?</h2><p>Governments debase their currency so that they can spend without raising further taxes. Debasing money to fund wars was an effective way of increasing the money supply to engage in expensive conflicts without affecting people’s finances — or so it is believed.</p><p>Whether by traditional debasement or modern money printing, money supply increases have short-sighted benefits in boosting the economy. But in the long term, it leads to inflation and financial crises. The effects of this are felt most acutely by those in society who do not own hard assets that might counter the loss in the currency’s value.</p><p>Currency debasement could also occur by malicious actors who introduce counterfeit coins to an economy, but the consequence of being caught can in some countries lead to a death sentence.</p><p><em>“Inflation is legal counterfeiting, Counterfeiting is illegal inflation.”</em> - Robert Breedlove</p><p>Governments can take some measures to mitigate risks associated with money debasement and prevent unstable and weak economies, for example by controlling the money supply and interest rates within a specific range, managing spending, and avoiding excessive borrowing.</p><p>Any economic reform that promotes productivity and attracts foreign investments helps maintain confidence in the currency and prevent money debasement.</p><h2>REAL-WORLD EXAMPLES</h2><h3>The Roman Empire</h3><p>The first example of currency debasement dates back to the Roman Empire under emperor Nero around 60 A.D. Nero reduced the silver content in the denarius coins from 100% to 90% during his tenure.</p><p>Emperor Vespasian and his son Titus had enormous expenditures via post-civil war reconstruction projects like the building of the Colosseum, compensation to the victims of the Vesuvius eruption, and the Great Fire of Rome in 64 A.D. The chosen means to survive the financial crisis was to reduce the silver content of the “denarius” from 94% to 90%.</p><p>Titus’ brother and successor, Domitian, saw enough value in “hard money” and the stability of a credible money supply that he increased the silver content of the denarius back to 98% — a decision he had to revert when another war broke out, and inflation was looming again across the empire.</p><p>This process gradually continued until the silver content measured just 5% in the following centuries. The Empire began to experience severe financial crises and inflation as the money continued to be devalued — particularly during the 3rd century A.D., sometimes referred to as the “Crisis of the Third Century.” During this period, spanning from about A.D. 235 to A.D. 284, Romans demanded higher wages and an increase in the price of the goods they were selling to face currency depreciation. The era was marked by political instability, external pressures from barbarian invasions, and internal issues such as economic decline and plague.</p><p>It was only when Emperor Diocletian and later Constantine took various measures, including introducing new coinage and implementing price controls, that the Roman economy began to stabilize. However, these events highlighted the vulnerabilities of the once-mighty Roman economic system.</p><p>Read More >> <a href="https://bitcoinmagazine.com/culture/hard-money-hyperinflation-roman-empire">Hard To Soft Money: The Hyperinflation Of The Roman Empire</a></p><h3>OTTOMAN EMPIRE</h3><p>During the Ottoman Empire, the Ottoman official monetary unit, the akçe, was a silver coin that went through consistent debasement from 0.85 grams contained in a coin in the 15th century down to 0.048 grams in the 19th century. The measure to lower the intrinsic value of the coinage was taken to make more coins and increase the money supply. New currencies, the kuruş in 1688 and then the lira in 1844, gradually replaced the original official akçe due to its continuous debasement.</p><h3>HENRY VIII</h3><p>Under Henry VIII, England needed more money, so his chancellor started to debase the coins using cheaper metals like copper in the mix to make more coins for a more affordable cost. At the end of his reign, the silver content of the coins went down from 92.5% to only 25% as a way to make more money and fund the heavy military expenses the current European war was demanding.</p><h3>WEIMAR REPUBLIC</h3><p>During the Weimar Republic of the 1920s, the German government met its war and post-war financial obligations by printing more money. The measure reduced the mark’s value from around eight marks per dollar to 184. By 1922, the mark had depreciated to 7,350, eventually collapsing in a painful <a href="https://bitcoinmagazine.com/guides/what-is-hyperinflation">hyperinflation</a> when it reached 4.2 trillion marks per USD.</p><p>History offers us poignant reminders of the perils of monetary expansion. These once-powerful empires all serve as cautionary tales for the modern fiat system. As these empires expanded their money supply, devaluing their currencies, they were, in many ways, like the proverbial lobster in boiling water. The temperature — or in this case, the rate of monetary debasement — increased so gradually that they failed to recognize the impending danger until it was too late. Just as a lobster doesn't appear to realize it’s being boiled alive if the water’s temperature rises slowly, these empires didn’t grasp the full extent of their economic vulnerabilities until their systems became untenable.</p><p>The gradual erosion of their monetary value was not just an economic issue; it was a symptom of deeper systemic problems, signaling the waning strength of once-mighty empires.</p><h2>DEBASEMENT IN THE MODERN ERA</h2><p>The dissolution of the Bretton Woods system in the 1970s marked a pivotal moment in global economic history. Established in the mid-20th century, the Bretton Woods system had loosely tethered major world currencies to the U.S. dollar, which itself was backed by gold, ensuring a degree of economic stability and predictability.</p><p>However, its dissolution effectively untethered money from its golden roots. This shift granted central bankers and politicians greater flexibility and discretion in monetary policy, allowing for more aggressive interventions in economies. While this newfound freedom offered tools to address short-term economic challenges, it also opened the door to misuse and a gradual weakening of the economy.<br><br>In the wake of this monumental change, the US has experienced significant alterations in its monetary policy and money supply. By 2023, the monetary base had surged to 5.6 trillion dollars, representing an approximate 69-fold growth from its level of 81.2 billion dollars in 1971.</p><p>As we reflect on the modern era and the significant changes in U.S. monetary policy, it’s crucial to heed these historical lessons. Continuous debasement and unchecked monetary expansion can only go on for so long before the system reaches a breaking point.</p><h2>EFFECTS OF DEBASEMENT</h2><p>Currency debasement can have several significant effects on an economy, varying in magnitude depending on the extent of debasement and the underlying economic conditions.</p><p>Here are some of the most impactful consequences that currency debasement can generate over the long term.</p><h3>Higher inflation rates</h3><p>Higher inflation rates are the most immediate and impactful effects of currency debasement. As the currency’s value decreases, it takes more units to purchase the same goods and services, eroding the purchasing power of money.</p><h3>Increasing Interest Rates</h3><p>Central banks may respond to currency debasement and rising inflation by increasing interest rates, which can impact borrowing costs, business investments, and consumer spending patterns.</p><h3>Deteriorating the Value of Savings</h3><p>Currency debasement can deteriorate the value of savings held in the domestic currency. This is particularly detrimental to individuals with fixed-income assets, such as retirees who rely on pensions or interest income.</p><h3>More Expensive Imports</h3><p>A debased currency can make imports more expensive, potentially leading to higher costs for businesses and consumers reliant on foreign goods. However, it may also make exports more competitive internationally, as foreign buyers can purchase domestic goods at a lower price.</p><h3>Undermining Public Confidence in the Economy</h3><p>Continuous currency debasement can undermine public confidence in the domestic currency and the government’s ability to manage the economy effectively. This loss of trust may further exacerbate economic instability and even <a href="https://bitcoinmagazine.com/guides/what-is-hyperinflation">hyperinflation</a>.</p><h2>SOLUTION TO DEBASEMENT</h2><p>The solution to debasement lies in the reintroduction of sound money — money whose supply cannot be easily manipulated. While many nostalgically yearn for a return to the gold standard, which was arguably superior to contemporary systems, it is not the ultimate solution. The reason lies in the centralization of gold by central banks. Should we revert to a gold standard, history would likely repeat itself, leading to confiscation and the debasement of currencies once again. Put simply, if a currency can be debased, it will be.</p><h3>How Bitcoin Avoids Debasement</h3><p>Bitcoin offers a permanent solution to this issue. Its supply is capped at 21 million, a number that is hard-coded and safeguarded by proof-of-work mining and a decentralized network of nodes. Thanks to its decentralized nature, no single entity or government can control Bitcoin’s issuance or governance. Furthermore, its inherent scarcity makes it resilient to the inflationary pressures that are typically seen with traditional fiat currencies.</p><p>As a distributed system, Bitcoin users can ensure that the supply never deviates from the predetermined supply cap by running the software that downloads and validates the entire transactional ledger. By verifying every transaction in Bitcoin’s history, where every coin came from and where it went, users can be absolutely sure that the supply has not been debased and no coins were created that should not have been.</p><p>Full node software like this for Bitcoin is essentially a counterfeiting detection machine that anyone can run. It guarantees the supply is intact, that coins being spent were properly authorized, and no funny business is happening. Any Bitcoin wallet software can also ensure that no one can restrict your access to your own money. </p><p>In times of economic uncertainty, or when central banks engage in extensive money printing, investors often turn to assets like gold and bitcoin for their store-of-value properties. As time progresses, there’s potential for people to recognize Bitcoin not just as a <a href="https://bitcoinmagazine.com/guides/store-of-value">store of value</a>, but as the next evolution of money.</p>2024-03-14T13:00:00Zurn:uuid:7c2f41fc-06a3-f88a-2dd8-8be02cfd2990Bitcoin Magazineledger-10-steps-intro---article-previewMichael Saylor's MicroStrategy To Raise $500 Million To Buy More Bitcoin Just two days ago, MicroStrategy bought $821.7 million worth of bitcoin, and now they're going to buy more.<p>MicroStrategy® Incorporated (Nasdaq: MSTR) has <a href="https://www.microstrategy.com/press/microstrategy-announces-proposed-private-offering-of-500-million-of-convertible-senior-notes_03-13-2024">revealed</a> plans to raise $500 million to buy more bitcoin through a private offering of convertible senior notes due 2031. The offering, subject to market conditions, targets qualified institutional buyers under Rule 144A of the Securities Act of 1933.</p><blockquote class="twitter-tweet"><p lang="en" dir="ltr">BREAKING: MicroStrategy to raise $500 million to buy more <a href="https://twitter.com/hashtag/Bitcoin?src=hash&ref_src=twsrc%5Etfw">#Bitcoin</a> <a href="https://t.co/EU19xmKB2x">pic.twitter.com/EU19xmKB2x</a></p>— Bitcoin Magazine (@BitcoinMagazine) <a href="https://twitter.com/BitcoinMagazine/status/1768010178828423270?ref_src=twsrc%5Etfw">March 13, 2024</a></blockquote>
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<p>The notes, unsecured and senior obligations of MicroStrategy, will bear semi-annual interest payable on March 15 and September 15, commencing September 15, 2024. Set to mature on March 15, 2031, the notes may be redeemed by MicroStrategy on or after March 22, 2028, subject to certain conditions.</p><p>Investors will have the option to convert the notes into cash, shares of MicroStrategy's class A common stock, or a combination thereof. Conversion before September 15, 2030, will occur based on specific events and periods, while after that date, conversion will be unrestricted until two days before the maturity date.</p><p>Proceeds from the offering will primarily fund the acquisition of additional bitcoin and support general corporate purposes, the announcement stated. The sale will be restricted to qualified institutional buyers under Rule 144A, with no registration under the Securities Act or other jurisdictional securities laws.</p><p>Just last week it was <a href="https://bitcoinmagazine.com/business/microstrategy-to-raise-600-million-to-buy-more-bitcoin">announced</a> that MicroStrategy was raising more money to buy more bitcoin. Following that announcement, MicroStrategy <a href="https://x.com/BitcoinMagazine/status/1767163297453769194?s=20">acquired</a> 12,000 BTC for $821.7 million this past Monday.</p>2024-03-13T20:45:50Zurn:uuid:4c7306bc-77de-b31e-a4ab-810fadcce7a6Nik Hoffmangiy5m66wqaaarovSaving Seeds in DNA: Bitcoin as InformationYour Bitcoin private keys are simply bits of random information. Information can be encoded and stored in an incomprehensible number of ways, including DNA. <p>I recently converted a Bitcoin seed phrase into a DNA sequence, just because I can. Using only the first four letters of the BIP39 seed words, a 12-word seed phrase can be stored in a mere 48 nucleotides of DNA. (For comparison, the average gene is several thousand nucleotides long, and the complete human genome contains over 3 billion nucleotides). Any genetics graduate student could, in just a few days, turn my seed word sequence into an actual strand of DNA and insert that DNA into <em>E. coli </em>or some other suitable host for storage (and propagation) inside a living organism. </p><p>DNA is just one modality for storing and transmitting information. There are numerous other ways to do so and once information is widely distributed it is nearly impossible to extinguish, which is why it will be impossible to stop Bitcoin on a global scale with regulation, legislation, or even violence. The mere fact that you can store a bitcoin private key in DNA demonstrates the futility of attempting to ban Bitcoin. Once unleashed, information is hard to contain. </p><figure>
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<p>But why is information so hard to contain? Perhaps because information is a fundamental entity of the universe. For centuries scientists thought the universe was made only of matter and energy. Today, we know it is made of matter, energy, and information. Information can be stored in matter and transmitted using energy, but information itself is neither. Einstein showed us that matter and energy are interchangeable (E=mc2) but <em>in toto</em> cannot be created nor destroyed. By contrast, information can be created and destroyed, but neither is easy. And once information is created and widely distributed, it is increasingly difficult to destroy. </p><h2>The Parts of Information</h2><p>Information is meant to be sent and received between two or more parties. It is done with a purpose by the sender and is meant to spur action in the receiver. There are five hierarchical components to information:</p><ol><li>Fidelity</li><li>Syntax (code or grammar)</li><li>Semantics (meaning)</li><li>Pragmatics (action)</li><li>Apobetics (purpose)</li></ol><h2>Fidelity</h2><p>Fidelity is the lowest element of information, but it is absolutely necessary for successful transmission. It was once a major issue for cell phone and internet communication. Remember the <em>“Can you hear me now?”</em> commercial? With technical advancements, low fidelity eventually became high fidelity (which weirdly became wireless fidelity, or Wi-Fi). Generally, we are not concerned with fidelity unless it is lacking. (<em>Can you hear me now?)</em></p><figure>
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<h2>The Code and Language</h2><p>Syntax refers to the code or grammar used for transmitting information. A code is a set of symbols that represent temporally or spatially interconnectable bits of information. That is, symbols can be strung together in time or space to achieve the next level of information (semantics). The symbols used can vary tremendously. They include, among other things, the letters that make up an alphabet, hand gestures (e.g., American Sign Language), musical notes (e.g., those old modem connections and touch tone phones), or the nucleotides in DNA and RNA. The number of symbols used can vary, as well. Most alphabets use 20-35 letters, the nucleotide code uses four chemicals (abbreviated A, U, C, and G), and the binary code employed by computers has just two symbols (0 and 1) representing the on and off states. The number and type of symbols employed are not selected randomly. For instance, they may be determined by the mode of transmission or to meet a specific need (Table 1). </p><p>Table 1: Symbols may be chosen for mode of transmission or to meet a specific need.</p><p>A common code is essential for information to be successfully communicated. That is, the code must be known to both the sender and the receiver. Also, because the code is not itself the information but merely the purveyor of information, any particular code can be <em>translated</em> to any other code. For example, written human languages can be translated from one to another: </p><p><em>Go tell it on the mountain…</em></p><p><em>Va le dire sur la montagne…</em></p><p><em>Ve a contario en la montaña…</em></p><p>The above phrase can also be translated, using human eyes, brain, and mouth, from symbols on a page into sound waves (acoustic symbols) in the air, which can be picked up by a microphone and converted to electrical signals in wires and then to radio waves transmitted through space to be picked up by an antenna on the space station, turned back into electrical signals, and then converted by a speaker back into sound waves to be heard by the ears of another human. In the ears of our human astronaut, the signal is converted from waves of air to waves of fluid in the cochlea and then to electrical nerve impulses carried to the brain to be interpreted by neurons. In the brain, those neurons somehow make sense of the original string of symbols, which brings us to the next level of information: semantics or meaning. </p><h2>Semantics, Pragmatics, and Apobetics</h2><p>Semantics is the meaning or intent of a message (a string of symbols). The allocation of meaning to symbols is a mental process. This doesn’t happen at the machine level but at the human level. When you read a book, you are not interested in fidelity (unless it is lacking) or syntax (unless the grammar is horrible or it’s a language you do not understand). Instead, you are interested in the <em>meaning</em> conveyed by the message, i.e., the semantics. Although computers can store and transmit information with ease, and can even perform logic operations via transistors, they cannot meaningfully interpret information the way a human can. Do raspberry pi nodes, hardware wallets, or ASICs understand Bitcoin the way a human does? I think not.</p><p>The aim of meaningful communication is to prompt some action in the recipient. This aim for action represents the pragmatic level of information. The reason the sender wishes to prompt this response is the purpose of the information, which is the apobetic level of information. These highest levels of information require genuine intelligence on both parties, even a will. Whether or not computers can ever possess a will remains to be seen. </p><p>“Go tell it on the mountain…” is a string of symbols (code) that create a meaningful message (semantics) with the sender expecting (apobetics) some response from the receiver (pragmatics). The message can only be received if transmitted adequately (good fidelity). </p><h2>Bitcoin as Information</h2><p>Bitcoin (the program) is computer code written in a particular coding language. From the software to the blockchain to the key pairs of wallets, bitcoin is information. This information can be stored, transmitted, and replicated in flash drives, printed books, or DNA molecules. Because it is now so widely dispersed, it is virtually impossible at this point to destroy. Politicians and bankers may not like it, but the genie is out of the bottle and cannot be stopped now. As they say, you cannot ban Bitcoin, you can only ban yourself from using Bitcoin. </p><p>Fidelity and syntax are the operational parts of information. Semantics, pragmatics, and apobetics are the higher levels of information concerned with the purpose and response of intelligent beings based on the meaning of the message. In Bitcoin, fidelity – or clarity of transmission – is achieved by the internet (and has even been accomplished by HAM radio) connecting a network of nodes, miners, and wallets. The syntax of Bitcoin consists of the coding languages used to write and execute Bitcoin Core and related software on those devices. The meaning, or semantics, of Bitcoin is a perfectly scarce, immutable, digital token. The highest purposes of Bitcoin – the pragmatics and apobetics – are demonstrated in the users that run miners, nodes, and wallets who are motivated and seeking to secure their wealth from theft, either by robbery or debasement. </p><p>The internet is now a mature and high-fidelity communication system. It cannot be destroyed without simultaneously destroying humanity as we know it. The computer codes and languages utilized by Bitcoin are sufficiently distributed such that eliminating them is essentially impossible. But even if you could somehow destroy the fidelity and syntax of the network, the <em>idea</em> of Bitcoin – the semantics, pragmatics, and apobetics – is too widely distributed to defeat. At this point, it has found its way into the minds of millions of people around the globe. Perhaps you could destroy the internet and every last hard drive holding the blockchain and every last computer running Bitcoin, but you would have to hunt down every last Bitcoiner to eradicate the idea of Bitcoin. And who knows, due to the ungovernable actions of some mad scientist, you might have to hunt down all the <em>E. coli</em>, too. </p><p><em>This is a guest post by Daniel Howell. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.</em></p>2024-03-13T16:30:00Zurn:uuid:5aef6988-2cf2-0728-7b11-0efe899e5e75Daniel Howelldefault_a_double_helix_strand_of_dna_with_bitcoin_bs_on_it_0Bitcoin Hits New Heights Between BlackRock Success and London Approval Bitcoin tops out price records again between major ETF inflows and new offerings in the UK. All signs point to increased financial acceptance worldwide. <p><strong><em>The below is an excerpt from a recent edition of Bitcoin Magazine Pro, Bitcoin Magazine's premium markets newsletter. To be among the first to receive these insights and other on-chain bitcoin market analysis straight to your inbox, </em></strong><strong><em><a href="https://bmpro.substack.com/">subscribe now</a>.</em></strong></p><figure>
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<p>Bitcoin has had another period of intense and record-breaking success, spurred on both by positive developments in international business and by increasingly large commitments from the spheres of traditional finance. </p><p>It’s truly stunning how well Bitcoin has been performing throughout the first quarter of 2024. The year began with Bitcoin’s valuation crossing the $40k mark, and March 1 saw a persistent hover around $60k. Now, however, Bitcoin has gone up to $72k, the highest valuation in its entire history. Although we still are not quite at the level where “digital gold” is more valuable than gold itself, we have even reached a new milestone: by market cap, Bitcoin is currently a more <a href="https://www.coindesk.com/markets/2024/03/11/bitcoins-market-cap-jumps-to-14t-surpassing-silver/">valuable</a> commodity than silver. Considering the immense role that silver has played in global currency for thousands of years, this is certainly a milestone to remember. </p><p>This period of success has been especially noteworthy for the continued confidence it’s been enjoying from some of the largest financial institutions in the world. On March 10, for example, it was <a href="https://cointelegraph.com/news/blackrock-bitcoin-etf-holds-more-btc-microstrategy">reported</a> that BlackRock, the world’s largest asset manager and prominent issuer of the Bitcoin spot ETF, had finally acquired enough bitcoin that it surpassed even the holdings of MicroStrategy. Considering that its board chairman, Michael Saylor, is such a Bitcoin evangelist, this development seemed especially huge. It was an even bigger surprise, however, when Saylor announced that he was buying enough to <a href="https://decrypt.co/221151/microstrategy-205000-bitcoin-treasury">reclaim</a> its leading position the very next day. Less than 24 hours passed between this original announcement and MicroStrategy’s purchase of 12k bitcoin, and this purchase took place when Bitcoin was already enjoying a price point over $70k. This purchase put MicroStrategy at the head of nearly every other private bitcoin stockpile, from all publicly traded miners to several major exchanges and ETF issuers.</p><iframe height="320" width="480" src="https://bmpro.substack.com/embed"
frameborder="0" scrolling="no"/></iframe><p>It’s a stunning display of confidence in Bitcoin that anyone is prepared to make such major investments at a time when it’s never been more expensive. It seems that the mood in these companies is that the all-time highs of today will seem like a paltry sum in just a few years. Analysts from ETF issuer Bitwise, for example, were confident enough in their <a href="https://cointelegraph.com/news/large-corporations-wirehouses-prepare-bitcoin-etf-bitwise">prediction</a> that corporate entities representing trillions of dollars would begin ramping up investments that Bitwise’s Chief Investment Officer released an official <a href="https://twitter.com/BitwiseInvest/status/1766162033311973474">memo</a> on the subject. Claiming “serious due diligence” conversations with everyone from hedge funds to massive corporations, the memo predicts that Q2 will see even more massive inflows than the first three months of the year. This just leaves us with one question: Where does this kind of confidence come from?</p><figure>
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<p>The center of the issue seems to be the runaway success of the Bitcoin ETF and, in particular, BlackRock’s dominating position over the main issuers. Initially, it struggled with Grayscale, which had several natural advantages: it was a Bitcoin-native company with a massive stockpile, it was a real leader in the legal battle to actually get SEC approval, its GBTC was a previously-existing fund that was converted into an ETF, and it had other tricks up its sleeve. Nevertheless, BlackRock is the ETF that <a href="https://www.ft.com/content/1bb8413e-b974-4e05-933e-7ffedec62bdb">reached</a> $10 billion faster than any other in history, shooting ahead of all other Bitcoin competitors and indeed all ETFs in general. Much of this revenue came from users fleeing GBTC’s high fees, and it seems like a confident industry leader today. Its success has even matured to the <a href="https://www.coindesk.com/business/2024/03/11/indian-crypto-investment-platform-mudrex-to-offer-us-bitcoin-etfs-to-indian-investors/">international</a> stage, as Mudrex, a crypto investment platform based in India, is opening up BlackRock ETF sales to institutional and private investors in a country with more than 1 billion people.</p><p>This kind of success from BlackRock in particular has also led some of its competitors to change up their tactical approach. VanEck, for example, made an <a href="https://twitter.com/vaneck_us/status/1767227350108794991">announcement</a> on March 11 that they were waiving all fees on their Bitcoin ETF for an entire year. This will only continue so long as their VanEck Bitcoin Trust is under $1.5 billion, but the fees after this window will still be some of the lowest available. Grayscale, for its part, is also seeking to <a href="https://www.axios.com/2024/03/12/grayscale-gbtc-bitcoin-etf-mini-version">address</a> the problem of high fees by spinning off a “mini-version” of its ETF, offering fractions of Bitcoin for a fraction of GBTC’s fees. It seems that BlackRock’s competitors are not yet willing to concede a market with such tremendous growth potential.</p><p>However, although the ETF market has been especially hot lately, that is not the only reason to believe that Bitcoin’s doing so well. <em>ABC News</em>, for example, <a href="https://abcnews.go.com/Business/bitcoin-soars-record-high-uk-approval-crypto-asset/story?id=108004016">credits</a> some positive developments from the United Kingdom as a major factor in Bitcoin’s price jump. Britain has previously been <a href="https://bmpro.substack.com/p/new-uk-rules-cause-consternation">considered</a> a particularly hostile regulatory environment for Bitcoin, especially the ETF, trailing behind both Western Europe and most of the Anglosphere in official Bitcoin approval. It was quite a surprise, then, when the London Stock Exchange (LSE) <a href="https://bitcoinmagazine.com/markets/london-stock-exchange-to-accept-bitcoin-exchange-traded-note-applications">released</a> a new factsheet on exchange-traded notes (ETNs), deciding that this type of financial instrument would be offered on their platform.</p><p>ETNs do differ substantially from ETFs, even those like the Bitcoin futures ETF, which has no direct link to Bitcoin itself. ETNs are a type of debt security and do not even include the proviso that the issuer actually holds the bitcoin in question. Still, they are directly tied to the value of Bitcoin and offer investors a way to gain exposure to the world’s leading digital asset. Considering that these ETNs are subject to the stringent rules that govern securities, it’s particularly interesting that the LSE has suddenly changed its tune on Bitcoin-related financial products. In other words, it seems that the sea change in legal Bitcoin spot ETFs in the United States has undeniably changed the calculus for businesses worldwide. With all these billions flowing into the Bitcoin ETF, even an unfriendly regulator like Great Britain must join in the bonanza if it wishes to maintain relevance as a leading hub of global finance. </p><p>These are just a few of the developments that have occurred in the world of Bitcoin, as the intersection between decentralized currency and traditional finance has become both broader and deeper. Looking forward, there are still plenty of upcoming events, like the halving predicted in April, to keep propelling the hype forward. It may be difficult to predict exactly where the next major development and price jump will come from, but right now it looks as if there is a growing faith coming from some true financial giants. Bitcoin has come an incredibly long way since the days of its total pariah status, and now there’s well over a trillion dollars in the market. With growth like that, it’s an easy win to keep betting on Bitcoin. </p>2024-03-13T14:45:04Zurn:uuid:40307b61-289c-6d76-3ac4-715f9170a141Landon ManningrocketmoonBitGo Rolls Out RBF Integration for Faster Bitcoin Transaction ProcessingBitGo users will now have the capability to replace transactions that are currently stalled with higher fees.<p><a href="https://www.bitgo.com/">BitGo</a>, a prominent provider of Bitcoin wallets and custody solutions, has unveiled a new enhancement to its platform with the introduction of Replace-By-Fee (RBF) integration, according to a press release sent to Bitcoin Magazine. This new feature is designed to increase the speed of Bitcoin transaction processing, offering users greater flexibility and control over their transactions.</p><p>RBF enables users to replace transactions that are stuck in process with higher fees, thereby incentivizing miners to confirm them promptly on-chain. Available across BitGo's range of wallets, including hot wallet, qualified custody, and self custody bitcoin wallet options, RBF integration marks a another big milestone in BitGo's ongoing efforts to provide advanced features and functionalities to its users.</p><p>The introduction of RBF brings several benefits to Bitcoin users. Firstly, it provides greater transaction flexibility, allowing users to adjust fees dynamically to accelerate confirmation, particularly during periods of high network congestion. This enhanced flexibility contributes to a smoother and more efficient transaction experience, empowering users to navigate the complexities of the Bitcoin network with confidence.</p><p>As part of the RBF integration, BitGo users will now have access to a range of new features and functionalities. These include the ability to signal for RBF in withdrawals, accelerate low-fee stuck transactions using RBF, and view replacement details on transfers accelerated via RBF. Additionally, BitGo will automatically signal for RBF in internal management transactions, such as consolidations and fanouts, to facilitate easy acceleration if needed.</p><p>The integration of RBF aligns with BitGo's dedication to providing the latest features and functionalities for its users. It enhances transaction management capabilities and contributes to a seamless and efficient user experience. As RBF becomes increasingly standard in Bitcoin wallets, BitGo intends to remains at the forefront of empowering users to navigate the complexities of the Bitcoin network with confidence and ease.</p>2024-03-13T14:00:00Zurn:uuid:ed82b898-c906-01de-7d39-4d7436895bc0Nik Hoffmanb4a8fb4e-1e18-48a9-a277-6fa9d20f8b0aOver 25 Leading Bitcoin Companies Rally for Official Bitcoin EmojiA coalition of over 25 leading organizations, including Bitcoin Magazine, rallies to introduce an official Bitcoin emoji.<p>Today, more than 25 leading Bitcoin organizations joined forces under the banner of the 'Bitcoin Deserves an Emoji' movement. Spearheaded by Nexo, this global initiative is dedicated to securing an official Bitcoin emoji for digital keyboards everywhere, signaling a monumental step toward recognizing Bitcoin's multifaceted role in society as a revolutionary technology, a form of money, and a cultural phenomenon.</p><p>“Bitcoin's journey reflects a remarkable blend of innovation and community,” stated Kosta Kantchev, Co-founder & Executive Chairman of Nexo. “It's time its significance is recognized universally, starting with a symbol we all understand - an emoji. Join us in making history.”</p><p>The coalition comprises a diverse group of participants including prominent entities such as Bitcoin Magazine parent company BTC Inc, Bitget, Brink, Chainalysis, Hacken, Nansen, and Unstoppable Domains. Together, they aim to celebrate and advocate for Bitcoin's integration into the digital lexicon through the universal language of emojis.</p><p>“Bitcoin is universal money for the world, it needs a universal emoji for every person, young and old to use,” said BTC Inc CEO David Bailey.</p><p>The campaign kicks off with a 50-day petition hosted on <a href="https://www.change.org/p/bitcoin-deserves-an-emoji">Change.org</a>, culminating in an official submission to the Unicode Consortium within the 2024 submission window. This concerted effort marks a renewed push for recognition, building on previous attempts and highlighting the growing importance of Bitcoin in our daily lives.</p><p>Emojis have evolved from their origins in Japan in the 1990s to become foundational elements of digital communication, transcending linguistic and geographical barriers. According to <a href="https://home.unicode.org/emoji/emoji-frequency/">Unicode</a>, 92% of internet users worldwide use emojis in their digital communications. The campaign for a Bitcoin emoji is more than symbolic—it's a movement to cement Bitcoin's status as an essential component of modern digital and financial ecosystems worldwide.</p><p>“Supporting Bitcoin's development has always been about paving the way for future innovation. An official emoji is more than a symbol; it's a nod to Bitcoin's technological impact on the world,” said Mike Schmidt, Executive Director of Brink.</p><p>The initiative invites everyone to join this community-driven effort. For more details and to become part of the campaign, visit the initiatives website <a href="http://bitcoinemoji.org">here</a>.</p>2024-03-12T15:00:07Zurn:uuid:26173e14-2b7d-e642-2575-43aeff02d5e1Mark Masonkeyvisual-1200x6752xBitcoin on Wheels: The Story of Bitcoinetas Meet the Bitcoinetas, a fleet of transformative vehicles on a mission to spread the bitcoin message everywhere they go. From Argentina to South Africa, these unique cars are emblematic of hope and practical financial literacy.<p>You may have seen that picture of Michael Saylor in a bitcoin-branded van, with a cheerful guy right next to the car door. This one:</p><figure>
<img src="https://bitcoinmagazine.com/.image/c_fit%2Ch_800%2Cw_1200/MjA0OTY4MDc0Mzg1MTcyMTAw/image12.jpg" height="800" width="781">
<figcaption><em>Ariel Aguilar and La Bitcoineta European Edition at BTC Prague.</em></figcaption>
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<p>That car is the Bitcoineta European Edition, and the cheerful guy is Ariel Aguilar. Ariel is part of the European Bitcoineta team, and has previously driven another similar car in Argentina. In fact, there are currently five cars around the world that carry the name Bitcoineta (in some cases preceded with the Spanish definite article “La”).</p><h3>Argentina: the original La Bitcoineta</h3><p>The story of Bitcoinetas begins with the birth of 'La Bitcoineta' in Argentina, back in 2017. Inspired by the vibrancy of the South American Bitcoin community, the original Bitcoineta was conceived after an annual Latin American Conference (<a href="https://www.labitconf.com/">Labitconf</a>), where the visionaries behind it recognized a unique opportunity to promote Bitcoin education in remote areas. Armed with a bright orange Bitcoin-themed exterior and a mission to bridge the gap in financial literacy, La Bitcoineta embarked on a journey to bring awareness of Bitcoin's potential benefits to villages and towns that often remained untouched by mainstream financial education initiatives. Operated by a team of dedicated volunteers, it was more than just a car; it was a symbol of hope and empowerment for those living on the fringes of financial inclusion.</p><figure>
<img src="https://bitcoinmagazine.com/.image/c_fit%2Ch_800%2Cw_1200/MjA0OTY4MDc0Mzg0OTA5OTU2/image7.jpg" height="675" width="1200">
<figcaption><em>The concept drawing for La Bitcoineta from December 2017.</em></figcaption>
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<p>Ariel was part of that initial Argentinian Bitcoineta team, and spent weeks on the road when the car became a reality. The original dream to bring bitcoin education even to remote areas within Argentina and other South American countries came true, and the La Bitcoineta team took part in dozens of local bitcoin meetups in the subsequent years.</p><figure>
<img src="https://bitcoinmagazine.com/.image/c_fit%2Ch_800%2Cw_1200/MjA0OTY4MDc0MTE2NDA5MDg0/image2.jpg" height="600" width="1200">
<figcaption><em>The original La Bitcoineta from Argentina.</em></figcaption>
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<p>One major hiccup came in late 2018, when the car was crashed into while parked in Puerto Madryn. The car was pretty much destroyed, but since the team was possessed by a honey badger spirit, nothing could stop them from keeping true to their mission. It is a testament to the determination and resilience of the Argentinian team that the car was quickly restored and returned on its orange-pilling quest soon after.</p><figure>
<img src="https://bitcoinmagazine.com/.image/c_fit%2Ch_800%2Cw_1200/MjA0OTY4MDc0Mzg0OTc1NjEy/image13.jpg" height="800" width="1067">
<figcaption><em>Argentinian Bitcoineta after a major accident (no-one got hurt); the car was restored shortly after.</em></figcaption>
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<p>Over the more than 5 years that the Argentinian Bitcoineta has been running, it has traveled more than 80,000 kilometers - and as we’ll see further, it inspired multiple similar initiatives around the world.</p><iframe width="560" height="315" src="https://www.youtube.com/embed/OrG20keYRm4" frameborder="0" allowfullscreen></iframe><blockquote><p>Follow La Bitcoineta’s journey:</p><p>Twitter: <a href="https://twitter.com/labitcoineta">https://twitter.com/labitcoineta</a> </p><p>Instagram: <a href="https://www.instagram.com/bitcoineta/">https://www.instagram.com/bitcoineta/</a></p></blockquote><h3>El Salvador: Bitcoin Beach </h3><p>In early 2021, the president of El Salvador passed the Bitcoin Law, making bitcoin legal tender in the country. The Labitconf team decided to celebrate this major step forward in bitcoin adoption by hosting the annual conference in San Salvador, the capital city of El Salvador. And correspondingly, the Argentinian Bitcoineta team made plans for a bold 7000-kilometer road trip to visit the Bitcoin country with the iconic Bitcoin car. </p><p>However, it proved to be impossible to cross so many borders separating Argentina and Salvador, since many governments were still imposing travel restrictions due to a Covid pandemic. So two weeks before the November event, the Labitconf team decided to fund a second Bitcoineta directly in El Salvador, as part of the <a href="https://www.bitcoinbeach.com/">Bitcoin Beach</a> circular economy. Thus the second Bitcoineta was born. </p><figure>
<img src="https://bitcoinmagazine.com/.image/c_fit%2Ch_800%2Cw_1200/MjA0OTY4MDc0Mzg0OTEwMDc2/image8.jpg" height="800" width="1125">
<figcaption><em>Salvadoran’s Bitcoineta operates in the El Zonte region, where the Bitcoin Beach circular economy is located.</em></figcaption>
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<p>The eye-catching Volkswagen minibus has been donated to the Bitcoin Beach team, which uses the car for the needs of its circular economy based in El Zonte.</p><blockquote><p>Follow Bitcoin Beach:</p><p>Twitter: <a href="https://twitter.com/Bitcoinbeach">https://twitter.com/Bitcoinbeach</a></p></blockquote><h3>South Africa: Bitcoin Ekasi</h3><p>Late 2021 saw one other major development in terms of grassroots bitcoin adoption. On the other side of the planet, in South Africa, Hermann Vivier initiated the <a href="https://bitcoinekasi.com/">Bitcoin Ekasi</a> project. “Ekasi” is a colloquial term for a township, and a township in the South African context is an underdeveloped urban area with a predominantly black population, a remnant of the segregationist apartheid regime. Bitcoin Ekasi emerged as an attempt to introduce bitcoin into the economy of the JCC Camp township located in Mossel Bay, and has gained a lot of success on that front.</p><p>Bitcoin Ekasi was in large part inspired by the success of the Bitcoin Beach circular economy back in El Salvador, and the respect was mutual. The Bitcoin Beach team thus decided to pass on the favor they received from the Argentinian Bitcoineta team, and provided funds to Bitcoin Ekasi for them to build a Bitcoineta of their own. </p><figure>
<img src="https://bitcoinmagazine.com/.image/c_fit%2Ch_800%2Cw_1200/MjA0OTY4MDc0Mzg0ODQ0NDIw/image5.jpg" height="800" width="1067">
<figcaption><em>Bitcoin Ekasi’s Bitcoineta as seen at the Adopting Bitcoin Cape Town conference.</em></figcaption>
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<img src="https://bitcoinmagazine.com/.image/c_fit%2Ch_800%2Cw_1200/MjA0OTY4MDc0NjUzMjE0NDYw/image14.jpg" height="800" width="600">
<figcaption><em>Bitcoin Ekasi’s Bitcoineta as seen at the Adopting Bitcoin Cape Town conference. Hermann Vivier is seen in the background.</em><br tml-linebreak="true"></figcaption>
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<img src="https://bitcoinmagazine.com/.image/c_fit%2Ch_800%2Cw_1200/MjA0OTY4MDc0MTE2MzQzNTQ4/image1.jpg" height="666" width="1200">
<figcaption><em>South African Bitcoineta serves the needs of Bitcoin Ekasi, a local bitcoin circular economy in the JCC Camp township.</em><br tml-linebreak="true"></figcaption>
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<p>Bitcoin Ekasi emerged as a sister organization of <a href="https://www.thesurferkids.com/">Surfer Kids</a>, a non-profit organization with a mission to empower marginalized youths through surfing. The Ekasi Bitcoineta thus partially serves as a means to get the kids to visit various surfer competitions in South Africa. A major highlight in this regard was when the kids got to meet Jordy Smith, one of the most successful South African surfers worldwide.</p><p>Coincidentally, South African surfers present an intriguing demographic for understanding Bitcoin due to their unique circumstances and needs. To make it as a professional surfer, the athletes need to attend competitions abroad; but since South Africa has tight currency controls in place, it is often a headache to send money abroad for travel and competition expenses. The borderless nature of Bitcoin offers a solution to these constraints, providing surfers with an alternative means of moving funds across borders without any obstacles. </p><figure>
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<p><em>Photo taken at the South African Junior Surfing Championships 2023. Back row, left to right:</em></p><p><em>Mbasa, Chuma, Jordy Smith, Sandiso. Front, left to right: Owethu, Sibulele. </em></p><p>To find out more about Bitcoineta South Africa and the non-profit endeavors it serves, watch Lekker Feeling, a documentary by Aubrey Strobel: </p><iframe width="560" height="315" src="https://www.youtube.com/embed/P8vlzaDSNY0" frameborder="0" allowfullscreen></iframe><blockquote><p>Follow Bitcoin Ekasi:</p><p>Twitter: <a href="https://twitter.com/BitcoinEkasi">https://twitter.com/BitcoinEkasi</a></p><p>Fundraiser: <a href="https://support.bitcoinekasi.com/">https://support.bitcoinekasi.com/</a></p></blockquote><h3>Europe: Bitcoineta Europa</h3><p>The European Bitcoineta started its journey in early 2023, with Ariel Aguilar being one of the main catalysts behind the idea. Unlike its predecessors in El Salvador and South Africa, the European Bitcoineta was not funded by a previous team but instead secured support from individual donors, reflecting a grassroots approach to spreading financial literacy. </p><figure>
<img src="https://bitcoinmagazine.com/.image/c_fit%2Ch_800%2Cw_1200/MjA0OTY4MDc0Mzg1MDQxMDI4/image11.jpg" height="800" width="1066">
<figcaption><em>European Bitcoineta sports a hard-to-overlook bitcoin logo along with the message “Bitcoin is Work. Bitcoin is Time. Bitcoin is Hope.”</em></figcaption>
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<p>The European Bitcoineta is a Mercedes box van adorned with a prominent Bitcoin logo and inspiring messages, and serves as a mobile hub for education and discussion at numerous European Bitcoin conferences and local meetups. Inside its spacious interior, both notable bitcoiners and bitcoin plebs share their insights on the walls, fostering a sense of camaraderie and collaboration.</p><figure>
<img src="https://bitcoinmagazine.com/.image/c_fit%2Ch_800%2Cw_1200/MjA0OTY4MDc0Mzg0ODQ0NTQw/image6.jpg" height="800" width="736">
<figcaption><em>Inside the European Bitcoineta, one can find the wall of fame, where visitors can read messages from prominent bitcoiners such as Michael Saylor, Uncle Rockstar, Javier Bastardo, Hodlonaut, and many others.</em></figcaption>
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<img src="https://bitcoinmagazine.com/.image/c_fit%2Ch_800%2Cw_1200/MjA0OTY4MDc0Mzg1MTA2NTY0/image10.jpg" height="800" width="600">
<figcaption><em>On the “pleb wall”, any bitcoiner can share their message (as long as space permits).</em><br tml-linebreak="true"></figcaption>
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<blockquote><p>Follow Bitcoineta Europa’s journey:</p><p>Twitter: <a href="https://twitter.com/BitcoinetaEU">https://twitter.com/BitcoinetaEU</a></p><p><a href="https://twitter.com/BitcoinetaEU"></a>Instagram: <a href="https://www.instagram.com/bitcoinetaeu/">https://www.instagram.com/bitcoinetaeu/</a></p></blockquote><h3>Ghana: Bitcoineta West Africa</h3><p>Embed: <a href="https://youtu.be/8oWgIU17aIY?si=hrsKmMIA7lI6jX4k">https://youtu.be/8oWgIU17aIY?si=hrsKmMIA7lI6jX4k</a> </p><p>Introduced in December 2023 at the Africa Bitcoin Conference in Ghana, the fifth Bitcoineta was donated to the Ghanaian Bitcoin Cowries educational initiative as part of the <a href="https://academy.trezor.io/">Trezor Academy</a> program. </p><figure>
<img src="https://bitcoinmagazine.com/.image/c_fit%2Ch_800%2Cw_1200/MjA0OTY4MDc0Mzg0Nzc5MDA0/image4.jpg" height="800" width="1198">
<figcaption><em>Bitcoineta West Africa was launched in December 2023 at the Africa Bitcoin Conference. Among its elements, it bears the motto of the Trezor Academy initiative: Bitcoin. Education. Freedom.</em></figcaption>
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<p>Bitcoineta West Africa was funded by the proceeds from the bitcoin-only limited edition Trezor device, which was sold out within one day of its launch at the Bitcoin Amsterdam conference.</p><p>With plans for an extensive tour spanning Ghana, Togo, Benin, Nigeria, and potentially other countries within the ECOWAS political and economic union, Bitcoineta West Africa embodies the spirit of collaboration and solidarity in driving Bitcoin adoption and financial inclusion throughout the Global South.</p><figure>
<img src="https://bitcoinmagazine.com/.image/c_fit%2Ch_800%2Cw_1200/MjA0OTY4MDc0Mzg0OTc1NDky/image9.jpg" height="800" width="1197">
<figcaption><em>Bitcoineta West Africa surrounded by a group of enthusiastic bitcoiners at the Black Star Square, Accra, Ghana.</em></figcaption>
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<blockquote><p>Follow Bitcoineta West Africa’s journey:</p><p>Twitter: <a href="https://twitter.com/BitcoinetaWA">https://twitter.com/BitcoinetaWA</a></p><p>Instagram: <a href="https://www.instagram.com/bitcoinetawa/">https://www.instagram.com/bitcoinetawa/</a></p></blockquote><p>—</p><p>All the Bitcoineta cars around the world share one overarching mission: to empower their local communities through bitcoin education, and thus improve the lives of common people that might have a strong need for bitcoin without being currently aware of such need. As they continue to traverse borders and break down barriers, Bitcoinetas serve as a reminder of the power of grassroots initiatives and the importance of financial education in shaping a more inclusive future. The tradition of Bitcoinetas will continue to flourish, and in the years to come we will hopefully encounter a brazenly decorated bitcoin car everywhere we go.</p><p>If the inspiring stories of Bitcoinetas have ignited a passion within you to make a difference in your community, we encourage you to take action! Reach out to one of the existing Bitcoineta teams for guidance, support, and inspiration on how to start your own initiative. Whether you're interested in spreading Bitcoin education, promoting financial literacy, or fostering empowerment in underserved areas, the Bitcoineta community is here to help you every step of the way. Together, we will orange pill the world!</p><p><em>This is a guest post by Josef Tetek. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.</em></p>2024-03-12T14:01:54Zurn:uuid:929ba51f-01cd-5316-e649-9a74343bac6aJosef Tětekbitcoinvan<em>Ariel Aguilar and La Bitcoineta European Edition at BTC Prague.</em>Bitcoin Exchange Relai Integrates Lightning Network For Its 100,000 European UsersRelai has partnered with Blockstream and Breez to allow its users to use the Lightning Network in a self-custodial manner.<p><a href="https://relai.app/">Relai</a>, the Swiss-based Bitcoin app with a self-custody wallet, has announced a new partnership with <a href="https://blockstream.com/">Blockstream</a> and <a href="https://breez.technology/">Breez</a> to integrate the Lightning Network into its platform, benefiting over 100,000 European users, according to a press release sent to Bitcoin Magazine.</p><p>The Lightning Network offers a scalable solution to facilitate fast and low-cost transactions, making Bitcoin more suitable for everyday use. By leveraging Lightning, Relai aims to streamline Bitcoin payments for its growing user base, empowering them to send and receive bitcoin directly to their wallets in a self-custodial manner.</p><p>“Bitcoin is sound money. Lightning is the future of Bitcoin,” said Relai CEO Julian Liniger. “It’s how money will be moved around the world in the 21st century. That’s why Lightning is a strategic focus of Relai and will be integral to our mission of bringing BTC to millions of people quickly, easily, and securely!”</p><p>Partnering with industry giants Blockstream and Breez, Relai aims to ensure seamless integration and optimal user experience. Blockstream's Greenlight cloud nodes and Breez SDK's Lightning Service Providers (LSPs) enable Relai to offer Lightning's benefits while maintaining non-custodial control over users' funds.</p><p>The integration of Lightning into Relai's platform is just the beginning of its product expansion and European expansion plans, according to the release. Relai aims to obtain the MiCA license to extend its services throughout Europe, marking a big step towards its goal of making Bitcoin accessible to millions of users across the continent.</p>2024-03-12T14:00:00Zurn:uuid:02775f28-cd8b-716d-976d-24cb415cf842Nik Hoffmandefault_bitcoin_and_european_flag_and_lightning_0London Stock Exchange To Accept Bitcoin Exchange Traded Note ApplicationsThe proposed ETNs would be physically backed with the assets held in cold storage.<p>The London Stock Exchange (LSE) <a href="https://docs.londonstockexchange.com/sites/default/files/documents/crypto_etn_admission_factsheet.pdf">released</a> a "crypto ETN admission factsheet" showcasing its decision to accept applications for Bitcoin exchange-traded notes (ETNs). The move comes as part of the LSE's efforts to expand its offerings and provide investors with exposure to bitcoin.</p><blockquote class="twitter-tweet"><p lang="en" dir="ltr">JUST IN: 2024-03-11T15:39:49Zurn:uuid:3893cef0-acd6-e95c-0060-bd514820e2fcNik Hoffmandefault_london_stock_exchange_and_bitcoin_0Donald Trump Says He "Sometimes Will Let People Pay Through Bitcoin"The former President says Bitcoin has taken on a life of its own.<p>Former President Donald Trump spoke to CNBC about his stance on Bitcoin today, revealing that he occasionally accepts Bitcoin as payment. In the interview, Trump acknowledged the growing popularity of Bitcoin and that "its taken its own life." While Trump did not provide specific details about the frequency or context in which he accepts Bitcoin, his statement underscores the increasing mainstream acceptance of BTC.</p><blockquote class="twitter-tweet"><p lang="en" dir="ltr">JUST IN: 2024-03-11T14:01:25Zurn:uuid:a9f8fc9b-3b83-19b2-168e-18bb916fdf9dNik Hoffmandefault_donald_trump_and_bitcoin_0Bitcoin Asset Protocol BRC-20 Appoints New MaintainersCreator of BRC-20 announces Layer 1 Foundation, Unisat and Best In Slot as new co-lead maintainers over the governance of the protocol.<p>The creator of BRC-20 (Bitcoin Request for Comment 20), Domo, has announced his non-profit foundation is now dedicated to the governance of the BRC-20 protocol. This organization, known as the <a href="https://layer1.foundation/">Layer 1 Foundation</a> (L1F), will collaborate with Ordinals companies such as <a href="https://unisat.io/">Unisat</a> and <a href="https://bestinslot.xyz/">Best In Slot</a> to oversee the protocol's maintenance, according to a press release sent to Bitcoin Magazine.</p><p>“The goal is to support the growth of Bitcoin metaprotocols on Ordinals and beyond,” said BRC-20 Creator, Domo. “BRC-20 was an early experiment—but we’re seeing a wave of standards that need tools, infrastructure and support to thrive. We hope to support innovation on Bitcoin in a fair and market-neutral capacity.”</p><p>Unisat and Best In Slot have been appointed as co-lead maintainers of the BRC-20 protocol and its indexer, operating within the <a href="https://layer1.foundation/resolution">governance guidelines</a> set by L1F. Unisat, known for developing the first BRC-20 indexer in partnership with Domo, has played a pivotal role in listing BRC-20 tokens, which recently reached a market cap of $5 billion.</p><p>Concerns over the risks associated with a centralized indexer led to the development of a decentralized BRC-20 indexing solution by Best In Slot. The two companies will work together to advance the decentralization of the BRC-20 indexer as co-lead maintainers.</p><p>Moreover, Domo has appointed five Ordinals companies to the L1F Oversight Committee, tasked with enforcing governance guidelines for the BRC-20 standard. These companies, including Hiro, Allium, ALEX, Oyl Dynamics, and UTXO Management, represent major stakeholders in the BRC-20 ecosystem.</p><p>The Layer 1 Foundation, operating as a non-profit with 501(c)(6) status, aims to advance the development of metaprotocols on Bitcoin beyond BRC-20. It seeks to provide educational resources and tools to support developers across Bitcoin-native ecosystems in attempt to foster innovation in a fair and market-neutral manner.</p><p><em>Disclaimer: UTXO Management's parent company, BTC Inc., is also the parent company of Bitcoin Magazine. UTXO Management operates separately and independently from Bitcoin Magazine.</em></p>2024-03-11T14:00:00Zurn:uuid:23d7296f-8791-51a0-bfac-29d84518800dNik Hoffmandefault_bitcoin_tokens_0-1Digital Currency Group Pushes Back Against NYAG Lawsuit Digital Currency Group files motion to dismiss NYAG criminal suit. This move comes after prolonged civil disputes between DCG subsidiary Genesis and a former business partner.<p><strong><em>The below is an excerpt from a recent edition of Bitcoin Magazine Pro, Bitcoin Magazine's premium markets newsletter. To be among the first to receive these insights and other on-chain bitcoin market analysis straight to your inbox, </em></strong><strong><em><a href="https://bmpro.substack.com/">subscribe now</a>.</em></strong></p><figure>
<a href="https://bmpro.substack.com/" ><img src="https://bitcoinmagazine.com/.image/c_fit%2Ch_800%2Cw_1200/MjAxMjU3OTE4Njk0MTcyMTYx/mtg5njayntyzmtmymjm2ode4.jpg" height="246" width="1200"></a>
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<p>Digital Currency Group, a venture capital firm, has filed a motion to dismiss a criminal suit filed against them by the New York Attorney General’s office.</p><p>The legal battle between DCG and the NYAG has been ongoing for several months, and is directly entangled with a dispute between two other prominent crypto firms: Genesis, a now-defunct brokerage firm, and Gemini, exchange and bank. These groups have been entangled in a series of disputes that trace back years, involving dramatic relationship changes and serious fraud accusations. A particularly relevant twist in the whole situation is the fact that the bankrupt Genesis is and has been a <a href="https://en.wikipedia.org/wiki/Digital_Currency_Group">subsidiary</a> of the substantially powerful DCG, which holds billions’ worth of assets under management and counts ETF issuer Grayscale as another subsidiary. </p><p>In other words, untangling the background for all the different players involved here is a fairly significant undertaking, especially considering the fraught environment that currently exists. Not only is the attorney general’s <a href="https://cointelegraph.com/news/gemini-genesis-dgc-sued-by-new-york-attorney-general-for-allegedly-defrauding-investors">suit</a> directed against DCG, Genesis and Gemini in equal measure, but Genesis and Gemini have also <a href="https://www.theblock.co/post/275907/genesis-asks-bankruptcy-court-to-approve-1-4-billion-sale-of-gbtc-shares">faced off</a> in civil suits independent of this. The NYAG accused these firms in October 2023 of collectively defrauding investors out of more than $1 billion, and the mutual recriminations involved have created a messy atmosphere. To begin, as good a place as any is a recent <a href="https://www.theblock.co/post/281064/genesis-gemini-possible-merger">revelation</a> found in court filings surrounding this dismissal. Specifically, court documents this March have made it public knowledge that Genesis and Gemini considered a merger in 2022.</p><iframe height="320" width="480" src="https://bmpro.substack.com/embed"
frameborder="0" scrolling="no"/></iframe><p>In 2022, DCG CEO Barry Silbert conducted a meeting with Gemini co-founder Cameron Winklevoss over lunch, to discuss some of the motivations and logistical issues with merging the two corporate entities together. At the time, Genesis was in serious danger of bankruptcy, and its substantial partnerships with Gemini meant that the fallout would likely damage the other company’s business. Gemini had lent substantial funds to Genesis as part of the Gemini Earn program, which Genesis had proceeded to <a href="https://www.theblock.co/post/258365/nyag-files-complaint-against-gemini-genesis-dcg-michael-moro-and-barry-silbert-over-earn-product-and-covering-up-1-billion-hole">lose</a>. The hedge fund Three Arrows Capital was in charge of this money when it went belly-up in the aftermath of the FTX collapse, and Genesis was faced with a $1 billion dilemma. As for the original source of these lost funds, the NYAG has accused the firms of defrauding this money from investors.</p><p>At the meeting, Silbert made the sales pitch that the two firms should combine, and that they “would be a juggernaut and would be competitive with Coinbase and FTX”. He added that, even if Genesis and Gemini couldn’t reach an agreement on these terms, “there is a ton more Gemini and Genesis can do together and the two companies should be leaning in together, not pulling apart”. Although Winklevoss was allegedly “<a href="https://decrypt.co/220648/dcg-genesis-gemini-merger-2022-court-documents">intrigued</a>” by the proposed deal, it did not happen. Frictions, alongside Genesis’ declaration of bankruptcy, arose in the immediate aftermath. </p><p>A particular point of friction is found in the aforementioned Gemini Earn partnership, which made <a href="https://bmpro.substack.com/p/genesis-wins-court-ruling-to-sell">headlines</a> this February when Genesis won a court ruling against Gemini. Essentially, Genesis owned a tranche of Grayscale Bitcoin Trust (GBTC) shares that were promised to Gemini as collateral for an exchange of money between the two companies, but Genesis declared bankruptcy before the shares could actually change hands. Since GBTC is unique among the Bitcoin spot ETFs as a pre-existing fund that was converted into an ETF, this tranche of shares had ballooned by early 2024 to be worth more than $1.2B. DCG’s ownership of both Grayscale and Genesis put an extra complication over the issue. Gemini objected to Genesis’ legal right to sell the shares it was promised years prior, and this began a lengthy civil suit.</p><p>Although the issue was resolved through a series of settlements that allowed Genesis to make the sale and kept both it and Gemini from admitting culpability, the NYAG still filed a <a href="https://ag.ny.gov/press-release/2024/attorney-general-james-expands-lawsuit-against-cryptocurrency-company-digital">complaint</a> alleging that the parties involved were all jointly guilty of substantial fraud. There were more than a billion dollars missing, and the attorney general’s office was growing tired of the mutual recriminations between the relevant parties. Even if Genesis could make enough money from their sale to recoup their investors, that still doesn’t address the issue of criminal activity. A particular illustration of the hostile environment came up when DCG, Genesis’ parent company, <a href="https://cointelegraph.com/news/digital-currency-group-objects-subsidiary-genesis-settlement-nyag">disputed</a> Genesis’ own settlement with the NYAG. </p><p>So, this brings us to the present day. On March 7, Silbert and DCG <a href="https://cointelegraph.com/news/dcg-dismiss-lawsuit-new-york-attorney-general">filed</a> a motion to dismiss the attorney general’s suit, claiming that the allegations against these companies were entirely baseless. In the <a href="https://dcgupdate.com/wp-content/uploads/2024/03/DCG-Memorandum-of-Law-Motion-to-Dismiss.pdf">motion</a>, DCG’s legal team claimed that “The allegations against DCG in this case are a thin web of baseless innuendo, blatant mischaracterizations and unsupported conclusory statements. In search of a headline-worthy scapegoat for losses caused by others, the OAG [Office of the Attorney General] wrongfully seeks to portray DCG’s good-faith support of a subsidiary as participating in fraud”. They specifically claim that DCG acted in good faith by funneling money towards Genesis after the Three Arrows collapse, investing “hundreds of millions of dollars of additional capital into its subsidiary during the months leading up to its bankruptcy, even though DCG had no obligation to do so”. The attorney general took a different view, that DCG’s net contributions conceal a large drain of Genesis’ money at one crucial moment: DCG took their money back, Genesis declared a “liquidity crunch” and did not allow users to withdraw their crypto, Genesis went bankrupt immediately. The burden of proof is on them, however, to demonstrate that this was a deliberate fraud tactic. </p><p>As of yet, there is no way of knowing what a judge will think of DCG’s proposed defense or motion to dismiss, or if a settlement is feasible in the event that the motion to dismiss is denied. However, one unambiguously good sign has come out of the morass: Gemini <a href="https://news.bitcoin.com/coin-for-coin-payback-gemini-announces-full-recovery-of-crypto-assets-for-earn-users-after-genesis-settlement/">announced</a> its plans to fully reimburse the allegedly defrauded users of the Gemini Earn partnership with assets in kind. In other words, these users had Bitcoin stolen from them in 2022, and Gemini has made commitments to pay them back, accounting for Bitcoin’s price jump since then. This has tacked on another $700M to the price tag of reimbursing over $1B in assets, and is a clear sign of confidence from the company. </p><figure>
<img src="https://bitcoinmagazine.com/.image/c_fit%2Ch_800%2Cw_1200/MjA0ODc5MTc2NjE0ODgwODYy/596c1c74-77a8-4c85-9e1d-5d25373ed685_1303x402.jpg" height="370" width="1200">
<figcaption><em><a href="https://ycharts.com/indicators/bitcoin_price">Source</a></em></figcaption>
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<p>If nothing else, this decision to reimburse users like this is an impressive display of sincerity and good intentions from Gemini. Gemini is <a href="https://dcgupdate.com/wp-content/uploads/2024/03/Barry-Silbert-Motion-to-Dismiss-March-2024.pdf">named</a> as a co-defendant on all the legal documents submitted by Silbert’s legal team about the NYAG suit, and would also benefit greatly from seeing the suit dismissed. This gesture of good faith might not be enough to clear the air for DCG and Genesis, but it certainly couldn’t hurt anyone’s chances of escaping the whole fiasco without a criminal conviction. Although Gemini failed to halt Genesis’ attempt at getting the money from GBTC sales, Gemini is still a successful and prominent exchange. Apparently, it was able to float a compensation of this size without relying on the GBTC tranche.</p><p>It’s anyone’s guess as to how the suit will proceed in the coming months. When the NYAG first filed a complaint after the first round of settlements, it seemed clear that the prosecutors were quite fed up with the acerbic attitude of these former business partners. Nevertheless, Gemini’s restitution plan will surely go a long way in proving their intention to do right by their users. If nothing else, it shows that they’re proactive in taking the issue seriously. We’ll have to observe the situation carefully as it develops, but it does seem clear that the mutual loathing and underhandedness displayed so far has not been rewarded. The broader digital asset space has periodically been filled with shaky businesses and outright scams, but eventually they all fall apart. Bitcoin, on the other hand, has come by its success legitimately. When the dust settles, the biggest winners might actually be the defrauded users, who collectively will see their expected payout nearly double thanks to Bitcoin’s own strength. Compared to those kinds of gains, it’s hard to imagine a scam working much better.</p>2024-03-11T13:00:00Zurn:uuid:c17ee0aa-7f57-7aff-a50b-13a5be7eff3aLandon Manningdefault_barry_silbert_head_of_the_digital_currency_group_0<em><a href="https://ycharts.com/indicators/bitcoin_price">Source</a></em>Learn Bitcoin, Earn Bitcoin: Announcing Unchained as Title Sponsor for 21 Days of Bitcoin Educational CourseUnchained will serve as Title Sponsor for 21 Days of Bitcoin, awarding Bitcoin to participants who complete a 21-day online educational course.<p>Bitcoin Magazine is pleased to announce <a href="http://unchained.com/?utm_campaign=btcmag-launch">Unchained</a>, the leading Bitcoin financial services provider, as the Title Sponsor for “21 Days of Bitcoin”. 21 Days is Bitcoin Magazine’s email-based course teaching participants the Bitcoin basics while rewarding them with bitcoin along the way. 21 Days has educated over 120,000 course participants since its inception in 2020, and through partnership with Unchained, will continue driving forward Bitcoin education for both individuals learning about Bitcoin for the first time as well as those wanting to refresh their Bitcoin knowledge.</p><figure>
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<figcaption>Click the above image to visit <a href="https://b.tc/21days">https://b.tc/21days</a> and earn 2,100 sats upon completion of the course.</figcaption>
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<p>Examples of content in the “21 Days of Bitcoin” course range from understanding the principles of sound money to unpacking how a Bitcoin wallet functions and the basics of bitcoin mining. Throughout the course, participants gain a greater understanding of the fundamental ideas that enable the Bitcoin protocol, as well as the underpinnings of the social layer that explicate Bitcoin as a superior form of money. Upon completion of the course, users can claim and withdraw 2,100 sats (sats are the smallest unit of bitcoin) via the <a href="http://bitcoinmagazine.app">Bitcoin Magazine app</a>.<br><br>Unchained’s Title Sponsorship comes on the heels of the <a href="https://bitcoinmagazine.com/press-releases/bitcoin-magazine-announces-partnership-with-unchained">recently announced</a> partnership between Bitcoin Magazine and Unchained, with Unchained serving as a our Official Collaborative Custody Partner. This represents a larger initiative to help investors upgrade their Bitcoin security by utilizing Unchained’s collaborative custody services. Through collaborative custody and Bitcoin’s native multisig capabilities, investors can take custody of their bitcoin while delegating 1 of the 3 keys to Unchained. Collaborative custody enables redundancy against loss and theft while keeping users in full control of their Bitcoin.<br><br>Learn more about Bitcoin Magazine and Unchained’s Collaborative Custody Partnership: <a href="https://unchained.bitcoinmagazine.com/">https://unchained.bitcoinmagazine.com/</a></p><figure>
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<p>Enhancing our readers’ understanding of Bitcoin, and the security that it can provide, are core pillars of Bitcoin Magazine’s mission as the first Bitcoin media organization. Working with Unchained, a prolific educator and provider of best-in-class Bitcoin security, is a perfect fit to help amplify and improve “21 Days of Bitcoin” as part of our goal to deliver Bitcoin education to the next wave of Bitcoin adopters.</p><p>Visit <a href="https://b.tc/21days">https://b.tc/21days</a> to begin your “21 Days of Bitcoin” journey, powered by <a href="http://unchained.com/?utm_campaign=btcmag-launch">Unchained</a>.</p>2024-03-08T17:15:53Zurn:uuid:d1b1b868-faaa-9af4-da03-939a30a8055fBitcoin Magazine21-days--unchained---press-release---article-previewClick the above image to visit <a href="https://b.tc/21days">https://b.tc/21days</a> and earn 2,100 sats upon completion of the course.$KARMA is the largest fungible token airdrop in Bitcoin historyBitcoin NFTs, known as Ordinals emerged in January 2023, and continue to explode in popularity. Bitcoin Ordinals can store all data directly on Bitcoin’s premier blockchain, meaning important events like the largest fungible token drop in Bitcoin history keep accumulating. This is no fad. It’s Airdrop season. The times, they are a changin’.<p><strong>REDMOND, WASHINGTON 4 March 2024 -</strong> <a href="http://www.karmacoin.xyz/">$KARMA</a> has released the largest fungible token airdrop in Bitcoin history to over 60,000 wallets. In true Web3 tradition, the collection was launched by a seven-member $KARMA Council, bringing together 10 leading Ordinals communities behind $KARMA’s mission.</p><p>The $KARMA Council’s airdrop aims to foster a sense of community amongst early Ordinals participants and bolster the burgeoning ecosystem. </p><h2>Strength in Numbers: Growing the Ordinals Ecosystem</h2><p>$KARMA is a token launched by a seven-member council, including four representatives from the OnChainMonkey (OCM) community: Soldman Gachs (@DrSoldmanGachs), Fitzy (@fitzyOG), Rabbi (@RabbiGains), and Drheref (@DrHeref). They are joined by BennyTheDev (@rarity_garden) and Alex Philippine (@Skrylabs) from Tap Protocol, bringing their technical expertise. Jason Fang (@JasonSoraVC) from Sora Ventures, a lead investor in Metagood, creators of OnChainMonkey, and the Tap Protocol is the final member of the Council.</p><p>Fostering strong relationships with other communities is something that the $KARMA Council believes will be an essential step in achieving the $KARMA community’s goals. Accordingly, a significant number of tokens have been earmarked for future ‘Karmunity’ Incentives.</p><p>The $KARMA community incentive pot will continue to activate future partnerships or activations that will help to further expand the $KARMA and Ordinals community. This could include rewarding valuable community members, partnering with additional projects, or general growth initiatives.</p><h2>The Ordinals Community Airdrop</h2><p>With this in mind, the $KARMA Council decided to airdrop 49,968,900 $KARMA tokens to communities within the Ordinals ecosystem. This was designed to push towards $Karma Council’s goal of expanding both the OCM & Ordinals ecosystems.</p><p>The Council sought to take an objective selection process. For this initial airdrop, they selected the top 9 collections by market capitalization at the time of the snapshot at Block Height 828,888 (4 February 2024). </p><p><strong>The 9 communities eligible to receive $KARMA tokens in the Community Airdrop are:</strong></p><ul><li>Bitmap (https://ordinalswallet.com/collection/bitmap)</li><li>Bitcoin Punks (https://bitcoinpunks.com/)</li><li>Bitcoin Puppets (https://magiceden.io/ordinals/marketplace/bitcoin-puppets)</li><li>Bitcoin Frogs (https://bitcoinfrogs.com/)</li><li>Nodemonkes (https://nodemonkes.com/)</li><li>OMB (https://magiceden.io/ordinals/marketplace/omb)</li><li>RSIC (<a href="https://magiceden.io/ordinals/marketplace/rsic">https://magiceden.io/ordinals/marketplace/rsic</a>)</li><li>PIPE (https://trac.network/Pipe/)</li><li>TRAC (https://trac.network/)</li></ul><h2>Rewarding the OCM Community</h2><p>A total of 560 million $KARMA tokens are being allocated to holders of OnChainMonkey NFTs. Eligibility for the OnChainMonkey community was based on assets being migrated from Ethereum to Bitcoin. Except for the OCM Karma collection (https://opensea.io/collection/karma-monkey), which has had their allocation of $KARMA reserved until that collection is upgraded to Bitcoin. Since the snapshot has not been completed for OCM Karma, people can still purchase the assets on ETH and when they migrate to Bitcoin, they will be eligible for the $KARMA airdrop.</p><blockquote><p>"Trac is the governance token for Tap Protocol, the first decentralized indexer economy on the Ordinals protocol enabling similar features of ERC20 but on Bitcoin L1. The TAP standard that created $KARMA was conducted by members of the OCM community but has now expanded towards 9 other Ordinals communities,” <strong>Jason Fang, founder of Sora Ventures said</strong>. “Tap protocol contains many more features compared to BRC20 that enables developers and projects to stake, send cost effective airdrops, and enable token distributions that make building on Bitcoin most cost effective, safer, and scalable.”</p><p>"$Karma embodies the spirit of innovation and community, serving as a beacon for the next generation of decentralized ecosystems. We're thrilled to champion this groundbreaking initiative led by our OnChainMonkey community members and investors," remarked <strong>Amanda Terry, co-founder and COO of Metagood</strong>. "At OnChainMonkey, we’re a community of builders and innovation and impact are woven into our DNA. Just as Bitcoin revolutionized finance, $Karma is poised to redefine collaboration, economic empowerment, and impact, with strong communities early to Ordinals at its core.” </p></blockquote><h2>Technical Milestones for Airdrops</h2><p>The airdrop of the $KARMA tokens was performed in an efficient manner utilizing “<a href="https://github.com/BennyTheDev/tap-protocol-specs">Tapping</a>,” a core feature of the TAP Protocol. “Tapping” is a process of transacting that makes it considerably cheaper and faster to distribute tokens to a large amount of addresses. Using the existing BRC-20 standard, conducting an airdrop for 61,000 wallets would have required over 122,000 transactions. The KarmaCouncil was able to complete the entire airdrop using under 55 transactions, therefore setting a precedent for the future of community inclusions for future airdrops on Bitcoin.</p><p>BRC20 requires 2 transactions for a single transfer of tokens between 2 parties. The TAP Protocol allows for many transfers within 2 transactions. 1 transaction with many receivers at once and a 2nd transaction to approve the transfers (called "tapping"). This reduces the costs for airdrops significantly in comparison to BRC20 as there is almost half of the transactions needed. It also helps to put the Bitcoin network under less stress due to lesser amounts of transactions required.</p><p>TAP Protocol's token authority feature allows it even to reduce it further using only 1 transaction, which makes it also attractive for simple individual transfers. Token authorities require additional setup configurations however, while airdrops work out of the box.</p><h3>A Note on Tap Protocol and the Technology</h3><p>Trac Core is an indexing solution (created by Trac Systems) designed to enable decentralized tracking of Ordinals metaprotocols on Bitcoin. Trac Systems is also the creator of the Tap Protocol. Creating the $KARMA tokens on the Tap Protocol was conducted by the community. Tap Protocol is a similar to BRC-20 and allows for features and hooks into DeFi that otherwise wouldn’t be possible natively. In layman-terms, Tap Protocol can be seen as BRC-20 “on steroids”. </p><p>Taps airdrop feature is cheap because it combines receivers of different token types and amounts into 1 inscription.</p><h3>About $KARMA (https://karmacoin.xyz/)</h3><p>$KARMA is more than a token; it's a commitment to growth, community, and innovation. Designed as a catalyst to expand the OCM and Ordinals ecosystems, $KARMA is set to redefine engagement and opportunity for the entire Ordinals community and beyond. $KARMA is a network of founders, builders, industry leaders and seasoned collectors in the Ordinals ecosystem.</p><h3>About OnChainMonkey (www.onchainmonkey.com)</h3><p>OnChainMonkey is the first non-fungible token (NFT) 10,000 profile picture collection created on-chain in a single transaction on Ethereum. OnChainMonkey marked history again, becoming the first 10k PFP NFT collection inscribed on Bitcoin in a single inscription. The collection of 10,000 randomly generated NFTs is led by an experienced team, including Danny Yang, who founded Taiwan’s largest cryptocurrency exchange; Amanda Terry, who served as a digital media business development executive at Twitter and NBC; and Bill Tai, a legendary venture capitalist who was the first investor in Zoom and early investor in Canva, Dapper Labs as well as over 20 companies that have become publicly listed. The OnChainMonkey community aims to create value for their token holders and promote positive real world impact through Web 3. </p>2024-03-08T16:00:00Zurn:uuid:8c68c0cc-5d9e-3e98-aa7b-5def4784f9b9Metagoodkarma_coin_airdropAn Interview With Polyd: The Rabbit hole of CovenantsA written interview with Polyd, a Control Systems Specialist and creator of the Enigma Network proposal, on the concept of covenants.<p><strong>Have you fallen into the ‘rabbit hole’ of covenants?</strong></p><p><em><strong>Interviewer:</strong></em><em> Hua, freelance writer, independent researcher. X: @AmelieHua</em></p><p><em><strong>Interviewee:</strong></em><em> Poly, a Controls Specialist, maintains multiple Distributed Control Systems (DCS's) and has worked with other five nine systems (99.999% uptime availability). X: @Polyd_ </em></p><p>Covenants are an old yet fresh topic. As early as 2013, developers began discussing this topic, and in recent years, multiple BIPs aimed at implementing covenants have been proposed, sparking intense debates and making it one of the hottest topics.</p><p>Covenants warrant serious discussion due to their powerful capabilities. They are considered to bring new possibilities to the programmability of Bitcoin and are believed to enable smart contracts. For Bitcoin, this is undoubtedly a double-edged sword. In this article, we will explore what covenants are, how they work, their robust functionality, and their significance for Bitcoin. While discussing details, this article often uses CTV as an example, but CTV is not the only method of implementing covenants.</p><p>This article delves into the exploration of covenants but also magnifies a slice of Bitcoin under a microscope for observation. Through this observation, we can understand how Bitcoin operates at a granular level, comprehending both its capabilities and limitations. Understanding what it cannot do is as crucial as understanding what it can do because only then can we choose the right path for building on Bitcoin.</p><h2>1.</h2><p><strong>Hua:</strong></p><p>Before discussing covenants, clarifying two issues related to Bitcoin may be necessary, which can help us better understand covenants.</p><p>We know that Bitcoin uses a scripting language, and it is known that scripting languages support the implementation of smart contracts. However, in reality, smart contracts have not been implemented on the Bitcoin main chain. This inevitably creates a sense that implementing smart contracts on Bitcoin faces some insurmountable obstacles, and it seems impossible on the Bitcoin network.</p><p>However, many people may not be aware that although Bitcoin can be programmed using a scripting language, the set of opcodes is extremely limited. This limited set of opcodes restricts the programmability scope of Bitcoin, meaning that, although the scripting language can implement smart contracts, programmers do not have sufficient "tools" to implement smart contracts.</p><p><strong>Poly:</strong></p><p><em>Definitely, Bitcoin Script can be considered limiting as it can only perform the basic operations such as making simple payments. Some of the reasons that people may find it “limiting” is that it doesn’t have a global state, it’s not considered turing complete, it uses a UTXO-based system (which has “value blindness”) instead of an account-based system. The last big reason is that very little data from the blockchain itself can be integrated into contracts causing blockchain-blindness.</em></p><p><em>This has created a lot of challenges over the years as people have worked around these limitations. We’ve also had a semantic shift with the term “smart contract” to mean one specific thing when you should consider the lightning network a production of many smart contracts formed by many individuals. Those multi-sigs with hashlocks and timelocks are not only smart contracts, but also have time-based covenants. </em></p><p><em>The problem is, just as you mentioned before, because Bitcoin only has simple opcodes to perform just the basics, if you attempt to scale beyond two people in a smart contract, you can get either a lot of bloat for an on-chain footprint or the things you want to do just might not be possible. This strict limitation comes from a few places, I think the biggest being that when the inflation bug occurred back in 2010, Satoshi had disabled a whole list of higher order opcodes including OP_CAT which would’ve allowed us to create more dynamic smart contracts via transaction introspection.</em></p><p><em>BCH has since overcome this limitation within their own script, showing that Script isn’t as weak as everyone assumes, just that Bitcoin has always been slower due to its decentralization and coordination is near impossible except over long periods of time. We’ve also barely touched on Taproot and Tapscript which will alleviate a lot of the footprint concerns and allows for new behaviors such as BitVM by rolling up the contract into the signature and you only reveal as necessary.</em></p><p><strong>Hua: </strong></p><p>Why are there strict limitations on opcodes? Can you use OP_CAT as an example to help us understand this point? </p><p><strong>Poly: </strong></p><p><em>So OP_CAT is deceptively simple, it will take two strings and add them together. It was originally disabled because it had resource issues and could be used to cause nodes to crash, but I’m not sure if that’s the full story as Satoshi set the 520 byte stack limit </em><em>and</em><em> disabled OP_CAT in the same commit so there could be more to it than just simple resource exhaustion.</em></p><p><em>But just to give a short list of what OP_CAT can perform: CTV/TXHASH covenants, verify SPV proofs, double-spend protection for 0-conf TXs, 64-bit arithmetic, vaults, quantum-resistant signatures. The list goes on, with OP_CAT alone, it can emulate both CTV[CheckTemplateVerify] and TXHASH style transactions. The only issue is it’s highly inefficient in the manner that it performs these actions that might be possible, but that could just preclude these transactions from being desirable except by users of scale such as custodians.</em></p><h2>2.</h2><p><strong>Hua: </strong></p><p>Let's talk about another "limitation" of Bitcoin. Bitcoin only supports "verification" as a form of computation and can't do general-purpose computation.</p><p>We also know that, for example, smart contracts on Ethereum contain rules for state transitions. It completes the state transition through computation, enabling the functionality of smart contracts. In comparison, Bitcoin can't do general-purpose computation, meaning it cannot achieve state transitions through computation on its own.</p><p>Is my understanding correct? </p><p><strong>Poly:</strong></p><p><em>Yeah, I’d agree that’s a simple summary of the current state of things. Bitcoin could be made to support computational transactions and the line can become quite thin when covenants and state transitions are involved, but those proposals aren’t as well researched and might not be something that’s considered desirable.</em></p><p><em>I’m actually not that much of a fan of the way Ethereum does things. Due to it being computational in nature with the verification built on-top, if I attempt to perform a trade, my window could shift and I could “fail to trade” but the transaction for the attempt to trade was still valid so i still paid for fees which wasted my money on what i’d want to consider a failed transaction and wasted blockspace for someone else. Another weird aspect are the Oracles in Ethereum. Oracles must pay gas to update their oracle prices whereas in Bitcoin DLC’s, the Oracle are blinded and are just providing a signature and can’t be “pinned” due to a change in fees nor can Oracles target specific contracts.</em></p><p><em>Earlier I discussed all the downsides to the UTXO model compared to the account model and global state model, but what allows the UTXO model to shine is parallelism. The only concern you have is the child transactions to the same UTXO, nothing else matters, this allows the system to scale much better. </em></p><h2>3.</h2><p><strong>Hua:</strong></p><p>Let's start discussing covenants now. What are covenants?</p><p><strong>Poly:</strong></p><p><em>Covenants usually refer to restrictions on how coins can be transferred. The word covenant seems to carry some sort of connotation with it so it helps to demystify it and explain it as simple locking mechanisms you can place only on your *own* coin.</em></p><p><em>We have two covenants already inside Bitcoin and they power the Lightning Network, CSV [CheckSequenceVerify] and CLTV [CheckLockTemplateVerify]. Some just call these opcodes “smart contract primitives” as they’re simple time locks, but they can also be classified as time covenants. </em></p><p><em>CTV [CheckTemplateVerify] is a proposed Bitcoin upgrade and is included in BIP 119. It is different from CSV and CLTV, you can think of CTV as a “TXID [Transaction ID] lock” or “UTXO lock”, only these TXID’s can be made from this lock. For CTV, we refer to this TXID lock as “Equality Covenants” as the resulting transactions must equal to the original transactions that were committed. It’s also called a deferred commitment covenant, as you can see that your UTXO has been committed to, but it isn’t yet placed on-chain. </em></p><p><em>The most known alternative is SH_APO [Any Previous Out or AnyPrevOut] which focuses on the payout commitment being ensured while allowing the pay-in method to be flexible. A few others discussed are OP_CCV [also known as MATT], OP_EXPIRE, TXHASH and TEMPLATE KEY. </em></p><p><strong>Hua:</strong></p><p>When you mention "covenants usually refer to restrictions on how coins can be transferred," can I understand it like this: Covenants are a method of specifying how funds can be used, or in other words, it's a way of restricting where funds can be spent.</p><p><strong>Poly:</strong></p><p><em>Yep, it effectively earmarks the UTXO to be distributed in a specific manner, once you commit to it, you can't take it back, it's now consensus bound, and only its new owner can decide how to spend their funds.</em></p><p><em>When a UTXO is created on-chain, our instinct is to assume that a single private key is holding that UTXO in place. But if it was a CTV bound UTXO, when the UTXO is spent, you'll see an extra 32 byte hash paired with the new transaction that represents the hidden state that was inside the original UTXO.</em></p><p><strong>Hua:</strong></p><p>You've mentioned "TXID lock/UTXO lock" multiple times. Can I understand it like this: To understand how CTV achieves their functionality, we need to understand what TXID lock is and how it works. TXID lock is a key mechanism.</p><p><strong>Poly:</strong></p><p><em>Yes, It creates a strong foundation to build further schemes. The TXID is determined by the contents of a tx. And if you can add inputs to a tx, you can manipulate the TXID. CTV makes you lock the number of inputs and outputs. This is how we ensure that CTV commitments are trustless, if the TXID could be malleable, you could potentially be able to steal someone’s funds. Once you have a TXID locking mechanism, you combine it with other locking mechanisms such as the time locks to build even greater smart contracts. </em></p><h2>4.</h2><p><strong>Hua:</strong></p><p>Why do you think covenants are a rabbit hole?</p><p><strong>Poly:</strong></p><p><em>I call covenants a rabbit hole because there’s so much you can do with simple restrictions on transactions such as a time lock or a TXID lock. We’ve managed to build the entire Lightning network with simple time locks and while it isn’t perfect, it is the only truly decentralized L2 in existence. I don’t like how it’s slowly shifting towards being custodial focused, but that’s exactly why I’ve started down this rabbit hole to begin with: To make our smart contracts more powerful. We refer to the TXID lock as a Template. With Taproot, we gained the ability to have signature aggregation. With Templates and CTV, we gain the ability to have transaction aggregation.</em></p><p><em>CTV serves as a replacement for a pre-signed transaction oracle, which eliminates the trust and interactivity requirements needed to create more sophisticated smart contracts that are needed for things like vaults and payment pools. The vaults and payment pools that you can make with CTV are technically possible today, but </em><em>currently</em><em> they’re precluded by the trust or interactivity needed to make it work. Moreover, with CTV, we can build channel factories, additional layer 2 solutions such as Ark, Timeout-Trees, Stakechains or Surfchains, and JIT fidelity bond solutions such as PathCoin. </em></p><p><em>Probably my favorite feature is Non-Interactive Channels [NIC’s] that we’ve also been referring to as Cold Channels. The basic idea is to take a normal lightning channel and simply place it in a CTV template. What makes this different from a normal lightning channel is that neither party actually needed to be online to create this channel. So if I need a channel with another person, I don’t need them to be online to create it, I don’t even need to tell them I made it until I’m ready to spend from it! This allows for cold storage capability on lightning because I don’t need a watchtower nor a node to safeguard my funds in any channels that aren’t yet active. Third-party coordinators can also establish NIC’s for two individuals so there’s a lot of flexibility in what’s possible.</em></p><p><em>As it stands, CTV won’t allow you to build a DEX on-chain, but I’m not sure if that is such a bad thing as people are currently trying to build DEX’s off-chain using the Lightning Network as it is today. I think this ties back into the “Verification vs Computation” discussion, how much do you really want on-chain versus how much do you need to verify on-chain. One concern I have about on-chain DEX’s, besides the excessive on-chain updates driving higher fees, is MEV. We’ve already spotted some MEV from BCH’s DEX’s transactions and as the market matures, this is bound to get worse.</em></p><p><strong>Hua:</strong></p><p>Can you give an example to help us understand how CTV works?</p><p><strong>Poly:</strong></p><p><em>Let’s say I am expecting to receive 5 BTC, as of right now, the only thing I can do is receive the payment and verify it on-chain. With CTV, I can commit to future addresses or to people and reduce it down to a simple pubkey that I give to my payer to pay me. They don’t know the details of it so it remains private to everyone but me. Once I can confirm that they’ve paid me, all of the actions I took using the CTV template have now also taken effect.</em></p><p><em>So if I had elected to create a channel with Bob, once Alice pays me, the channel with Bob is now committed, even though the channel with Bob is nowhere to be seen on-chain, it is only accessible by my template and the transaction that Alice had created. It’s only known to me until I share the channel details with Bob. Once I do share the details with Bob, we can use the channel as normal. When we cooperatively close the channel, instead of needing to place an open channel details on-chain, we just place the closing channel on-chain. This allows us to perform transaction cut-through, reducing the total number of transactions that need to be on-chain by at least half for layer 2 solutions.</em></p><p><em>The opening portion only needs a commitment, what we really care about are the closing details. If this was a shared UTXO with multiple people, we could collaborate to close our transactions together as well, reducing the number of on-chain transactions even further.</em></p><h2>5.</h2><p><strong>Hua:</strong></p><p>As you mentioned before, we can introduce different opcodes to implement covenants.</p><p><strong>Poly:</strong></p><p><em>So if we re-introduced OP_CAT, I think it would allow for nearly every type of covenant possible as you can emulate any form of introspection for TXHASH. The more limited method would be to introduce opcodes representing the explicit behavior desired like with CTV, CSFS or CheckSeperateSignature. CTV is the ability to do deferred outputs. CSFS is the ability to do deferred signatures so you can defer the payment itself. They sound similar and in fact they work well together as building blocks to enable LN-Symmetry, but the commitments are happening at different levels.</em></p><p><em>TXHASH and TEMPLATE KEY both enable introspection and serve the same purpose, but TEMPLATE KEY uses a single-byte mode while TXHASH uses multi-byte flags. This allows for much more powerful capabilities inside script and smart contracts, but many are concerned about the side effects it could have. TXHASH and TEMPLATE KEY are more of a CTVv2, something that would make CTV more powerful and expressive.</em></p><p><strong>Hua:</strong></p><p>I've noticed that there doesn't seem to be a significant disagreement about whether to support the implementation of covenants. However, in comparison, there seems to be more significant divergence among people regarding which method or set of opcodes to add to implement covenants.</p><p><strong>Poly:</strong></p><p><em>I think a large part is there’s different camps of thought. There’s a lot of the lack of understanding the intent behind each proposal as they have different goals in mind and are designed in completely different ways. </em></p><p><em>A lot of developers have only had their eye on Lightning and how it’s to evolve, they tend to favor opcodes like SH_APO since it enables LN-Symmetry. For a lot of developers that don’t particularly like Lightning due to its limitations such as Inbound Liquidity constraints or the requirement to be online, they tend to favor opcodes like OP_CAT, TXHASH as more expressive scaling solutions. The developers that prefer CTV are more neutral and are looking at it from a systems point of view, it doesn’t necessarily do any one thing perfectly but it greatly enhances everyone’s ability to do their preferred thing, whatever it may be without introducing risks that can’t be measured since it doesn’t introduce introspection.</em></p><h2>6.</h2><p><strong>Hua:</strong></p><p>Before discussing covenants, we talked about issues related to opcodes in scripting language and the problem of limited computation leading to state transition. We already know the relationship between covenants and opcodes. Now, let's delve into the issue of state transition. I'm not sure if looking at covenants from the perspective of "state transition" is correct, but this perspective truly fascinates me. </p><p>Without covenants, the scripting language's main function is to retrieve transactions' signatures and verify them. The transaction can only be completed when the private key is correct, and there is no intermediate state. With covenants, a transaction can be completed when certain conditions are met. Moreover, a transaction can only be completed when specific conditions are satisfied (not just the correctness of the private key). Can we understand it this way: Covenants indirectly provide conditions for state transition.</p><p><strong>Poly:</strong></p><p><em>The covenant is the template shell or the "state". Inside of it, you're going to need to make time locks and other functions to enable the desired functionality that you’re wanting, be that a vault, lightning channel or some other layer 2 solution.</em></p><p><em>So CTV allows for the state creation to occur, but you have to dynamically rebuild the state at each transition to keep it in homeostasis, we call this meta-recursive. Whereas something like SH_APO allows you to create a state and then periodically update that state, making it recursive. CTV can also create a chain of transactions that would allow you to “step-through” that state. </em></p><p><em>A good example to think about is Ark, it’s a giant smart contract, almost like a giant coinjoin and the one running the protocol creates a new state [or rounds as it’s called] every few seconds to facilitate participants to pay others as needed. Once the Ark operator is ready, they will send a transaction to the mempool to commit the current state to on-chain. These on-chain placeholders can be thought of as the “transition states.” The operator has to constantly recompute new states to present to the Ark participants and what’s sent to on-chain is the verification of that state.</em></p><p><strong>Hua:</strong></p><p>Can we understand it this way: Covenants implement a form of smart contract based on verification rather than computation?</p><p><strong>Poly:</strong></p><p><em>Yes. Definitely. This smart contract is just comparing a transaction to an associated sha256 hash. Block speed verification would actually increase since there’s no signature operations. </em></p><p><strong>Hua:</strong></p><p>One direction of development for blockchains is modularity, including off-chain computation. However, Bitcoin seems naturally designed for off-chain computation, appearing behind but actually leading the way. What do you think?</p><p><strong>Poly:</strong></p><p><em>Time is a flat circle. It’s crazy how it seems like we’ve come full circle to what’s wanted in a blockchain. Bitcoin still seems to have some modularity issues and footprint issues. I wish we had better side-chains that weren’t simply multi-sig solutions and used actual cryptographic means to secure one’s funds and allowed for Unilateral Exits. I think that would help push the boundaries on Bitcoin’s modularity. Taproot has allowed for even more off-chain computation with things such as BitVM, which would allow us to compute almost anything off-chain. But unfortunately, it can’t emulate things inside Bitcoin such as CTV so it seems we still have progress to make.</em></p><h2>7.</h2><p><strong>Hua:</strong></p><p>What possibilities can be achieved by combining covenants with other opcodes like DLC?</p><p><strong>Poly:</strong></p><p><em>So DLC’s have a few problems that would be fixed with covenants such as increasing the flexibility of the parameters of the DLC by making many price points [if 2024-03-08T15:40:29Zurn:uuid:bed46ee6-e4c3-36ef-612a-f71dc14cfa4cAmelie HuaholycovenantUnderstanding Your Bitcoin Keys: Bip39 Seed WordsHow large numbers and randomness secure your bitcoin, and what your seed phrase has to do with it. The first installment of “10 Steps to Self-Sovereignty” powered by Ledger.<p>The bedrock of Bitcoin self-sovereignty is having control over your private keys. Without this, in one way or another, you are relinquishing control of your money to someone else. “Not your keys, not your coins” as the saying goes. A counter-intuitive aspect of Bitcoin for people who aren’t familiar with the technical underpinnings of it is “where” your Bitcoin actually is. When people think of a wallet, they think “the place where I keep my money.” <a href="https://www.ledger.com/academy/topics/crypto/what-is-a-bitcoin-wallet-and-how-does-it-work">Your bitcoin wallet</a> doesn’t actually “hold” your Bitcoin, it just stores your private keys. Your Bitcoin is just entries of data on the blockchain hosted by everyone participating in the network. When you go to spend your bitcoin, what you are actually doing is proposing an update to the data stored on the blockchain. A private key is how the protocol ensures that you, and you alone, can authorize an update to the blockchain that spends your Bitcoin. </p><p>So what are your private keys? Just very large numbers. Extremely large. This is a private key in binary: </p><p><em>1110001011011001011110111100000101000100000010001001111010111011010101110111001111111111101010111010010111010011101001110010100110111101000110000111110101111001101001011110011011101000001101101101110001101000110001111010001001001111011010101011001101101010</em></p><p>256 random 1s and 0s. This random number is what ultimately secures your Bitcoin. It might not look like much, but its randomness is what ensures your wallet’s security. There are almost as many possible Bitcoin private keys as there are atoms in the visible universe. That is how many numbers a computer would have to count through to generate and catalog all the private keys potentially possible. As long as the process used to generate the keys is truly random, your keys are safe. </p><p>This is what a private key looks like in hexadecimal (binary uses two digits to encode a number, 1 and 0, hexadecimal uses 16 digits, 0-9 and A-F): </p><p><em>E2D97BC144089EBB5773FFABA5D3A729BD187D79A5E6E836DC68C7A24F6AB36A</em></p><p>This is what a private key looks like in uncompressed Wallet Import Format (WIF): </p><p><em>5KYC9aMMSDWGJciYRtwY3mNpeTn91BLagdjzJ4k4RQmdhQvE98G</em></p><p>WIF format is how everyone used to interact with their private keys in the early days of Bitcoin. In this era, you could generate one private key at a time, and then you’d generate the public key from that. The process of generating a public key is essentially just the multiplication of very large numbers but there is a bit more to it than that.. All public keys are an x and y point on a graph showing a very, <em>very</em> large curve that loops back on itself. </p><p>On the graph curve, in Bitcoin’s case <a href="https://en.bitcoin.it/wiki/Secp256k1">Secp256k1</a>, there is a point called the “generator point.” This generator point can be thought of as the “base point” on the Secp256k1 curve. It is integral to the process of generating keys and signing with them. This is what the generator point is for Bitcoin’s curve: </p><p><em>G = 02 79BE667E F9DCBBAC 55A06295 CE870B07 029BFCDB 2DCE28D9 59F2815B 16F81798</em></p><p>To generate the public key from your private key, you take the private key you generated and multiply it by the generator point. That’s it. This now establishes a point on the graph with a mathematical relationship to the private key you generated that only you know. </p><p>This is an uncompressed public key showing both x and y points: </p><p><em>04C0E410A572C880D1A2106AFE1C6EA2F67830ABCC8BBDF24729F7BF3AFEA06158F0C04D7335D051A92442330A50B8C37CE0EC5AFC4FFEAB41732DA5108261FFED</em></p><p>It is very common to “compress” public keys in the rare chance you interact with them to just store the x coordinate with a byte to tell you whether the y coordinate is negative or positive. That shortens it considerably: </p><p><em>04C0E410A572C880D1A2106AFE1C6EA2F67830ABCC8BBDF24729F7BF3AFEA06158F0C04D7335D051A92442330A50B8C37CE0EC5AFC4FFEAB41732DA5108261FFED</em></p><p>When you go to sign a transaction with your private key, it once again boils down to essentially just multiplication. By generating a random number (the nonce), and using that and your private key to essentially multiply the hash of the transaction you are signing, you produce the signature (which is made up of two values, r, and S). This allows someone to run an algorithm to verify the message was signed by the appropriate private key without revealing that key. The thing guaranteeing only you can authorize spending your Bitcoin is essentially just the multiplication of very, very large numbers. </p><p>If you aren’t all that familiar with these concepts before reading this, all of this probably seems somewhat intimidating. Binary? Hexadecimal? Graph points? How do you back up a WIF? </p><p>Since the development of more intuitive ways of handling this data, most users are unfamiliar with these complicated formats. Most likely, you have more experience with word seeds, also known as seed phrases.</p><h2>BIP 39 Mnemonic Seeds</h2><p>Mnemonic seeds, or seed phrases, were created to address the problem of the experience of interacting with your private keys.</p><p>As we discussed earlier, private keys are ultimately just a long series of 1s and 0s that are randomly generated. Imagine trying to create copies of this and ensure you didn’t make an error transcribing it:</p><p><em>1110001011011001011110111100000101000100000010001001111010111011010101110111001111111111101010111010010111010011101001110010100110111101000110000111110101111001101001011110011011101000001101101101110001101000110001111010001001001111011010101011001101101010</em></p><p>All it would take is a single error copying one digit to render a backup of your keys useless. This is where mnemonic seeds come in handy. 256 consecutive 1s and 0s in a row is not a human-friendly way to interact with sensitive information. Recording this number incorrectly means losing access to your account.</p><p><em>truck renew fury donkey remind laptop reform detail split grief because fat</em></p><p>That is much easier to deal with, isn’t it? Just 12 words. So how does that work, going from a bunch of random 1s and 0s to a string of words that actually make sense to you? An encoding scheme, just like binary or hexadecimal!</p><p>Each of those 12 words in that mnemonic seed above is a binary number in an <em>encoding scheme</em> mapping specific strings of 1s and 0s to words. If we look back at the WIF private key example earlier, that was simply a number encoded in a specific encoding scheme, in that case, base 58, which uses every number and letter of the alphabet except 0 and 1, and O and l (case sensitive). The exclusion of those characters was done specifically to make transcription errors unlikely by confusing a 1 for an l, or a 0 for an O. bech32 and bech32m used by Segwit and Taproot take this to the next level by using only this set of characters (qpzry9x8gf2tvdw0s3jn54khce6mua7l). </p><p>Bitcoin Improvement Proposal 39 (BIP 39), introduced a standardized encoding scheme where each word in a specially crafted dictionary is alphabetically mapped to a binary number from 00000000001 to 11111111111. The demonstration seed above maps to this: </p><p>truck: 11101001001</p><p>renew: 10110110001</p><p>fury: 01011110011</p><p>donkey: 01000001001</p><p>remind: 10110101110</p><p>laptop: 01111101000</p><p>reform: 10110100010</p><p>detail: 00111100010</p><p>split: 11010010001</p><p>grief: 01100110100</p><p>because: 00010011110</p><p>fat: 01010011011</p><p>In just binary it looks like this:</p><p>11101001001 10110110001 01011110011 01000001001 10110101110 01111101000 10110100010 00111100010 11010010001 01100110100 00010011110 0101001 1011</p><p>There are 2048 words, each mapped to a specific 11 digit string of 1s and 0s, specifically to make it easier for people to interact with their private keys. When you generate a random number for your private key, your wallet cuts that number up into chunks of 11 digit binary numbers and maps them to the BIP 39 Mnemonic dictionary. It’s still the same large number, but now you can read it as English words. Since your brain is much more accustomed to this format than long strings of 1s and 0s, this <em>drastically</em> reduces the odds of you writing down something wrong and losing your Bitcoin in the process. </p><p>You may have noticed that in the raw binary encoding of the word seed above, there are four digits (1011) sitting off on their own, and the last “word” is only actually 8 digits. That is a checksum to ensure that a seed phrase is valid. When you generate your random number, there aren’t enough digits to map it exactly to 12 (or 24) words. The wallet hashes those existing digits you generated and takes the first few digits of the hash to add on to the end of your random number. This gives you enough digits to map to the last word. </p><p>This last word allows you to perform a safety check on copies of your seed. If you enter your mnemonic seed into a wallet incorrectly, the checksum will not match. Each 12 or 24 word seed has multiple potential valid checksum words, but if the last word doesn’t match the checksum of a correct seed your wallet will warn you it is invalid. This gives people an intuitive yet still mathematical way to guarantee their backups are correct, unlike the messy process of transcribing and backing up the raw binary numbers. </p><p>The selection of the specific words on the list even went so far as to guarantee that none of the 2048 words have the same first four letters. This was done to reduce the likelihood of people making transcription errors by confusing similar words and winding up with an incorrect backup of their private keys. </p><p>Translating these words into a <em>set</em> of multiple private/public keys is quite simple. Your mnemonic seed is taken and hashed using SHA512, which outputs a hash of 512 individual 1s and 0s. Half of that output is used as an actual private key, and the other half is used as input to SHA512 with an index number and the existing private or public key to generate a new key pair. You can do this as many times as you want to generate new private/public keys that can all be recovered from your single mnemonic phrase. </p><p>This ensures that you can manage your private keys as easily, and <em>safely</em>, as possible with the lowest odds of making a mistake that loses your money. And all of it was done using math! Hopefully, now you have a good understanding of why people say that Bitcoin is money ‘secured by math.’</p>2024-03-08T15:00:31Zurn:uuid:99e3bd86-64f1-a3b5-0b63-ed15e8a46e06Shinobiledger-10-steps---seed-words---article-previewThe Perils of Centralized ControlCentralized forces exerting influence over the masses is the greatest threat to any decentralized system or activity.<blockquote><p><em>“It is in the nature of a system of government control of business to aim at the utmost centralization…In voting for government control of business the voters implicitly, although unwittingly, are voting for more centralization.”</em></p><p>- Ludwig Von Mises</p></blockquote><p>One of the most underestimated threats that modern society faces is the ever tightening grip of centralized control. History has shown us time and again that centralized control inevitably devolves into tyranny, eroding the foundations of liberty upon which free societies are built.<a href="https://www.marxists.org/archive/marx/works/1848/communist-manifesto/ch02.htm"> The 10 planks of communism</a>, as outlined by Karl Marx and Friedrich Engels in <a href="https://www.marxists.org/archive/marx/works/download/pdf/Manifesto.pdf">The Communist Manifesto,</a> that serves as the blueprint for transitioning society to a collectivist system cannot be implemented without centralization first occurring; due to the fact that communism at its core seeks to abolish every form of private ownership while enthroning the state as master of all. The sad reality is that these planks have been gradually implemented over the years by most countries in the world, thus progressively eroding free markets and the overall liberty of their citizens.</p><p>The centralization of speech online is the most recent threat that has emerged as a potent tool for state control. Ironically, this phenomenon resembles the realization of plank 6 of the communist manifesto, which advocates for the<em> "centralization of the</em><em> Means of Communication</em><em> and Transport in the Hands of the State." </em>As commerce and communications via online platforms grows, these two very important aspects of human existence become centralized in the hands of the big tech companies that own these platforms. In our cancel culture driven world, the increasing overlap between centralized social media platforms and financial services has significantly increased the risk of absolute censorship; where violating the constantly changing "community guidelines" can lead to one becoming persona non grata and being immediately deplatformed.</p><figure>
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<p>Without decentralized alternatives, censoring any speech or transaction that is deemed “undesirable” becomes a trivial matter. Big tech social media giants acting as the de facto thought police and enforcers for the state, wield immense influence over the flow of information, and suppress every form of dissent through the threat of financial strangulation when one doesn’t toe the line.<em> </em>There are two major factors that undergird this power to silence dissent online:</p><ul><li>Centralized nature of the social media platforms </li><li>Centralized payment processors like PayPal that dominate these platforms </li></ul><p>For individuals who rely on social media for their livelihood, deplatforming represents a significant threat, not only to their ability to express themselves freely but also to their income. Self-censorship naturally becomes the norm and this is even more dangerous as it creates the illusion of alignment with the current thing of the day. Thankfully, Bitcoin has made these payment processors irrelevant and due to it being fully decentralized, neutral, apolitical and censorship resistant; it’s a viable alternative. </p><h2>Code is Speech</h2><p>In 2013 Cody Wilson, the pioneer of the world's first 3-D printable gun, <a href="https://archive.nytimes.com/thelede.blogs.nytimes.com/2013/05/10/printable-gun-instructions-spread-online-after-state-dept-orders-their-removal/?version=meter+at+null&module=meter-Links&pgtype=article&contentId=&mediaId=&referrer=&priority=true&action=click&contentCollection=meter-links-click">received a letter</a> from the State Department demanding removal of blueprints for his plastic firearm, <a href="https://en.wikipedia.org/wiki/Liberator_(gun)">the Liberator</a>, or risk facing jail time and millions in fines. In 2015 Wilson's organization, <a href="https://defdist.org/">Defense Distributed,</a> filed a lawsuit against the State Department, alleging that prohibiting the publication of his plans, which are essentially computer code, constitutes a prior restraint of free speech rights, as guaranteed by the First Amendment of the US constitution. The dispute revolved around the State Department’s claim that posting 3-D printable gun files online constitutes a potential breach of arms export controls, a controversial set of regulations known as <a href="https://www.pmddtc.state.gov/ddtc_public/ddtc_public?id=ddtc_kb_article_page&sys_id=24d528fddbfc930044f9ff621f961987">the International Traffic in Arms Regulations (ITAR)</a>. </p><p>The history of ITAR has been marred by controversy and contention. In the 90s, it was used to target cryptographers (aka cypherpunks), classifying strong encryption tools as military munitions. After the source code for <a href="https://www.philzimmermann.com/EN/essays/WhyIWrotePGP.html">PGP</a> was released and printed out as a book, it immediately fell under First Amendment protection. Despite this seemingly obvious fact, its inventor Phil Zimmermann, was subjected to a grueling three-year Department Of Justice (DOJ) investigation during these <a href="https://www.wired.com/1993/02/crypto-rebels/">Crypto Wars</a>, which was subsequently put to bed without any indictments. In 1995 cryptographer Dan Bernstein also sued the DOJ, arguing ITAR violated his First Amendment rights, and won the case. This was the landmark case that designated <a href="https://www.eff.org/cases/bernstein-v-us-dept-justice">code as speech</a>. </p><p>Despite the State Department's two-year enforcement of ITAR against Defense Distributed, it failed to stop the proliferation of its 3-D printable gun files online. Instead, concerns over censorship spurred over <a href="https://archive.is/o/LeqEi/https://www.forbes.com/sites/andygreenberg/2013/05/08/3d-printed-guns-blueprints-downloaded-100000-times-in-two-days-with-some-help-from-kim-dotcom/">100,000 downloads of the Liberator blueprint</a> in just two days! Despite removal from Defense Distributed’s websites, the file quickly spread to platforms like the Pirate Bay, making erasure nearly impossible. Attempts to ban speech in the digital age are not only absurd but futile because of its ability to manifest in infinite forms.The historical example of <a href="https://en.wikipedia.org/wiki/RSA_(cryptosystem)">RSA's</a> classification as munition highlights the futility of restricting information as epitomized by printing forbidden information on t-shirts. Information must be free. </p><figure>
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<figcaption><em>Export-controlled RSA encryption source code on a T-shirt turned the shirt into a restricted munition.</em></figcaption>
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<p>In an interview I had with <a href="https://twitter.com/jessicasolce">Jessica Solce</a>, the film maker and executive producer of <a href="https://www.deathathletic.com/"><em>Death Athletic: A Dissident Architecture</em></a> a documentary that profiled Cody Wilson and the 3D-printed guns movement; when commenting on the significance of Cody’s battle with the government she said,</p><p>“<em>Cody entangled the First and Second Amendment by pushing guns into the digital era. He utilized the burgeoning technology of 3D printing to reduce a gun to code. This WikiWeapon, the Liberator, was directly inspired by Wikileaks, and immediately threatened the Government’s axis of power and control. It was a masterful play that antagonized the military complex and forced the conversation of gun control into the age of the Internet.”</em></p><p>In other words, Wilson didn’t just challenge the military industrial complex’s monopolization (i.e., centralization) of firearms manufacturing. His stance extended to firmly resisting instances of government overreach that sought to regulate and control information pertaining to emerging technologies, which in and of itself is another form of centralized control. A condition which George Orwell described in his book 1984 as, “<em>an endless present in which the party is always right”. </em></p><p>Interestingly Jessica also encountered firm resistance from centralized content distributors and media outlets when the film was released, as it definitely didn’t fit the “approved narrative” because on the surface it looks like a film about guns but it’s really a story about the power of free speech and free access to information in the internet age.<em> </em>Clearly the time is ripe for more decentralized content distribution and streaming services that are integrated with Bitcoin payments, think <a href="https://www.angel.com/">Angel Studios</a> on a Bitcoin standard. This will empower content creators to not only profit from captivating content while simultaneously challenging centralized control over information, ensuring artistic creative control, prioritizing truth, and preservation of free speech., but I digress.</p><p>In July 2018, three years after Defense Distributed challenged the State Department’s actions in court, they accepted a<a href="https://www.documentcloud.org/documents/4600187-Defense-Distributed-Settlement-Agreement.html"> settlement offer</a> from the State Department, including a license to publish its files and a payment of nearly $40,000. When questioned about the settlement, State Department spokesperson Heather Nauert <a href="https://www.usatoday.com/story/news/politics/2018/07/31/3-d-printable-guns-donald-trump/870557002/">justified the decision</a>, stating that the Department of Justice advised settling the case to avoid likely loss on First Amendment grounds in court. Information must be free.</p><p>This and many other ongoing legal battles faced by Cody Wilson and Defense Distributed underscore important aspects of individual rights and freedom of speech that must be defended. These battles serve as a reminder that:</p><ol><li>The state seeks to control and capture new technologies by “any means necessary” </li><li>Lawfare and bureaucracy are the weapons of choice in achieving this aim </li><li>More decentralized technological tools and protocols that incorporate Bitcoin as the monetary layer need to be built to ensure the preservation of liberty and individual sovereignty. </li></ol><p>Jessica echoed similar sentiments when stating one of the biggest takeaways that she hopes people will get from Cody’s story; “<em>The takeaway is to build however you can - community, resources, decentralized systems, archive history and information. The battle for information, the era of the Internet and the battle for its control must be understood as a type of new frontier. Many are against </em><a href="https://constitution.congress.gov/constitution/amendment-2/"><em>second amendment rights</em></a><em> so I’d ask them are they truly against the free and open dissemination of information as well? Do they like someone telling them what they are able and not able to understand and read?” </em></p><p>I couldn’t agree more.</p><h2>Decoding Free Speech in the Digital Age</h2><p>Just like PGP or Cody’s 3D-printable gun designs, Bitcoin at its core is fundamentally open source code, thus Bitcoin is speech. In <a href="https://archive.ph/yAOwZ#selection-1319.220-1331.15">the words</a> of Beautyon,<em>“There is no point in any Bitcoin transaction that Bitcoin ceases to be text. It is all text, all the time.</em>” <a href="https://www.eff.org/press/archives/2008/04/21-40">The ruling</a> in the Bernstein v. The DOJ case set a precedent that recognized code as protected speech under the First Amendment, and therefore this protection also directly applies to Bitcoin. Fundamentally, Bitcoin is a messaging system and functions much like email and text messaging, all of which transmit messages. Its primary aim is to definitively confirm an owner's control over a cryptographic key, represented as a block of text, enabling access to a corresponding entry in the global Bitcoin network ledger. The point here is that restriction of communication using programming languages is an example of a prior restraint of speech. </p><figure>
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<p>Attempts to ban Bitcoin are just as ludicrous as banning memorizing 12 words in your head or outlawing<a href="https://scholar.google.com/scholar_case?case=2653838863893184007"> certain musical scores </a>.Does this mean that the powers that be will not try to outlaw Bitcoin and increase their grip on the narrative through censorship? You bet they will! Just like they have declared war on free speech online by rebranding it as a war on<a href="https://youtu.be/q_4Cjki3SOM?si=BybFrgsFt5JVs6Xs&t=820"> “misinformation and disinformation”</a>, propaganda is also being disseminated by the corporate media that paints Bitcoin mining in particular, <a href="https://bitcoinmagazine.com/sponsored/mining-misinformation-how-the-united-nations-university-misrepresented-data-to-exaggerate-bitcoins-environmental-footprint">as being harmful to the environment</a>, a claim that has been repeatedly debunked along with the usual “<a href="https://x.com/YahooFinance/status/1732445529777271268?s=20">Bitcoin is for money launderers and criminals</a>” </p><p>Time fails me to discuss the latest proposed <a href="https://bitcoinmagazine.com/legal/bitcoin-anti-totalitarianism">FinCen regulations</a> and the EU’s Markets in Crypto Assets <a href="https://www.esma.europa.eu/esmas-activities/digital-finance-and-innovation/markets-crypto-assets-regulation-mica">(MiCA)</a> law which are all very subtle but sinister attempts to gradually cripple Bitcoin in the name of combating money laundering and enforcing know your customer policies.. In the same vein, digital ID’s and central bank digital currencies (CBDC’s), are more than just surveillance tech; but are also weapons for destroying free speech and independent thought. The ultimate road to serfdom. While legal challenges against all these forms of government overreach noted above will be launched and likely won, they take a long time to settle and are usually very costly. The best solution is to develop more open-source, decentralized technological tools that will thwart and defang any attempts by the state to censor speech.</p><p> As big tech companies pay lip service to freedom of speech while simultaneously implementing <a href="https://x.com/lindayaX/status/1681656761101479936?s=20"><em>“freedom of speech not reach</em></a> policies, online discourse increasingly mirrors the authoritarian control described by Ludwig von Mises <a href="https://cdn.mises.org/Bureaucracy_3.pdf">when he said</a>: “<em>At every instant of his life the "comrade" is bound to obey implicitly the orders issued by the supreme authority. The State is both his guardian and his employer. The State determines his work, his diet, and his pleasures. The State tells him what to think and what to believe in”. </em>This is even more true today, than it was in 1944 when it was written. </p><p>Without the freedom of speech we lose a critical part of what it means to be free human beings. Today we may witness the battles between Defense Distributed and the State Department, Wikileaks and the DOJ, Bernstein and the DOJ, and so on. However, one thing remains clear: the players may change, and the time frames may differ, but the underlying struggle has always been centralization versus decentralization, a battle between those who seek to control speech and those who seek to liberate it. Satoshi Nakamoto, Julian Assange, Aaron Schwartz and many others are some of the martyrs of freedom that contributed immensely to the preservation of free speech in our society today. Bitcoin is the best shot that we have at safeguarding the future from being suffocated by the censorship industrial complex leviathan. </p><p><em>This is a guest post by Kudzai Kutukwa. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.</em></p>2024-03-07T18:17:16Zurn:uuid:d8bbb7f6-4e36-9f4f-aba2-4f99fb0bec6bKudzai Kutukwadefault_a_centralized_authority_controlling_people_1<em>Export-controlled RSA encryption source code on a T-shirt turned the shirt into a restricted munition.</em>Arthur Hayes-backed Bitcoin Ordinals Trading App Raises $3 MillionOyl has raised $3 million for its bitcoin wallet with in-app trading, backed by Arca, Arthur Hayes’s family office and Foresight Ventures.<p>Pioneering bitcoin wallet company Oyl has secured a $3 million pre-seed investment from a variety of investors, including UTXO Management and Domo, the creator of the BRC-20 token standard.</p><p>The investment marks a noteworthy shift in cryptocurrency investment trends, with several Ethereum NFT funds making their first foray into a bitcoin-centric business. Arca, which led the round, is a venture firm with a history of investments in Ethereum NFTs and alternative blockchains. Now, the company is extending its portfolio into the bitcoin sphere through Ordinals. Other investors include Foresight Ventures, Taproot Wizards CEO Udi Wertheimer, and distinguished NFT funds Kanosei and FlamingoDAO.</p><p>“The speed of development on Bitcoin is primarily constrained by lack of infrastructure — we’re in a race to see who can create the most usable backend tooling for developers to build on,” said BRC-20 creator Domo.</p><p>Based in Brooklyn, NY, Oyl is set to launch in coming weeks, aiming to become the first bitcoin wallet to incorporate "in-wallet" trading of bitcoin and Ordinals. The app is designed to support market aggregation for BRC-20s and facilitate swap integrations with the "bitcoin DeFi" protocol Omnisat.io.</p><p>“We want to support the new surge of development on Bitcoin — starting with builder tools like RPCs, all the way to consumer platforms like the Wallet,” Alec Taggart, Oyl CEO, said in a statement. </p><p>Arthur Hayes, whose family office Maelstrom also participated in the funding, noted the growing recognition of the untapped potential within the bitcoin DeFi sector.</p><p>“Funds that have historically been focused on other chains are now seeing what’s possible on Bitcoin with Ordinals,” said Arthur Hayes. “The infra winners in ‘Bitcoin Defi’ are yet to be determined — it’s a huge opportunity.” </p><p>In addition to being on the verge of launching its wallet, Oyl has introduced Sandshrew, a product that offers developer tools such as Bitcoin Core, Esplora, and Ordinals endpoints.</p><p><em>Disclaimer: UTXO Management's parent company, BTC Inc., is also the parent company of Bitcoin Magazine. UTXO Management operates separately and independently from Bitcoin Magazine.</em></p>2024-03-07T18:09:31Zurn:uuid:c9b6cd19-2302-36d6-0881-1a806ac44a2dNamciosdefault_bitcoin_price_all_time_high_of_70000_0-1We Can Be So Back Nostalgia is used as a vehicle for rewriting history and using those alterations to push agendas decided by the powerful, but it can also be used to reinvigorate the reality of the past. From "The Inscription Issue".<p><strong><em>This article is featured in Bitcoin Magazine’s</em> <em>“The Primary Issue”. Click </em><em><a href="https://store.bitcoinmagazine.com/collections/magazines/products/bitcoin-magazine-annual-subscription">here</a></em> to get your Annual Bitcoin Magazine Subscription.</strong></p><p><strong>Click <a href="https://inscriptionissue.bitcoinmagazine.com/we-can-be-so-back">here</a> to download a PDF of this article.</strong></p><blockquote><p><em>“The Greek word for ‘return’ is nostos. Algos means ‘suffering’. So nostalgia is the suffering caused by an unappeased yearning to return.”</em></p><p>― Milan Kundera, <a href="https://www.goodreads.com/work/quotes/3424606"><em>Ignorance</em></a></p></blockquote><figure>
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<p>Nostalgia is a powerful emotion. A coping mechanism, an inspiration, or a manipulative rhetorical tool. For quite some time, the inhabitants of the West have found themselves conscripted onto a battlefield of the mind. Society has been reshaping itself or being reshaped at a frenetic pace for decades now. Nostalgia has proven itself to be a potent weapon in the arsenals of every faction on that battlefield.</p><p>The power of contrast should never be underestimated. Humans are living, breathing, pattern-recognition machines. We cannot help but compare proposed plans and present circumstances to historical outcomes. This is normal, this is healthy: It lets the human mind achieve some measure of confidence in predicting what happens next. The human mind loathes unpredictability more than anything else. The unknown noise in the dark is far more terrifying than the wild animal on the ridgeline that you can observe and predict.</p><p>The regime knows that contrast holds such power, because it allows for critique. Such was the power of Florida during COVID, for instance. Without a state that was free of lockdowns and mandates, foisting the same circumstances on an entire population across the board would have caused less negative sentiment of those measures. This was the real reason for the mass psychosis and peer pressure of that era. It’s much more difficult to make someone take a bite of a turd sandwich insistently offered to them when there are other options.</p><figure>
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<blockquote><p><em>“The past is a candle at great distance: too close to let you quit, too far to comfort you.”</em></p><p>― Amy Bloom, <a href="https://www.goodreads.com/work/quotes/3286459"><em>Away</em></a></p></blockquote><p>“Hireath” is an old Welsh word that describes a feeling of homesickness for something that no longer exists or perhaps never did. Millennials stand astride the old world before 9/11 and the new one, with memories of a higher-trust society with much more prosperity and unity than what we have now. These feelings are amplified by the fact that due to their age, the entirety of the era before the shift was viewed through the rose-colored glasses of childhood. Essentially, millennials are too young to remember the 1992 L.A. riots or the Oklahoma City bombing with any sense of clarity or context, but old enough to remember when innocence was valued and optimism about the future was commonplace.</p><p>This contrast between a less anxious past and a present that consists of never-ending psychological warfare can be many things. The past can be pointed to as a critique of how far we have fallen and thrown in the faces of the ruling order as dissent. It can also be a coping mechanism, both healthy and unhealthy. From vaporwave to homesteading, from filtered edits of 1980s Miami to thinking about the Roman empire, the aesthetics and contrast of the past are coming back with a vengeance as the present is too Lovecraftian to personify.</p><p>My personal favorite example of this has been the meteoric resurgence of the band Creed. While the band broke up in 2004, they have miraculously been memed back to life. A video of the 2001 Thanksgiving halftime show they performed in Dallas went viral. Taking place just two months after 9/11, that snapshot in time captured and distilled both the optimism of the time and the resilience of its people. The video entered the narrative bloodstream, provoking remarks about how “we used to be a real country” and with it, the demand that we deserve something better than this because we once had something better than this.</p><p>Shortly afterwards the Texas Rangers began to streak toward the World Series after a rough start. The team gave the credit for their comeback to Creed, which they began to play constantly in the locker room for motivation. Home games in Dallas blared “Higher” and “My Sacrifice” prompting the fans to sing along in a massive chorus. The Rangers would go on to win the World Series, with a reunited Creed attending the game with Jerseys and a newly announced tour across the United States. The winner of this season of The Voice was a burly white guy belting out Creed’s “Higher” during his finale. In a dark time of “Its So Over” lies the burning embers of a “We Are So Back”.</p><blockquote><p><em>“Every act of rebellion expresses a nostalgia for innocence and an appeal to the essence of being.”</em></p><p>― Albert Camus, <a href="https://www.goodreads.com/work/quotes/486408"><em>The Rebel</em></a></p></blockquote><figure>
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<p>But the regime understands the power of contrast, too. The solution to this problem has been to tear down or change the past. Beloved franchises that influence culture are butchered ignobly by the likes of Kathleen Kennedy. Films and shows of historical fiction are made to impose contemporary norms of sex, diversity, and sarcastic cynicism upon our past. Suddenly there have always been black Scandinavians, African Roman legionnaires in Britain, and the great men of history have their conquests and achievements “reimagined” to give someone else the credit. Wikipedia is edited, and classical literature and its heroes are “reimagined” and judged through a contemporary lens.</p><p>Visual media is obviously the most powerful avenue with which to do this. A series like <em>Stranger Things</em> seeks to recreate the most familiar possible representation of the 1980s, only to subtly slip in the values the regime wishes to promote as if this state of affairs has always been the norm. <em>Yellowstone</em> receives critical acclaim only for tough cowboys and patriarchal dynasties to spend spare moments reinforcing that a good feller ought to be a feminist. Like an angler fish with a pretty lure and a poisonous bite, designed to entertain you just enough to where the subversion can slip through.</p><p>This adds a certain sense of urgency to stopping the rot. It is why we must promote and share the best parts of our past, even if it’s something like a halftime show played by Creed. Those of us who remember the time before the world moved on must pass down what was normal and what was good to the generations born inside the throes of hell world who don’t know any better. It is our duty to shout from the rooftops that this isn’t the best we can do, and it’s not the best we’ve ever done. Even if the past must stay in the past, it provides a blueprint for the right kind of future.</p><p><strong><em>This article is featured in Bitcoin Magazine’s</em> <em>“The Primary Issue”. Click </em><em><a href="https://store.bitcoinmagazine.com/collections/magazines/products/bitcoin-magazine-annual-subscription">here</a></em> to get your Annual Bitcoin Magazine Subscription.</strong></p><p><strong>Click <a href="https://inscriptionissue.bitcoinmagazine.com/we-can-be-so-back">here</a> to download a PDF of this article.</strong></p>2024-03-07T15:00:00Zurn:uuid:752e0c67-6ade-aed2-bfa4-567987025c2bAristophanesaristo_1Click the image above to subscribe!Brave Wallet Integrates Bitcoin Support For Its 60 Million UsersBrave says Bitcoin is expanding its use cases and is serving as a foundation for innovation.<p><a href="https://brave.com/">Brave</a>, a privacy-focused web browser with over 60 million users, has <a href="https://brave.com/bitcoin-wallet/">rolled out</a> an update to its desktop version (1.63) that introduces support for Native SegWit Bitcoin wallets within its built-in Brave Wallet. Additionally, Brave Wallet now enables users to send and receive from all types of Bitcoin addresses, including Legacy, Nested SegWit, Native SegWit, and Taproot, ensuring compatibility with third-party wallets.</p><blockquote class="twitter-tweet"><p lang="en" dir="ltr"><a href="https://twitter.com/hashtag/Bitcoin?src=hash&ref_src=twsrc%5Etfw">#Bitcoin</a> is now available in Brave Wallet on desktop!<br><br>Just make sure you’re on the latest version of Brave (v1.63) and you’ll see the option in the “Accounts” section of Brave Wallet.<br><br>Details are in today’s blog post 2024-03-06T21:27:32Zurn:uuid:e4fd7c76-0985-b1e7-52e2-71f9c527a078Nik Hoffmanghw9qf7w8aavdr9Policymakers, Bitcoin Industry Leaders to Meet in Washington D.C. at Bitcoin Policy Summit Politicians, policymakers and Bitcoin industry leaders are meeting in Washington D.C. for the second annual Bitcoin Policy summit to explore the implications of Bitcoin and digital assets on federal policy.<p>Leading Bitcoin advocates and key politicians will convene at the National Press Club Ballroom in Washington D.C. for the second annual Bitcoin Policy summit hosted by the Bitcoin Policy Institute. The bipartisan policy event will address the increasing integration of Bitcoin and digital assets into the political landscape of the United States while identifying important policy measures that interact with this burgeoning ecosystem.</p><p>The upcoming summit on April 9, 2024 will bring together key players in the Bitcoin ecosystem covering a diverse range of subjects including: energy and the environment, national security, perspectives on Bitcoin and democracy, and how to counter the rise of digital authoritarianism. Confirmed speakers include Avik Roy (President, Foundation for Research On Equal Opportunity), Mike Brock (CEO of Block’s TBD), Sarah Kreps (Director, Cornell Brooks Tech Policy Institute) and Matthew Pines (Director, Security Advisory at Sentinel One). The full speaker list can be viewed <a href="https://www.btcpolicysummit.org/2024-speakers">here</a>. Further speakers will be announced prior to the event according to Bitcoin Policy Institute representatives.</p><p> At the inaugural Bitcoin Policy Summit on April 26, 2023, policymakers including US Senator Ted Cruz, US Senator Cynthia Lummis and House Majority Whip Tom Emmer met with Bitcoin industry representatives to discuss the importance of Bitcoin from a national and economic security perspective, as well as the importance of Bitcoin in the context of human rights. Notable Bitcoin industry representatives included Alex Gladstein (Chief Strategy Officer, Human Rights Foundation), Jack Mallers (Strike CEO), and Roya Mahboob (CEO and Co-Founder, Digital Citizen Fund).</p><p> During the 2023 summit, Senator Ted Cruz made headlines when <a href="https://x.com/BitcoinMagazine/status/1651278737256718336?s=20">revealing</a> that he was: “incredibly bullish on Bitcoin <em>specifically</em>”, perhaps indicating his preference for Bitcoin over alternative digital assets. He also remarked: "I own a little more than 2 bitcoin, and every Monday I own a little bit more. I bought the dip." With bitcoin trading at approximately $28,000 per coin at the time of his statement in 2023, Cruz’s bullishness appears to have been well-founded.</p><p> This year’s Bitcoin Policy Summit will be livestreamed to viewers in partnership with Bitcoin Magazine, bringing live footage to viewers across social media including Twitter (X) and YouTube. Interested attendees can also receive exclusive discounts on Bitcoin Policy Summit tickets by visiting <a href="https://www.btcpolicysummit.org/">https://www.btcpolicysummit.org/</a> and entering code “bmag21” for 21% off tickets. It should be noted that attendees must apply and be selected in order to attend as in-person attendance is highly limited.</p><figure>
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<p> Policymakers, industry leaders and media may contact the organizers of the Bitcoin Policy Summit via their website <a href="https://www.btcpolicysummit.org/">https://www.btcpolicysummit.org/</a> for questions and comments.</p>2024-03-06T18:00:00Zurn:uuid:94d4f711-657f-704d-8175-efa15ff2e7c7Bitcoin Magazinebitcoin-policy-summit-2024---article-preview5 Ways Bitcoin Mining Benefits EthiopiaExpansion of Bitcoin mining in Ethiopia offers a route to monetizing a coming massive increase of energy production, and help finance the build out of electrical grid infrastructure.<blockquote><p>Ethiopia is emerging as Africa's most promising bitcoin mining hub, poised to claim a significant share of the global hashrate as the hum of miners reverberates across the globe.</p><p>- Jaran Mellerud & Kal Kassa</p></blockquote><p>Recent attention from a <a href="https://www.bloomberg.com/news/articles/2024-02-08/bitcoin-mining-why-ethiopia-is-attracting-chinese-crypto-miners">Bloomberg article</a> and the announcement of a bitcoin mining investment by the <a href="https://twitter.com/KalKassa/status/1758448312628207863">Ethiopian Government</a> signals a newfound global spotlight on the Ethiopian bitcoin mining sector.</p><p>The potential of Ethiopia as a bitcoin mining hub resides in the promise of a mutually beneficial relationship between the nation and the industry. In this article, we delve into the transformative power of bitcoin mining to uplift Ethiopian society, unveiling five compelling avenues for prosperity in this East African gem.</p><h2>Bitcoin mining monetizes Ethiopia’s surplus electricity</h2><p>Bitcoin mining allows Ethiopia to transform excess electricity into a valuable commodity, fostering economic growth while maximizing the utilization of its abundant hydropower reserves.</p><p>Ethiopia's allure for bitcoin miners is undeniably anchored in its abundant hydropower resources. Nestled within the country’s mountainous terrain lies the source of the Blue Nile, accounting for a staggering <a href="https://www.nilebasin.org/index.php/83-nbi/member-states?limit=4&start=4">85%</a> of the Nile's water. This abundant water wealth translates into the immense potential for hydropower generation, making Ethiopia a prime destination for electricity-intensive industries like bitcoin mining.</p><figure>
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<figcaption><em>Kal Kassa, Bitcoin Educator at BitcoinBirr and Alen Makhmetov, CoFounder of Hashlabs Mining at </em><em>“Exporting energy through the internet” a Hashlabs Mining event in Addis Ababa</em><br tml-linebreak="true"></figcaption>
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<p>With the potential to harness an estimated <a href="https://www.trade.gov/country-commercial-guides/ethiopia-energy">60 GW</a> of hydropower, geothermal, wind, and solar, Ethiopia stands as a powerhouse that could theoretically become capable of generating more than <a href="https://ccaf.io/cbnsi/cbeci?pStoreID=epp">three times</a> the electricity consumed by the entire bitcoin mining network. Presently, the nation has tapped into a fraction of this potential, having an electricity generation capacity of <a href="https://www.bloomberg.com/news/articles/2024-02-08/bitcoin-mining-why-ethiopia-is-attracting-chinese-crypto-miners">5.3 GW</a>.</p><p>Assuming a capacity factor of 40%, Ethiopia's current electricity generation capacity translates to a potential of 18.6 terawatt-hours (TWh) per year under normal rainfall conditions. Comparatively, in 2022, the country's electricity consumption amounted to only <a href="https://ourworldindata.org/energy/country/ethiopia">14.7 TWh</a>, leaving approximately 20% of the electricity generation potential unutilized. This number will be even higher during particularly wet years.</p><p>As if Ethiopia's electricity surplus wasn't already substantial, the nation is on the brink of nearly doubling its generation capacity with the commissioning of The Grand Ethiopian Renaissance Dam. This awe-inspiring project will claim the title of Africa's largest hydropower plant, boasting an impressive nameplate capacity of <a href="https://www.mowe.gov.et/en/project/grand-ethiopian-renaissance-dam-1">6.5 GW</a>.</p><p>With an anticipated capacity factor of <a href="https://web.archive.org/web/20200403235717/https://www.internationalrivers.org/sites/default/files/attached-files/international_panel_of_experts_for_ethiopian_renaissance_dam-_final_report_1.pdf">29%</a>, sustained by the continuous influx of water to the dam, the power plant is projected to yield approximately 16.5 terawatt-hours (TWh) of electricity annually. This output is equal to <a href="https://ccaf.io/cbnsi/cbeci?pStoreID=epp">10%</a> of the consumption of the Bitcoin mining network, underscoring Ethiopia's potential to become a dominant force in both energy production and bitcoin mining.</p><figure>
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<p>The forthcoming Grand Ethiopian Renaissance Dam's anticipated 16.5 TWh of electricity production will propel Ethiopia's total potential generation to a staggering 35.1 TWh annually under typical rainfall conditions. With current consumption at 14.7 TWh, the surplus electricity generation will amount to an impressive 20.4 TWh, corresponding to a percentage electricity surplus of 58%.</p><figure>
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<p>Ethiopia is one of the world's fastest-growing economies and is set to see a surge in electricity demand, necessitating the expansion of its hydropower infrastructure. However, the non-modular nature of hydropower plants often leads to overbuilt capacity, resulting in surplus generation until demand catches up.</p><p>The flexibility inherent in bitcoin mining makes it the <a href="https://bitcoinmagazine.com/business/five-factors-making-bitcoin-miners-unique">perfect match</a> for Ethiopia's surplus electricity, offering a means to monetize until residential, commercial, and industrial consumption catches up. Once demand increases, miners can adapt by relocating or contributing to the financing of new power plants.</p><p>Without Bitcoin mining, Ethiopia faces the prospect of significant electricity wastage until demand aligns. By seizing the opportunity to leverage its abundant energy resources, Ethiopia positions itself for sustained economic growth, with initiatives like Bitcoin mining serving as a catalyst for optimizing resource utilization and driving prosperity.</p><h2>Bitcoin mining increases Ethiopia’s exports and access to foreign currency</h2><p>Ethiopia grapples with a daunting challenge: a staggering trade deficit. With more dollars flowing out than in, the nation faces mounting difficulties in importing vital goods and services. Compounded by a struggling currency, ironically named the Birr, Ethiopia's citizens are vulnerable to soaring inflation rates.</p><p>In 2022, Ethiopia imported $23 billion worth of products and services while exporting just $11 billion, leaving a cavernous trade deficit of $12 billion. This deficit is straining the nation's ability to meet debt obligations, showcased by the ongoing negotiations with the International Monetary Fund (IMF) for a potential bailout.</p><figure>
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<p>Luckily, Ethiopia's abundant electricity surplus presents a promising opportunity for foreign currency generation through exports. However, traditional avenues like selling electricity to neighboring countries have been limited due to low demand and weak economies in the region, yielding modest returns of around $70 million annually.</p><p>Enter Bitcoin mining, a revolutionary solution that transcends geographical constraints by allowing electricity to be converted directly into digital currency. With minimal investment in transmission infrastructure, Ethiopia can tap into the global Bitcoin network as a lucrative consumer of its surplus energy.</p><figure>
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<figcaption><em>Jaran Mellerud, Alen Makhmetov, and Marek Šafárik, Cofounders of Hashlabs Mining</em></figcaption>
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<p>By embracing Bitcoin mining, Ethiopia diversifies its export income and reduces reliance on neighboring countries for electricity sales. With the ability to export electricity through the Internet, the nation gains a stronger negotiating position and can demand higher prices for its exported power.</p><p>In a recent interview with <a href="https://www.bloomberg.com/news/articles/2024-02-08/bitcoin-mining-why-ethiopia-is-attracting-chinese-crypto-miners">Bloomberg</a>, Yodahe A. Zemichael of the Information Network Security Administration (INSA) highlighted the government's motivation of legalizing the bitcoin mining industry, citing that companies pay in foreign currency for the electricity they consume in data center operations.</p><p>Considering the official bitcoin mining tariff of $0.0314/kWh, Ethiopia stands to generate a substantial export income of $640 million if it sells all its excess electricity to Bitcoin miners. Furthermore, by self-mining with the most efficient machines available, the country could potentially yield an export income of $3.9 billion, making Bitcoin mining a transformative force in Ethiopia's economy and potentially its largest export industry. This tantalizing prospect underscores the transformative potential of Bitcoin mining for Ethiopia's economic landscape.</p><p>Indeed, it's prudent to adjust our expectations to account for real-world factors such as the Bitcoin halving and Ethiopia's likely utilization of a portion of its electricity surplus for other purposes. A more realistic estimate of Ethiopia's export income from Bitcoin mining would likely fall somewhere between $640 million and $3.9 billion, settling in the middle at around $2.3 billion.This figure still positions Bitcoin mining as the largest export industry in Ethiopia, representing a significant economic opportunity for the nation.</p><figure>
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<p>A $2.3 billion boost in export income would indeed wield transformative power for the Ethiopian economy, providing a vital injection of foreign currency to strengthen the national currency and facilitate easier access to essential imports. Moreover, reducing dependency on foreign lenders would enhance Ethiopia's sovereignty and bolster its economic resilience.</p><p>At this pivotal moment, Ethiopia faces the imperative of addressing its trade imbalance and charting a course for economic prosperity. Embracing bitcoin mining as a means to export surplus electricity through the internet offers a groundbreaking opportunity to unlock Ethiopia's economic potential.</p><p>Indeed, it could represent the greatest economic opportunity of this generation for the country.</p><h2>Bitcoin miners can build out electrical infrastructure in Ethiopia</h2><p>The challenge of electrification in Ethiopia is stark: only <a href="https://data.worldbank.org/indicator/EG.ELC.ACCS.ZS?locations=ET">54%</a> of the population currently has access to electricity, with rural areas significantly lagging behind urban centers. While cities boast a <a href="https://data.worldbank.org/indicator/EG.ELC.ACCS.UR.ZS?locations=ET">94%</a> electrification rate, rural areas struggle at just <a href="https://data.worldbank.org/indicator/EG.ELC.ACCS.RU.ZS?locations=ET">43%</a>. The Ethiopian Government has set an ambitious goal of achieving near-universal electrification by 2030, but this endeavor faces significant hurdles.</p><p>The electrification challenge in Ethiopia, particularly in rural areas, underscores the urgent need for innovative solutions. While the country boasts significant electricity generation capacity, the main hurdle lies in transmitting and distributing this energy to remote communities.</p><p>Bitcoin miners offer a potential solution by financing and constructing substations in rural areas with surplus electricity, such as those near The Grand Ethiopian Renaissance Dam. These substations could serve not only miners but also nearby residents, potentially providing electricity to entire towns.</p><figure>
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<figcaption><em>A substation in Africa</em></figcaption>
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<p>This approach, akin to efforts by <a href="https://gridlesscompute.com/">Gridless</a> in Kenya, could complement Ethiopia's goal of near-universal electrification by 2030. Unlike in Kenya, where Gridless focuses on building power plants with bitcoin mining as an anchor customer, Ethiopia already has sufficient power plants. Thus, Ethiopian miners could focus on building out substations to improve the population’s access to electricity.</p><p>Moreover, the increased revenue from selling electricity to miners could enable Ethiopia to invest in new electrical infrastructure, including substations, transmission lines, and distribution networks. As a result, bitcoin miners could indirectly finance the expansion of electrical infrastructure in Ethiopia, contributing to electrification for Ethiopians and fostering socio-economic development nationwide.</p><h2>Bitcoin mining brings tech jobs to Ethiopia</h2><p>Ethiopia, boasting the second-largest population in Africa with 122 million inhabitants, predominantly comprises a youthful demographic. Regrettably, the nation faces a significant challenge of high unemployment rates among its youth.</p><p>Introducing the bitcoin mining industry could potentially provide avenues for accessing tech jobs, not limited to mining facilities but also encompassing the broader bitcoin economy poised to develop alongside the foundational growth of the bitcoin mining industry.</p><p>Bitcoin mining will bring a significant amount of jobs to Ethiopians across many talents and skills. On this, Advisor at <a href="https://www.hashlabsmining.io/ethiopia">Hashlabs Mining Ethiopia</a>, Kal Kassa says:</p><blockquote><p><em>“500 jobs per bitcoin miner is a high goal to meet and I doubt this rumor we’ve been hearing is an honest reflection of the government’s intent to regulate and add thresholds to investment. That being said, facilities with investment over $100 million are very likely to require more than 500 personnel, contractors, vendors, and local suppliers. In fact, we see more than double that in interest from technicians and electrical engineers. Training and certifying skilled talent will be a pillar of our objectives in Ethiopia and I have no doubt we will inspire a generation forward.”</em></p></blockquote><p>Additionally, <a href="https://www.hashlabsmining.io/">Hashlabs Mining</a> has sponsored the onboarding of hundreds of wallets at ALX Ethiopia, DevFest’24, and the Information Network Security Administration (INSA) in keeping with this vision.</p><figure>
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<figcaption><em>Kal Kassa with Elias Abebe, COO of Hello Solar Technology PLC</em></figcaption>
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<blockquote><p>Kassa continues, <em>“For programmers and devs building, I urge them to build a profile and open a free lightning wallet with sost.tech and similar initiatives to get paid in bitcoin. BTrust Builders may also be a solid destination for experienced computer engineers and enthusiasts. Hashlabs Mining Ethiopia, and various additional sponsors, will be supporting these educational and vocational efforts via the funded <a href="https://drive.google.com/file/d/1CjXyZdyUY-J0oag-p260iqRUMegTCkhX/view">Hashlabs Education Fund</a> and BitcoinBirr.”</em></p></blockquote><p>BitcoinBirr, a community of educators and innovators, boasts a strong vision for providing bitcoin learning materials across several languages and regions. <a href="http://t.me/bitcoinbirr">Telegram</a> is the most popular platform for communication among its mods and members. Most recently Kal Kassa gave a presentation titled “Mining Bitcoin of the Nile River” at <a href="https://bitcoin-oasis.com/">Bitcoin Oasis in Dubai</a>. In the next few weeks, and with sponsors from across the world, BitcoinBirr would like to complete the bitcoin training of all 2,000 staff at INSA, in addition to other institutions and organizations that have requested bitcoin education.</p><p>Beyond hackathons and presentations, Hashlabs Mining is committed to the training of talent in tech. Private sector leaders like Mehrteab Leul and Associates (MLA), Yingke Consultants, Grant Thornton Advisory, MMCY Tech, Boseti Energy Exploration, Meedo Records, HabeshaView, Flawless Events, Education Matters Addis, Tryst Cafe, Ethiopian Airlines and Sheraton Addis are highly appreciated and we honor your friendship during our work in Ethiopia.</p><h2>Ethiopia can leverage mining to build a bitcoin treasury</h2><p>The Ethiopian Investment Holdings (EIH), the country's sovereign wealth fund, has been rumored to partner with a Chinese bitcoin and data mining group. As per a LinkedIn post shared by EIH’s official account, we understand the project will consist of a multi-million dollar investment.</p><figure>
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<figcaption><em>Jaran Mellerud, Cofounder of Hashlabs Mining at an event in Addis Ababa</em></figcaption>
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<p>Given the natural series of events that occur with bitcoin miners, the accumulation of bitcoin may be a way for Ethiopia’s treasury to maintain a balance of BTC on behalf of its country. As methods for collateral and proof of reserves develop within the bitcoin “space”, these reserves may be used to prove creditworthiness.</p><p>The events surrounding Exchange Traded Funds (ETFs) and the Securities and Exchange Commission (SEC) may also be instructive to Ethiopians.</p><p>There is also a sentiment from some Bitcoiners that governments should not be involved in bitcoin mining. And that bitcoin is an experiment by cryptopunks and libertarians to create tools for the free market. Given Ethiopia's recent communist history from 1974 to 1991, Ethiopia’s citizens and leaders may need a refresher course on the Austrian School of Economics.</p><h2>Conclusion</h2><p>We are witnessing significant development in real time. It’s difficult to point towards a singular event or catalyst. But we are at the center of a very serious and interesting moment in our history. The moment we are experiencing allows value to be generated from an open and free community of bitcoin miners. And this novel technology allows humanity to preserve value across time and space.</p><p>As we dive into the future, it may also be important to note the need for humility. It should be remembered that over the past few years, Ethiopians and East Africa have witnessed a haunting amount of death and destruction, often self-inflicted and many times manipulated on the world stage. </p><p>We can’t bring back our fallen friends. Like our dear brother Tekeste Sebhat Nega, an early bitcoiner and a visionary. He lost his life in the last few weeks of 2020. An energetic and smart young man died in a senseless civil war. And there are many more stories like him. The entire country is going through a syndrome of sorts, so let’s remain humble as we carry the burden.<br><br>Let’s move with purpose, passion, and dignity toward a future that values math and physics more than fiat and violence. That is our hope for ourselves and that’s the energy with which we will operate in Ethiopia.</p><p><em>This is a guest post by Jaran Mellerud & Kal Kassa. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.</em></p>2024-03-06T17:30:00Zurn:uuid:847badb0-aa84-324c-35c6-36a1a394583dJaran Mellerudehtiopoa<em>Kal Kassa, Bitcoin Educator at BitcoinBirr and Alen Makhmetov, CoFounder of Hashlabs Mining at </em><em>“Exporting energy through the internet” a Hashlabs Mining event in Addis Ababa</em><br tml-linebreak="true">Arizona State Senate Considering Adding Bitcoin ETFs to Retirement PortfoliosThe bill has passed the Senate and is now being reviewed by the House.<p>The Arizona State Senate is <a href="https://legiscan.com/AZ/supplement/SCR1016/id/426920">considering</a> a proposal to encourage the Arizona State Retirement System (ASRS) and the Public Safety Personnel Retirement System (PSPRS) to explore the inclusion of Bitcoin ETFs in their investment portfolios.</p><blockquote class="twitter-tweet"><p lang="en" dir="ltr">JUST IN: 2024-03-06T15:29:53Zurn:uuid:6f9b78bc-653a-f25b-f378-03a8482ec37aNik Hoffmandefault_bitcoins_on_the_new_york_stock_exchange_up_close_0-19Bitcoin Enters the Conversation within the German ParliamentGerman Bitcoin Youtuber Roman Reher, and CEO of terrahash.energy GmbH Kristian Kläger speak in German Parliament after Joana Cotar, independent MP, puts Bitcoin on the parliament's agenda.<p>With the kickoff event 'Bitcoin im Bundestag,' Bitcoin has entered the political discourse in Germany. Roman Reher of Blocktrainer, the largest German-speaking Bitcoin YouTube channel, and Kristian Kläger, CEO and founder of terahash.energy GmbH, delivered two formidable introductory presentations in the German Parliament. Since German politicians still mainly associate Bitcoin with criminal activities, money laundering, and climate damage, the objective was to nurture a better understanding of the unique opportunities Bitcoin has to offer.</p><p>Privacy was paramount to kickstarting the event. Given that Bitcoin remains a complicated subject in German politics, ensuring full privacy for attending MPs and their staff was crucial to spare them potential reprimands from their party leaders. The event was well-attended, also by visitors from outside. Since MPs preferred to take a backseat on the main floor, ordinary visitors were invited to fill the front seats. Overall, the event was a big success, and more Bitcoin events in the Bundestag are in the pipeline. While cameras were not permitted during the main event, a few exclusive moments later allowed for capturing select opinions on camera.</p><iframe width="560" height="315" src="https://www.youtube.com/embed/b5YaVed1C4Q" frameborder="0" allowfullscreen></iframe><p>Joana Cotar is the founder of the initiative 'Bitcoin im Bundestag.' As a party-independent MP, she has the privilege of putting Bitcoin on the agenda, for example, during debates about the introduction of the digital Euro. As a party member, this would not have been possible.</p><p>Still, her former affiliation with the right-wing AfD poses challenges too. In German politics, guilt by association is a strong mechanism, and no party wants to collaborate with the AfD. It creates a political vacuum and has led to discussions within the Berlin Bitcoin community. According to her it is good to remind oneself that Bitcoin is apolitical, uncensorable, and free money, and even your worst enemy can use it.</p><p>Also in the German parliament, Bitcoin is a bottom up movement, and according to Joana Cotar, the staff of the MPs play a crucial role in getting the topic on the agenda. They work long hours with the MPs, and are also often consciously encouraged by Members of the German Parliament to explore new topics. </p><p>In the following interview, Joana Cotar provides unprecedented insights into the workings of German politics. She discusses the free access banking lobbyists have to the German parliament, their strong influence on MPs, and articulates concrete requests such as making Bitcoin legal tender, allowing for self-custody, promoting sustainable Bitcoin mining, and urging opposition to the introduction of the digital Euro.</p><iframe width="560" height="315" src="https://www.youtube.com/embed/xqIkrCAjnR8" frameborder="0" allowfullscreen></iframe><p><em>This is a guest post by Daniel van Heel. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.</em></p>2024-03-06T14:45:00Zurn:uuid:09ad67bf-f90e-d91c-805d-10b39c2c9371Daniel van HeelgermanparlOfficial: Bitcoin Reaches New All Time HighBitcoin surpasses its previous all time high of $69,000 with no signs of slowing down.<p>In a momentous surge, Bitcoin has officially smashed through its previous all-time high, surpassing the $69,000 mark. This milestone comes as Bitcoin continues its remarkable ascent after spot Bitcoin Exchange Traded Funds (ETFs) were approved by the U.S. Securities and Exchange Commission, leading to a consistent large influx of capital into BTC.</p><blockquote class="twitter-tweet"><p lang="en" dir="ltr">OFFICIAL: <a href="https://twitter.com/hashtag/BITCOIN?src=hash&ref_src=twsrc%5Etfw">#BITCOIN</a> REACHED A NEW ALL TIME HIGH ABOVE $69,000 <a href="https://t.co/DccMr0Gnc5">pic.twitter.com/DccMr0Gnc5</a></p>— Bitcoin Magazine (@BitcoinMagazine) <a href="https://twitter.com/BitcoinMagazine/status/1765030286704722180?ref_src=twsrc%5Etfw">March 5, 2024</a></blockquote>
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<p>The Bitcoin market witnessed a flurry of activity as BTC surged to its new peak as BlackRock's spot Bitcoin ETF did over $1 billion in trading volume for the sixth consecutive day yesterday. Bitcoin's previous all time high of $69,010 happened almost three years ago on November 10, 2021, 846 days ago. </p><p>For the month of February, Bitcoin had the biggest green monthly candle in its history, rising almost $20,000 that month alone. To put into context how bullish that month was price wise, the bear market bottom for bitcoin was ~$16,000, meaning bitcoin pumped almost $4,000 more than that alone in February.</p><blockquote class="twitter-tweet"><p lang="en" dir="ltr">JUST IN: <a href="https://twitter.com/hashtag/Bitcoin?src=hash&ref_src=twsrc%5Etfw">#Bitcoin</a> had its biggest monthly green candle EVER in February 2024-03-05T15:10:31Zurn:uuid:e039a2b0-b48a-6acd-4e9a-1bc8224a37f3Nik Hoffmandefault_bitcoin_price_all_time_high_of_70000_green_0-1Let Bitcoin Cook The journey is the reward.<p>“Let him cook” has been the expression that all of the young whippersnappers are using lately when describing somebody or something that shouldn’t be interrupted, because they are on a roll.</p><p>I know this piece will come across as annoying to some, especially because I have only been bullish on bitcoin with some gusto for the last couple of months (though I first <a href="https://quoththeraven.substack.com/p/23-stocks-im-watching-for-2023-part-639">pointed it out to my readers</a> in December 2022), but as a newfound member of the <s>church of</s> bitcoin community, I’d be remiss if I didn’t try out my voice a bit.</p><p>I apologize in advance for opining on things that many members of planet bitcoin have talked about and debated ad nauseam for the last decade. But, one way or another, I have to get myself up to speed, and I do that best cathartically through writing. As a result, you, the reader, are left here to suffer. So, you know, don’t forget to renew your paid subscriptions to <em>Fringe Finance.</em></p><p>Enough with the prelude — we all know it has been a breathtaking week for bitcoin, which is up well over 20% in just the span of days.</p><figure>
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<figcaption>"Oh my fuck." - Bubbles, Trailer Park Boys</figcaption>
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<p>The moves have done well to spin up even more interest in the cryptocurrency than there was over the last month with the launch of the ETFs. Hell, even Morgan Stanley came out this week and said they were thinking of throwing their hat into the ring and launching a bitcoin fund of their own.</p><figure>
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<p>I’ve gotten a number of phone calls and texts about bitcoin, and I’m not even a prominent member of the community, nor am I a well-known bull. And so I can’t even imagine the outreach that maximalists and longtime advocates have seen this week.</p><p>Undoubtedly, it is exciting, and I can’t even imagine how long people have been waiting to savor this moment, after years of abuse from family members and uninformed assholes like myself, as well as general doubt about the asset class. But, if there is one small lesson I have learned from decades in the capital markets that I think translates across asset classes, it is to <em><strong>celebrate modestly and prepare for the worst.</strong></em></p><p>That may seem like the furthest thing from people's minds this week, but for me, it has always been the best way to savor success. Many people who listened to the <a href="https://quoththeraven.substack.com/p/talking-bitcoin-on-the-what-bitcoin">podcast that I did a couple of weeks ago</a> with Peter McCormack know that it was arrogance and hubris that turned me off from bitcoin to begin with. Perhaps that is my fault for not having an open enough mind and not doing enough of my own work – it’s a mistake that saw me miss out on large gains. But today I’m speaking as one of the people who can visualize bitcoin as a long-term success and are genuinely excited about onboarding the rest of the world.</p><p>My Twitter feed over the last week has been replete with people triumphantly celebrating, bragging, and taking shots at those who doubted that the price would ever go back up again. Here’s one example from my brother James Lavish, who I know well enough to know he won’t mind me using him as an example because he knows I respect the shit out of him. Behold Exhibit A: James talking shit to Vanguard.</p><figure>
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<p>Does James have a point? Yes, he does. Could be wind up being right 50 years from now also? Yes, he could. But is it karmically sound to taunt the $7.7 trillion bear? To me, not really. I’d rather just savor the satisfaction of the temporary dub quietly.</p><p>Everybody is well within their rights to celebrate this short-term action anyway they would like, but what I’m suggesting today is that karmically and psychologically, <strong>the less you force the issue and the more humility you show, the more evenly and consistently bitcoin will thread itself through the rest of the world.</strong></p><p>Think of this: celebrating making an exorbitant amount of money or rage-tweeting about your success is going to do two things: (1)it’s going to turn off people like myself who think that behavior is generally synonymous with fraud and (2) it’s going to excite investors with lower-than-average sophistication who will look for quick riches and won’t be the steady hands bitcoin needs to become a perpetual success.</p><p>Rather, what I’m suggesting is to allow the news media to do what they do (generally be useless and chase stories long after they’ve happened) and allow people to come to the realization about bitcoin the same way that I did: on my own, <strong>o</strong><strong>nce I felt as though I wasn’t being suffocated with the idea</strong> by outside sources anymore.</p><p>My interest in <a href="https://quoththeraven.substack.com/p/why-i-bitcoin">looking at bitcoin this go-round</a> in early 2024 was completely organic: the news coverage of it had died down, and I had blocked or unfollowed enough people who were hyping it that I could have some clarity and some peace of mind about it when I sat down to consider how it worked, seriously, for the first time ever. It was that calm, relaxed, blank slate that allowed me to grasp the relatively complex concepts of how it worked and believe in it the way that I do now.</p><p>I think given the astronomical week that we just had, we’d be better off to “act like we’ve been here before” and to remember that sometimes the more you push an idea, the more people are prone to resistance than barking like hyenas and taunting people. If bitcoin had a $50 trillion market cap, that’d be a different story. But we’re still in the early stages of this courtship with the rest of the world and, like any good relationship or friendship in your life, there has to be a genuine organic interest in “showing up” to the idea of it happening. All of those who have been smothered by a partner or a friend in the past know that all it does is create distortions and unhealthy dynamics. Such delicate things cannot be forced, but rather, accepted willfully like a slow, purposeful deep breath outside on a winter day.</p><p>This is not to say that I don’t believe this week is the beginning of much larger adoption that would likely drive the price of bitcoin higher. As I said on the “What Bitcoin Did” <a href="https://quoththeraven.substack.com/p/talking-bitcoin-on-the-what-bitcoin">podcast</a>, I believe that there is at least one, if not several, nation-states looking at putting bitcoin on their sovereign balance sheets, and that this will kick off a period of game theory for the digital asset revolution the likes of which we haven’t seen yet. Just days after I said that, yesterday Edward Snowden came out and postulated the same.</p><figure>
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<p><em>Try to keep up with me, Eddie.</em></p><p>But in all seriousness, we know what will happen if the price continues to rise. The hype will continue to flywheel further, as will interest and adoption. People will have the same realization that it took me a decade to figure out: this thing simply isn’t going anywhere anytime soon. But if you ask me, especially given the fact that we all know how quickly price moves can whipsaw back to the downside in the short term, I think the community would be well served to focus less on spiking the football here and more on how we will be able to clearly explain and convey the transformation that is unfolding before our eyes in a calm, measured, and comprehensive way.</p><p>After all, whose questions do you want to deal with on the next 20% overnight whipsaw lower: unsophisticated maniacs or measured investors who already know and expect the volatility that is a certainty.</p><p>And the more time we spend setting reasonable expectations that bitcoin can easily exceed, instead of overpromising and underdelivering, the less time we have to brag about being right. The journey is the reward. Or, as the bible says:</p><blockquote><p>“When pride comes, then comes disgrace, but with humility comes wisdom.”</p><p>— Proverbs 11:2</p></blockquote><p>But I think if Jesus were around today, he would simply tell us to “let bitcoin cook”.</p><figure>
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<p><em><strong>QTR’s Disclaimer</strong></em><strong>:</strong> <em>I am an idiot and often get things wrong and lose money. I may own or transact in any names mentioned in this piece at any time without warning. I didn’t double check any numbers or figures in this piece and am generally lazy with my research. Contributor posts and aggregated posts have not been fact checked and are the opinions of their authors. Contributor posts and curated content are posted either with the author’s permission or under a Creative Commons license. This is not a recommendation or solicitation to buy or sell any stocks or securities, just my opinions. I often lose money on positions I trade/invest in. Sometimes I just lose money by misplacing it. I’m generally irresponsible. I may add any name mentioned in this article and sell any name mentioned in this piece at any time, without further warning. These positions can change immediately as soon as I publish this, with or without notice. You are on your own. Do not make decisions based on my blog. Do your research elsewhere. I exist on the fringe. The publisher does not guarantee the accuracy or completeness of the information provided in this page. These are not the opinions of any of my employers, partners, or associates. I did my best to be honest about my disclosures but can’t guarantee I am right; I write these posts after a couple beers sometimes. Also, I just straight up get shit wrong a lot. I mention it numerous times because it’s that important that you.</em></p><p>This piece was originally published on Quoth the Raven's Substack <a href="https://quoththeraven.substack.com/p/let-bitcoin-cook?r=qtpff&utm_campaign=post&utm_medium=web&triedRedirect=true">here</a>. </p><p><em>This is a guest post by Quoth the Raven. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.</em></p>2024-03-05T15:03:00Zurn:uuid:664c0647-dfd1-84d0-081a-6e24f0011cf7Quoth the Ravenbitcoincook"Oh my fuck." - Bubbles, Trailer Park BoysMicroStrategy To Raise $600 Million To Buy More BitcoinThe business intelligence firm continues its aggressive bitcoin accumulation strategy as its stock price rips past $1,330.<p>MicroStrategy Incorporated (Nasdaq: MSTR) has <a href="https://www.microstrategy.com/press/microstrategy-announces-proposed-private-offering-of-600-million-of-convertible-senior-notes_03-04-2024">announced</a> its plans to offer $600 million aggregate principal amount of convertible senior notes due 2030 in a private offering to qualified institutional buyers. The offering is subject to market conditions and other factors, with the potential to increase by an additional $90 million.</p><blockquote class="twitter-tweet"><p lang="en" dir="ltr">JUST IN: MicroStrategy to raise $600 million to buy more <a href="https://twitter.com/hashtag/Bitcoin?src=hash&ref_src=twsrc%5Etfw">#Bitcoin</a> <a href="https://t.co/oCKnn8KDpy">pic.twitter.com/oCKnn8KDpy</a></p>— Bitcoin Magazine (@BitcoinMagazine) <a href="https://twitter.com/BitcoinMagazine/status/1764759996342980921?ref_src=twsrc%5Etfw">March 4, 2024</a></blockquote>
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<p>These unsecured, senior obligations of MicroStrategy will bear interest payable semi-annually and mature on March 15, 2030. The company intends to grant initial purchasers an option to purchase additional notes within a 13-day period.</p><p>MicroStrategy plans to use the net proceeds from the offering to "acquire additional bitcoin and for general corporate purposes." The offering will be made to qualified institutional buyers in reliance on Rule 144A under the Securities Act of 1933.</p><p>As the self described "world's first Bitcoin development company", MicroStrategy is dedicated to supporting the growth and development of the Bitcoin network. The company uses its cashflows and proceeds from equity and debt financings to accumulate bitcoin, which serves as its primary treasury reserve asset.</p><p>The offering will help bolster MicroStrategy's position in the Bitcoin market and further its mission of advancing Bitcoin adoption and innovation. However, the offering is subject to uncertainties related to market conditions and completion terms, as outlined in MicroStrategy's recent filings with the Securities and Exchange Commission.</p><p>MicroStrategy's stock has outperformed Bitcoin year to date in 2024, rising 94.70% at the time of writing, compared to a 58.22% rise for BTC.</p><figure>
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2024-03-04T21:25:46Zurn:uuid:9af5d422-3a5e-6083-3ea9-34aaefcbe0d7Nik Hoffmanmichael-saylor-max-keiser-bitcoin-2021The biggest Bitcoin event in history welcomed more than 12,000 enthusiasts to celebrate together in real life, proving that this decentralized, open-source software project is a cultural force to be reckoned with.Bitdeer Announces New 4nm Bitcoin Mining Chip SEAL01The SEAL01 chip features a 4-nanometer process technology and indicates a power efficiency of 18.1 J/TH.<p><a href="https://www.bitdeer.com/">Bitdeer</a>, a leading technology firm specializing in Bitcoin mining and high-performance computing, has unveiled the SEAL01, a new mining chip built on a 4-nanometer process technology. The SEAL01 chip boasts a power efficiency ratio of 18.1 J/TH, aiming to set a new standard for energy-efficient Bitcoin mining.</p><blockquote class="twitter-tweet"><p lang="en" dir="ltr">Bitdeer has Tested Its 4nm Bitcoin Mining Chip SEAL01<br><br>Bitdeer has successfully designed a Bitcoin mining chip, the SEAL01. As a world-leading technology company for blockchain and high-performance computing, Bitdeer (NASDAQ: BTDR) today introduced its first cryptocurrency mining…</p>— Bitdeer (@BitdeerOfficial) <a href="https://twitter.com/BitdeerOfficial/status/1764497981909192705?ref_src=twsrc%5Etfw">March 4, 2024</a></blockquote>
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<p>“With the successful testing of our new mining chip, I am very excited to formally announce the introduction of both the SEAL01 chip and the SEALMINER A1 as core to our new mining machines business,” said Jihan Wu, Founder, Chairman, and Chief Executive Officer of Bitdeer. “These products showcase our technology excellence and position us well for the future.”</p><p>Designed to enhance Bitcoin mining performance while minimizing power consumption, the SEAL01 chip intends to to lower operating costs for miners. Bitdeer plans to integrate this latest chip into its upcoming mining rig, the SEALMINER A1.</p><p>Recognizing the evolving challenges faced by Bitcoin miners, Bitdeer said it has invested heavily in research and development to create a solution that offers efficiency, stability, scalability, and sustainability. The company's international team of engineers specializes in chip design, firmware, and hardware engineering, aiming to push the boundaries of performance to support the mining community.</p><p>With preparations underway for the mass production of these mining rigs, Bitdeer says they remains committed to its mission of providing a world-leading, comprehensive Bitcoin mining solution globally and supporting the security and advancement of the Bitcoin network.</p>2024-03-04T19:36:16Zurn:uuid:e75dc44d-4990-7d17-44e6-a532537efe33Nik Hoffmandefault_bitcoin_mining_0Generation Bitcoin to Unite Student Groups in Worldwide NetworkBy providing access to educational resources, job opportunities, and mentorship, BSN aims to help younger generations get more involved in Bitcoin.<p>At <a href="https://bitcoinatlantis.com/">Bitcoin Atlantis</a>, non-profit organization Generation Bitcoin announced the launch of the <a href="https://x.com/BTCStudents?s=20">Bitcoin Students Network</a> (BSN), an initiative aimed at empowering students to learn about and contribute to the Bitcoin space. BSN, presented by <a href="https://www.genbitcoin.org/">Generation Bitcoin</a>, operates as a one-stop platform providing logistical, educational, and financial resources to students interested in Bitcoin.</p><p>BSN's primary goal is to connect students globally, fostering collaboration and knowledge exchange among young individuals passionate about Bitcoin. The network facilitates the creation and scaling of student clubs dedicated to Bitcoin, offering support and financial assistance to affiliated clubs.</p><p>"The word 'network' is mentioned 21 times in the bitcoin whitepaper," said Ella Hough, Co-founder and Project Lead at Generation Bitcoin. "Satoshi was too purposeful for this amount to be a coincidence. We founded the Bitcoin Students Network to empower students with knowledge and networking opportunities and encourage them to join the conversation that needs them in it. BSN aims to remove barriers to creating student Bitcoiner communities and strengthen Bitcoin’s Layer 0, the social/human layer." </p><p>BSN aims to act as a bridge between students and the broader Bitcoin industry, facilitating communication and collaboration between educational institutions and industry players. By providing access to resources, job opportunities, and mentorship, BSN aims to strengthen the social fabric of Bitcoin's human layer, known as Layer 0.</p><p>The network operates on core values such as freedom through knowledge, open-source principles, proof of work, and first principles thinking. These values underpin BSN's distributed yet organized structure, with a founding team, industry board of advisors, and student board of advisors guiding its operations.</p><p>For students, BSN offers a plethora of opportunities, including starting or growing university Bitcoin clubs, accessing educational and job opportunities, and connecting with like-minded individuals in the Bitcoin community.</p><p>"A key part of my journey has been educating the next generation about Bitcoin," stated Generation Bitcoin Growth Lead and Co-founder Arsh Molu. "The Bitcoin Students Network aims to provide support for university clubs as well as equip students with resources, knowledge, and job opportunities worldwide."</p><p>Industry players are also encouraged to participate by organizing events, providing financial support, donating resources, offering mentorship, and sharing internship and job opportunities.</p>2024-03-04T16:21:25Zurn:uuid:97c9d96c-5433-8040-afba-167e3bc85401Nik Hoffmanunnamed-15Will Bitcoin Transform into Just Another Stock Amidst Institutional Surge and ETF Integration? An analysis of the inverting correlation between Bitcoin and other financial markets, and the implications this could have for the Bitcoin market.<p>Steering through a sea of change in the crypto market, the investment game is experiencing a seismic shift. Spot Bitcoin ETFs already exist, signaling Bitcoin's leap into mainstream finance and knitting it closer to conventional investment fabrics. We'll look at the tip of the iceberg trying to imagine its true depth as well as the current correlation between Bitcoin, stocks, and Gold. We’ll attempt to figure out if the traditional market is really leading Bitcoin out of its decentralized place, or if there's still an avenue for hope that it can maintain its unique path.</p><p>According to the Kaiko data, Bitcoin's risk-adjusted returns were superior to traditional assets. Nvidia led with the highest returns on a risk-adjusted basis, while Bitcoin impressively trailed just behind, outpacing major traditional assets like the S&P 500, Gold, with its value surging over 160% in risk-adjusted terms. </p><figure>
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<figcaption><em>Source: Kaiko Research</em></figcaption>
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<p>Meanwhile, according to the IMF Crypto Cycle and US Monetary Policy study, 80% of variation in crypto prices and its increasing correlation with equity markets <a href="https://www.imf.org/en/Publications/WP/Issues/2023/08/04/The-Crypto-Cycle-and-US-Monetary-Policy-534834">coincided</a> with the entry of institutional investors into crypto markets since 2020. In particular, trading volumes by institutions on crypto exchanges grew by more than 1,700% (from roughly $25 billion to more than $450 billion) during the second quarter of 2020 and the second quarter of 2021. According to the study, the US monetary policy affects the crypto cycle, just like global equity cycles, but surprisingly, only the US Fed's monetary policy matters, not the other major central banks – probably because crypto markets are highly USD-dependent.</p><p>Furthermore, the 2023 Institutional Investor Digital Assets Outlook Survey <a href="https://www.coinbase.com/ru/institutional/research-insights/resources/education/2023-institutional-investor-digital-assets-outlook-survey">indicates</a> that 64% of investors are set to up their stakes in the crypto sphere within three years, allocating up to 5% of AUM to crypto. It said a number of institutions made investments for the first time over the past year, while others increased their existing investments. While the study highlights a surge in crypto commitment from 41% of asset managers, only 27% of asset owners seem to be ramping up their stakes.</p><p>Although Bitcoin was born from the idea of spreading power equally, recent studies indicate that it's slowly becoming dominated by a select few big players.</p><h2>Changing Correlation Dynamics</h2><p>Interestingly, <a href="https://stealthex.io/blog/bitcoin-price-prediction/">Bitcoin</a> moves in sync with the S&P 500 and Nasdaq, with an impressive correlation. Meanwhile, the correlation between Bitcoin and Gold has sharply decreased recently, contrasting with claims that investors see crypto as a safe haven or hedge against inflation, a role traditionally played by Gold.</p><figure>
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<figcaption><em>Source: TheBlock</em></figcaption>
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<p>Notably, Bitcoin's correlation with Gold was positive at 0.83 on November 7, 2023, but decreased to -0.1 on January 10, 2024, before rebounding to a marginally higher positive level 0.14 on February 9, 2024. In the meantime, Bitcoin's relationship with the S&P 500 saw a negative correlation of -0.76 on November 11, 2023, and then hit a positive correlation of 0.57 in January 2024. Ths shift from negative to positive correlation points to Bitcoin's changing perception among investors.</p><p>The Nasdaq Composite, known for its technology and growth stocks, also displayed a variable correlation with Bitcoin. The negative correlation, of -0.69 on October 30, 2023, shifted to positive 0.44 in January. It seems traders are linking Bitcoin's rhythm to the tech sector's pulse, hinting at a new kinship in investment strategies.</p><p>When the correlation between Bitcoin and traditional equity markets like the S&P 500 and Nasdaq increases, while its correlation with Gold decreases, it suggests that Bitcoin is behaving more like a risk-on asset rather than a safe haven. When investors are feeling venturous, they often swing toward stocks and digital coins for the chance at juicier profits.</p><p>If institutional and retail investors are increasingly involved in both equity and cryptocurrency markets, their simultaneous buy and sell decisions could cause the price movements of these assets to align.</p><p>Spot Bitcoin ETFs getting the green light seem to be ramping up its charm for big-time investors, with a solid chunk already planning to boost their Bitcoin game. Bitcoin's move into ETFs might make it act more like stocks since those funds are big players in the stock world.</p><p>Amidst these developments, the essence of Bitcoin and other cryptocurrencies, free from the confines of traditional financial systems, could be undermined. Moreover, these shifts could expose Bitcoin to the very systemic risks from which it was designed to escape.</p><h2>Closing Thoughts </h2><p>As we look at how spot Bitcoin ETFs might shake up Bitcoin's role in the market and its current tie to stocks, we need to keep a sharp eye on balancing our excitement for more big players jumping in and the possible growth with staying true to Bitcoin's core principle of not being centrally controlled. Bitcoin's move toward a more centralized investment scene could stir the market, offering bright opportunities, but also tough challenges ahead. </p><p><em>This is a guest post by Maria Carola. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.</em></p>2024-03-04T15:30:00Zurn:uuid:5079db5b-213f-b76a-7e35-5f20463eaae1Maria Carolabitcoinchain<em>Source: Kaiko Research</em>US Government Continues Bitcoin Seizures, Controls Nearly 1% of Circulating Supply Massive Bitcoin seizures from Bitfinex hackers add to US government stockpile. Snowden predicts major government entry into Bitcoin market. <p><strong><em>The below is an excerpt from a recent edition of Bitcoin Magazine Pro, Bitcoin Magazine's premium markets newsletter. To be among the first to receive these insights and other on-chain bitcoin market analysis straight to your inbox, </em></strong><strong><em><a href="https://bmpro.substack.com/">subscribe now</a>.</em></strong></p><figure>
<a href="https://bmpro.substack.com/" ><img src="https://bitcoinmagazine.com/.image/c_fit%2Ch_800%2Cw_1200/MjAxMjU3OTE4Njk0MTcyMTYx/mtg5njayntyzmtmymjm2ode4.jpg" height="246" width="1200"></a>
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<p>The United States federal government has once again added to its substantial Bitcoin hoard, transferring $922 million worth from wallets associated with Bitfinex hackers in a seizure.</p><p>Over the course of a series of various seizures and other asset forfeitures, the United States federal government has accumulated and holds enough Bitcoin to unquestionably count as one of the largest whales. In the earliest days of the Bitcoin scene, the overwhelming crypto-anarchist spirit among the community led to a series of various extralegal business ventures, most famously the Silk Road. This overtly illegalist era of the industry is more or less completely over, but the success of these early ventures accumulated massive amounts of Bitcoin: which has in time been accumulated by the US government.</p><p>The Silk Road alone has been at the center of several massive seizures from law enforcement agencies, with the site’s actual coffers far from the only source. On multiple <a href="https://www.cnbc.com/2023/10/17/crypto911.html">occasions</a> over the last few <a href="https://www.theblock.co/post/268743/u-s-appeals-court-finalizes-mandate-for-forfeiture-of-silk-road-bitcoin">years</a>, various hackers who robbed the Silk Road have in turn seen their assets seized and added to the federal government’s massive stockpile. Even though <a href="https://blockworks.co/news/us-government-dumps-bitcoin-silk-road">hundreds</a> of millions of bitcoins from this source have already been sold at government auctions or through other means, there are still billions left to go. For their part, law enforcement agencies seem to be in no <a href="https://www.wsj.com/finance/currencies/federal-government-bitcoin-5-billion-78ce0938?st=y3p0zfhiipykvjk&s=09">hurry</a> to wash their hands of these assets. </p><figure>
<img src="https://bitcoinmagazine.com/.image/c_fit%2Ch_800%2Cw_1200/MjA0NzgzMTY5NjAwMjM0NTI1/f3a374db-8e34-4c0d-b28c-4dc4f62cf7fa_790x601.jpg" height="800" width="1052">
<figcaption><em><a href="https://coingape.com/u-s-governments-bitcoin-holdings-surge-to-8-3-billion-outpaces-microstrategy/">Source</a></em></figcaption>
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<p>On February 29, the stockpile <a href="https://cointelegraph.com/news/u-s-gov-moves-922-million-seized-bitcoin">grew</a> once again when the government moved more than 15k bitcoins from the wallets of two Bitfinex hackers. The hackers, Ilya Lichtenstein and Heather “Razzlekhan” Morgan, recently <a href="https://www.bloomberg.com/news/articles/2024-02-27/crypto-heist-mastermind-ilya-lichtenstein-turned-us-cooperating-witness?sref=IIP4JEyu">testified</a> about their 2016 hack of Bitfinex, which ranks as one of the most profitable heists of all time with nearly 120k bitcoins stolen. Bitfinex, one of the oldest still-operating exchanges in the entire crypto ecosystem, is still a prominent service, but their operations still bear lingering scars from a theft of this magnitude. For one thing, US citizens are completely forbidden from accessing the platform, along with citizens from several other countries. Perhaps it is for this reason that the Justice Department has <a href="https://www.coindesk.com/tech/2024/02/28/us-government-crypto-wallets-transfer-nearly-1b-of-bitcoin-seized-from-bitfinex-hacker/">refused</a> to state whether or not the government intends to reimburse Bitfinex’s 2016 customers, who actually had their money stolen.</p><iframe height="320" width="480" src="https://bmpro.substack.com/embed"
frameborder="0" scrolling="no"/></iframe><p>Regardless of what the government’s plans are with this money, a seizure like this has once again highlighted the sheer <a href="https://decrypt.co/219720/us-government-owns-12-billion-worth-bitcoin-heres-why">size</a> of the federal government’s Bitcoin reserve. Thankfully, the government’s dealings with these assets are all a matter of public record, and Bitcoin transactions themselves are all completely transparent on the blockchain. For this reason, analysts are confident in the claim that the United States holds just shy of 200k bitcoins, worth approximately $12.1 billion. This makes them unmistakably one of the largest whales out there, with only Binance and Satoshi holding greater amounts. In fact, the government currently holds nearly 1% of all Bitcoin in circulation. Regardless of <a href="https://www.wsj.com/finance/currencies/federal-government-bitcoin-5-billion-78ce0938?st=y3p0zfhiipykvjk&s=09">claims</a> that prosecutors have no interest in maximizing profits when disposing of these assets, it’s undeniable that the government holds substantial leverage over the whole space.</p><p>These seizures are particularly interesting due to some recent <a href="https://bitcoinmagazine.com/markets/edward-snowden-anticipates-government-acquisition-of-bitcoin-in-2024">comments</a> made by exiled whistleblower Edward Snowden. Specifically, considering the rising global acceptance of Bitcoin in regulation and traditional finance, Snowden predicted that “A national government will be revealed this year to have been buying Bitcoin—the modern replacement for monetary gold—without having disclosed that fact publicly”. If Bitcoin is the digital gold, after all, it would only make sense that powerful nations would want to build up reserves. The strategy has famously worked for the Salvadoran president, Nayib Bukele, who greeted the new bull market with a <a href="https://decrypt.co/219525/el-salvador-bitcoin-40-percent-profit-nayib-bukele-defiant">declaration</a> that his country’s Bitcoin investment has gone up by 40% since the initial purchases. Not, of course, that he plans to sell.</p><p>In any event, Snowden’s comments seem especially relevant in that the United States hasn’t actually purchased any of the Bitcoin it currently holds. Even though the government has a theoretical responsibility to dispose of these assets, the pace as of yet has been glacial, and in the meantime, it would be extremely straightforward for Congress to halt these sales. All it would take is a desire for the policy to change, and a genuine Bitcoin reserve could spring up overnight. This is the crux of Snowden’s specific prediction that governments will acquire Bitcoin secretly and that the government has ample plausible deniability. We don’t have a reserve; we just happen to be reserving these assets for a later sale. There is nothing suspicious about that!</p><p>If a government did actually want to acquire massive quantities of Bitcoin in secret, it would run into a great number of transparency problems caused by the trustless nature of Bitcoin’s blockchain. The anonymous “Mr. 100” has made <a href="https://dailyhodl.com/2024/02/26/mysterious-mr-100-quietly-buying-bitcoin-in-massive-quantities-say-on-chain-analysts-heres-who-the-entity-might-be/">headlines</a> throughout the month of February, acquiring a mind boggling 100 BTC per day and reaching the status of the 15th largest whale. As chain analysts have tried to determine the buyer’s identity, <a href="https://bmpro.substack.com/p/the-bitcoin-market-surge-unraveling">speculation</a> has already begun that a national government is the culprit. Based on the timing of the purchases and several other factors, the buyer is likely in Asia, specifically the Middle East. Qatar, the United Arab Emirates, Saudi Arabia—all these are strong candidates to be the coins’ rightful owners.</p><p>In other words, if a government wishes to build up a Bitcoin reserve, it might be easier to seize the assets outright rather than buy them at fair value. After all, if the transactions will be recorded on the blockchain either way, why not save their money? The UK seems well-positioned to build up a stockpile in this way like the Americans, having <a href="https://www.ft.com/content/7aec98dd-6161-4ee9-8e0e-654fc7e0fae3">seized</a> $1.77 billion in January. Not only were these bitcoins seized from a foreign national currently on the run, with no recourse to recoup these funds, but the British government has <a href="https://www.coindesk.com/policy/2024/03/01/uk-law-enforcement-will-soon-have-more-power-to-seize-crypto-assets/">subsequently</a> passed legislation deepening its power to seize or freeze cryptocurrency assets. It wouldn’t take much to start building up a notable hoard in its own right.</p><p>By this point, the days when Bitcoin’s core community held a defiant attitude towards law enforcement are a distant memory. Although people can commit crimes centered around Bitcoin just like they can with any other currency, the fact of the matter is that Bitcoin is only becoming more legitimate for the world’s governments. US regulators approved a Bitcoin ETF, and other <a href="https://bitcoinmagazine.com/markets/blackrocks-spot-bitcoin-etf-to-start-trading-in-brazil-tomorrow">countries</a> are falling like <a href="https://bitcoinmagazine.com/markets/largest-south-korean-parties-promise-bitcoin-etfs-before-election">dominoes</a> to endorse it themselves. Eventually, it’ll be a necessity for powerful governments to stay on par with their competitors and maintain their own reserves of Bitcoin. The US, after all, controls nearly 1% of a massive industry with substantial leverage over it. Are they going to be the only country with this leverage? It may be difficult for any nation to build up these stockpiles in secret, but even so, the race has already begun. No matter who wins it, it’s Bitcoin that will be on top in the end. </p>2024-03-04T14:15:46Zurn:uuid:8bcd3e80-6a79-ccac-58fc-dee992ba0b42Landon Manninggovernmentseize<em><a href="https://coingape.com/u-s-governments-bitcoin-holdings-surge-to-8-3-billion-outpaces-microstrategy/">Source</a></em>Final Agreement On EIA Emergency Survey ReleasedThe details of the agreement between the EIA and Texas Blockchain Council & Riot Platforms has been published. There's some good news and bad news.<p>The <a href="https://storage.courtlistener.com/recap/gov.uscourts.txwd.1172776308/gov.uscourts.txwd.1172776308.24.0.pdf">final agreement</a> between the Texas Blockchain Council & Riot Platforms, Inc., and the Energy Information Administration has just dropped, and it’s a good one.</p><p>In sum, the EIA will voluntarily terminate the illegal EIA-862 collection action they initiated, and they will commit to destroying all the information that they have received and may still receive under the EIA-862. Furthermore, they will also cancel and withdraw the <a href="https://bitcoinmagazine.com/legal/second-eia-survey-extension-being-pushed-with-open-comment-period">February 9th, 2024 notice</a> for collection, replacing it with a new Notice.</p><p>This new notice will run for a full 60 days from the date it is released in the Federal Register, and the EIA also has consented to ensure that any comments which have been received on the Feb. 9th notice will be incorporated and considered in the new notice.</p><p>So here’s the takeaway: the Government has to go back to the well and do it right. They can’t use a pretextual political “emergency” to ram this through, and fortunately the Mining industry, through the quick and decisive work of the Texas Blockchain Council & Riot, blocked that clear violation.</p><p>But the flight is not over, we have to file our comments on the new data collection notice as soon as it’s released. And you can see that the fight is going to be harder, as groups antagonistic to bitcoin mining are already jumping into the fray.</p><p>The Sierra Club <a href="https://storage.courtlistener.com/recap/gov.uscourts.txwd.1172776308/gov.uscourts.txwd.1172776308.18.1_1.pdf">attempted to file an amicus brief</a> in this case. That brief, which did make it on the record (though it was<a href="https://storage.courtlistener.com/recap/gov.uscourts.txwd.1172776308/gov.uscourts.txwd.1172776308.21.0.pdf"> opposed as improper</a> and it’s moot now anyway), shows their arguments that they will likely elaborate on in a filing supporting the EIA’s new data collection. Those arguments are as weak as you might expect, but they will be out there and will need to be addressed and overcome.</p><p>Finally, as a lovely cherry on top, the Government will also reimburse the Texas Blockchain Council & Riot Platforms, Inc., for $2,199.45 of court costs and attorney’s fees. Clearly not enough to cover the expense, but still a sweet surprise. But let’s be clear, nothing in this agreement is “an admission of liability or wrongdoing… .” Sure, and “[s]omething is rotten in the state of Denmark,” which can be smelt all the way in Waco, Texas.</p><p><em>This is a guest post by Colin Crossman. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.</em></p>2024-03-01T19:30:00Zurn:uuid:89edde5f-97cf-2c86-b92b-e1bafeea0014Colin CrossmaneiaagreeInstant Settlement Series: It's Not About The MoneyThe sixth and final part in an article series by Ivan Makedonski from Breez on how Lightning's instant settlement finality can be a disruptive force fundamentally changing how different industries are organized.<p>Instant settlement profoundly transforms our behavior as it reconnects us with the elemental laws of nature. The existing paradigm mirrors the primal imperative of reaping benefits in exchange for labor–working to survive, but the pay-per-time system in the labor market is creating the incentive to get something for nothing. In the whole “fiat stack,” everyone optimizes their efforts to achieve this on different levels, as I explain below. How can I get money for nothing? As we explore the effects of instant settlement across diverse industries, a fundamental divide between workers and clockwatchers emerges, as I have argued throughout this series. Fiat payments work without instant settlement; instead, a virtual credit arrives immediately with the actual settlement usually coming much later. The Lightning Network enables instant settlement. That is a key advantage, and it’s why Bitcoin is the only financial network that has the potential to achieve the vision that I am describing in this series.<br><br></p><p>The fiat monetary system is training us to play the game of rent-seeking without realizing it, and it is no wonder that the best players become the richest. From our first jobs, we learn how to extract maximum payment for minimum effort, and the incentives reward creative ways of doing just that. The first trick everyone learns is how to “milk the clock” by doing as little as possible without getting fired. A slightly more advanced technique is learning how to take credit for others’ work. Skilled players seek promotions in order to gain access to others’ labor for their own benefit. This is the fiat game.</p><p>As if that weren’t bad enough, the rent-seeking game also corrodes skills. Just as my results in the gym are correlated with the effort I invest into my workout, employees’ mastery comes from effort. But time-based compensation rewards passing time rather than performance, allowing skills to atrophy. In technologically primitive societies, skill development was imperative for survival. The problem was friction: assessing the value for each miniscule action and compensating each one individually. So the obvious way to reduce friction was to collapse all the tasks into a single variable — time. But after decades of time-based compensation and diminishing initiative, we are becoming lethargic, weak, skill-deficient, and reliant on free money. The result is a culture of dependency, where the quest for easy money overshadows the pursuit of self-improvement. How many steps are we from enslaving our own children to avoid working?</p><p>Perhaps the key to overcoming this fate is deciding not to chase the fucking money, but to pursue other goals instead and just using the money to achieve them. Make a list of what you want in life and start working towards it. Instead of working for wages, saving money, and buying a house, you can build your own house. Yes, it will take years, but that is the point. Do the work! If you object that you can’t build a house, you’re probably right. You can’t do anything until you can. It’s simply a matter of placing one brick on top of another, a roof on top of the walls, and so on. Work transforms us, makes us better, faster, stronger, and more skillful versions of our former selves. Bitcoin preserves the value of your energy, allowing you to achieve your goals faster than is possible with fiat. When you are working for others’ goals, you should be compensated instantly, which is almost like double compensation. You get skills and money. In the fiat system, when you get free money (money for time passed), you do not acquire any skills, and the skills you have start to atrophy because you are not using them. The only incentive that pushes people to do something is the fear of getting fired. That is why they seek to find the balance right between minimal work and not getting fired.</p><p>But there remains an undeniable obstacle: why should I work for my money rather than simply waiting and receiving it without exertion? The status quo is comfortable, but comfort is the enemy. Defeating this enemy requires a collective willingness to break free from the allure of effortless gains and embracing a more natural, purposeful way of working.</p><p>Those who shun time-based compensation will have the advantage of attracting and retaining the most exceptional individuals as employees. As these forward-thinkers continually evolve–growing faster, stronger, and more skillful over time–their products and services will outshine pay-per-time systems.</p><p>In the new market landscape I have described throughout this series, employees who are paid for their work rather than their time are no longer tethered to a single company. The quality of products and services is propelled by the collective efforts of the contributors rather than malingering clock milkers supervised and pushed by management. Labor exploitation becomes untenable, and pay-for-work is what retains the best talent. This is true simply because the best want to be paid based on results, and the only fair compensation to both the employee and employer is pay-per-work, which is based on those results.</p><p>This newfound power may lead individuals to focus on the things they want to see built rather than what the company tells them to build. They gain not only a decentralized income but can also benefit the most from the tasks they complete. If there is an open project to fix ten roads, I will contribute to fixing the one that I use most. It is the most selfish altruistic thing. That benefit is not private; it is shared. The money I receive is private. As long as we chase money rather than projects, it is no surprise we are indifferent towards other people's problems. In this new paradigm, the balance of power shifts decisively to the people, aligning with their preferences and aspirations, not the agenda of a single company.</p><p>Additionally, the pay-for-work system mirrors the competitive nature of sports–individuals are compensated for their time and effort, but victory is contingent on active participation and skill. In sports, the best players distinguish themselves with their superior skills, the effort they invest, and their adaptability in the face of competition. This natural dynamic, favoring the fastest, strongest, and most adaptable, can now enrich the labor market. Survival and prosperity will hinge not only on individual effort but on the ability to outperform others in the pursuit of a larger share of benefits. Even those merely chasing money prosper by simply mirroring Bitcoin. If I do something selfishly in Bitcoin, the whole network benefits.</p><p>In the world of sports, fame and wealth often follow the best players, but their initial motivation lies in the desire to be the best. Encouragement in the pay-for-work labor market takes the form of payment, catalyzing continued dedication and progress. The accumulation of these payments, akin to encouragement, propels people to refine their skills, enhance their performance, and, in turn, receive more Bitcoin in acknowledgment of their efforts.</p><p>The reward in this system is not acclaim or praise; it starts as a necessity for money and progresses to satisfaction derived from the work. Instant settlement becomes the Trojan horse guiding us back to this ethos. In this continuous competition, unlike the win-lose dynamics of warfare, everyone stands to gain. Individuals work for themselves, driven by the desire to achieve their own goals, while the finished product simultaneously serves a common need because a lot of them are collective goods. The swifter, more efficient, and cost-effective completion of tasks that benefit the community will induce a snowball effect where subsequent benefits build on previous ones. In this interconnected web, where everyone coordinates efficiently, there is no theft or exploitation; rather, it is a shared journey toward collective betterment.</p><p>With pay-for-time, people seek to climb the hierarchy and obtain the privilege of delegating, which lets them shift accountability and find scapegoats. In stark contrast, the pay-for-work built on instant-settlement systems operates like the immutable and uncompromising laws of physics. Every individual bears complete responsibility for their work. This paradigm gauges individuals not by their inclination to assign blame or dwell on problems, but by their responsibility and their commitment to accomplishing the job at hand. The best performance yields the most money, so pay-for-work puts the job first, unlike pay-for-time, where more money results from more time passed, and the job is almost irrelevant. In the pay-for-work system, responsibility becomes a measure of personal and professional integrity, fostering a culture where the focus is on getting the work done efficiently and collaboratively.</p><p>Roy Sheinfeld, Breez CEO and my boss, has said that we should not tell people what experiences to create in their apps. I agree. The point of the previous chapters was to spark interest in the possibilities so the experts can create those experiences. I am not the right person to say how construction, logistics, book publishing, and other industries should evolve. I am trying to open the window for them to realize the potential they can create and build for all of us. If they do this we all win. They receive Bitcoin, and in turn, we spend Bitcoin more efficiently on things that enrich our lives. This collaborative venture is an invitation to explore, innovate, and contribute to a shared future where everyone stands to gain.</p><p>Here’s a quick recap with the take-home messages from the previous articles in this series:</p><p>The first article: <a href="https://bitcoinmagazine.com/technical/instant-settlement-the-construction-industry">The Construction Industry</a></p><ul><li>What is work?</li><li>The conflict between people who are asked to work but benefit from passing time without working.</li><li>How reputation depends on the work done, not someone’s job title.</li></ul><p>Second article: <a href="https://bitcoinmagazine.com/technical/instant-settlement-the-logistics-industry">The Logistics Industry</a></p><ul><li>How delaying payments creates counterparty risk.</li><li>How intermediaries (banks) compound that risk.</li><li>How split payments align everyone’s incentives to deliver on a project.</li><li>Decentralization fostering competition.</li></ul><p>Third article: <a href="https://bitcoinmagazine.com/technical/instant-settlement-series-the-publishing-industry">The Publishing Industry</a></p><ul><li>The dematerialized economy is now on steroids</li><li>The benefit of any work is determined more by demand for it than supply of it</li><li>Talking and selling are not the same, so commissions are the best way to compensate influencers </li></ul><p>Forth article: <a href="https://bitcoinmagazine.com/technical/instant-settlement-series-real-time-streaming-payments">Real-time Streaming Payments</a></p><ul><li>Benefiting from work can be a continuous process with streaming payments.</li><li>Global benefits deserve global compensation.</li><li>Auctioning seats to events can transform live entertainment.</li></ul><p>Fifth article: <a href="https://bitcoinmagazine.com/technical/instant-settlement-series-betting">The Gambling Industry</a></p><ul><li>Fiat is gambling. </li><li>Licenses and credentials disadvantage the poor and reinforce the power of the rich.</li><li>How to invest wisely.</li></ul><p>A transitional period is crucial. If a business were to suddenly shift to a performance-based pay model without considering the existing workforce, it could lead to unrest and prompt employees to leave for a pay-per-time company. Those who recognize the need for change should adopt a long-term perspective and implement both payment methods – pay-per-time and instant settlement – simultaneously. The objective is to have these methods coexist, attracting top performers and fostering a culture of excellence. Once the company establishes a foundation of high-performing individuals, it can then phase out the pay-per-time structure entirely. I draw inspiration for this approach from my mentor from a distance, Jeff Booth, as these two systems represent distinct paradigms, necessitating a careful and strategic transition rather than an abrupt shift.</p><p>These are my final messages:</p><p><em>Build utility, do not promise future fortunes.</em></p><p><em>Do not wait or ask permission to do work. Do the work that you want to do.</em></p><p><em><strong>Let's Fucking GO!</strong></em></p><p><em>This is a guest post by Ivan Makedonski. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.</em></p>2024-03-01T15:00:00Zurn:uuid:473f8225-5629-d889-a6af-f50735f31669Ivan Makedonskiimage1BITPACS: Emulating DAOs on BitcoinWhile DAOs are traditionally associated with Ethereum, emulating most of the functionality of a DAO is possible on Bitcoin using multisig and voting on which transactions to sign.<p>I wanted to share some thoughts on a seemingly overlooked innovation that has come to Bitcoin within the last year, called Bitpacs. </p><p>Bitpac stands for a Bitcoin Based Publicly Auditable Cooperative. Bitpacs are essentially normal bitcoin multisig wallets with the additional introduction of public auditability. Traditionally in a multisig setup, participants of the multisig are not disclosed. In a Bitpac multisig, participants are intentionally made public, which allows for transparent auditability. With this transparency, unique features, tooling, rules, and transaction crafting is possible. The goal of Bitpacs is to emulate the familiar DAO experience on other chains. </p><p>DAO’s are marketed as Decentralized Autonomous Organizations. However, Ethereum and other altcoin based DAOs only inherit the “decentralization” of their chain, so will not be as decentralized as the same experience built on Bitcoin. DAO’s are also not autonomous, as humans control and shape the decisions they make. The Bitpac definition is a more honest explanation of the tech involved and I think eventually will be a better experience for users. <br>Why should bitcoiners even care about DAO’s? As of Feb 18th 2024, DAO’s on Ethereum hold over $35 billion in treasury funds. There have been millions of DAO proposal makers and voters, and hundreds of millions of dollars have been transacted via DAO governance. (<a href="https://deepdao.io/organizations">source</a>) There is clear demand for on-chain governance and community management, Bitpacs allow this to come to Bitcoin.</p><p><br>How can Bitpacs actually work?</p><p>While Bitpacs don't directly utilize smart contracts on the Bitcoin blockchain itself, they achieve similar functionality as DAOs through a combination of multisig wallets and carefully crafted Bitcoin transactions. The structures possible with this encompass most of what a DAO does:</p><ul><li>Multisig ensures that no one is ever in unilateral control of any Bitpac funds, requiring the quorum threshold to spend anything.</li></ul><ul><li>Signing thresholds that mandate how many signatures are needed to finalize a transaction (3 of 5 or 6 of 10 for example) can fine tune required voting thresholds in line with the defined Bitpac consensus requirements. </li><li>Time constraints can be applied to voting rounds, ending the signing process for proposals that haven’t achieved a signing threshold by the end of a voting period. </li><li>Gating membership of Bitpacs based on certain criteria can be done at the platform level, like unique assets held, bitcoin contributed to the treasury, or known wallet addresses, all of which can be verified on-chain. </li><li>All of these dynamics that cannot be enforced through Bitcoin script or pre-signed transactions, and must resort to social enforcement, are transparently verifiable on-chain guaranteeing detection of Bitpac rule violations. </li></ul><p>What do Bitpacs enable on Bitcoin?</p><p>Bitpacs unlock exciting possibilities for bitcoin users:</p><ul><li>Community-driven funding: Fundraising for public goods, projects, or charitable causes becomes more efficient and secure with Bitpacs. Contributors can trust that funds are used as intended, thanks to the transparent nature of the multisig.</li><li>Decentralized governance: Bitpacs empower communities to make collective decisions regarding fund allocation and spending. Voting rights are distributed among key holders, ensuring a transparent and verifiable process.</li><li>Increased trust and collaboration: By eliminating the opacity often associated with traditional financial systems, Bitpacs build trust and foster collaboration between individuals with shared interests, and doing so fully on-chain.<br><br></li></ul><p>Some specific examples of Bitpac use cases include: </p><ul><li>Funding open-source development: Developers can create Bitpacs to receive community funding for their projects, with transparent spending records ensuring accountability to their backers.</li><li>Managing community treasuries: Any organization can leverage Bitpacs for transparent management of their funds, allowing members to track spending, create proposals, and participate in decision-making. </li><li>Crowdfunding: Bitpacs can be used as a means to crowdfund bitcoin from a group of supporters for a pre-established shared goal, company, investment fund, or project. </li></ul><p><br>A major lesson for the industry over the last year has been how much innovation and experimentation can still be done on native Bitcoin without requiring any changes to the network. We have seen massive interest around BitVM, Ordinals, roll-ups, sidechains, layers, metaprotocols, all within bitcoins current consensus. There is clearly a cambrian explosion of developer and user interest coming to Bitcoin which will not slow down any time soon. Tens of thousands of new niche communities will be popping up on Bitcoin in the coming years. This doesn’t include traditional companies that continue to trend towards Bitcoin adoption over time. Bitpacs can agnostically offer community organization, treasury management, and on-chain governance to all of them. </p><p>The thousands of ideas being “built on Bitcoin” should have one thing in common, eventual settlement on the base layer. Different methods of governance will be experimented with over time, but this is why Bitpacs could be the superior model. Bitpac members have direct voting access to the treasury and transactions occur at the base layer; there is no side-chain, layer, or additional protocol that Bitpac members need to trust. Potentially this cycle, people will start to realize that Bitcoin block space is just as scarce as bitcoin the asset. As we trend further towards a hyperbitcoinized world, with nation states and institutions transacting, I think that Bitpacs representing large community or entity treasuries will be one of the few things that will justify occurring at the Base layer. </p><p>–</p><p>Anybody can create Bitpacs on their own. @Tribe_btc is a centralized project I’m working on aiming to create a full tooling suite for Bitpacs. Tribe will be releasing our Bitpac documentation soon.</p><p>By Dillon Healy</p><p>BD / Partnerships BTC Inc. @dillonhealybtc</p>2024-03-01T14:01:08Zurn:uuid:010e4cd7-33dc-8cc1-1359-39ab832bb914Dillon HealybitpacAnduro: A Network of SidechainsAnduro is a federated/merge mined hybrid sidechain design, specifically designed to enable the federation to manage multiple sidechains with differing architectures.<p>Marathon <a href="https://twitter.com/marathondh/status/1762947336693535027?s=46&t=-CilZxNcloFTuxxYHbr-bA">yesterday announced</a> their Anduro layer two proposal. While there aren't really any fundamentally new pieces or developments in the Anduro design, they do compose in slightly different ways compared to other existing sidechain systems such as RSK or Liquid/Elements. </p><p>Anduro is a federated model that makes use of a quorum, referred to as the “Collective” in the released documents. The main distinction between Anduro and other sidechain proposals is the explicit design based around the Collective operating and being capable of spinning up and managing multiple sidechains with different architectures. This is not so dissimilar from the concept of drivechains enabled a wider network of sidechains, rather than a singular one. </p><p>Anduro is also going to be merge mined, which like RSK (also using a federated peg), does not offer any type of added security for the bitcoin pegged into the sidechain held by the federation. It does however, also like RSK, provide POW security to other assets that might be issued on the sidechain not pegged in from the mainchain and custodied by the federation. </p><h2>Peg And Consensus Model</h2><p>The actual peg between the mainchain and the sidechain is fundamentally the same thing as Liquid, and in detail looks to be roughly identical in terms of structure and implementation. The Collective will be launched with 15 members as Functionaries, the entities actually handling the multisig keys involved with managing the peg, and 50 or more Contributors, which seem to be similar to Liquid partial members that can whitelist and initiate withdrawals from the sidechain(s) even though they are not active participants in processing those withdrawals. </p><p>Also like Liquid, Anduro will also use a formal organization to handle matters of governance. I.e. handling upgrades to the network, deciding on future changes to the membership set of the federation, and in general any issues that will come up in regards to the operation of the sidechains the Collective is operating. The federation’s security ultimately relies on jurisdictional diversity in order to maintain any type of censorship resistance or safety from fund confiscation even though a federation is composed of honest members. </p><p>The interesting part of the design here, is unlike RSK, the Collective plays an active role in the consensus process beyond facilitating the operations of the peg mechanism. In Anduro, the Collective actually comes to consensus on the block contents for the sidechain through a Byztanine Fault Tolerant (BFT) algorithm or round robin selection where a single member constructs the blocks for that round. They also periodically sign blocks to function as a checkpointing system to prevent reordering of anything in the historical past. Once signed and checkpointed, miners are incapable of reorging any sidechain blocks without the assistance of the Collective. </p><p>Both of these factors essentially function as a firewall between <a href="https://bitcoinmagazine.com/technical/miner-extractable-value-mev-and-programmable-money-the-good-the-bad-and-the-ugly">Miner Extractable Value</a> opportunities and the miners. MEV is any opportunity available to miners where reordering transactions, such as front running orders on a decentralized exchange, can present an opportunity for that miner to earn extra revenue when they mine their next block. MEV has shown a tendency to increase centralization pressures for block producers in other networks it has become prevalent in. Because of the fact that the Collective is actually deciding the contents of sidechain blocks, and miners are simply committing to them with proof of work, the Collective acts as a shield against those centralizing pressures for block producers (in Bitcoin’s case miners) by taking on the role of actual block construction. </p><p>Long term Marathon states they intend to work towards trustless peg mechanisms and consensus mechanisms, specifically citing <a href="https://bitcoinmagazine.com/technical/the-big-deal-with-bitvm-arbitrary-computation-now-possible-on-bitcoin-without-a-fork">BitVM</a> as an example of how this could be achievable. While this draws into question the ability to maintain the MEV protections the current architecture has in such a transition, it currently prevents MEV from presenting a risk of centralization pressures for miners. It’s also important to note that BitVM ultimately as designed with a prover-verifier model inherently requires defined participants to manage any funds locked in a BitVM peg. While it does radically improve the security model of the peg by allowing provable penalization of dishonest participants by a single member, massive changes to BitVM’s design itself would be necessary to completely remove the need for the equivalent of a federation. </p><p>Overall the architecture strikes a nice balance of implementing a variant of existing sidechain designs, while in its current iteration intentionally creating a sort of protective layers between the sidechains and miners when it comes to the risks of MEV. </p><h2>The First Two</h2><p>On launch Anduro will have support for two sidechain architectures, one based on Bitcoin, the other on Ethereum. </p><p>Coordinate: Coordinate is the Bitcoin sidechain variant. It will implement small changes to Bitcoin, including native support for asset issuance similar to Liquid, and is intending to cater towards Ordinals and token use cases such as BRC-20, and the primitive DeFi products and services that have built up around them. </p><p>Alys: Alys is the Ethereum sidechain variant, essentially just porting the Ethereum Virtual Machine and Solidity to a Bitcoin sidechain. The hope is that it can provide a new learning curve environment for Ethereum application developers to shift their focus towards building services and tools on top of Bitcoin.</p>2024-02-29T19:23:17Zurn:uuid:4bfad864-7e8b-afd9-5927-7aa2d2a418e2ShinobianduroWells Fargo and Bank of America’s Merrill Are Now Offering Spot Bitcoin ETFs To Clients The banks are providing access to Bitcoin ETFs to select wealth management clients with brokerage accounts upon request.<p>Bank of America Corp.’s Merrill Lynch and Wells Fargo & Co.’s brokerage unit have begun offering access to exchange-traded funds (ETFs) that directly invest in Bitcoin, according to <a href="https://news.bloomberglaw.com/business-and-practice/bofas-merrill-wells-fargo-offer-bitcoin-etfs-to-wealth-clients">Bloomberg Law.</a></p><blockquote class="twitter-tweet"><p lang="en" dir="ltr">JUST IN: Wells Fargo and Bank of America’s Merrill are offering spot <a href="https://twitter.com/hashtag/Bitcoin?src=hash&ref_src=twsrc%5Etfw">#Bitcoin</a> ETFs to wealth clients 2024-02-29T18:34:39Zurn:uuid:33079970-fccb-6fe9-e6c1-756070b743feNik Hoffmandefault_wells_fargo_and_bitcoin_up_close_0BlackRock’s Spot Bitcoin ETF To Start Trading in Brazil TomorrowIBIT39 will initially be available to qualified investors, with retail access expected to follow in the coming "weeks."<p>BlackRock's spot Bitcoin exchange-traded fund (ETF) is poised to make its debut in Brazil tomorrow, according to a <a href="https://www.infomoney.com.br/onde-investir/etf-de-bitcoin-da-blackrock-chega-ao-brasil-com-bdr-na-b3/">report</a> from the largest financial market news platform in Brazil, InfoMoney. The launch follows the announcement by BlackRock that the Brazilian Depositary Receipts (BDRs) of its iShares Bitcoin Trust ETF (IBIT39) will begin trading on B3, Brazil's stock exchange, on Friday, according to the report.</p><p>“Our digital asset journey has been underpinned by the goal of providing high-quality access vehicles to investors,” said Karina Saade, president of BlackRock in Brazil. “IBIT39 is a natural progression of our efforts over many years and builds on the fundamental capabilities we have established so far in the digital asset market.”</p><p>IBIT39 will initially be available to qualified investors, with retail access expected to follow in the coming "weeks." The management fee for IBIT39 is set at 0.25%, with a one-year waiver and a reduction to 0.12% after reaching $5 billion in assets under management.</p><p>In the United States, where Bitcoin spot ETFs were cleared by regulators in January, BlackRock's Bitcoin ETF has emerged as the most popular option, accumulating over <a href="https://x.com/JSeyff/status/1763069374867427767?s=20">$9 billion</a> in assets since launch. According to Bloomberg data, BlackRock's ETF attracted a record $612 million of inflows in a single day yesterday.</p><p>Despite the success of Bitcoin ETFs, Saade emphasized that BlackRock's launch in Brazil and the United States does not constitute an endorsement of Bitcoin itself but rather a recognition of its relevance as an asset class. “Our goal is to serve our customers with safe and transparent products. We have no recommendation or any expectations regarding Bitcoin itself,” Saade explained.</p>2024-02-29T17:38:16Zurn:uuid:8f1e3352-a1dd-51a1-9f7b-fb6d73367a4aNik Hoffman26812213289_f460d63e07_kChrist the Redeemer&sol;FlickrChrist the Redeemer, Rio de Janeiro, Brazil