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via the NCLA

Texas Blockchain Council v. Department of Energy

"ORDER SETTING PRELIMINARY INJUNCTION HEARING in District Courtroom #1, on the Third Floor of the United States Courthouse, 800 Franklin Ave, Waco, TX, on Wednesday, February 28, 2024 at 10:00 AM.

All parties and counsel must… pic.twitter.com/Qu4IMqbIwR

— Pierre Rochard (@BitcoinPierre) February 26, 2024

On February 1st, we made you freaks aware of an invasive survey that the Energy Information Administration (EIA) sent out to mining companies in the United States under the guise of ensuring that reliability of the nation's energy infrastructure isn't being materially impacted by bitcoin miners. The registry was attempting to collect information about the location of mining operations (down to the geographic coordinates), their energy providers, the overall percentage of total production that miners were buying from individual electricity producers, the amount of hashrate at each location, and the ASIC they are running at each location. Among other sensitive competitive data.

[

The Biden Administration Wants To Create A Registry Of Bitcoin Miners

Earlier today, the Biden Administration announced an emergency data collection initiative targeted at bitcoin mining operations in the US via the US Energy Information Administration, an “independent” sub-agency of the Department of Energy.

TFTC – Truth for the CommonerMarty Bent

](https://tftc.io/eia-bitcoin-mining-survey/)

At the time, I encouraged everyone in the industry to tell the EIA to screw off due to the egregious encroachment on civil liberties the registry represents. Luckily for us, many operators in the industry agreed with this sentiment and Riot decided to push back alongside the Texas Blockchain Council by suing the Department of Energy and initiating a halt on the data collection. Claiming that the Department of Energy did not provide adequate notice before demanding that operators hand over extremely sensitive information to the EIA.

[

Texas Blockchain Council vs The US Dept Of Energy

The Texas Blockchain Council and Riot Platforms vs. U.S. Department of Energy.

TFTC – Truth for the CommonerStaff

](https://tftc.io/texas-blockchain-council-riot-platforms-lawsuit-department-energy/)

The US District Court for the Western District of Texas granted a 14-day Temporary Restraining Order during which the EIA will not be allowed to force miners to respond to the survey. There is a hearing scheduled for Wednesday morning at 10am Central in Waco, Texas during which Riot, The Texas Blockchain Council, and others like the Chamber of Digital Commerce will put forth the case that the EIA and the Department of Energy are infringing on the privacy rights of miners and using bullying tactics to intimidate a budding industry.

As we said when we first discussed this invasive registry, the EIA and the Department of Energy don't have a leg to stand on. They are claiming that miners are a detriment to the stability of our grid systems and electricity prices. Nothing could be further from the truth. Miners are a boon to our nation's grid systems. Providing utilities and power generators with dependable revenue streams and a demand response mechanism that is unrivaled. This is made clear by data that has been released by ERCOT which shows that miners played a crucial role in ensuring that the grid had an ample supply of electricity at reasonable prices during the abnormal cold front that hit the state in early January.

As it stands today, miners account for ~95% of Large-Flexible-Loads within ERCOT. As you can see from the chart above, miners reduced their electricity usage by ~75% or more during morning demand spikes; the period of time when the temperature is still very cold from the overnight cool down period and people are waking up and turning on their lights, heat, kitchen electronics, and office lights. As a result, more electricity was able to be sent back to the grid to meet the increasing demand and real-time pricing fell dramatically from its peak.

This is all made possible due to the fact that bitcoin miners are uniquely suited to respond to changes in demand quicker than any other load on the grid. Mining firmware connected to ERCOT pricing and usage data APIs can take in signals and turn down machines within seconds. Freeing up the electricity miners would have otherwise used to ensure that people can heat their homes at affordable prices. Again, no other load source can react this quickly. There are two reasons for this; the miners are somewhat dumb machines (they only do a few things; produce hashes, send small amounts of data to the bitcoin network, and run internal diagnostics) and they can turn off at a moment's notice without disrupting the distributed bitcoin network. Blocks of transactions are still added to the ledger even when a material amount of hashrate comes off the network. They are just produced a bit slower than the ten-minute block time target until the next difficulty adjustment.

The data is on our side. It will be interesting to see what the District Court in Texas decides on Wednesday morning. We hope that sanity and logic prevail. Though, if it doesn't, the industry should keep fighting back and even refuse to fill out the registry if the Department of Energy decides to move forward with it. If that is what they decide to do, it will be up to the states to stand up for the industry and put the federal government in its place.

Final thought...

Took my son to his first baseball game yesterday. He was more engaged than I was expecting. It was a great Sunday and a great weekend overall.

Use the code "TFTC" for 15% off

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A collection of previously unpublished emails between Bitcoin's pseudonymous creator, Satoshi Nakamoto, and developer Martti Malmi (known as Sirius) has been released. Spanning from 2009 to 2011, these emails provide insight into the early days of Bitcoin and the thought process of its enigmatic creator.

The Emergence of Bitcoin as an Independent System

Bitcoin, since its inception, has evolved into a complex, emergent system that transcends its creator's identity and intentions. The decentralized nature of Bitcoin means that it operates independently of any single authority or interpretation, much like the invention of the wheel that continues to find relevance irrespective of its origin.

The Anonymity of Satoshi Nakamoto

The anonymity of Satoshi Nakamoto is a foundational aspect of Bitcoin's narrative. Satoshi's clear intent to remain anonymous has been a call for the community to respect their privacy. Public speculation about Satoshi's identity can lead to unintended and potentially harmful consequences for individuals mistakenly identified as the creator of Bitcoin, as demonstrated by the unfortunate events experienced by the late Hal Finney.

Insights from the Emails

Proof of Work and Energy Consumption

In one of the emails, Satoshi discusses the necessity of proof of work for the functioning of peer-to-peer electronic cash without a trusted third party. They acknowledge the potential energy consumption by the Bitcoin network but argue that it would be less wasteful than traditional banking activities.

Monetary Value and Utility

Satoshi reflects on the historical precedent of scarce commodities becoming forms of money, highlighting the distinction between functional and monetary value. They point out that most of the value of gold is not derived from its physical properties but rather from the value ascribed to it by society.

Cryptocurrency Terminology

An email exchange reveals Satoshi considering the adoption of the term "cryptocurrency," which suggests that the term may not have been coined by Satoshi themselves. This indicates a collaborative evolution of concepts and terminology within the early Bitcoin community.

Bitcoin's Limitation and Distribution

Satoshi explains the reasoning behind the limitation of Bitcoin to 21 million coins and its distribution schedule. The decision was based on making Bitcoin comparable to existing currencies and acknowledging the uncertainty of its future adoption.

Personal Insights

Through these emails, a more personal side of Satoshi emerges. They mention financial constraints, a day job, and the stress of the project, highlighting the human aspect behind the creation of Bitcoin.

Conclusion

The release of these emails adds to the historical record of Bitcoin's early development and provides a deeper understanding of Satoshi Nakamoto's vision and philosophy. It underscores Bitcoin's growth beyond its initial parameters and the foresight of its creator in anticipating the challenges and potential of a decentralized digital currency.

As the community continues to explore these emails, it is crucial to approach them with a sense of respect for privacy and a focus on the technical and philosophical content rather than the identity of the individual behind the pseudonym.

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In The Zero Dollar Manifesto: Part One, we talked about why you’d want to hold zero dollars. With GetOnZero, you use bitcoin as the money in your checking account, while using the dollar as a legacy payment rail to remain interoperable with the fiat system. The benefits are clear to anyone who’s been down the bitcoin rabbithole: you are upgrading your money from one that is being actively devalued, to one that can’t. Touching dollars for no longer than a millisecond (only at the time of transaction) allows us to completely sidestep financial debasement by unelected bureaucrats in government. 

Friction in going dollar-free

In The Zero Dollar Manifesto: Part Two, we walk through how to achieve this goal with the tools we have available to us today. Much of the process involved disparate tools, manual processes, and periods where we may be exposed to the dollar more than we’d ideally like to be. 

For example: you receive your paycheck via your “ACH Node” (discussed in Part Two here) via dollars. Instead of being instantly, automatically converted from Weak Money (dollars) to Strong Money (bitcoin), today you manually “buy” bitcoin with those dollars. Next, when it comes time to pay a bill through dollars via your ACH node, you manually “sell” the exact amount for the conversion & payment to go through. Unfortunately, chances are that your bills are not all due on the same day. This complication implies one of two strategies—either:  

1. remember to convert on the day-of payment (which adds friction to the experience—you’ll need reminders on multiple days), or 
2. batch convert all bill-pays at once (which may expose you to dollar debasement for longer periods).

Filing taxes at the end of the year is much easier than you may think, but still may involve a little bit of manual effort: 

1. getting a list of transactions from your exchange, 
2. formatting it properly, then 
3. uploading it to your tax tracking tool (see Part Two for specifics on tax related tools).

It’s worth it

I get it. Between work, family, and rising cost of living, we all have enough to deal with on a day-to-day basis. No one is looking for additional friction in their financial tools; none of this is the ideal GetOnZero experience. With that said, we’ve come a long way in the last few years. Developers and companies like Fold and Strike working on GetOnZero tools are actively looking for help—we owe it to ourselves to give them feedback and steer them in the right direction! I would argue that these compromises are minor, and are absolutely worth it in order to avoid financial debasement and fully participate in the upside of bitcoin’s purchasing power.

The ultimate vision

Originally, internet connectivity relied on dial-up connections through traditional, legacy phone lines, necessitating a switch between phone and internet usage. However, with technological advancements, the landscape shifted towards broadband internet access and Voice over Internet Protocol (VoIP) for voice communication. This transition streamlined communication processes, offering faster internet speeds and enabling seamless integration of voice and data services over a single, interoperable network. Fast-forward past the transitionary period to today, and modern phone calls now primarily utilize digital upgraded networks, providing enhanced reliability, clarity, and efficiency compared to the legacy network.

From The Zero Dollar Manifesto: Part One

In much the same way, I see interoperability with legacy payment rails as a transitionary phase as we evolve into a fully hyperbitcoinized world with bitcoin as store of value, direct medium of exchange, and unit of account. Until then, it helps to have a foot in both worlds so we can focus on our craft, providing value, and enjoying life - rather than worrying about having a second job as an investor. 

Let’s be very clear about the ultimate vision of what a GetOnZero bank looks like: with your upgraded bank account, you will be able to send and receive money - anytime, anywhere, using any payment rail, without holding any fiat currency. You hold Strong Money (bitcoin) while being interoperable with anyone, regardless of what the medium of exchange or payment rail is. Conversions will happen instantaneously and automatically, without having to think about the underlying mechanics.

• If your employer requires paying you with dollars and ACH, you happily accept because you know your bank will automatically convert to Strong Money as soon as you receive it. 
• If your landlord only accepts Venmo, you happily pay, because you know it will automatically come out of your Strong Money (bitcoin) balance without you having to hold a Weak Money (dollar) balance. 
• If your rancher accepts bitcoin for beef, you will be proud to pay using the lightning network, thanks to the privacy benefits. You won’t be worried about spending your bitcoin, since you only have bitcoin  (no dollars!) to spend.

Whether it’s dollar bills, lightning network, ACH, ecash, or PayPal, you are fully interoperable with any payment rail while only holding bitcoin—upgraded money. 

How we get there

Here are the missing pieces, and the path to get to GetOnZero bank vision:

Instant conversions

Conversions between Strong Money (bitcoin) and Weak Money (dollars) must be instant. When receiving via the dollar network, it’s important to instantly convert to bitcoin to completely sidestep fiat financial debasement. When sending money, conversions from bitcoin to dollars must be instant, to be able to make payments at any time without running into liquidity constraints (eg. waiting 2-5 business days for a transfer to settle).

Today, some products have instant conversions (milliseconds), while others have near-instant conversions (1-5 minutes). As conversion time decreases, we’ll be exposed to weak money for little time. 

Automated conversions

While not a strict requirement for those of us that are willing to jump through a few hoops (like manually buying and selling), automated conversions between Strong Money (bitcoin) and Weak Money (dollars) are critical to providing a smooth user experience that abstracts away underlying complexities–the optimal user experience.

When dollars touch your bank account (via ACH, account/routing number, or wire) a bitcoin-buy order is placed, instantly converting the fiat currency into bitcoin.

On the other side (say you need to pay off your credit card bill, denominated in fiat currency): When an ACH-pull is triggered by your credit card company, a bitcoin-sell order is placed, converting the exact amount of bitcoin you need to fiat currency to pay off the bill.

This way, you are only exposed to fiat currency debasement at the time of transaction, and for no longer.

Zero transaction fees

There is no denying that it’s important for a financial services company to be able to earn revenue to be a sustainable business. That said, charging a fee (or spread) on conversions negatively incentivizes the conversion process. 

It’s not a big deal if a is occasionally buying bitcoin or sets up a recurring DCA. It’s much more painful when they are frequently converting between Weak and Strong money. Conversions should not be penalized! Fees cause huge psychological friction.

Instead of charging a conversion fee, the ideal Strong Money bank would charge a recurring subscription fee, better aligning incentives for providing a valuable financial service. This bank could have two tiers of service: one for occasional buyers (fee-based) and another for those who live on bitcoin (subscription).

Bitcoin rails

Interoperability with legacy rails is critical for this transitionary period we’re living through. With that said, being able to make payments via superior, upgraded rails (bitcoin-native rails) is even better whenever possible. If you’re able to spend your money (bitcoin) with both payment rails, you and your counterparty have a choice of which rail to use—and there are clear benefits of using upgraded rails.

Lightning network interoperability

The lightning network is a second-layer scaling solution for near instant, inexpensive bitcoin payments. You can think of lightning as a clearing mechanism between different self-custodial wallets, fedimints, and banks. Imagine a world where you can spend bitcoin to pay rent via ACH, and pay for coffee via lightning—using the same Strong Money bank. A single bitcoin balance, available to pay anyone, regardless of rails. 

Bitcoin withdrawals

Most bitcoin banks will likely be custodial (third-party custody), at least during this transitionary period of using the dollar as a legacy payment rail. While there is certainly a downside risk of custodial bitcoin, the benefit is ease of use and user experience. By storing some money in a Strong Money Bank, you can seamlessly spend that money via bitcoin-native rails, or legacy (dollar) rails without having to manually transfer funds.

On-chain withdrawals of your bitcoin will be critical to allowing for a “run on the bank”, and will help to keep these Strong Money banks honest. In your bitcoin bank, store only what you need for your “checking account” amounts, and withdraw the rest to cold storage. Not your keys, not your bitcoin.

However, some people that have a fixed number of bills in the month (say, a couple credit card bills, mortgage, car payment) may be comfortable with the tradeoff of manually depositing bitcoin into their Strong Money bank right before a payment is due, in order to minimize custodial risk. A good Strong Money bank should allow you to deposit and withdraw your money to your own self-custody wallet via bitcoin-native payment rails (on-chain, lightning). 

Bitcoin deposits

As bitcoin evolves as a medium of exchange, many customers will want to accept bitcoin directly for goods and services. As Parker Lewis talks about in his Pay Me In Bitcoin Theory, this behavior is rational. Accepting bitcoin directly bypasses added friction in acquire Strong Money: namely cost in conversion between Weak and Strong Money, and using more privacy preserving payment rails (bitcoin-native rails). Allowing for bitcoin deposits will make your bitcoin bank a one-stop shop for all bitcoin transactions, including using legacy payment rails via the dollar. 

Allowing for deposits will also let customers spend bitcoin savings without having to keep a large custodial balance. By withdrawing your balance after exceeding a certain amount (based on your custodial risk appetite), you can withdraw to self custody. Then, if you need to spend your bitcoin via the dollar as a payment rail, deposit the bitcoin and spend via your bitcoin bank.

Tax reporting improvements

Today, your bitcoin exchange or Strong Money bank provides a simple spreadsheet of buy and sell transactions. This data needs to be manually formatted, and then uploaded to your tax tracking tool of choice (eg. Cointracker). Getting this transaction information into the tool is important to be able to minimize your tax liability, since we are converting between Strong and Weak money often. As we discussed in detail in The Zero Dollar Manifesto: Part Two, capital gains tax should not be an impediment to upgrading your money. If you owe tax, it’s because you are coming out ahead compared to holding Weak Money. All of this is fairly straightforward, and takes me around 30-60 minutes every year. 

That said, it is additional friction that could be abstracted away. In the future, Strong Money banks could export spreadsheets already pre-formatted for the most popular tax tracking software. Even better—they could have one-click integrations with tax tools like Cointracker or TurboTax.

Spending on collateralized credit: GetOnNegative?

As we discussed in The Zero Dollar Manifesto: Part Two, spending on credit is not critical, but helps streamline some of the experience around transactions. If you could minimize spending your bitcoin to zero (and spend on credit), would you?

In this hypothetical example, your checking account balance (held in Strong Money: bitcoin) would be used as collateral for a revolving line of credit (similar to a HELOC) that you could draw on at any time. This bank would have both ACH and lightning network interoperability, so that you could “unleash” your collateral (checking account balance) without spending it directly, to pay for rent, coffee, and more.

The obvious risk here would be exchange rate fluctuations, but it could be mitigated by having enough of a balance to be able to withstand harsh drawdowns.

Other non-dollar assets

Hold a basket of assets, while being interoperable with any payment rail

Relax—I’m not talking about altcoins! 

GetOnZero doesn’t mean hold only bitcoin. It just means holding fiat currencies that are actively debased by governments. 

What if you could hold Apple shares, stock market index funds, or even gold ETFs in your Strong Money bank, and be interoperable with all payment rails? Imagine a basket of these non-dollar assets as your money that you can send, receive, and save in. It’s not something I’m personally interested in (bitcoin-only for me!) but I could see this being a useful bridge service, especially for those who are more concerned about bitcoin’s near-term exchange rate volatility measured in dollars. Additionally, this would likely increase the total-addressable-market for a GetOnZero product by going beyond just bitcoiners.

Banking table-stakes

Debit cards are important for both spending money, and being able to withdraw dollar bills from ATMs. “Spend your bitcoin” using dollar bills as a payment rail: a great privacy win! Some transactions require the use of personal checks, so being interoperable with that payment rail is important as well.

KYC concerns

In my opinion, Know Your Customer and Anti Money Laundering laws harm honest citizens more than they do stop criminals, and should be abolished. That said, there is no denying the fact that Strong Money bank will be required to comply with KYC/AML regulations. I don’t like it or agree with it, but that’s one of the tradeoffs of using a convenient Strong Money bank.

If noKYC is a strict requirement for you, I still think the Strong Money mental model can be a valuable one to internalize. Holding as few dollars as possible should be the goal, and the specific mechanics can be adjusted depending on your acceptance of KYC vs UX tradeoffs.

Some examples of privacy-friendly ways of spending Strong Money are: The Bitcoin Company VISA gift cards, Fold gift cards, and noKYC physical cash ATMs.

You may still want to track the cost basis of your noKYC coins. Privacy is the ability to selectively reveal information about yourself, so being able to choose to reveal cost basis information if you need to spend large amounts of bitcoin via a KYC exchange (eg. buying a house) can be a useful preparatory tool.

Looking ahead: imagine a future where all Square terminals accept bitcoin directly, and your landlord accepts bitcoin as payment. I’m optimistic that this future is coming soon. I am hopeful that legacy payment rails are a transitionary phase until bitcoin-native rails are more commonplace, and we can spend bitcoin directly in a more privacy-preserving way.

Note: I am by no means a bitcoin privacy expert. Follow my friends Matt Odell and Tony Giorgio for more information on how to transact privately with bitcoin.

A call to action

Bitcoin has superior monetary properties to dollars in almost every way. Those of us who already have a large potion of their savings in bitcoin already understand this. As far as I can tell, the primary benefit of the dollar is its salability—that is, it’s much more widely accepted around the world. 

When we GetOnZero and use the dollar as a payment rail rather than an asset, we get the best of both worlds: the salability of dollars with the store of value properties of bitcoin. 

After Parts 1, 2, and 3, we now understand why we should hold zero dollars, know how to functionally implement the framework today, and are aware of the tradeoffs. If you believe in this vision and are a builder yourself, now is the time to implement this vision. If you work at a bitcoin company, consider adding these features to your roadmap. If you’re a client of a bitcoin company, ask your favorite product when they are going to help you GetOnZero. 

Now is the time. There is no need to wait for “hyperbitcoinzation”. We’re living through it.

Engage & learn more

Have specific questions? Find me on Twitter @SahilC0 and join the GetOnZero Telegram group here. 

Read Part One and Part Two on TFTC.

Originally published on Sahil's Substack

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The topic of bitcoin scaling solutions seems to be bubbling up again. Many people are discussing whether or not certain OP codes should be added to the protocol to enable things like covenants, zero knowledge proofs, and cross-input signature aggregation, among other things. Not only are people discussing them, but many are pushing to have some of these proposals soft forked into bitcoin as soon as possible. While I have my own thoughts about particular proposals and whether or not they'd be advantageous, I don't share the urgency that many currently sparking these conversations seem to have. Particularly those who would like to replicate the "L2 functionality" altcoins have enabled in recent years. In my opinion, I don't think it should be a priority to replicate these use cases on bitcoin. They have provided little utility outside of degenerate gambling to date.

A lot of the conversations around these soft forks seems to be driven by the beliefs that bitcoin isn't scaling sufficiently to meet the coming demands of the market and more "L2s" need to be enabled to stoke a "sufficient fee market" to properly secure the network. I don't think either of these things are a problem and I think everyone who is opining about these perceived problems is doing so out of a misunderstanding of what bitcoin is competing with at the protocol level; Fedwire and similar central bank settlement networks.

Earlier today I recorded an episode of the TFTC podcast with Matthew Mežinskis to walk through his Q4 2023 monetary base update. As it stands today bitcoin is the 7th largest base money in the world and the 6th largest when you exclude gold.

This is pretty remarkable when you consider that bitcoin has only been competing in the market for base monies since January 2009. It doesn't seem like a perceived scaling deficiencies have prevented bitcoin from competing with currencies that have been around for centuries.

Matthew and I have been recording a podcast every quarter to go over his monetary base updates for the better part of four years now and I always look forward to our discussions because he does the best job of surfacing high signal economic data pertaining to bitcoin out of anyone I have ever met. Today's discussion did not disappoint. We walked through some new data we have never discussed throughout the years; a trailing 12-month comparison of payment volumes and transfer values on bitcoin and Fedwire. These are two of the most bullish charts I have ever seen. They highlight that bitcoin is not merely competing with its base money competition, but it is already out-competing Fedwire. Let's take a look at the charts.

Here we have a chart of the trailing 12-month payment volumes on bitcoin and Fedwire. In 2023, Fedwire averaged ~530,000 payments per day and the trailing 12-month volume was 193,316,782 payments. Bitcoin almost doubled that volume with 367,044,946 payments over 2023. Matthew's calculations take change outputs out of the equation. When you spend bitcoin you make two transactions if you don't spend the full UTXO; one transaction goes to the person you are transacting with and another goes to a change address associated with your wallet. The change address address transaction isn't really an economic transaction, so it is taken out of the dataset. This chart would make bitcoin look more dominant than it already is if those transactions were included.

This calculation also includes batched transactions, which enable users to batch multiple inputs into a single transaction to pay multiple people at once. This is typically done by exchanges who are processing bitcoin withdraws for their users. Instead of sending each user an individual transaction, the exchanges collect dozens or hundreds of withdraws and batches them into a single transaction. This practice has increased the number of transactions per second from 3-4 transactions to ~12. Allowing the bitcoin network to process ~1,000,000 transactions per day.

Again, this is already almost double the amount of transactions that are processed by Fedwire each day and an overwhelming majority of those transactions have better final settlement times compared to Fedwire. If batching becomes more efficient and more widely adopted bitcoin's advantage over Fedwire when it comes to payment volumes can grow even larger.

Here's the chart of the 12-month trailing transfer value of Fedwire and bitcoin with the Fedwire supremacy ratio overlaid on a log scale. As you may imagine, at the current moment, the amount of value that Fedwire transfers and settles far exceeds the amount of value settled by the bitcoin network. Last year Fedwire transferred $1.083 quadrillion while bitcoin settled $1.36 trillion. Put another way, Fedwire moved almost 1,000 times more value in 2023. A wide gap to fill!

While that gap is wide at the moment the black line on the chart is showing that bitcoin has been making steady progress to close this gap. In 2010 Fedwire was transferring 22.4 billion times more value than the bitcoin network on a 12-month trailing basis. Today, it is only transferring 799 times more value than bitcoin. And at one point in late 2022 that ratio fell to 190. As the price of bitcoin increases, this ratio will only go lower, at some point it will reach parity, and eventually it will surpass Fedwire in transfer value.

I don't know about you freaks, but bitcoin seems to be scaling just fine at the protocol level to me. Especially when you compare it to its true competitors; other base monies and the rails they settle through.

The questions that remains are, "How do we scale beyond large settlement payments and enable transactions of a smaller value size so that bitcoin can be used efficiently as a transactional currency?" and "How many individuals will be able to hold economically viable UTXOs at the protocol level?"

Personally, I think that we should treat the protocol level as a settlement layer for large transactions and push smaller transactions up to higher layers. Hal Finney was incredibly prescient in December of 2010 when he made everyone aware that "[..]bitcoin itself cannot scale to have every financial transaction in the world be broadcast to everyone and included in the block chain. There needs to be a secondary level of payment systems which is lighter weight and more efficient."

We are beginning to see Hal's 2010 vision come to life via second layers like Lightning, Chaumian Mints, Liquid, and other solutions like statechains. All of these second layer solutions are still in the early days of their build outs and some are showing a lot of promise.

I do not feel like there should be any urgency to rush through one or many potential scaling solutions for bitcoin right now. There are a ton of low hanging fruit that bitcoiners should be taking advantage of to push the limits of what we have in our hands today. There are efficiencies to be gained with more users adopting best transaction batching practices, leveraging things like Miniscript to create unique scripts that enable desired conditional transactions, connecting lighting with Chaumian mints at scale to bring faster final settlement and more privacy, and experimenting with other second layer solutions that are possible today.

Rushing through a soft fork that could introduce unexpected negative externalities to the network is not a wise decision. One of the main reasons that bitcoin is valuable in the first place is that it is extremely hard to change. Rushing through soft forks so that people who want to engage in altcoin degeneracy can do so seems extremely shortsighted at best and totally reckless at worst.

Bitcoin is already scaling quite magnificently despite what some impatient people would lead you to believe.

On a side note, if you have made it this far, you should subscribe to Matthew's YouTube page. He is putting out very high signal content about bitcoin, economics and markets on a daily basis.

[

Porkopolis Economics

Money, markets, history; free and unfree. With Matthew Mezinskis, creator of Crypto Voices podcast, established 9 January 2017.

YouTube

](https://www.youtube.com/@porkopolis_econ?ref=tftc.io)

Final thought...

Spring has sprung in Austin, Texas.

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Key Takeaways

The Stephan Livera podcast episode featuring Ben Carman from Mutiny Wallet delves into a rich discussion on Bitcoin's protocol development, its challenges, and the future of Bitcoin wallets. The conversation highlights the ongoing struggle between scaling Bitcoin and maintaining its decentralized ethos.

One of the core challenges identified is scaling Bitcoin effectively. Despite the success of the Lightning Network, it's clear that Lightning alone isn't the silver bullet for scaling; it is part of an incremental solution. The need for additional measures like soft forks to facilitate scaling has sparked a divide within the community, leading to a social consensus problem that overshadows technical issues.

Another significant point is the social dynamics within the Bitcoin community, which can be categorized into four groups: ossificationists, conservatives, progressives, and those with a more permissive attitude towards upgrades that may facilitate altcoins. This taxonomy reflects the varied philosophies regarding Bitcoin's development path.

The discussion also touched upon the importance of covenants and soft forks in improving Bitcoin's scalability and user experience. Ben Carman leans towards the view that covenants, particularly those enhancing the Lightning Network, offer promising avenues for scaling Bitcoin ownership and transactions.

Layer two solutions (L2s) are also debated, with the consensus being that true L2s should enable unilateral exits without relying on trusted intermediaries. However, the definition of what constitutes an L2 is expanding as the ecosystem evolves.

Mutiny Wallet, the project Ben Carman is working on, represents an attempt to create a new hybrid era for Bitcoin wallets. It aims to combine the best aspects of self-custodial wallets with features from federated models like Fedimint, providing a seamless experience for both novice and advanced users.

Best Quotes

1. "A lot of our challenges are almost more social than technical. We need to come to a social consensus of what's the next move."
2. "If Bitcoin is worth like a trillion dollars tomorrow, soft forks probably aren't happening anymore. It's just like being able to activate things just comes that much harder the bigger the system gets."
3. "We're trying to make self-custody easier and cheaper and more scalable for end users. If we stop soft-forking today, frankly, most users won't be able to use self-custodial Bitcoin."
4. "Lightning is kind of beautiful where it's a truly peer-to-peer network... It's not like service providers to function the network, which is a really different model than a lot of the other L2s."
5. "We're just fine. And the outlook is good. Lightning is not going to die tomorrow kind of thing that a lot of people are saying, and inscriptions aren't going to kill Bitcoin."

Conclusion

The podcast episode with Ben Carman provides a comprehensive look into the current state and future of Bitcoin, particularly focusing on the technical and social challenges the ecosystem faces. The need for soft forks and covenants, alongside the development of layer two solutions like the Lightning Network, are critical for enabling greater scalability and user adoption.

The nuanced conversation also sheds light on the diverse opinions within the Bitcoin community regarding protocol upgrades and the underlying philosophies that drive these viewpoints. The episode concludes with optimism, despite the challenges ahead, highlighting the resilience of the Bitcoin network and the continuous efforts to improve it.

Mutiny Wallet emerges as an innovative solution striving to offer a bridge between the ease of use provided by custodial services and the security and autonomy of self-custody. As the ecosystem evolves, it will be interesting to see how these developments shape the future of Bitcoin and its potential to onboard billions of users while maintaining its core tenets.

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Coinbase Commerce's Recent Move

Coinbase Commerce, a service designed to facilitate cryptocurrency payments for merchants, has recently announced the removal of native bitcoin support. This change means that while merchants can still accept bitcoin, the transactions can only be processed if the customer uses a coinbase.com account. Consequently, this update precludes the acceptance of bitcoin from self-custodial wallets or third-party exchanges.

Source: nobsbitcoin.com

Impact on Merchants and Payment Processing

This policy shift may have significant repercussions for Coinbase Commerce's market share, as merchants might opt for alternative payment processors that support a broader range of transaction sources. Alternatives such as Zaprite, BTC Pay Server, or other solutions that accommodate payments via self-custody wallets, both on-chain and through the Lightning Network, are likely to gain traction among merchants seeking to retain bitcoin-using customers.

Technological and Competitive Analysis

Despite Coinbase's extensive history in the cryptocurrency space, its capabilities have been called into question. Competitors, including smaller startups, have successfully integrated payment options that Coinbase has yet to adopt, such as the Lightning Network. This has raised concerns about Coinbase's technological agility and commitment to servicing the bitcoin community comprehensively.

Coinbase's Position on Bitcoin and Smart Contracts

There has been criticism from industry figures regarding Coinbase's stance on bitcoin's smart contract capabilities. While bitcoin does support smart contracts, it does not offer Turing-complete smart contracts, which are more complex and versatile. This distinction, however, does not inherently hinder the acceptance of on-chain or Lightning Network payments.

Regulatory Considerations and Future Prospects

There is speculation about the long-term implications of Coinbase's custodial role, particularly in relation to the U.S. government's potential actions. Historical precedents, such as the seizure of gold through Executive Order 6102 in 1933, are cited as potential analogs for future government intervention in the cryptocurrency domain.

The theory posits that in a scenario where bitcoin matches or exceeds the market capitalization of gold, a financial crisis could trigger government action to seize bitcoin held in custodial services like Coinbase. This would be a method for the government to stabilize the economy by nationalizing digital assets and compensating holders with a fixed amount of fiat currency.

Recommendations for Bitcoin Holders

In light of these concerns, cryptocurrency holders are advised to familiarize themselves with the process of withdrawing bitcoin from exchanges to personal wallets, ensuring self-custody of their assets. Learning to use hardware wallets and self-custodial wallets for both on-chain and Lightning Network transactions is crucial for maintaining control over one's digital assets.

Conclusion

The recent decision by Coinbase Commerce to restrict bitcoin payment options has implications for both merchants and consumers. While it raises questions about Coinbase's business strategies and technological capabilities, it also underscores the importance of self-custody. With the potential for regulatory intervention in the future, Bitcoin holders are encouraged to take steps to secure their assets independently.

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Is the Bitcoin-dollar poised to be the new petrodollar? My latest read, The Bitcoin-Dollar by Mark Goodwin, has been a thought-provoking journey into the intricacies of Bitcoin's future impact. This book not only deepened my understanding of Bitcoin's potential to redefine the monetary landscape but also illuminated potential attack vectors that I previously hadn’t considered. Moreover, Goodwin explores the dynamics of Bitcoin and the dollar, and discusses how we should prepare for their convergence. It also advocates for bitcoiners to adopt a more proactive stance, aiming to strengthen the Bitcoin ecosystem, going beyond the HODL ethos. Goodwin's strategic insights offer a refreshing depth, often missing from discussions on similar topics. Here’s what I learned from the book and my key takeaways.

Stablecoins: A Trojan Horse for CBDCs?

The Bitcoin network itself is highly resistant to state attacks due to its decentralization. However, the security of the Bitcoin network should not lead to naivete regarding potential attack vectors targeting Bitcoin network users. These attacks could impact accessibility, surveillance, and the dollarization of on and off-ramps. While much attention has been given to the creation of Central Bank Digital Currencies (CBDCs) by central banks globally, it's equally plausible that the U.S. federal government will continue its policy of private-public partnership to achieve the control they desire, much like the military industrial complex and the medical industrial complex. It is likely, perhaps even more so, that the government will opt to collaborate with stablecoin issuers in order to bring digital market commerce under its influence.

“[Stablecoins have] all the benefits of the CBDC without any headache.” pg. 26

With stablecoins being intertwined with Bitcoin at the on and off-ramps, users are forced to use dollar liquidity, creating the opportunity for perverse incentives to develop. This strategy does not compromise the decentralization of the Bitcoin network itself, but it could, in practical terms, diminish the qualities that we value in a decentralized monetary network. Is it possible for dollar-backed entities to pervert incentives enough such that the value of privacy and self-custody is lost for the majority of users? Goodwin challenged me to think about the role of stablecoins, how they might be co-opted, and the implications that would have for Bitcoin.

The Dollar-Bitcoin Link

The growth of Bitcoin will likely benefit the dollar in the medium term. With massive government spending during the Covid regime, coupled with years of near zero interest rates, we are left with record-high debt. This scenario limits the Federal Reserve's ability to aggressively raise interest rates, as done by Volcker in the 1980s, without risking default. Following the most recent rate hikes, the Fed will inevitably have to lower interest rates or resort to monetary expansion to avoid a recession, if they can. Moving forward, with limited options to further expand the monetary supply, and with Bitcoin's continuous growth, the Fed might increasingly lean on Bitcoin to absorb dollar liquidity.

“By pegging the dollar to Bitcoin’s limitless demand potential and by setting algorithmic interests for stablecoin wallets, the US can further capital mobility, increase the dollar system network effects, and further diminish the inflationary action of a run-away monetary supply.” pg. 68

Tether and the like have essentially pegged the short to medium-term success of Bitcoin to the dollar. This offers the Fed a new avenue for monetary expansion as we advance towards the future of digital money. Although I had considered the possibility that the dollar could be positively impacted by the growth of Bitcoin, I hadn’t considered the possibility of a tight-link between the two in such a way that it could further the monetary expansion of the dollar.

Choosing Allies

As we enter the “then they fight you” stage, and Bitcoin starts to gain the attention of powerful elites, it will become increasingly important to have allies in politics and across various private sector industries. To transition to a Bitcoin standard and reorganize power towards individual sovereignty, it will be crucial to select allies who understand both Bitcoin's properties and the ethos of its community. Blind allegiance to any politician who speaks positively of Bitcoin should be avoided in favor of substantive action. These relationships should be grounded in an understanding of Bitcoin's proposition. We should encourage tangible actions from our allies to protect privacy, self-custody, and mining infrastructure from state capture. It’s understandable that many bitcoiners want nothing to do with politics, as do I, but as the famous Pericles quote goes, “Just because you do not take an interest in politics doesn't mean politics won't take an interest in you.”

Bitcoin’s Robustness & Having an Impact

We all recognize that if Bitcoin is to become the monetary network of the world economy, second layer protocols will need to be developed. Although, it’s important that second layer solutions expand the usability of Bitcoin without sacrificing the inherent properties of Bitcoin. As the Bitcoin network expands, the practicality of conducting most transactions on the main chain will be diminished, especially with growing institutional involvement leading to higher transaction fees. This development will likely render on-chain settlement unaffordable for many users, highlighting the necessity of investing in second-layer technologies such as the Lightning Network and Chaumian Mint implementations. While these technologies offer various tradeoffs between privacy and user experience, maintaining a reasonable level of decentralization within these networks is crucial.

“Again, if Bitcoin is to become a cash-like technological monetary network in countries with less favorable financial freedom laws, it is important we do not allow adversarial entities to control or centralize the onramps and routing infrastructures of this scaling solution [Lightning].” pg. 126

Furthermore, to bolster the robustness of the Bitcoin network, we should also bolster our robustness as individuals. With Bitcoin, we can actively take back control of our economic power.

“The game is to create not just as many economic nodes as possible on the Bitcoin network, but to create strong, sustainable nodes that can weather short-term unpredictable price action and regulatory uncertainty.” pg. 192

All of us can be active agents and contribute to building the world we want to see through our economic choices. This doesn’t mean we should all spend our Bitcoin for some greater good, but we can all take steps to become less reliant on the legacy system which we are attempting to replace. It's imperative to avoid letting the legacy financial system dominate Bitcoin's infrastructure, whether out of convenience or apathy. Thus, every individual plays a pivotal role in fortifying the Bitcoin network, sculpting a monetary system that mirrors our ideals and aspirations for a world that values individual sovereignty.

Final Thoughts

Mark Goodwin’s The Bitcoin-Dollar has been an eye-opening exploration of the complex relationship between Bitcoin and the dollar, and the broader implications for the future of the Bitcoin network. It not only deepened my understanding of Bitcoin's potential to reshape our monetary landscape but also highlighted the nuances and challenges that are to come. In light of these insights, I find myself motivated to transform into a robust network node myself, actively contributing to and fortifying the ever-evolving landscape of Bitcoin.

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In a surprising turn of events, Senator Elizabeth Warren, a known critic of Bitcoin, appears to have honored it's creator, Satoshi Nakamoto. A flag was flown over the United States Capitol in recognition of Nakamoto and Bitcoin's 15th anniversary. The certificate accompanying the flag was signed by Senator Warren, praising Bitcoin as "the first truly inclusive financial system."

The Certificate and the Capitol Flag Program

The certificate's text recognizes the impact of Bitcoin and its contribution to providing "new economic freedoms" to marginalized populations. The gesture seems to counter Warren's historical stance against Bitcoin and suggests a potential shift in her views.

It's worth noting that the Capitol flag program allows individuals to purchase a flag and request it to be flown over the Capitol with a personalized message. This program is generally non-political and is often used to commemorate personal milestones or to honor individuals.

Warren's Historical Position on Bitcoin

Elizabeth Warren has been vocal about her skepticism towards Bitcoin and the cryptocurrency industry. She has raised concerns about consumer protection, environmental impact, and the potential for cryptocurrencies to undermine the traditional financial system. Warren's legislative and advocacy efforts have often focused on imposing regulatory oversight of the crypto market.

Bitcoin's Role in Addressing Economic Issues

The endorsement of Bitcoin is seen by some as a move that aligns with Warren's stated mission to fight for the middle class. Critics of central banking practices argue that Bitcoin can mitigate wealth inequality by serving as an alternative to central bank currencies.

The Display at Pubkey and the Bitcoin Community's Response

The historic flag and certificate are now on display at Pubkey, a Bitcoin bar in Manhattan. The bar's co-owner reported that the items were given to them by an anonymous individual who claimed they represented a significant moment in Bitcoin's history. The display has sparked discussions within the Bitcoin community and beyond.

Analysis of the Situation

This development raises questions about the authenticity of Warren's purported change of heart. The Capitol flag program's nature allows for symbolic gestures that may not necessarily reflect the personal views of the officials who facilitate them. Consequently, it's unclear whether this event represents a genuine pivot in Warren's stance on Bitcoin or merely a clever use of the flag program by an advocate of Bitcoin.

Conclusion

The flying of a flag over the Capitol in honor of Bitcoin and its creator has ignited a conversation about Senator Elizabeth Warren's position on Bitcoin. While the certificate signed by Warren praises Bitcoin, it remains to be seen if this act signals a real transformation in her long-standing approach to cryptocurrency regulation and oversight. As the situation unfolds, it will be closely watched by both supporters and critics of Bitcoin.

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Bitcoin has recently reached a significant price milestone, trading above $52,000. This level has not been sustained for an extended period previously, marking a notable moment in Bitcoin's history.

Historical Perspective

The last time Bitcoin approached the $52,000 threshold, the landscape was markedly different. Trading entities like Celsius and Gemini Earn were offering yields on Bitcoin. Additionally, prominent figures and institutions such as Larry Fink of Blackrock have shifted their stance on Bitcoin, moving from skepticism to a more accepting view of the digital asset.

Source: CNBC

Network Strength

A critical measure of Bitcoin's underlying technology, the network hash rate, has seen a substantial increase. Currently, it is at 521 million terahashes, which is a significant rise from the 130 million terahashes recorded the last time Bitcoin traded at similar levels.

Source: ycharts.com

Bitcoin Adoption

The integration of Bitcoin into various financial products has led to increased exposure to the asset. Major companies have included Bitcoin on their balance sheets, and it is now indirectly owned by investors through indices like the Nasdaq Composite, Russell 2000, and S&P 600 via companies such as Tesla, Coinbase, and others.

Institutional Involvement

Asset management companies have begun incorporating Bitcoin into their offerings, with firms like Fidelity launching Bitcoin spot ETFs. These funds are not only profitable since their inception but are also being integrated into retirement portfolios, broadening Bitcoin's reach.

Source: MarketWatch

Market Sentiments and Trends

Despite the price increase, public interest in Bitcoin seems subdued, as indicated by Google Trends data. This could suggest that the current market cycle is still in its early stages, with potential for growth as sentiment shifts from neutral to bullish.

Google Trends data for search term "bitcoin"

ETFs and Unit Bias

The advent of Bitcoin ETFs addresses the issue of unit bias by allowing investors to purchase shares at a fraction of the price of a full Bitcoin, making the asset more accessible.

Altcoins

Altcoins have been underperforming relative to Bitcoin, with even robust alternatives like Monero losing ground against the leading cryptocurrency, a trend that is uncommon in bull markets.

Supply Dynamics

With the upcoming Bitcoin halving, the supply of new Bitcoins will decrease, potentially intensifying the demand-supply imbalance. This event is anticipated to fuel further price appreciation, as historical patterns have shown.

Credibility and Market Evolution

Bitcoin's credibility is expected to increase with the growing interest from large-scale investors such as family offices, sovereign wealth funds, and hedge funds. This new wave of investment could signal the beginning of a significant shift in Bitcoin's market positioning.

Conclusion

Bitcoin's recent price surge is backed by strong fundamentals, growing institutional interest, and an expanding adoption rate. With the halving event approaching, the market shows signs of entering a new phase of growth. Despite some skepticism, the overall market dynamics suggest a positive outlook for Bitcoin's future valuation and integration into the broader financial ecosystem.

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The last week has been a surreal in the world of bitcoin. I think it's safe to say that most people were convinced that the approval of the bitcoin ETFs would bring significant demand for bitcoin with them. However, I don't think anyone thought that the ETFs would be as successful as they have been since their launch last month. While I don't believe that anyone who cares about getting proper exposure to bitcoin should be buying the ETFs (there are much more secure ways to buy bitcoin that enable you to actually hold the asset yourself), it is impossible to ignore the success that they've had at accumulating bitcoin.

UPDATE

Bitcoin ETF Net In Flows + 12.8K #BTC 🚀

New All Time High 704.4K BTC Held in ETFs
New 9 ETFs + 14.3K BTC

Highlights
Blackrock +10K BTC 🤯
Fidelity + 3.3K BTC
GBTC -1.5K BTC

Follow our ETF Tracker for Live Updates pic.twitter.com/THHyeSMdsL

— Thomas | heyapollo.com (@thomas_fahrer) February 14, 2024

As it stands today, in aggregate, the ETFs hold ~704,400 bitcoin. Though, it should be noted that GBTC converted their trust product which already had over 610,000 into an ETF and brought that BUM with them to the broader bitcoin ETF market. GBTC has seen a material outflow due to the fact that FTX's bankruptcy estate decided to liquidate all of their shares to pay back creditors waiting in line to get their money back from the Ponzi scheme led by Sam Bankman-Fried, and the fact that GBTC is objectively a shitty product due to their fees, which are egregiously higher than their competitors.

Over the last week, it seems that the market has weathered the outflows from GBTC and momentum for inflows into the other ETFs, dominated by Blackrock and Fidelity, has reached a breakout pace. Over the last four days inflows have averaged well above 10,000 bitcoin per day. Today, there were more than 14,300 bitcoin that were purchased on the market by ETF issuers. To put this into context, as it stands today, 900 new bitcoin are distributed to the market per day via the block subsidy. That subsidy is set to fall to 450 bitcoin per day in 9,479 blocks. If this pace keeps up (let's assume 10,000 bitcoin per day) ETF issues will be eating up 11.11x the daily issuance leading up to the halving. And, if the demand from ETFs persists, that will double to 22.22x the daily issuance. This stat is even more jarring when you consider the fact that more than 70% of bitcoin is held in addresses that have been dormant for a year or longer.

[

Bitcoin Surges Past $51,775 As ETF Net Inflows Surpass 10,000 Bitcoin Per Day

Bitcoin is back over $51,775 for the first time since early December 2021 and has surpassed a $1 Trillion market.

TFTC – Truth for the CommonerMarty Bent

](https://tftc.io/bitcoin-etf-net-inflows-10-000/)

Now, these type of flows in bitcoin terms will simply not be able to persist. At least not for longer than ~2,000 days. If they did, the ETFs would hold all of the bitcoin on the market. This is simply not going to happen. The demand in dollar terms may persist, but the ETFs won't be pulling 10,000+ bitcoin off the market for too long. The supply and demand dynamics of a finitely scarce asset will come into play and drive up the price to a point where it is impossible to scoop up that much bitcoin. With bitcoin over $52,000 at the time of writing, it is pretty clear that these dynamics are already at play. The question that many are asking is, "At what point does the supply of bitcoin available on OTC desk become so scarce that it affects the price of bitcoin in unprecedented ways?" Creating intraday gap-ups that have not been seen in bitcoin's history?

If this momentum keeps up, I would not be surprised if that day comes sooner than most people think. And if it does come sooner than people think, particularly before the next block subsidy halving coming in April, it could create a very unique market environment for the bitcoin mining industry.

Historically, bitcoin block subsidy halvings have been cleansing event for the mining industry. The subsidy gets cut in half, therefore cutting miners' revenue (sats/terahas/day) in half literally immediately from one block to the next (block 839,999 to block 840,000 in this case), and forcing miners with older machines and electricity costs that are too high post-halving out of the market. The price of bitcoin at the time of previous halving events has been anywhere from 40-60% below the all time highs set in the previous bull market. The price is either dumping or sputtering into halving events. What makes this year's halving particularly interesting is that the price of bitcoin is ripping. As it stand today, the price of bitcoin is only 24.3% below the current all time high of $69,010. And we have a little over two months until the next halving.

This leads me to wonder whether or not this cycle will be different for the mining industry. If price keeps heading up-and-to-the-right, it is totally plausible that the halving event won't be as catastrophic for lower tier miners as it has been in past cycles. One only has to look at a hashprice chart to see that this cycle is already shaping up to be a bit different.

via Braiins

As you can see from the chart above, the hashprice dynamics heading into the halving are drastically different than they were in 2020. In 2020, hashprice was falling along with price into the halving. The two red boxes highlight the overnight dump to $3,500 which cut hashprice by ~40% and the halving, which cut hashprice by 50% from block 629,999 to block 630,000. If you pan over to the far right of the chart, you'll notice that we're in a completely new environment this time around. Hashprice has been making a concerted march off the floor set last Fall and is accelerating upward as the price of bitcoin rises. Yes, hashprice may be lower than it was in 2020, but it is important to understand that this low point is where the market has settled. Miners have adapted their businesses to weather the bear market, locking in the power costs that are as low as possible, and ASICs that enable them to run profitably. The bottom of the hashprice bear market last Fall was $0.059/TH/day and we are currently standing at $0.092/TH/day. If the price keeps running it is not unfathomable that hashprice will be more than double the floor that was set last Fall.

If this is the case, there is a strong case to be made that this halving won't be the market clearing mechanism that it has been in the past. Miners that would have been forced to shut down after past halvings may be able to keep hashing this time around. Now, with that being said, it is important to keep in mind that hashrate and difficulty are currently ripping alongside the price. As it stands right now, we will have another +7.6% difficulty adjustment in ~11 hours.

Bitmain released their S21 series to the market in January, which has introduced a much more efficient fleet to the market. More countries have entered the mining fray. And energy companies have begun to wise up to the opportunity that bitcoin mining provides them to bolster their revenue streams. All of this means that mining is becoming even more competitive by that day, which would naturally force weaker miners out of the market all else held equal.

The question that every miner is asking themself right now is, "Can the price pump protect us from a halving death blow?" We shall see. And a price pump bailout is not something that any miner who fancies themself to be a competent operator should be depending on. However, from a point of pure observation, it is impossible not to wonder if this may be the case. And if it is, what type of psychological effect does that have on the mining industry, the broader public's perception of bitcoin and the overall health of the network? I guess we'll find out.

This is something to pay attention to in the months ahead.

Final thought...

Get your ass to the Bitcoin Takeover in Austin on March 15th if you want to hear from some of the most impressive people bringing about the Bitcoin Standard.

Sign Up Today

Use the code "TFTC" for 15% off

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In this guide, we'll explore how to pair your Coldcard wallet with a mobile device using virtual disk mode and integrate it with Nunchuck Wallet. This setup allows you to manage your Bitcoin with added security and mobility.

Prerequisites

Before beginning, ensure you have:

• A Coldcard wallet set up with a seed phrase and wallet allocated.
• Familiarity with basic Bitcoin transactions and wallet use.
• A mobile device (Android or iPhone).
• A compatible cable to connect your Coldcard to your mobile device (e.g., USB-C to USB-C for newer devices, USB-C to Lightning for older iPhones).

Section 1: Exporting Wallet from Coldcard

1. Power On and Log In: Connect your Coldcard to your mobile device using the appropriate cable. The Coldcard will draw power from your phone. Enter your pin to access the main menu.
2. Enable Virtual Disk Mode: Navigate to Settings > Hardware on/off. Ensure that both the USB Port and Virtual Disk Mode are turned on.
3. Export Wallet File: Go to Advanced Tools > Export Wallet > Generic JSON and choose to save the file to the virtual disk. This file will include your wallet's xPub (extended public key).

Section 2: Setting Up Nunchuck Wallet on Mobile

1. Download and Open Nunchuck: Install the Nunchuck Wallet app on your mobile device and open it.
2. Importing Wallet File:
   • Tap the + icon to add an air-gapped key.
   • Opt to import via file and navigate to the Coldcard drive in your file explorer.
   • Select the recently exported JSON file and import it into Nunchuck.
3. Create a Wallet:
   • On the home screen, tap the + beside Wallet.
   • Choose Create Wallet, and name your wallet (e.g., CC Single for Coldcard Single Sig).
   • Confirm the key associated with the wallet and the number of signatures required (for single sig, this will be one).
4. Finalize Setup: Review the summary of the wallet setup and confirm. The wallet now appears on the main screen.

Section 3: Receiving Funds

1. Receive Address: In Nunchuck Wallet, tap on your wallet and select Receive to display a QR code and address. Share this with the sender or use another wallet to send funds to this address.
2. Confirm Transaction: Once the transaction is sent, it will appear as pending in Nunchuck Wallet. After confirmation on the Bitcoin blockchain, the funds will be available in your wallet.

Section 4: Sending Funds with Coldcard

1. Construct Transaction: In Nunchuck Wallet, tap Send. Enter the amount and recipient's address (either by pasting or scanning a QR code).
2. Customize Transaction: Opt to customize the transaction to adjust the fee or select a manual fee rate.
3. Export Unsigned Transaction: Confirm and create the transaction, then export the unsigned transaction file to the virtual disk on the Coldcard.
4. Sign Transaction on Coldcard: With the Coldcard still plugged into your phone, navigate to Ready to Sign on the Coldcard to sign the transaction. Confirm the details and approve the transaction.
5. Import Signature: Back in Nunchuck Wallet, import the signed transaction file from the virtual disk. Confirm the signature and broadcast the transaction.
6. Completion: The transaction is now sent, and your balance in Nunchuck Wallet will update accordingly.

Final Thoughts

Using Coldcard with virtual disk mode and Nunchuck Wallet on your mobile device provides a secure and convenient way to manage Bitcoin transactions. This method is efficient, user-friendly, and preserves the security benefits of a hardware wallet.

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The central bankers are getting cocky.

“It’s a great business to be in. You can print money and people believe it.”

“We actually fund ourselves.”

Pride cometh before the fall.

Bitcoin is a much more ethical and sensical monetary system.

pic.twitter.com/AeY8xEDKJf

— Marty Bent (@MartyBent) February 13, 2024

The Finance and Expenditure Committee of the New Zealand government held a meeting with the nation's central bank governors yesterday during which the country's central bankers admitted two things; they are openly stealing from their population via overt monetary debasement and they do not understand how successful bitcoin has been to date.

“It’s a great business to be in, central banking. We print money and people believe it.”

For those who are unfamiliar with the gif above, it is from a scene in The Big Short, which chronicled the lead up to the Great Financial Crisis and a few members of the "select few" within the world of finance who were able to correctly identify and grasp the fact that the US housing market was built on a foundation of sand. In this scene, Steve Carell's character is perplexed after a conversation with a couple of mortgage brokers in South Florida who openly admitted that they were accepting mortgage applications from people who shouldn't have been receiving them because it was highly unlikely that they would ever be able to pay them back. To make matters worse, the brokers were bragging about how much money they made from accepting these applications and were quite frank that they actively try to push riskier subprime loans with adjustable rates because they make more money on those loans.

For anyone who has seen this movie, it is impossible to watch the clip from the New Zealand Reserve Bank Governor and not immediately connect it with this particular scene. The parallels are stark. You have an individual bragging about a moral hazard produced by a perverse incentive system that benefits them unduly at the cost of the Common Man, who is completely unaware of the systemic risk inherent in the system. In the lead up to the Great Financial Crisis the Common Man believed that the US housing market was ironclad and that Wall Street was filled with the smartest people in the world. Little did they know that the smartest people in the world, benefiting from easy money, had blown one of the largest asset bubbles in human history. As bubble that inevitably popped and wrecked havoc throughout the global economy.

What we hear coming out of the New Zealand central bank is exactly the same, just another layer down the stack of finance with, astonishingly, a bit more arrogance. Most of the world is completely unaware that the global monetary system is built on a house of cards, better referred to as a Ponzi scheme. The mass of men believe that the money they hold is good money and that the people who control that money, the central banks, are the smartest people in the room. This class of unwitting men is completely unaware that every central bank around the world is engages in moral hazard on a day to day basis because they are operating in a system with completely perverse incentives. And our central banking friend is basically admitting this. He's openly saying it is hilarious that billions of people are falling for the immoral scam that is central banking and then enjoying a good laugh with the committee as they bask in the fact that they are pulling one over on every one.

We should give him credit though, this type of forthright honesty is rare in central banking circles. You're supposed to dress up the scam with McKinsey-speak so that it is masqueraded in opaque language that is hard to decipher for the layman. The Federal Reserve here in the United States knows how to do this well as is evidenced by the way they disclose how they do not have to produce a GAAP cash flow statement:

You see pleb, the central banks have "unique powers and responsibilities" that enable them to skirt the proper accounting principles that everyone else is forced to abide by. It's not supposed to be framed as "a great business to be in". That makes the con too obvious. The con most be hidden behind a facade of nonsensical, yet just-official-sounding-enough jargon to make the masses believe that there is some legitimacy backing the Ponzi scheme. The perceived legitimacy is what is backing the fiat currencies of the world. You're not allowed to let everyone know that it's a pure belief with no legitimacy! That may lead to some uncomfortable questions!

They print money and most people believe it. That is all that is backing the global monetary order at the moment. The belief that there is some legitimacy behind it. Well freaks, I hate to burst your bubble, but there isn't. This has been made abundantly clear after every crisis that was created by a central bank reaction that was initiated to solve the crisis that preceded it. If you haven't read Parker Lewis' Enders Game, I highly recommend you do so because he does a masterful job of highlighting that the Federal Reserve had absolutely no idea what it was doing in the lead up to and aftermath of the 2008 crisis.

[

Enders Game - Unchained

For context, the following research piece was written just before the Fed began to unwind its balance sheet (October 2017) and it hasn’t been revised or altered since. At the time, I had set out to better understand the financial crisis and the impact of quantitative easing (QE) in an effort to then forecast what […]

UnchainedParker Lewis

](https://unchained.com/blog/enders-game/?ref=tftc.io)

What's even funnier about the committee meeting in New Zealand is that same central banker attempted to paint bitcoin as an illegitimate competitor to the fiat monetary system.

“Bitcoin is not a means of exchange, it’s not a store of value, and it’s not a unit of account.” New Zealand Reserve Bank Governor

In reality:

- BTC is up 71,001,457% since 2009
- 965,356,378 txs have been confirmed
- More people are selling sats denominated services every day pic.twitter.com/XBP7f4NJlM

— TFTC (@TFTC21) February 13, 2024

This, ladies and gentlemen, is what we in the psyop business like to call projection. The rotting, corrupt and incompetent central bankers are trying to project their shitty attributed onto the bitcoin network. This is nice to see. They are scared and they should be. Bitcoin is eating their lunch and humanity will be way better off because of it.

Final thought...

Blaring jazz while being the last one in the office is a nice vibe.

Use the code "TFTC" for 15% off

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Unstoppable Money: Bitcoin

Bitcoin, as a decentralized digital currency, has established itself as a form of "unstoppable money." Unlike traditional currencies, it operates without the need for a central authority. Transactions on the Bitcoin network are verified by a decentralized network of nodes, and recorded on a public ledger known as the blockchain.

The Technology Behind Bitcoin

Bitcoin's foundational technology is based on public-private key cryptography. This ensures that only the owner of the private key can authorize transactions, providing security and autonomy to users. The network relies on a proof-of-work consensus mechanism to validate transactions and create new coins, a process known as mining.

Bitcoin's Market Performance

As of the latest data, the market capitalization of Bitcoin stands at over nine hundred billion dollars, with millions of active users worldwide. Its price has experienced significant volatility, with peaks and troughs that have attracted both investors seeking high returns and critics concerned about its stability as a store of value.

Nostr: A Decentralized Communication Protocol

Nostr has emerged as a decentralized communication protocol that champions free speech. It operates independently of any corporation or centralized entity, contrasting with platforms like Twitter, Facebook, and TikTok.

How Nostr Works

Nostr utilizes a decentralized network of relays run by volunteers to distribute posts, pictures, and videos. It also employs public-private key cryptography, similar to Bitcoin, to secure user data and ensure control remains with the individual.

Adoption and Usage of Nostr

Nostr's popularity has grown as a decentralized alternative to social media networks, with a user experience likened to Twitter. Users can publish content, follow others, and engage with a global community without the oversight of a central authority.

Integration of Bitcoin Payments

An intriguing feature of Nostr is the integration of Bitcoin payments through the Lightning Network. This allows for microtransactions to be sent and received within the platform, enhancing the interactivity between users.

The Lightning Network

The Lightning Network is a second-layer protocol that operates on top of the Bitcoin blockchain. It enables faster and more cost-efficient transactions, making it suitable for small, casual transfers.

User Experience with Nostr Clients

Various clients are available for accessing Nostr, catering to different platforms, including Amethyst for Android and Damus for iOS. Users can choose a client that suits their needs, and, should a client become unavailable, they can continue accessing Nostr using their private key on an alternative client.

Setting Up a Nostr Account

Setting up a Nostr account involves downloading a compatible client, creating a new account, and personalizing a profile. The account creation process generates a unique Nostr private key, which can be used across different clients.

Interactivity and Community Engagement

Nostr's community is described as vibrant, with the platform offering features like the ability to follow notable figures, post content, and engage with others. The integration of Lightning payments adds an additional layer of interactivity, allowing users to support content creators through microtransactions.

Financial Transactions on Nostr

Users can fund their Nostr accounts with bitcoin, either by purchasing directly through the platform or transferring from other wallets. Once funded, users can send and receive payments within the community, incentivizing content creation and participation.

Conclusion

The convergence of Bitcoin and Nostr represents a paradigm shift towards more decentralized and censorship-resistant systems for money and communication. Bitcoin's role as unstoppable money aligns with Nostr's mission to foster free speech, creating a synergy that could significantly impact how individuals interact with money and information in the digital age. As both platforms continue to evolve, they offer alternative models that prioritize user control and resist centralized interference.

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“If you understand the why, you can go through any how”.

In The Zero Dollar Manifesto: Part 1, we talked about what upgrading your money means, why you’d want to hold zero dollars, and how to rethink the function of dollars as a payment rail to move bitcoin. To execute this vision, we need the right tools for the job.

While there aren't any perfect products out there yet, there are tools to get the job done. Where there’s a will, there’s a way. In Part 2 of this series, we’ll take a look at the tools that I personally have used for the last two tax years to GetOnZero and fully upgrade my money. These are your best tools today, but software is ever-changing. Things will only get better from here.

Pieces of the stack

Because no tool has full automation as of the writing of this article, my Strong Money tooling stack currently involves a little bit of manual effort–well worth it for me in order to avoid monetary debasement. As you earn income in dollars (hitting your bank account), you can pay off bills for the month (credit card, car payment, rent) and buy bitcoin with the rest. If expenses exceed income in that month (eg. have a large purchase, down payment), simply sell bitcoin to have enough Weak Money to quickly send away.

Note that there’s definitely additional friction with this Stack, today. There are periods where I’m exposed to Weak Money for longer than I’d like, and I’m doing a good amount of manual math. That said, these are all solvable problems, and the tools are already improving at a rapid pace.

ACH “Node”

Having access to an account & routing number is critical to be able to send & receive Weak Money (dollars). Whatever dollars are left after paying bills, you send to your bitcoin exchange to convert to Strong Money (getting you on zero dollars).

Tools:  Fold (non-ref link), Cash App (non-ref link), Ally Bank.: Fold and Cash App both have full access to Account & Routing numbers, right alongside their bitcoin financial services. Ally Bank is more of a traditional ACH node (checking account).

Bitcoin exchange

Unsurprisingly, there must be a way to convert Weak Money into Strong Money and vice versa, and the bitcoin exchange serves that purpose today. Any excess dollars you have after paying bills, you buy bitcoin with. If you ever have bills to pay that exceed income, sell bitcoin to your ACH node.

Since we convert frequently, look for an exchange with zero fees and the lowest spread possible. For a list of services with their fees, see btcpricetool.com

Tools: Fold (non-ref link), Strike (non-ref link), Cash App (Direct deposit) (non-ref link)

Credit card & debit card

While not a requirement by any means, responsible use of credit cards streamline the Strong Money experience, until more tools add automated conversion features. Instead of manually selling bitcoin every time you want to spend, spending on credit allows batch selling once a month.

Either pay the bill as your income comes in, or sell bitcoin from your bitcoin exchange to pay the bill from your ACH node.

If your bitcoin exchange (i.e. Strong Money bank) issues a debit card that automatically pulls from your bitcoin balance, that’s a great solution as well. 

Tools: Traditional credit cards, Fold debit card (non-ref link)

Tax software (handling capital gains)

(This is not financial advice, talk to your accountant. This is from a United States POV.)

In the United States, because bitcoin is treated as a commodity and not currency, any purchasing power gains (measured in dollars) may be subject to capital gains tax.

This should not be a deterrent to upgrading your money, at all. You are only subject to this tax if you come out ahead (measured in dollars). If you were sitting in Weak Money (dollars), you wouldn’t be subject to the tax, but you also wouldn’t be protecting yourself from monetary inflation. Capital gains tax isn’t fun, but it’s not a barrier to upgrading your money.

It’s important to have access to a tool that can automate year-end tax preparation for you. A great bitcoin tax software will take a simple spreadsheet from your exchange (or Strong Money Bank) and pull out your buys, sells, and cost basis, automatically tracking and optimizing your tax burden. 

Remember: if you’re paying capital gains tax, you’re coming out ahead, compared to holding Weak Money! 

Additionally, depending on your accounting method (eg. HIFO, or highest-in-first-out), your software will pick your highest cost-basis coins as the sale, keeping you running at the lowest tax burden possible.

An hour a year. That’s it.

Tool: Cointracker, ideally using the HIFO option

Case study: How to GetOnZero with Fold

Fold is the platform that I've personally been using as my Strong Money bank. In partnership with them, here's a case study to demonstrate how to use Fold to get on zero dollars today.

Step 1: Sign up for Fold

Just like signing up for a new bank account, you’ll need to make sure you have a Fold account. (If you want, you can use my referral link here and we both get some sats.)

Step 1

Step 2: Move over your dollars

Use your account and routing number to receive the dollars from your existing checking account. Move them all over to your Fold ACH node.

Step 2

Step 3: Convert Weak to Strong Money

Time for some fun. Hit that smash buy! With Fold, you also get rewards for converting from Weak Money to Strong Money. Fold Spin+ members get zero fees, which I recommend.

Congratulations - you are now on zero dollars!

Step 4: Convert back (to pay bills)

Any time you need to pay a bill in dollars, hit “Push to Card” to have dollars instantly available to spend via ACH or the debit card.

In this case, I needed a few hundred dollars for a bill payment, so I "sold" $622.73 and instantly paid the bill. I didn't have to hold dollars for more than a millisecond—I used the dollar as a payment rail to move my bitcoin. The rest stays in my bitcoin balance, contributing to my savings, and protecting my wealth from inflation.

Tips for the best experience

• Set up direct deposit to receive your paycheck into your Fold account.
• Keep your Fold debit card on you for cash withdrawals.
• Use PayPal to pay bills with the Fold debit card, to earn extra sats back.
• Connect Venmo or other P2P apps to your Fold Account & Routing number to “spend bitcoin over Venmo” (Push to Card on Fold, then spend over Venmo)
• Fold pays you to get on zero dollars: bitcoin buys earn sats back rewards!

Fold is actively looking for feedback here, so definitely reach out to them once you’ve given it a try. Thanks to Fold for their partnership in this portion of the series!

The future

For years after Satoshi discovered bitcoin in 2009, the tooling was not user friendly. Custody was confusing, foot-guns were common, and high quality education wasn’t as pervasive. Over time, the landscape evolved to where we are today. 

Just like those who saw the power of bitcoin early on, we may need to jump through some hoops while the user experience of tools improves. I hope that Parts 1 and 2 of this series have shown that while holding zero dollars is not perfectly frictionless yet, it is indeed achievable. 

In Part 3 of the Zero Dollar Manifesto, we’ll explore what the ideal, upgraded, frictionless, interoperable, Strong Money bank looks like. 

Engage & learn more

Have specific questions? Find me on Twitter @SahilC0 for Part 3, and join the GetOnZero Telegram group here.

(Originally published on Sahil's Substack)

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Think the deficit, debt, and interest on that debt don't affect you? 44% of your income taxes this fiscal year have been consumed by just interest on the debt.
No roads. No schools. No hospitals. No military.
Just. Interest.
And it's going up... pic.twitter.com/BbhIvzAipt

— E.J. Antoni, Ph.D. (@RealEJAntoni) February 12, 2024

via FRED

Do you feel as if your tax dollar are being allocated efficiently? I think it is impossible for anyone with a modicum of common sense, no matter what side of the aisle they fall on, to look at the data and say that their tax dollars are being properly and efficiently spent. When 44% of your hard earned money is being shoveled toward servicing a runaway national debt problem and the other 56% is being wasted on haphazard spending across the military-industrial complex, the education-industrial complex, the pharmaceutical-industrial complex and the agricultural-industrial complex, among a slew of other wasteful and downright harmful endeavors like renewable energy credits, it is time to call a spade a spade. The government is wasting hundreds of billions of dollars that would have been allocated more efficiently and resulted in a significant increase in productivity and quality of life if they weren't forcibly taken from the bank accounts of the American people.

To make matters worse, the national debt continues to rise at an alarming rate, which means that this percentage is set to rise. Especially when you consider the fact that the United States economy is currently weathering a tsunami of layoffs despite the attempts by the Biden administration to paint the economy as stronger than ever.

US companies are discussing cost cutting, mass layoffs and "operational efficiency" on earnings calls at a record rate: Morgan Stanley

That explains the record low unemployment rate

— zerohedge (@zerohedge) February 13, 2024

[

Consumer Credit Hits The Wall

Earlier today the Federal Reserve Bank of New York released a report on the state of consumer credit. Dissecting data across student, auto, mortgage credit card, and other similar types of loans that US consumers have taken out and painting a bleak picture of the state of the average American.

TFTC – Truth for the CommonerMarty Bent

](https://tftc.io/consumer-credit-delinquency-rates/)

At what point do tax paying American citizens begin to push back against this overt theft and money laundering into unproductive endeavors by the government? You spend your life developing knowledge, skills, a network, maybe a business, and work your hardest to make a good life for yourself only to see one third of your income siphoned off into a black hole of corruption and incompetence that is actively making you, and society at large, worse off. The Founding Fathers took on the British Empire because of a 2% tax on their tea.

It seems that the American taxpayer has more in common with a masochist who likes getting abused by a dominatrix than he does with the people who founded this country. "Thank you sir, may I have another!" He screams as a third of his earnings are taken and thrown at an endless pit of debt that will never be paid back and a gender studies curriculum in Pakistan. Despicable.

The government is robbing Peter to pay Paul, who himself works for the government and has already taken the money that was previously stolen from Peter and given Solyndra a $535 million loan guarantee only to watch the company quickly fall into bankruptcy.

Do you honestly believe the government is getting a return on the large amounts of capital you fork over to them every time you get paid? Do you think that if taxpayers were instead allowed to keep that money and spend it and invest it as they see fit the country would be in a better place? It's time more people start asking these very simple questions with very straightforward answers.

Final thought...

South Florida is nice this time of year.

Use the code "TFTC" for 15% off

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The landscape of corporate asset management is evolving rapidly with the advent of Bitcoin. As businesses look to diversify their treasuries, Bitcoin has emerged as a compelling asset class. This article delves into the realm of Bitcoin custody for businesses, exploring the mechanisms, risks, and best practices associated with securing corporate Bitcoin holdings.

Bitcoin in Corporate Treasuries

Recent data indicates that approximately 2 million Bitcoins, worth nearly $100 billion, are held in various corporate treasuries. This represents about 10% of all Bitcoins in circulation. These holdings are not limited to private companies; they also include public firms, government entities, and investment funds. While 43 publicly traded and 18 privately held companies have disclosed their Bitcoin investments, many more businesses maintain undisclosed exposures to the Bitcoin.

Methods of Gaining Bitcoin Exposure

Businesses can gain Bitcoin exposure through several avenues, each with its own set of considerations:

• ETFs and Funds: Investment products like ETFs offer a way to gain exposure to Bitcoin without directly holding the asset. The fees for these services can range from an introductory 0.2% to 2.25%, though they typically increase over time. However, these options carry counterparty risks, as the investor does not hold the actual keys to the Bitcoin.
• Exchanges and Custodians: Platforms like Coinbase offer another route to Bitcoin investment, with fees ranging from 0.5% to 2.25%. Although these IOUs for Bitcoin are redeemable, they still present counterparty risks.
• Stocks and Miners: Investing in companies associated with the Bitcoin ecosystem, such as mining operations, provides indirect exposure. This method involves varying broker fees and carries high counterparty risk.
• Self-Custody: Direct ownership of Bitcoin through self-custody eliminates management fees and counterparty risk. It requires the investor to manage their private keys, ensuring 24/7 access to the Bitcoin without relying on third parties.

Counterparty Risks

Counterparty risk refers to the potential default of one party in a financial contract, which is a significant consideration for businesses holding Bitcoin through third parties. A majority of Bitcoin ETFs use custodians like Coinbase or Gemini, with Fidelity being an exception practicing self-custody. Moreover, the industry has witnessed numerous losses and bankruptcies, such as Silvergate, Prime Trust, FTX, and Celsius, highlighting the risks associated with third-party custodians.

The Case for Holding Your Own Keys

Self-custody ensures that businesses have full control over their Bitcoin assets, without counterparty risk or management fees. Properly set up, self-custody solutions can offer secure, unilateral access to Bitcoin holdings, with no single points of failure.

Unchained's Collaborative Custody Solution

Unchained Capital offers a collaborative custody model for Bitcoin, utilizing a multi-signature vault that requires at least two out of three keys to authorize transactions. This approach combines the security of self-custody with the convenience of expert support. Over six years, Unchained has secured billions of dollars in Bitcoin without any loss due to exchange or custodian hacks.

Enterprise Solutions

Unchained provides various models to suit different organizational needs:

• Collaborative Custody: Businesses hold two keys, while Unchained holds the third.
• Partner Custody: The business holds one key, a key agent holds another, and Unchained holds the third.
• Delegated Custody: The entire custody solution is managed by Unchained, ideal for enterprises that prefer not to handle keys directly.

All models feature robust security and are SoC 1 and 2 certified, ensuring compliance with rigorous data security standards.

Conclusion

As the corporate world increasingly turns its gaze towards Bitcoin as a viable asset for treasury management, understanding the nuances of custody becomes paramount. Whether through ETFs, exchanges, or self-custody, each method presents distinct advantages and risks. Collaborative custody solutions like those offered by Unchained Capital provide a balanced approach, combining the benefits of direct ownership with professional oversight and support, enabling businesses to navigate the complex landscape of Bitcoin investment securely and confidently.

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While governments often warn their citizens about the risks associated with Bitcoin, there's a notable contrast between their public statements and their actions. An analysis of data from various sources, including bitcointreasuries.net, reveals that several governments have significant holdings of Bitcoin. Countries such as the United States, United Kingdom, Germany, Ukraine, and El Salvador have all been reported to own Bitcoin, albeit for various reasons.

For instance, the United States government has seized Bitcoin in various criminal cases and has auctioned some of it off. El Salvador, on the other hand, has gone as far as adopting Bitcoin as legal tender. The reasons behind these holdings vary, but they underscore a recognition of Bitcoin's value and potential utility.

Cryptocurrency Scammers' Bitcoin Investments

While some actors within the cryptocurrency space denounce Bitcoin, alleging that it is outdated or environmentally harmful, their actions often contradict their criticisms. A notable case is that of the private company Block.one, which issued the EOS token. Reports indicate that after raising funds through the offering, Block.one invested a significant portion of the proceeds into Bitcoin. This strategic move has resulted in Block.one owning a substantial amount of Bitcoin, which is indicative of the underlying trust in Bitcoin's value despite the public criticism.

The performance of EOS against Bitcoin has been on a decline, showcasing Bitcoin's resilience and strength as a cryptocurrency asset. Investors who participated in the EOS token sale have arguably not seen returns comparable to those of Bitcoin investments.

Cryptocurrency Trading and Bitcoin as the Aspirational Asset

Within the cryptocurrency trading community, Bitcoin is often seen as the ultimate asset to hold. Traders frequently engage in trading altcoins, not to accumulate more of the same or different altcoins, but rather to increase their Bitcoin holdings. This trend suggests that Bitcoin is seen as the "aspirational good" in the crypto economy, a status not afforded to other cryptocurrencies.

Institutional Adoption of Bitcoin

The journey of Bitcoin from a fringe asset to one that is increasingly embraced by institutional investors is noteworthy. An example is BlackRock, whose CEO, Larry Fink, once referred to Bitcoin as an "index of money laundering." Despite such initial skepticism, BlackRock is now reportedly on track to create one of the world's largest spot Bitcoin ETFs. This change in stance from BlackRock and other institutional investors represents a significant shift in the perception of Bitcoin's legitimacy and potential as an investment vehicle.

Criminal Use of Bitcoin and Privacy Coins

Bitcoin's use in illegal activities is often cited as a point of concern. However, it is reported that even within these illicit markets, Bitcoin is preferred over privacy-focused cryptocurrencies like Monero. While Monero might be used on the dark web due to its enhanced privacy features, it is often converted to Bitcoin for larger transactions or to preserve value. This preference even among criminal actors further underlines Bitcoin's position as a sought-after asset.

Bitcoin’s Role as Non-Sovereign Cash

Bitcoin's decentralized nature means it operates outside the control of any single community or legal jurisdiction. Its properties of being censorship-resistant and having a fixed supply cap make it attractive to a diverse audience seeking an asset that cannot be easily devalued.

Conclusion

Despite the mixed messages from governments, critics, and various actors in the cryptocurrency space, the data and actions suggest a clear pattern: Bitcoin is considered a valuable asset across a broad spectrum of stakeholders. From government holdings to the investment strategies of companies and individuals, Bitcoin's role as a digital form of gold continues to solidify. This trend suggests that despite skepticism and volatility, confidence in Bitcoin's long-term value proposition remains strong.

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Key Takeaways:

The podcast episode featuring host Peter McCormack and guest Colin Harper delved into a variety of subjects ranging from personal histories to the intricacies of local governance and the impact of bitcoin on communities and industries. Peter McCormack shared anecdotes about his background, revealing that he was nearly born in Cyprus due to his father's job as an aircraft engineer, but ultimately grew up in Bedford, UK, which holds great personal significance for him. He discussed his past aspirations to work in the music industry and his experiences at university before dropping out.

The conversation shifted to McCormack's current battle with the local council over the football club he owns. He expressed frustration with the council's decision to cancel the renewal of his club's lease while granting a 99-year lease to a rival club, Bedford Town. Despite having legal grounds to fight this, McCormack emphasized his desire to work with the council for the benefit of the community, highlighting the successes of the club's women's and men’s teams and their contributions to the local economy.

Colin and Peter also explored the challenges faced by local councils, including budget restraints and social commitments. They critiqued the decision-making process within councils and the impact on the private sector, drawing parallels to wider governance issues. They touched on the financial struggles of UK councils and the significance of the 21 million bitcoin supply cap as a solution to many systemic problems.

Additionally, they discussed the global financial system's dependency on the US dollar and historical patterns of financial engineering leading to crises. They concluded with reflections on the bitcoin community's fragmentation, its potential for positive influence on capital allocation, and the gradual understanding of bitcoin's benefits through personal experiences.

Best Quotes:

1. "I've lived in Bedford my whole life [...] it's a very important place to me and I'm trying to do everything I can to lift it up." - Peter McCormack
2. "I know somebody's listening, like, good onto bitcoin, but this is related all to bitcoin." - Peter McCormack on the relevance of local governance issues to broader themes in bitcoin.
3. "We're sucking away allocation of capital from idiots. That's what we're doing." - Peter McCormack on the impact of bitcoin on capital deployment.
4. "There are things that take time to grok through experience. So you hear theory of bitcoin and why it's important [...] but over the last twelve months, I've got so much clarity over bitcoin and so much clarity over governance, bitcoin itself." - Peter McCormack reflecting on his bitcoin journey.

Conclusion:

The podcast episode provided a nuanced perspective on the intersection of personal experiences, local politics, and the broader implications of bitcoin for governance and economic systems. Peter McCormack's candid sharing of his struggles with the local council sheds light on the realities of navigating bureaucracy and advocating for community interests. The episode underscored the importance of understanding the intricate dynamics of governance and the transformative potential of bitcoin in addressing systemic issues. It also highlighted the value of embracing diverse viewpoints within the bitcoin community and recognizing the gradual learning process involved in truly grasping the significance of bitcoin. As the conversation concluded, it left listeners with a sense of the ongoing evolution of both the individual's and the community's relationship with bitcoin and its overarching message of financial sovereignty and prudent capital allocation.

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Introduction

Bitcoin has come a long way since its inception, marking its journey from an experimental digital asset to a recognized investment vehicle and payment method. On this historic day, we reflect on the 15-year evolution of Bitcoin, from Hal Finney running a Bitcoin node to the approval of eleven Bitcoin ETFs.

Early Adoption and Technological Progress

Hal Finney's early adoption set the stage for Bitcoin's growth. Over the years, the quality of services surrounding Bitcoin has improved significantly. In its early days, custody solutions were rudimentary, but now, businesses have access to sophisticated services that make Bitcoin storage more secure and user-friendly.

Bitcoin ETFs and Mainstream Acceptance

The approval of Bitcoin ETFs signifies Bitcoin's entry into the mainstream financial world. ETFs provide a regulated and accessible way for investors to gain exposure to Bitcoin without the complexities of direct ownership and management of the asset.

Integration into Businesses

Integrating Bitcoin into business operations is now more viable than ever. Companies are adopting Bitcoin for various reasons, ranging from investment and savings to transactional purposes. The panelists, representing different facets of Bitcoin integration—payment, storage, and accounting—discuss the benefits and considerations for businesses adopting Bitcoin.

Why Now?

The current financial landscape, characterized by inflation and economic uncertainty, presents a compelling case for businesses to consider Bitcoin as both a store of value and a medium of exchange. The prevalence of Bitcoin ownership among consumers and its potential as an inflation hedge are driving factors for integration.

Challenges and Solutions

Businesses looking to integrate Bitcoin may face technical and operational challenges, such as managing price volatility and ensuring secure storage. However, advancements like the Lightning Network provide solutions for faster and more efficient transactions, mitigating some of these concerns.

Legal and Accounting Implications

Businesses must be diligent in record-keeping and accounting when dealing with Bitcoin transactions. Proper tracking and understanding the tax implications are crucial to staying compliant and making informed decisions regarding Bitcoin's role in business finances.

Customer Experience and Community

Accepting Bitcoin can enhance customer experience by providing a more secure and private payment option. Additionally, the sense of community among Bitcoin users can create a loyal customer base and differentiate a business within its industry.

Strategic Considerations

Businesses must consider their risk tolerance and long-term strategy when allocating a portion of their balance sheet to Bitcoin. It is advised to start with a manageable amount and gradually develop a deeper understanding of Bitcoin's market behavior and asset characteristics.

Conclusion

The incorporation of Bitcoin into business operations is not without its challenges, but with proper planning, risk management, and an understanding of the technological infrastructure, businesses can leverage Bitcoin to their advantage. This evolution from the early days of individual node operation to the widespread adoption of Bitcoin ETFs marks a significant milestone in Bitcoin's journey into the business world.

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NOW - Biden refers to the Egyptian president El-Sisi as the "president of Mexico."pic.twitter.com/VxUDH8ZrVk

— Disclose.tv (@disclosetv) February 9, 2024

The last 12-hours will be looked back upon as a pivotal moment in world history. That may seem like an outlandish statement, but when you consider the juxtaposition of Tucker Carlson's interview with Vladimir Putin with President Biden's train wreck of a press conference in which he proved without a shadow of a doubt to be mentally incapacitated it is glaringly obvious that the US federal government is in an extremely weak position. A vulnerable position that signals to the rest of the world that they need to seriously consider whether or not the United States federal government is equipped to lead in any capacity.

Last night's incoherent rambling will be viewed in retrospect as the straw that broke the camel's back. The incoherent rambling has been a problem since before Biden took office. However, the culmination of the economic stress that Americans are currently under, the border crisis, and the unavoidable comparison to Putin - who Biden has been engaged in a proxy war with for two years - are too much to overcome. The lack of awareness from the Biden administration to allow Sleepy Joe to give an emergency press conference just as millions of people were sharing and watching clips on social media of Putin and commenting on how articulate he is will be seen as the biggest political miscalculation of the Biden regime. It is so egregious that one has to wonder whether or not it was intentional. The Deep State pulling the strings sees the writing on the wall and decided to put Joe out of his misery with one last humiliation ritual so they can get a more coherent puppet in front of the American people before the election in November.

The only thing you can do is laugh. The clown show better known as American politics has become the laughingstock of the world and you should laugh along with everyone else. However, when you are done laughing it would be wise to take some time to think about what this particular inflection point means and how to benefit from it despite the fact that it may mean the end of America's political dominance on the world stage.

To be clear, I believe there is a big enough contingent of American citizens that still have that dog in them. There are plenty of competent, clear minded Americans out there who can help steer the ship back toward calmer waters without having to depend on the federal government. They simply need to take control of their destiny and start making decisions that remove the federal government's influence from their lives. This may seem like an impossible task, but there is a very low hanging fruit that individuals can pick off the branch to create some distance between themselves and a dying government; bitcoin.

via River

The price of bitcoin is up more than 5% over the last twenty four hours. It is highly unlikely that the price movement over the last twelve hours is being driven by the events of last night. There are multiple disparate factors that drive the price of a very liquid scarce asset that trades 24/7/365. However, it is impossible to ignore the poetic timing of this particular rise in price. It's almost as if God is sending the world a message, "Now that it is clear to you that the politicians have lost control, maybe you should pay attention to bitcoin."

In a world in which bitcoin exists, you are not powerless against the whims of a central government that has lost control. Bitcoin empowers individuals with one of the most potent tools they could ever wish to leverage, a monetary system completely separated from the centrally controlled system operated by incompetent and corrupt central bankers and politicians who live and breath off the fumes emanating from pervasive moral hazard. Money is the most powerful tool in the world and for well over a century it has been co-opted and gate kept by a select few who have no interest in making sure your life is as fruitful and fulfilling as it should be.

Bitcoin allows you to take this power back in a sly roundabout way. Instead of having to forcibly take the power of the purse from the government and central banks and return it to the free market you can peacefully opt-in to a far superior system that cannot be corrupted by central planners.

Despite the fact that we have a president who cannot speak and things may seem more dire than they have been in generations, it is morning in America if you are willing to take agency over your life by removing the government's influence over your monetary good.

We're winning.

Final thought...

My boys are beginning to rough house and I feel the urge to buy a ref's whistle.

Use the code "TFTC" for 15% off