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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.

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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.

Use the code "TFTC" for 15% off

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Every once in awhile the veil is pierced and the world gets a glimpse into the inner workings of the power structure. Earlier today we were blessed with a slight piercing of the veil when Tucker Carlson told Glenn Beck the saga of his attempts to get former UK Prime Minister Boris Johnson to sit down for an interview to discuss Ukraine and Tucker's recent trip to Russia. Apparently Boris has been playing hard to get and wants Tucker to pay him $1,000,000 before agreeing to an interview.

This highlights just how sleezy your run-of-the-mill politician is. Instead of being a man and agreeing to a conversation in which he can engage in an honest exploration of competing ideas for the sake of providing the public with better context that could equip them with better knowledge to arrive at a more informed opinion on the topics at hand, it appears that Boris is more interested in a fat pay day. I guess $1,000,000 for one to two hours of work isn't a bad gig if you can get it, but this outrageous ask was more likely a way to create a scapegoat. "I was open to sitting down for a conversation but he wasn't willing to pay my rate!"

One of the interesting details that Tucker disclosed is the fact that Boris is demanding that his fee be paid in "US dollars, gold or bitcoin."

“He will talk to you, but he wants $1,000,000. $1,000,000 in either US dollars, gold, or bitcoin.”

Bitcoin is becoming mainstream pay-to-play money. Bullish.

pic.twitter.com/gesCQz11oT

— Marty Bent (@MartyBent) February 20, 2024

A former Prime Minister doesn't even want to accept pounds, which should tell you all you need to know about that particular cuck buck. But, alas, that's not the point of this article. Boris Johnson, despite being a warmongering statist who would like to shovel billions of more dollars toward the war in Ukraine, is a man of good taste in the arena of pay-to-play currencies. If he's going to risk getting embarrassed in front of a global audience he might as well walk away with some good money. The fact that he has bitcoin as one of his payment options is indicative of two things; he understands the best way to preserve his wealth over the long-term and bitcoin is more respected in the eyes of people who understand the incumbent monetary system than most people realize.

Bitcoin becoming mainstream pay-to-play money is a very bullish indicator. Boris Johnson being part of a political class that has embarked on a coordinated effort over the last decade-and-a-half to label bitcoin as the currency of drug dealers and money launderers is the cherry on top of this particular story. It proves that the political class deals in propaganda seeped in pure projection. They will be the first to attempt to drive the Common Man away from bitcoin and even go as far as to try to prevent him from accessing it if he is so willing while also demanding it in payment for themselves.

That is where the signal lies. Despite what many in the political class would attempt to have you believe, they understand that bitcoin is better money. This is an undeniable fact. There will only ever be 21,000,000 bitcoin. It is divisible. It is portable (over the Internet). It is easy and cheap to verify. It is extremely hard to corrupt. It is impossible to centrally control. And it is running in a race with a bunch of chronically ill competitors. Every fiat currency is mathematically destined to be debased into oblivion. Precious metals are woefully centralized and impractical for facilitating day-to-day trade. As Michael Saylor likes to day, there is no second best. Most of the world doesn't realize this fact yet, but it doesn't negate the fact that it is a fact. Bitcoin is the best money in the world and that is an objective statement.

Boris Johnson understands this and many others like him do as well. They would like you to believe otherwise because their careers are wholly dependent on making everyone believe that the money they can print at will is the best money. Their ability to print that money at the snap of a finger is what seeds all of their power and control.

Their efforts to prevent bitcoin's proliferation will be futile in the end. They can't help but slowly kill themselves via 1,000 cuts and today's piercing of the veil was just one slash of many more to come.

Final thought...

My son's favorite game at the moment is to make me begin reciting the alphabet so that he can insert a random word between "f" and "g". "A-B-C-D-E-F-TOILET-PAPER-G" doesn't really flow well, but the giggle fits will fill your heart.

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A couple of weeks ago we touched on the fact that the data is abundantly clear, the US consumer is currently tapped out and has hit a wall. This is evidenced by the fact that new consumer credit generation came in 90% below expectations in December of 2023 and 30+ day delinquency rates are rising sharply as the high interest rate environment has pushed American consumers, who were going into more debt due to desperation brought on by years of consistently high price inflation, out of the credit markets.

[

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/)

Here's a data point that came across my Twitter feed earlier today that highlights the severity of the situation more acutely; outstanding personal interest payments.

Personal interest payments have now crossed $550 billion

As consumers have amassed a lot of debt

Current levels have NEVER been seen since 1959

This is going to be very troubling for the already weak consumer pic.twitter.com/CTjtfkXzEZ

— Game of Trades (@GameofTrades_) February 18, 2024

Collectively American consumers have interest payments of more than half a trillion dollars. This is an astonishing number. Especially considering the fact that it doesn't even take the principal of the debt into consideration. Just look at the chart. That is the definition of "hockey stick growth", and unfortunately for the US economy it is not a chart that one would ever want to see exhibiting hockey stick characteristics. The new nauseating heights of interest payments are ~57% higher than they were four years ago right before COVID hysteria hit in 2019. Once the economic lockdowns hit, people weren't allowed to go out so they paid down their debts, which was accelerated by government stimulus checks.

Well, this was a very short-lived deleveraging event as personal interest payments are up well over 100% since 2021. This is your economy on central planning. This problem has been bubbling up for the better part of two decades post-2008. The reaction to that crisis led to insane amounts of risk that were allowed to permeate through and build up within the system. Prolonged ZIRP created a hyper-levered economy that passed the event horizon and became completely impossible to unwind. When the Fed tried to reverse their ZIRP policies beginning in late 2015 by slowly raising interest rates, they were forced to reverse course in the middle of 2019 with the Fed Funds Rate around 2.4% as liquidity problems began to materialize throughout the banking system. Most significantly in September of 2019 when the over night repo markets spazzed out. Luckily for the Fed, a global pandemic materialized a few months later and they were able to accelerate their rate cuts back to the zero-bound in a matter of two months in March and April and expand the monetary base by more than $6 TRILLION between 2020 and 2022.

These actions, coupled with the lockdowns, led to massive dislocations throughout the economy that created a supply and demand imbalance of goods and with the massive supply of dollars that flooded the market for those scarce goods, prices went up at their fastest rate since the 1970s. The problem with central planning is that it has the potential to create temporary periods of perceived comfort. In the immediate aftermath of the lockdowns people were scared, but many felt as if they were financially secure. Especially if they were working in the digital economy. This perceived comfort led to a slew of large purchases in the form of real estate, cars and stock portfolios, which sent all of these assets to all time highs.

Slowly but surely over the course of 2021 and 2022 inflation began to materialize in earnest. At the same time, it began to become clear to anyone who was paying attention that the exuberance that the economy was floating on nothing but hot air. Eventually, the CPI (which drastically under reports inflation) was coming in consistently above 10% and the Fed was forced to begin raising rates at a rapid pace.

This took all of the hot air out of the economy, companies who were prioritizing growth at all costs instead of running profitable businesses were forced to begin cutting their headcounts in earnest at the beginning of last year, and even though the rate of inflation as defined by the CPI has fallen significantly prices throughout the economy are still sitting on a much higher base. The result of all of this is an absolute clusterfuck of epic proportions as is made evident by the historically high interest expenses that Americans are currently paying on their debt. The central planners successfully rug pulled everyone.

The most insidious part of this is that the damage has been done and there still isn't a way out other than more debasement. A temporary recede in the rate of inflation is just that, temporary. Push is coming to shove. The American consumer is laying on their back all battered and bruised in a chaotic ocean of debt and job prospects that are getting worse by the day. One has to wonder how much more pressure can build before the system collapses in on itself again.

How much longer will it take for the Common Man to realize that the central planners are ruining his life?

Final thought...

I liked the latest True Detective season.

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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.

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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.

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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.

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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.

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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. We'll take a look at some of the most glaring data below, but we'll first state that it seems pretty clear that the average consumer is completely tapped out, struggling to stay afloat, and quickly losing the ability to pay back the debt they've accrued.

[

NY Fed Q4 2023 Consumer Credit Report

NY Fed Q4 2023 Consumer Credit Report.pdf

2 MB

.a{fill:none;stroke:currentColor;stroke-linecap:round;stroke-linejoin:round;stroke-width:1.5px;}download-circle

](https://tftc.io/content/files/2024/02/NY-Fed-Q4-2023-Consumer-Credit-Report.pdf "Download")

The report dropped on the same day that consumer credit numbers for December came in with only $1.56B in new debt while expectations were $16B. Put another way, the amount of consumer credit that was created in December was 90% lower than the smartest people on Wall Street were predicting. While I am no fan of credit myself and I think people should avoid it as much as humanly possible, this is a pretty stunning miss that signals the American consumer, who is notoriously ADDICTED to credit, can't take on anymore of the heroin because they have reached their limit. Another limit increase would send them into no man's land.

One of the most shocking pieces of data to come out of this report, something that made me rub my eyes to make sure I was reading the right axis correctly, is the number of credit cards held by Americans. Just under 600 MILLION. That is 2.29 credit cards per American over the age of 18. Utter insanity. As you can see from the chart below that number has increased by ~20% since 2020 and far surpasses the number of credit cards held by Americans right before the Great Financial Crisis.

To make matters worse, people are starting to fall behind on their payments for these credit cards at an alarming rate.

Here is the transition into delinquency of more than 30 days:

Here is the transition into delinquency of more than 90 days:

Using a squinting eye test it seems that the slope of the increase in 30+ day delinquencies for credit cards is steeper than it was in the lead up to 2008 and the 90+ day delinquency rate seems to be following a similar trajectory. It will take more time for that chart to paint a clearer picture. But I think it is easy to figure out what is happening here when you look at the delinquency rates across the different types of credit.

When it comes to the hierarchy of credit as dictated by Maslow's Hierarchy of Needs, it makes sense that credit card delinquencies are the first to rip higher with auto loans coming in second and mortgages rounding out the top three. People stop paying off their credit cards first and make sure they make their car and mortgage payments as they take priority. People need a way to get to work and drive the family around and they need a house to live in. If forgoing the repayment of credit card debt doesn't prove to be enough, people will stop paying their cars off next and their houses off last.

With interest rates as high as they are and with the amount of consumer debt expansion that happened in 2020-2022, it isn't that surprising that the American consumer is feeling the pain right now. That pain has been exacerbated over the last year with mass layoffs across every sector despite the fact that the Biden administration would lead you to believe that the jobs market and economy are stronger than ever.

"Lowest initial jobless claims in decades" - Even Goldman is mocking the constant political BS spewed by the Biden Dept of Labor propaganda. pic.twitter.com/MKCjQAV4hC

— zerohedge (@zerohedge) January 30, 2024

All is not well in the economy right now and with a banking crisis rumbling on the horizon I find it hard to believe that things could make a rapid turn for the worse in the coming months.

[

Bank Runs Are Back On The Menu

The sector of the economy that seems to be on the top of everyone’s mind is commercial real estate. The combination of economic lockdowns driving people out of their expensive office buildings and into their home offices and a precipitous increase in the cost of capital has created a perfect storm.

TFTC – Truth for the CommonerMarty Bent

](https://tftc.io/bank-runs-are-back-on-the-menu/)

One has to wonder if the average American even cares that they're falling behind on their credit card payments specifically. When you consider that the average American adult holds 2.29 credit cards and the rate of expansion over the last four years, it isn't hard to believe that many have simply thrown their hands up and decided, "If everyone is getting bailed out, I might as well run take advantage of as much credit as is humanly possible and never pay it back. Bail myself out with a trip to bankruptcy court." It's almost as if a nihilistic fervor has taken over the country and most people have decided they might as well get going while the goings good. Ignore the potential consequences and deal with them later. Gary Brode joined us on The Last Trade podcast last week and laid out this exact case.

"If you put yourself in the shoes of the American consumer and they look at everyone else getting bailed out, you can see why people might be willing to run up huge credit card debt and just say we're going to make it somebody else's problem." - @Gary_Brode pic.twitter.com/8v6jcFqVkd

— TFTC (@TFTC21) February 2, 2024

As Gary explains, while many people may be feeling this way and running up their credit because they don't care about the consequences of bankruptcy, someone pays that debt at the end of the day. If enough banks find themselves on the hook for a growing amount of deadbeat credit in the form of credit card, auto and mortgage loans it could lead to a systemic problem that forces the Fed and the Treasury to step in to fill the gap, which means more money printing and price inflation in the future. A vicious cycle currently set on repeat for humanity. Except every subsequent time the song reaches its crescendo it gets louder and more disorienting.

Regardless of whether or not there is a material cohort of American citizens who have adopted a nihilistic view on their relationship with credit, the numbers don't lie. It is becoming increasingly impossible for more and more Americans to cover their debts as they get thrown in the tumbler of inflation eating into their ability to sustain an expected quality of life and a piss poor job market that has turned a worrying amount of people into a triple "employed" gig workers.

It doesn't have to be this way. All of these problems stem from a monetary system that is rotten at its core. A monetary system that encourages all of this unnecessary risk. Central planners did this to you and the only way to get out of this problem is to remove the central planners from the equation. This is why we bitcoin, freaks.

Final thought...

I need to take more notes.

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US Regional Bank Stocks 1 Month Into 2024:

1. NY Community Bank, $NYCB: -60%

2. Valley National Bank, $VLY: -25%

3. Metropolitan Bank, $MCB: -15%

4. HarborOne, $HONE: -14%

5. Comerica Bank, $CMA: -13%

6. Zions Bank, $ZION: -12%

7. Western Alliance, $WAL: -11%

8. Citizens…

— The Kobeissi Letter (@KobeissiLetter) February 6, 2024

Don't look now, but it seems that the regional banking crisis is beginning to reemerge after almost a year of hibernation. Last February brought with it the failure of Silicon Valley Bank, First Regional and Signature Bank. At the time, the crisis was quickly spreading and the Fed was forced to step in with an emergency facility known as the Bank Term Funding Program (BTFP), which allowed banks to turn in underwater treasuries in return for cash equivalent to the par value of the treasuries at a very low interest rate. The BTFP is structured as a 1-year loan and Jerome Powell and company announced that they will not be extending the BTFP due to the fact that banks were taking the cash and dumping it into higher yielding facilities at the Fed to take advantage of an arbitrage opportunity that the BTFP opened up, which hindered the Fed's balance sheet.

This is your life on central planning. Even when the lender of last resort steps in to help out, the banks will seize on the opportunity to take advantage of any opportunity that arises to achieve their yield targets. Even if that means biting the hand that fed you. A real life manifestation of the ouroboros destroying itself.

With the BTFP set to come to a halt next month it seems that markets are taking a gander at the markets, noticing that the 10-Year US Treasury yield is hovering a bit higher than it was when the banks started failing last year, the 30-Year is holding steady well above where it was this time last year, noticing that companies are laying off their employees en masse, and beginning to come to the realization that the problem that led to the failure of the banks last year has not been solved at all. If anything, it has been exacerbated and the ultimate consequences of more than a decade of ZIRP followed by a rapid increase in interest rates are quickly approaching our doorstep.

The sector of the economy that seems to be on the top of everyone's mind is commercial real estate. The combination of economic lockdowns driving people out of their expensive office buildings and into their home offices and a precipitous increase in the cost of capital has created a perfect storm. Companies aren't getting funded at the rate they were just three years ago, which mean there are less potential tenants for the owners of commercial real estate properties. The companies who were able to secure funding are rapidly cutting costs by laying people off to stay afloat. And people who see the writing on the wall and are beginning to jump ship are selling their commercial real estate positions for pennies on the dollar.

Another sign the Commercial Real Estate (CRE) crisis is worse than we thought?

The Xerox building in Washington DC just sold for $25 million.

It was last purchased for $145 million just over a decade ago, in 2011.

This reflects an 83% LOSS on the 19-story office building.

The… pic.twitter.com/h5Sl3TyUR6

— The Kobeissi Letter (@KobeissiLetter) February 1, 2024

The banks who have material commercial real estate exposure are in for a rough time and it seems like the dominoes are beginning to fall with New York Community Bank leading the way. I would expect this crisis to begin to unravel rather quickly as we get closer to Spring. Nothing made me more certain of this than Janet Yellen's comments on Capitol Hill that sounded eerily similar to the reassurance Ben Bernanke gave markets in 2007 when he was asked about the systemic nature of the subprime mortgage market.

March, 2007 https://t.co/bsTrdYh424 pic.twitter.com/r8iBv94j0B

— Marty Bent (@MartyBent) February 6, 2024

Head for the hills, freaks! The counter-signal has been initiated.

In all seriousness, if a banking crisis is about to materialize it is better to begin preparing now as opposed when it is abundantly clear that you are in the midst of a banking crisis. If you are an individual with a good amount of savings that is wholly exposed to the banking system, it is probably a good idea to buy some bitcoin and get it in a wallet that you have control over. Our friends at Unchained can help you secure your bitcoin while eliminating single points of failure in your custody set up. If you are a business in the same boat, I would say that it is an imperative that you lock up three to six months worth of runway in bitcoin so that you can make payroll if shit hits the fan. Unchained can help you out too.

Who knows what's going to happen at the end of the day, but it's better to be prepared and wrong about a crisis than it is to be wrong about this being a nothingburger and unprepared. I'm sure if the crisis does reemerge in earnest the Fed and the Treasury will step in with extreme measures. However, if we have learned anything over the last two decades it's that these extreme measures have extreme unintended consequences and the further they kick the can down the road the more extreme everything gets. The question is how much more road is left before the can crashes into the wall?

Final thought...

I will wake up at 5:30 tomorrow.

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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. It seems that the Biden Administration is identifying the electricity usage of the bitcoin mining industry as an emergency that is threatening grid stability throughout the US, as is evidenced by the name of the survey; "Proposed Emergency Survey - Cryptocurrency Mining Facilities". Here is the press release and the official filing from the EIA.

via the EIA

When I read the press release and the filing my initial thought was, "Interesting. Maybe this will turn out to be a net positive for the industry. The EIA has made some pretty naive assumptions and the surveys should conclude that bitcoin miners have provided clear benefits to the grid systems they operate within. Especially those who participate in demand response programs that ensure reliable electricity is available to residential consumers during times of peak demand." But after some thought that initial inclination felt a bit naive. Data from bitcoin miners participating in demand response programs and others taking care of escape methane emissions by mining off-grid using natural gas that would otherwise be flared or stranded and unmaintained has been public for years. There is no need for a forced survey on the industry out of nowhere.

That's when I decided to take a look at the actual survey. Upon review, it proves to be one of the more Orwellian things I've seen come out of this Administration. And that's saying a lot. If you dig into the information that the EIA is requesting, it looks as if the EIA is setting out to create a hyper-detailed registry of mining operations in the United States. Getting as granular as to request specific information about mining fleets and hashrate data. And as with any Dystopian edict put forth by a government gone mad with perceived power, the survey starts out with an overt threat.

Not only does it start with a threat, but it requires that "ALL commercial cryptocurrency mining facilities in the United States" respond. This is utterly insane. Before we opine on the insanity, let's dive into the information the government is expecting the mining industry to fork over.

Miners will be expected to provide information about their companies, where their domiciled, and the addresses of where their operations are located. As well as a point of contact for the EIA.

The companies will also be required to identify whether they are running operations that involve Proof of Stake or Proof of Work consensus mechanisms.

They will then need to tell daddy government how many mining facilities they operate.

After that, they will be expected to disclose the location of their individual operations, including GEOGRAPHIC COORDINATES, and the amount of electricity that was consumed at the facility all together, regardless of whether or not the miner has any control of the electricity that it is not using.

From there they will have to disclose the percentage of the facility's electricity consumption that was used specifically for mining and doxx their electric service provider.

Next up, they will have to somehow come up with the average percentage of all the electricity dedicated to bitcoin mining at different energy suppliers and, again, doxx them.

And last, but certainly not least, miners will be expected to give detailed information about their mining fleets. The EIA wants to know the number of ASICs miners are running at individual facilities, the models of the miners (which will be determined by cross referencing the age of the miner with different model releases), the amount of energy needed to power those mining machines, and the maximum amount of hashrate they produced during the reporting period.

This is one of the most egregious encroachments on privacy and free markets that I have ever seen. It is so egregious that it is hard not to believe that this survey is anything less than a first step that leads down a path toward an all out attack on the mining industry in the United States. This survey serves as a way for the federal government to tag each individual operation within the country. They are going as far as to demand geographic coordinates from companies.

Funnily enough, the only other country to request information like this from the bitcoin mining industry operating in their borders is Venezuela, and they quickly confiscated operations and began mining for themselves once they knew where all of the miners were located. It would be naive to think that a federal government drunk on debt, losing control of the narrative, desperate for a scapegoat, and cognizant of the threat to its power over the money printer posed by bitcoin's success would not resort to similar tactics.

If you are an operator in the bitcoin mining industry in the US it is imperative that you ignore this survey and tell the EIA, the Department of Energy, and the current administration to fuck off. Bitcoin miners are law abiding electricity purchasers who are interacting in mutually beneficial economic contracts with power providers who are trying to optimize their revenue streams so that they can profit more and invest in providing more reliable services to their end customers. The continued attempts to discriminate against the bitcoin mining industry should be seen as nothing less than harassment and unconstitutional.

With that being said, this should be and has been expected for many years. What was once a hypothetical "what happens when the government begins creating a registry of miners?" is now a reality and the reaction from the industry will dictate the fate of bitcoin mining in America. Companies can either succumb to the run-of-the-mill fear tactics employed by the government or stand in solidarity to fight for our inalienable right to not be discriminated against and engage in economic activity with other consenting, supposedly free, companies.

The industry set a good precedent of solidarity last week when a number of companies cosigned many letters in response to FinCEN's proposed rules around the usage of bitcoin privacy tools.

[

Our Response to FinCEN on Proposed Surveillance Rules for Bitcoin

We submitted a legal response to the U.S. Department of the Treasury and FinCEN’s proposed rules that would seriously harm privacy by effectively prohibiting basic bitcoin best practices such as not reusing addresses and collaborative bitcoin transactions.

TFTC – Truth for the CommonerMarty Bent

](https://tftc.io/fincen-surveillance-rules-bitcoin/)

The government only gave us a week's worth of rest before dropping this survey. Well, freaks, it's time to get back on the horse and let the government know that this act of egregious aggression that singles out a particular electricity consumer will not stand. The bitcoin mining industry is doing nothing wrong and it should not have to respond to a survey that is attempting to paint us as bad actors. As I stated earlier, the data is already out there and it is abundantly clear; bitcoin miners are a massive boon to the energy systems of this country both on and off-grid. Entrepreneurial spirit and a drive to make the world a better place while making some money has begun to fix systemic problems that government policy created in the first place.

If the government is truly worried about the robustness of the energy systems in the United States they should get out of the way. All of the subsidies thrown at "renewable energy" have created perverse economic incentives that favor unreliable energy generation over reliable base load. They have actively hindered the proliferation of nuclear energy for decades with layers of red tape that make it almost impossible to build new nuclear reactors. They have prevented us from drilling for oil and gas on federal lands and shut down the construction of pipelines that would increase the accessibility and decrease prices mid-construction. Just last week they issued a mandate to stop the construction of LNG facilities that have allowed the United States to become a net-exporter of energy over the course of the last decade. LNG saved Europe two winters ago after we blew up the Nord Stream 2 pipeline.

The United States federal government is objectively the biggest threat to energy security in America. It isn't bitcoin miners. Don't show them any respect by responding to this survey. They do not deserve it.

Final thought...

I haven't had adrenaline coursing through my vains like this while writing in a long time. It's a great feeling.

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Here's something that's not being talked about enough in bitcoin circles; the European Union could potentially enshrine "Technical Standards specifying certain requirements of Markets in Crypto Asset Regulation (MiCA)" as laid out by the European Securities and Markets Authority later this year that, if passed, would knee cap bitcoin mining across the EU. Among a slew of other actions that would prohibit individuals from leveraging the full potential of bitcoin's sovereign properties.

[

ESMA75-453128700-438_MiCA_Consultation_Paper_2nd_package

ESMA75-453128700-438_MiCA_Consultation_Paper_2nd_package.pdf

2 MB

.a{fill:none;stroke:currentColor;stroke-linecap:round;stroke-linejoin:round;stroke-width:1.5px;}download-circle

](https://tftc.io/content/files/2024/01/ESMA75-453128700-438_MiCA_Consultation_Paper_2nd_package.pdf "Download")

As should be expected from a collectivist society that has completely shot itself in the foot over the course of the 21st century with objectively suicidal energy policy, the ESMA's main gripe with bitcoin mining is it's eNeRgY cOnSuMpTiOn. Preferring that bitcoin transition to a less energy intensive Proof of Stake consensus mechanism and pointing to Ethereum as a responsible project that successfully made the transition. This is a cute virtue signal, but it is nothing more than that. A couple of freedom fighters in the EU, Lyudmyla Kozlovska and Bota Jardemalie, have submitted a letter to the ESMA in defense of bitcoin and the bitcoin mining industry. Highlighting that bitcoin is a potent tool for activists who find themselves under oppression. You can read the article here:

[

Defend PoW: Submission to ESMA - Open Dialogue Foundation

The Open Dialogue Foundation (ODF) welcomes the opportunity to participate in this consultation of the European Securities and Markets Authority (ESMA) concerning “Technical Standards specifying certain requirements of Markets in Crypto Assets Regulation (MiCA)”. We believe our comments will help to shape the regulation of the use of crypto-assets in line with fundamental rights not only in the EU, as well as the new AML/CFT Regulation, and will be reflected in the relevant report and recommendations of the Parliamentary Assembly of the Council of Europe (PACE), Parliamentary Assembly of the Organization for Security and Co-operation Europe (OSCE PA), as well as the Organisation for Economic Co-operation and Development (OECD) and the Financial Action Task Force (FATF) Recommendations regarding non-profit organisations.

Open Dialogue Foundationv.yanenko

](https://en.odfoundation.eu/a/724499,defend-pow-submission-to-esma/?ref=tftc.io)

In the thread below, Lyudmyla lays out the two critical moves the EU would make if these requirements are written into law.

There are several regulatory approaches developed by the @EU_Commission and based on the @ecb /#ESMA, experts of the @EP_Economics recommendations re ban of PoW.

In general we see the main trends are:

(1) to expand the ECB's remit to economically disincentivise or even…

— Lyudmyla Kozlovska 🇪🇺🇺🇦 (@LyudaKozlovska) January 31, 2024

While the focus of these requirements focuses on the impacts of Proof of Work, the ESMA is trying to "economically disincentivize or even prohibit investment into any bitcoin or bitcoin-adjacent products as a fight with a threat to environment security". This makes it sound like the EU would enact tax policies that would make it uneconomical for entrepreneurs to start bitcoin businesses and/or outright ban people from starting any business that is bitcoin-related due to the fact that it would be anchored to bitcoin's proof of work in some fashion.

Beyond this, their justification for the abolition of Proof of Work is that it threatens Europe's energy security. This is real rich when you consider the fact the the biggest threat to Europe's energy security is the energy policy that it has set over the last twenty years. The death pact better known as "net zero carbon emissions" has created an artificial scarcity of energy infrastructure that has put the EU at risk. Bitcoin miners are not the problem. If anything, they could be a crucial part of the solution if Europe got its act together, reversed course on their horrid energy policy, and committed to building back reliable base load energy sources. Incorporating bitcoin miners into a plan to build back reliable base load would significantly reduce the pay back period on new power plants because the plants would be able to produce revenue as transmission lines were being built out and could ensure that revenue is maximized once transmission lines are finished by having mining operations soak up any excess capacity.

Pragmatic and realistic bitcoiners in the EU like Lyudmyla and Bota who are attempting to properly educate the ESMA and other stakeholders throughout the EU need our support right now. If these requirements are written into law the earliest they will be able to be repealed will be two years from now. As another halving approaches, it would be a great shame for Europeans to be prevented from participating in the rapidly expanding bitcoin economy.

[

Defending Bitcoin PoW in the EU | Lyudmyla Kozlovska & Bota Jardemalie

This episode of the Stephan Livera Podcast features Lyudmyla Kozlovska and Bota Jardemalie, human rights defenders and advocates for Bitcoin, particularly its use as a tool for preserving human rights.

TFTC – Truth for the CommonerStaff

](https://tftc.io/bitcoin-pow-eu-regulations/)

It is important to be clear here. The only thing these requirements will accomplish if they are written into law is the prevention of European citizens from reaping the benefits of the most radically liberating technology humanity has come into contact with in centuries. Bitcoin won't even notice that the EU cut itself off from the network. Other countries who recognize the opportunity that bitcoin represents will take advantage of that opportunity and surpass the EU as it renders itself an anti-progress regime.

Final thought...

Bully mode.

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Last week the team at Bitcoin Park in Nashville, Tennessee hosted the Nashville Energy and Mining Summit. As you may be able to tell by the name of the summit, professionals from across the mining and industries congregated to discuss a wide range of topics. I still have a bunch of the discussions from the end of last week ping ponging in my mind, so I figured I'd write down some of the things I took away from the event and share them with you all here. The summits at Bitcoin Park follow Chatham House rules, so I won't be able to attribute any of the takeaways to particular individuals.

Geographic Distribution of Hashrate

After the Chinese Communist Party decided to ban mining within China in the middle of 2021, a material amount of hashrate migrated to the United States. Current estimates state that anywhere from 35-40% of bitcoin's network hashrate is operating in the United States. With a large chunk of that located in the state of Texas. It was funny that the summit was happening last week because there was a polar vortex that devoured the Southern part of the United States, which spike the demand for energy on grid systems and forced miners accounting for gigawatts worth of power to wind down to ensure the grids remained stable. At one point, ~25% of the total network hashrate came offline, with some saying that Texas miners alone sent 2 gigawatts worth of electricity they would have used back to the grid.

25% of bitcoin hashrate is offline!

Down from 525 EH to 395 EH in just few days. Caused by freezing weather in the US - miners turning off to save the grid.

The grid needs the energy for heating households so miners switch off automatically. Demand response at its best🤌 pic.twitter.com/vVTBN8f545

— Braiins (@BraiinsMining) January 17, 2024

This showed up in the difficulty adjustment over the weekend, which came in at -3.9%.

via mempool.space

While it is exciting to see that miners are playing a crucial role to stabilize grids during periods of peak demand, it is not ideal to have this amount of hashrate concentrated in the United States. This shouldn't be surprising considering the fact that Americans, despite the collectivists who make up our federal government, are extremely entrepreneurial, have access to the most mature capital markets in the world, and the most robust energy infrastructure in the world (again, despite what the collectivists have done to destroy these advantages).

Luckily for those of us who worry about geographic hashrate centralization, the discussions during the summit have made me extremely optimistic that hashrate is about to enter another phase of rapid geographic distribution. It is becoming clear that energy rich countries in the Middle East are becoming well aware of the opportunity bitcoin mining presents for them to take advantage of their cheap electricity and stranded energy sources. At the same time, advancements in ASIC water cooling technology have reached the point where it is becoming viable to run mining operations in extremely hot geographies.

On top of this, bitcoin mining is proving to be a great way to bootstrap energy systems in areas across Africa that do not have the correct economic incentives in place to justify build outs. A consistent buyer of first and last resort solves the zero to one problem.

Expect mining activity to pick up in the Middle East, Africa and South America.

Bitcoin ASIC Wars

With Bitmain's aggressive pricing of their s21 series of miners ($14/Th) out of the gate it is clear that the largest bitcoin miner manufacturer in the world is attempting to use its economies of scale to muscle out their competition. It will be interesting to see if the pricing moves are able to suffocate the smaller ASIC manufacturers. I think MicroBT should be safe, but the others are probably sweating. If the s21 series from Bitmain proves to provide the market with durable and reliable hardware, we could see the bitcoin mining hardware market turn into an entrenched duopoly. Though, it is encouraging to see hardware providers catering to home miners like FutureBit seeing a lot of success in the market.

ASIC Firmware

It is becoming abundantly clear that the stock firmware offered by Bitmain and MicroBT is not meeting the demands of the market. Miners located in different environments and in different economic situations demand different outputs from their machines. The ability to tap into the firmware running on the machines is essential to running a mining operation as efficiently as possible to ensure the long-term health and financial viability of a mining fleet. Miners have had to turn to after-market firmware like Braiins OS+ to reap these benefits.

Unfortunately, to even get after-market firmware like Braiins OS+ to the market it takes a Herculean effort for the firmware producers to jailbreak the machine and make it so their firmware is compatible. I think it is very clear that something needs to happen to create a mining firmware standard of sorts to make it as easy as possible for third party firmware producers to bring better products to market. A return to the open source standards set by a project like CGMiner would be a step in the right direction in my opinion.

Alternative Revenue Streams And Consolidation

As the landscape in mining becomes more cut throat due to the sheer amount of competition that is entering the arena (nation states, utilities companies, power plants), the ability for most miners to depend solely on mining revenues is going to falter. It is imperative for any sizable miner to - if they haven't already - begin thinking about incorporating alternative revenue streams into their business plans. Miners engaged in demand response are already doing a good job of this. The profit margin squeeze is coming as low cost energy producers and nation states who can operate at a loss for longer begin to enter the market at scale. I am more convinced than ever that miners will begin to consolidate with large energy producers and utilities companies to drive their costs down to rates that will ensure they remain competitive. Well actually, it will be a mixture of consolidations, energy companies incorporating their own mining operation, and miners acquiring energy assets.

The Energy Professionals Are Here

The Energy and Mining Summit was particularly exciting for me because it was the first mining event I've been to over the last six years that convinced me that top-notch operators and professionals from the energy sector have fully groked bitcoin mining and see an opportunity to leverage their skills and expertise to throw jet fuel on the mining industry. To date, miners have been fighting an uphill battle against their lack of experience with power markets and infrastructure build outs. Even though the mining industry has matured considerably over the last few years, I believe this has been an outcome predominately driven by pure grit, determination, and a deep understanding of an asymmetric opportunity. Even though miners deeply understand the asymmetric opportunity that bitcoin mining presents in the world of electricity price arbitrage, the last five years or so have been a pure baptism by fire in the energy sector. Filled with miners making mistakes when signing power purchase agreements, not understanding the logistics that go into energy infrastructure build outs, and not knowing the nuances of the power generation side of things that can trip them up at some point.

The industry has certainly learned a ton in a short period of time and the overall level of understanding will continue to increase. However, the reinforcements have arrived on the front lines in the form of power and infrastructure professionals who have come to understand the asymmetric opportunity at play and are now focused on using their decades of experience to teach miners the right way of doing things. Structuring power purchase agreements the right way. Aligning incentives with power producers to ensure long-term partnerships materialize. Cutting down the time it takes to build infrastructure and facilities. All of that knowledge is coming to the bitcoin mining arena and I could not be more bullish.

Regulatory Landscape

Despite all of the vitriol toward bitcoin mining and bitcoin more generally coming out of Washington DC, it doesn't seem that miners are that fazed. Again, they understand a massive opportunity and they aren't going to allow some screeching Karens to make them back away from the action. This is the way. There is too much at stake and the collectivists aren't sending their best. The bitcoin mining industry has more data to combat the baseless FUD than ever before and the vibe shift is well under way. I don't think there is any need to cater to those screeching from their pedestals in DC. In fact, I think the numbers are speaking for themself that the benefits bitcoin mining provides companies, grid systems and energy producers are undeniable. One of the largest power providers in the country attended the summit and made it clear that miners are a net benefit to their operations. We have just reached the point where the benefits have piqued the interest of the power providers where they deem it necessary to lean in and begin working more closely with the mining industry to better understand what we need and where we can be the most beneficial to their operations.

There is no stopping an idea whose time has come.

Final thought...

Modernity is filled with hideous aesthetics.

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Another year has come and gone and another annual Gathering of the Ghouls is underway in Davos, Switzerland. Klaus Schwabb and his team at the World Economic Forum are hosting a meeting of the most corrupt and delusional of minds to brainstorm about how they can con the global public into accepting Totalitarian policies that will erode civil liberties and sovereignty. I've been keeping a running thread of some of the insane ideas being spewed by the World Economic Forum attendees. Here's what these kleptocrats would like to do.

Going to keep a thread of the insane totalitarianism coming out of Davos this week.

We’ll start with John Kerry stating that elected leaders won’t be able to stop insane climate hysteria policies if they want to.

pic.twitter.com/ZeKocD4qqy

— Marty Bent (@MartyBent) January 16, 2024

"It's absolutely critical that we accelerate." John Kerry took the stage to make it clear that the climate hysterics' will ignore presidents who "don't believe in a climate crisis" and who push back against their suicidal agenda. The "market" is making decisions that will ensure this victory. He said this with a straight face. When you pierce through Kerry's posturing and look at reality, it is clear that the market participants who are pushing this agenda (which is backed by an unfathomable amount of money from governments) are getting absolutely demolished. This is evidenced by the fact that ESG funds are winding down en masse as their return profiles are abysmal because LARPing about the climate doesn't produce returns because the "green transition" isn't economically sustainable. Germany has proved this over the last two decades.

[

Humanity at a Crossroads

It’s time to come back to reality.

TFTC – Truth for the CommonerMarty Bent

](https://tftc.io/humanity-at-a-crossroads/)

Ursula von der Leyen took the stage to explain how the EU plans to censor online speech. Apparently the WEF has identified "disinformation and misinformation" as the number one concern in their Global Risk Report. Ursula has been focusing on "tackling this" and with the Digital Services Act in the EU, the European regulators will be able to put legal pressure on social media companies to censor speech they deem as wrong think. That's not all though, the EU plans to tackle the existential risk of AI next.

Lord Ursula explaining how governments are going to unabashedly censor speech to make sure there’s no wrong think that leaks to the public. pic.twitter.com/VqFCyWIEtG

— Marty Bent (@MartyBent) January 16, 2024

It has been brought to my attention that the clip below of John Evans didn't come out of this week's event, but I'm going to share it any way because it is imperative that you are aware what the ghouls are working on. John is pretty boned up about a social credit score disguised as an "individual carbon footprint tracker". Stay tuned, these people are developing a technology that will give you a social credit score based on where you travel, how you travel, what you eat, and what content you consume on the internet.

Some dude named John Evans getting all horned up over social credit scoring systems that are being worked on. Are you ready to be tagged and tracked, maggot? pic.twitter.com/fmJE95PAec

— Marty Bent (@MartyBent) January 16, 2024

Here is the President of the World Economic Forum, Børge Brende, openly asking a leading question about transitioning toward a "New World Order". The world is adapting quickly as we transition into the Digital Age and there is a pressing need ensure that right people are in charge and leading the transition.

Openly talking about the New World Order. pic.twitter.com/yNY9gi1FFr

— Marty Bent (@MartyBent) January 16, 2024

War is Peace. The way to get to a "peaceful, just end to this war [in Ukraine]" is more weapons and bloodshed.

War is peace. pic.twitter.com/sRCLS3rmdC

— Marty Bent (@MartyBent) January 16, 2024

Twitter is a toxic public square. Don't get your information from Twitter. We need to "have a societal reflection" on how information propagates on social media. This is coded language for, "we need to determine the right way for information to propagate and that means not letting information we don't like getting to individuals who are supposed to have free will and the ability to discern for themselves what is good and bad information."

Twitter is too toxic. Don’t get your information here. pic.twitter.com/FO2x0LpdZA

— Marty Bent (@MartyBent) January 16, 2024

The ghouls are openly talking about the convergence of the public and private sector to solve the problems it deems most pressing. Put another way, they are openly calling for Fascism as defined by Mussolini.

“Fascism should more properly be called corporatism because it is the merger of state and corporate power.” - Benito Mussolini

This one is filled with light endorsements of a borderless world.

Governments and corporations must work together (Fascism) to brute force the climate agenda down the commoners’ throats. pic.twitter.com/i4eSQISpFP

— Marty Bent (@MartyBent) January 16, 2024

There is a heavy focus on social media companies in their role in the spreading of information. This woman makes it clear that social media companies must work closely with partners in the media and government to surface the "good information". Too much wrong think could sway elections in a way that doesn't align with what the ghouls ultimately want.

Social media companies must censor users to protect elections. pic.twitter.com/RjaSYeiV34

— Marty Bent (@MartyBent) January 16, 2024

Bill Gates joined CNBC to let us all know that the mRNA vaccines are safe, effective, and only getting better. Not only that, but pretty soon you won't be getting "jabbed", you'll be getting "patched".

Bill Gates: “More vaccines are on the way. In the form of patches!” pic.twitter.com/YOEVT7B449

— Marty Bent (@MartyBent) January 16, 2024

If you farm or fish you are apparently committing "ecocide". Two activities that have been fundamental to the development of humanity and the global economy are now considered deeply concerning.

Farming and fishing must be labeled ecocide. pic.twitter.com/Qf77AkueD0

— Marty Bent (@MartyBent) January 17, 2024

It wouldn't be a proper Gathering of the Ghouls without Jamie Dimon making his annual appearance on CNBC to tell the world why bitcoin is, in fact, bad and has nothing innovative to provide the world. The real innovation is happening with "blockchain technology" that is helping JP Morgan tokenize assets to make their grift more efficient. Be prepared for the "tokenization of assets" meme to grow significantly during this bull market. It's the next hot affinity scam.

Jamie Dimon wants you to believe that bitcoin is a “pet rock” and JP Morgan’s blockchain is the real innovation. pic.twitter.com/x40TjkLa4s

— Marty Bent (@MartyBent) January 17, 2024

Lastly (as of right now), we have the Director-General of the World Health Organization, Tedros Adhanom Ghebreyesus, explaining how the world needs to be wary of "Disease X", which is a "placeholder for unknown diseases". Tedros went as far as to say that COVID is considered a disease that would fall under the "Disease X" category and that they were preparing for something like it to emerge before it swept across the planet. This is interesting considering the fact that it is pretty well established that COVID was most likely created in a lab that was partially funded by the NIH. It seems to me that we should be more worried about the fact that there are people throughout the world working diligently to create the next "Disease X" instead of "Disease X" itself.

Talking creepily about “Disease X” and saying that they were preparing for COVID-like disease before COVID started spreading. By “preparing” does he mean “creating Disease X in a lab”?

pic.twitter.com/vm8lruhuoU

— Marty Bent (@MartyBent) January 17, 2024

If the World Economic Forum and World Health Organization are really afraid of new diseases being unleashed on the world, why don't they call out the teams creating viruses with "100% kill-streak in 'humanized' mice"?

Chinese lab crafts mutant COVID-19 strain with 100% kill streak in ‘humanized’ mice: ‘Surprisingly’ rapid death https://t.co/nLF8eFjfS6 pic.twitter.com/1YFLnfJlfs

— New York Post (@nypost) January 17, 2024

The ghouls are putting the pedal to the metal and moving ahead full steam with their attempts to tightly control every individual on the planet. They are using their tried and true fear tactics to make you believe that humanity faces a number of existential threats that need action. The actions they want you to take have consistently and will continue to end with governments gaining more power over individuals by limiting civil liberties in the name of "safety".

Do not fall prey to their fear tactics. Instead, ridicule these out-of-touch kleptocrats and expose them for the frauds that they are.

Final thought...

The South really can't handle the cold or the snow.

Use the code "TFTC" for 15% off

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So, we got in way before BlackRock 🤷🏻‍♂️

— Nayib Bukele (@nayibbukele) January 10, 2024

Now that the spot bitcoin ETFs have been approved after 24-hours of epic levels of fuckery and incompetence we can all accept that we now live in a world in which the financial institutions have officially endorsed bitcoin and have joined us at the party. Instead of dwelling on the minutia of the ETFs getting across the finish line, what impacts they may have on the price of bitcoin, and whether or not it is a good way to get exposure to bitcoin (it's not), let's turn to the next wave of big adopters; nation states.

Nayib Bukele sent this tweet out about 20 minutes ago as of the time of writing and it makes your Uncle Marty wonder, "How many countries out there have a bit of FOMO at the moment?" I imagine there is at least a handful of countries around the world who have seen what El Salvador, Bhutan, Oman, Russia and others have done over the last few years, have seen how the West has weaponized the SWIFT system, and are now seeing Wall Street institutions put their weight behind bitcoin that are seriously considering a bitcoin strategy. Whether that's buying bitcoin directly to store in their national treasuries or figuring out a way to utilize energy resources to mine bitcoin. I will not be the least bit surprised if we see a wave of nation state endorsements and accumulation of bitcoin throughout the rest of this year.

If you freaks think BlackRock and other titans of Wall Street getting into bitcoin is bullish for the price, just wait until a string of nation states declare that they deem bitcoin is a valuable asset to hold on their balance sheets. Things will get absolutely bonkers. And once that domino falls, there is truly no turning back. The cat will be so obviously out of the bag that no amount of brow beating or screeching about mOnEy LaUnDeRiNg and CrImInAlS will be able to stop the wave of capital flowing into bitcoin.

Now, you may ask, "Is this good for bitcoin?" And the answer to that is, "Everything is good for bitcoin." However, the stakes will be much higher and the need for individuals to step up in the face of Wall Street and nation states stepping into the fray will be higher than ever. Make no mistake, the Wall Street types and nation states will band together in an attempt to neuter bitcoin to the best of their abilities. It will be imperative for individuals to stand up and let the people who have deemed themselves the smartest people in the room to sit down and accept that bitcoin can only succeed if the properties of full node distribution, backwards compatability, hashrate ownership distribution, permissionless access, and the 21,000,000 supply cap are respected and upheld.

They, too, can reap the monetary benefits of the best money the world has ever seen, but to do so they will have to concede that those benefits only come if freedom to receive, hold and send bitcoin in a self-sovereign way is respected. We're crossing the chasm, freaks. And the great crossing will come with some epic battles. Prepare accordingly.

Final thought...

Every single one of my dreams last night involved eating.

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We are excited to announce today that Fedimint 0.2 has landed! 🛬

This release is a huge milestone for Fedimint as it is now a mostly feature-complete federated e-cash system. Development will be focused on backwards compatible improvements and bug fixes from now on. (1/5)

— Fedimint 🔆 (@fedimint) January 3, 2024

Last week marked a pivotal moment for the Fedimint open-source protocol with the launch of Fedimint v 0.2.1. Over two-and-a-half years ago, bitcoin developer Eric Sirion released a prototype for a Chaumian Mint built on top of bitcoin. This prototype quickly morphed into the Fedimint open source protocol and since the end of Summer 2021 a globally distributed team of developers has been working on getting the protocol to the point where it can be stably released to the market.

[

Issue #1037: A Chaumian Mint prototype emerges

via fedimint.org [https://fedimint.org/MiniMint/architecture/\]A few weeks ago, we wrote about [https://tftc.io/martys-bent/issue-1022/\] the potential for Chaumian mints to improve Lightning Network wallets. Particularly custodial wallets that make a big privacy tradeoff to provide ease of use. At the time, we were surfacing

TFTC – Truth for the CommonerMarty Bent

](https://tftc.io/issue-1037/)

Well, freaks, that day arrived last week. With Fedimint v 0.2.1 there is officially a stable Fedimint protocol release in the wild that stands as a foundation from which people can feel comfortable building on. In the release notes Eric Sirion states, "This is the first version that will stay compatible for a long time and provide an upgrade path into the indefinite future." From what I can tell the protocol will only be looking to make backwards-compatible releases moving forward. Similar to how the bitcoin protocol upgrades today.

This release has been long awaited and I, for one, am very excited to see people begin building on Fedimint in the wild. The privacy, efficiency, costs and extensibility capabilities that are enabled by Chaumian Mints on bitcoin are extremely exciting. Ideas like Stability Pool, which enables mint members to lock in a stable USD value via a two-sided market of liquidity providers and those looking to lock in a stable value without having to rely on centralized stablecoin issuers could be extremely disruptive. Out of the gate, it looks like a team of developers has launched a prediction market module that will enable people to bet on certain outcomes. The native privacy benefits and the interoperability Fedimint has with the lightning network alone would be massive user experience upgrades.

Obviously, all of this comes with a custody tradeoff. You are trusting the federation of mint operators not to collude to steal you bitcoin. But when you consider the need for scaling beyond the base layer and accept that tradeoffs will need to be made in certain areas, I think the federated model is an acceptable tradeoff for certain use cases. Users will just have to be very particular with the mints they decide to join and how they distribute risk among multiple mints.

With mempools being consistently full these days the launch of a stable Fedimint release couldn't come at a better time. We'll be keeping track of the development of the Fedimint protocol, the different projects that get built with it, and how people interact with them in the coming months.

As we said yesterday, don't let people fool you into thinking that bitcoin needs to be incorporated into the incumbent financial system. Bitcoin provides us with the ability to build a whole new system from scratch and it's happening right in front of Wall Street's face whether they realize it or not.

Final thought...

50 hours into the fast and my wife decides to reheat the best beef bourguignon she's ever made. This is the test I needed.

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The bitcoin price is up more than $3,000 (>7%) today, at the time of writing. The animal spirits are building in anticipation of the approval of the first spot bitcoin ETFs and everyone and their mother is refreshing their Twitter feeds to get the latest details on filings and fund fees in an attempt to guess who will be the front runner out of the gate.

A few things are undeniable:

1. Bitcoin is a permissionless system and anyone who wants to participate can do so, even Wall Street.
2. The ETF will be very bullish for the price of bitcoin.
3. There will be a large number of people who prefer to get exposure to the ETFs over holding their own keys.

With all of that being said, it will be, in my opinion, extremely important to recognize that a ton of noise will be tagging along with the butt ton of money that Wall Street seems primed to funnel into bitcoin via their products. As many have been saying over the last couple of weeks, bitcoin is about to cross the chasm and be thrust into the mainstream in a way that it has not been throughout the first 15 years of its existence. Crossing the chasm will coincide with a new cohort of people who are new to bitcoin and are here to fix it.

They'll deride early bitcoiners as unsophisticated amateurs who didn't understand the asset that they were dealing with. They'll claim that they know what bitcoin needs and the proper ways in which to incorporate it into the world. And they'll completely misunderstand the beauty of a truly peer-to-peer distributed cash system built on an open source protocol that enables new ways of receiving, holding and sending money in the Digital Age.

Many early bitcoiners are going to be faced with the pull of complacency in the coming years. The lure of massive bag pumps is going to make it easier for some to concede ground in the fight for the separation of money and states/central banks. The appreciation of their net worth may cause pause when feeling the urge to push back against the over-encroachment of the government and supranational regulatory agencies. The fast talking suits may successfully bamboozle many into believing it isn't an imperative to leverage bitcoin's native properties, particularly self-verification, when interacting with counterparties. A willingness to concede sovereignty in the face of uncomfortable battles due to social pressure and threat of persecution via the state may materialize.

Try not to be one of those bitcoiners. Bitcoin's purpose is much higher than increasing the net worth of those who hold it (or hold exposure to it). Bitcoin is freedom money and the siren calls of wealth and convenience are on their way to undermine the mission. Don't get distracted. Our children will be free.

Don’t let the money distract you from the end goal: separation of money and trusted third parties.

— Marty Bent (@MartyBent) January 7, 2024

Final thought...

Day 1 of the 5 day fast is done and I'm feeling pretty good.

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Pure projection. The US government is the biggest perpetrator of financial crimes on the planet. https://t.co/CvNxIKLEmW

— Marty Bent (@MartyBent) November 22, 2023

As I am sure most of you are aware of by now, earlier today the Treasury Department and the Department of Justice announced that they have reached a plea agreement with Binance and it's CEO CZ for breaking anti-money laundering laws brought forth by the CFTC. Purportedly helping Hamas finance their operations via their exchange. The plea deal entails that CZ pays a $50M dollar fine personally to the CFTC and Binance pays more than $4.3B in fines. The largest fine ever levied by the Justice Department on a single corporate entity.

When you take a step back and survey the field, this move makes sense and is a win-win for all parties involved. The market is eagerly awaiting the approval of the spot bitcoin ETFs that have filed and are sitting on the desk of the SEC. The SEC's comments to date have been clear that their biggest worry at the moment is "off-shore" exchanges manipulating the price of bitcoin. Binance is the largest exchange in the world and has successfully operated outside of the purview of the United States government until today. With this plea agreement, the off-shore price manipulation problem is solved, CZ is able to get away with a relative slap on the wrist, and the Treasury and the Department of Justice are able to LARP about how they're protecting consumers at the end of the day.

The result of all of this will be the spot bitcoin ETFs getting the green light, regulatory enforcement precedent that will be used to pressure companies in the space to make the experiences of their users much worse, and CZ getting a clean exit back stage where he will likely operate Binance from the shadows and reap the massive benefits that will come with the next bull market without spending the rest of his life locked in a cage.

This is a classic misdirection move that comes with the corrupt pay-to-play mechanisms that have become all too common in our fiat dominated world. The Treasury and the Department of Justice don't actually care about protecting consumers. What they care about is the perception that they are actually doing something beneficial by "taking care of Binance". Nothing makes this clearer than the fact that they have focused in on "terrorist financing" as the activity that they are preventing. If the Treasury Department and the Department of Justice truly cared about the end consumer they would have lambasted Binance for leading their users to financial slaughter by incentivizing them to burn their hard earned money on altcoin speculation. The focus on "terrorist financing" allows them to pretend that bitcoin and other cryptocurrencies are the medium of exchange of choice for terrorists, which will enable them to single out and scrutinize the industry even more moving forward.

This is a pure projection play because if the Treasury or the DoJ actually cared about preventing money laundering and terrorist financing they would investigate themselves. It is very convenient that they are able to pick on bitcoin and other cryptocurrencies when we live in a world in which Jeffrey Epstein's client list is withheld from the public, there is no accountability for the $100B+ in taxpayer money that has been siphoned off to Ukraine, politicians are currently running 2024 election campaigns with dollars overtly stolen from FTX users, and the Pentagon just failed yet another audit and can't account for $3.8 TRILLION of military equipment. $3.8 TRILLION is 5.34 times larger than the current bitcoin market cap. And that is only one part of the government. We haven't even mentioned the black box that is the "Inflation Reduction Act", or the COVID PPP loans, or the black box budgets of the CIA and other intelligence agencies. If these people actually cared about money laundering or protecting US consumers they would be aggressively investigating themselves.

An introspective investigation is obviously off the table. The only move these scummy decrepit dying institutions have left is projecting their own guilt on others and manifesting scapegoats that can lead people away from the scent of their rotting corrupt corpses. And that is exactly what we saw today with the Binance plea deal. The Treasury and DoJ get to make it seem like they are doing good work, CZ and Binance get to live another day, and the cronies at BlackRock get the cover they need to open up the floodgates to their ETFs.

Stay frosty out there, freaks.

Final thought...

It's crazy how lazy they're getting.

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New episode of The Last Trade, out now! @BespokeGroupCO founder @mcclintock_m joins hosts @MartyBent @Croesus_BTC @MTanguma to explore the intricacies of securing bitcoin for future generations and the asset’s emergent role in portfolio construction.

Get the full episode here 👇… pic.twitter.com/jiyxjAhUJ1

— Onramp (@OnrampBitcoin) August 4, 2023

Yesterday on The Last Trade we had a great conversation with Matt McClintock, Founder and Executive Managing Director at Bespoke Group, about why it is going to be very important for bitcoiners to set up trust structures to protect their wealth over multiple generations. I highly recommend that anyone who isn't up to speed on trusts and how they can help protect your wealth check out the episode (writing from my wife's iPad and can't figure out how to hyperlink, so search "The Last Trade on your favorite podcast app or on YouTube.)

While the trust alpha was illuminating, I thought Matt's insight into how some of his high networth "fiat whale" clients are beginning to come around to bitcoin was extremely encouraging and validates what we wrote in the rag on Tuesday; it is becoming abundantly clear that central banks and governments the world over are losing control and bitcoin is very well positioned to benefit from the chaos. With Japan losing control of its yield curve, the Treasury looking to issue $1.85T worth of fresh debt through the rest of the year, interest expenses exploding above $1T, and energy inflation rearing its head again it is becoming harder and harder to believe that the Fed is going to successfully pull off a soft landing. It seems like, at least according to the anecdotes that Matt shared, some of the people with the most to lose in terms of wealth are beginning to wake up to this reality and recognize bitcoin as their "flight to safety" option.

This makes perfect sense if you understand how bitcoin works. In a world where central banks and governments are increasingly debasing their currencies, accumulating obscene amounts of debt, and actively moving to confiscate wealth or prevent people from accessing their money an apolitical peer-to-peer distributed monetary system that includes a hard capped supply and eliminates counter-party risk is a no brainer. Those with a lot to lose are beginning to recognize this, which makes sense when you consider the fact that most of them accrued their wealth by being smart and being able to recognize trends and market inefficiencies. Bitcoin is a natural fit for this class of people. The best fit if we're being honest with ourselves.

I don't think people are fully understanding what is currently happening behind the scenes at this current moment. This bear market has been brutal and drawn out, but I've become convinced that the wheels are being primed for a bull run the likes of which we have never experienced since bitcoin launched in 2009. The combination of central banks and governments fumbling the ball, people losing faith in institutions at an increasing pace, and the bitcoin protocol and the layered stack being built on top of it reaching a point of sufficient maturity is setting the scene for a flood of capital into bitcoin that is almost hard to fathom. Combine all of this with the block subsidy halving that is coming in ~8 months and the fact that hodlers are only becoming more certain about their positions and we are officially cooking with jet fuel. Mentally prepare for the face ripping rally. Your Uncle Marty sees it coming around the corner.

Final thought...

I love making my sons laugh.

Enjoy your weekend, freaks.

You have your place to buy Bitcoin, but have you tried River? It’s where all the Bitcoiners are now going. See why at River.com/TFTC

Sleep soundly at night knowing your bitcoin are secured by multisig.

CrowdHealth BTC is now accepting memberships starting June 1st and later. Use code TFTC during sign-up and the first 1000 members will receive a discounted membership of $99/ month for the first 6 months.

This rag was delivered to you via Ghost. If you are thinking about starting a newsletter or website and are looking for the most robust and sovereign option you should check out Ghost. For sovereign payments connect your Ghost site to Scrib.

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Japan bonds (JGBs, corporates, etc) have come under tremendous pressure since the BOJ's mild tweak to yield curve control.

Group just clocked the worst 2-day slump in at least 23 years pic.twitter.com/lhkxN2BHJj

— David Ingles (@DavidInglesTV) July 31, 2023

As everyone and their mother seems to be mentally prepping for a soft landing, it seems that things are starting to go terribly awry in the world of sovereign debt. Late last week the Bank of Japan made a surprise policy change and didn't put a confident foot forward when changing the range within which they plan to employ yield curve control. Since the policy change JGBs have experienced their worst two-day slump in at least 23 years and the yen has weakened significantly against the dollar. Reaching 142.5 earlier today. In layman's terms, markets are signsling that the little confidence they had left in the Bank of Japan's ability to maintain the monetary system was just destroyed with this spastic move. This move follows their abrupt policy change around Christmas of last year, which spooked markets at the time.

In a world that runs on a hyper-connected and intertwined financial system where everything everywhere needs to be in place for everything to function properly, the Bank of Japan, the JGB market, and the yen are the canary in the coal mine that signal turbulance on the horizon. And if we pan over to the US, things aren't looking so hot on the sovereign debt side of things either.

Earlier today, Fitch downgraded the US governments sovereign debt rating to AA+ from AAA. Joining S&P which downgraded to AA+ in 2011. Leaving the US with no AAA rating to point at while declaring that it has iron clad credit. While we've learned to be wary of credit ratings coming from these ratings agencies due to their abject negligence and pandering during the lead up to the 2008 finacial crisis, it is safe to say that the US debt situation is becoming impossible to ignore. These agencies tend to be very generous with their ratings. If they're downgrading the US government, you know things have to be pretty bad. Likely much worse than a AA+ status. Just look at how much debt Treasury is looking to take out to finish out their pillaging of the American people in 2023.

The Treasury's new guidance today is that they want borrow

::checks notes::

$1.85 trillion during the second half of this year. pic.twitter.com/zIYTB38oDe

— Lyn Alden (@LynAldenContact) July 31, 2023

If my back-of-the-napkin math is in the right ballpark, we're about to increase the national debt by ~10% this year. Utter insanity. And don't look now, but oil prices have been creeping higher and look like they are about to break out. Especially when you consider the inventory draws we've seen recently.

WTI first consecutive closes over the 40-week MA since July 2022. pic.twitter.com/oGLXTy2lQL

— Larry Tentarelli, Blue Chip Daily (@LMT978) July 31, 2023

Your Uncle Marty thinks the inflation problem is still pervasive, but it will begin to become even more obvious as it will be forced to be recognized by CPI prints because of energy costs rising. Let's hope this superconducter stuff is legit.

I don't think there's anything more attractive on the planet than bitcoin hovering between $28,500 and $31,000. The tremors are beginning to rumble louder and louder, the central banks have lost control of their monetary systems and the governments have absolutely no ability to stop themselves from binging on debt, which makes for a pretty precarious situation. It's not shocking that they want you focused on aliens, climate change, and the latest round of Trump indictments. They have completely lost control of the money behind the scenes.

Final thought...

Headed to the Big Apple tomorrow. Come check out the mining mert up at PubKey tomorrow night if you're in town.

You have your place to buy Bitcoin, but have you tried River? It’s where all the Bitcoiners are now going. See why at River.com/TFTC

Sleep soundly at night knowing your bitcoin are secured by multisig.

CrowdHealth BTC is now accepting memberships starting June 1st and later. Use code TFTC during sign-up and the first 1000 members will receive a discounted membership of $99/ month for the first 6 months.

This rag was delivered to you via Ghost. If you are thinking about starting a newsletter or website and are looking for the most robust and sovereign option you should check out Ghost. For sovereign payments connect your Ghost site to Scrib.