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Key Takeaways

The recent episode of The Bitcoin Frontier podcast features an insightful conversation with James Seyffart, a Bloomberg Intelligence analyst with a comprehensive background in ETFs. The discussion zeroes in on the intersection of traditional finance (TradFi) and Bitcoin, particularly through the lens of Bitcoin ETFs.

James provides a behind-the-scenes look at the ETF landscape, explaining how these funds serve as a bridge for institutional and retail investors seeking exposure to Bitcoin without the complexities of direct ownership. The eight to nine Bitcoin ETFs that have launched are, contrary to some opinions, not flops, but rather successful ventures in the ETF space. As these ETFs gain assets and volume, they're expected to become an even more integral part of the investment ecosystem.

The conversation touches on the approval process for the Bitcoin ETF, with James critiquing the SEC's hesitance and eventual capitulation, largely due to the Grayscale lawsuit. He argues that the SEC's resistance was rooted in political considerations, with influences from Democratic Party figures like Elizabeth Warren, rather than a genuine concern for investor protection.

Moreover, the podcast explores the role of ETFs in reducing Bitcoin's volatility. The notion is that as ETFs become more prevalent, the automatic rebalancing by investors could dampen extreme price swings, thereby contributing to a more stable Bitcoin market.

Best Quotes

1. "ETFs are like a solar system, essentially. As they get volume, as they get assets, it helps them to get more volume and get more assets." - James Seyffart
2. "I think of [the Bitcoin ETF] as a bridge to the Bitcoin rail. It's the widest, most efficient bridge you can create between TradFi and Bitcoin." - James Seyffart
3. "The SEC should trust the ETF industry and these traders who make up this industry more than they distrust the crypto and Bitcoin industry because they will clean things up." - James Seyffart
4. "This [Bitcoin ETF] is a win for end retail investors. This is an efficient product, this is an efficient market, and this is a win." - James Seyffart
5. "The less trading you do, the better off you are, because then you're just giving money to Wall Street, essentially." - James Seyffart

Conclusion

The recent podcast episode with James Seyffart serves as a testament to the transformative potential of Bitcoin ETFs within the financial market. Despite the initial skepticism and regulatory hurdles, these ETFs are carving out a space that not only facilitates Bitcoin exposure for traditional investors but also promises to reduce the asset's notorious volatility.

James's insights demystify the world of ETFs and underscore the importance of allowing the market to adapt and adopt new financial products. The conversation sheds light on the political dynamics that can affect financial innovation and the need for the industry to embrace efficiency and investor protection.

As the Bitcoin ETFs continue to evolve, it's clear that their impact will span beyond mere investment vehicles—they symbolize a step towards the normalization and integration of digital assets within the broader financial landscape. Whether as a "gateway drug" or a "wide bridge," Bitcoin ETFs are poised to play a pivotal role in shaping the future of investment and the mainstream acceptance of Bitcoin.

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

Bitcoin in Corporate Treasuries

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

Methods of Gaining Bitcoin Exposure

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

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

Counterparty Risks

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

The Case for Holding Your Own Keys

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

Unchained's Collaborative Custody Solution

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

Enterprise Solutions

Unchained provides various models to suit different organizational needs:

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

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

Conclusion

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

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Introduction

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

Early Adoption and Technological Progress

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

Bitcoin ETFs and Mainstream Acceptance

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

Integration into Businesses

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

Why Now?

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

Challenges and Solutions

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

Legal and Accounting Implications

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

Customer Experience and Community

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

Strategic Considerations

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

Conclusion

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

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Key Takeaways

This episode of the Bitcoin Frontier podcast from Unchained delves into the misconception that increased energy consumption due to population growth or technological advancements will lead to the depletion of resources or environmental catastrophe. The guest, Andrew Myers, argues that the planet can sustain significant energy growth, and this fear is unfounded.

Challenges in California's Energy Market

Myers highlights the inefficiencies and bureaucratic layers in California's energy market where the end consumer faces inflated retail prices due to mismanagement and regulatory complexities, despite low wholesale costs for power production.

Centralization and Monopolies in Energy Transmission

The discussion brings to light the centralization and monopolistic control over energy transmission lines, which act as gatekeepers, adding substantial time and cost to the process of integrating new power generation assets or loads into the grid.

Bitcoin's Role in Decentralizing Energy Markets

Bitcoin is presented as a parallel solution to the energy industry's centralization problem, similar to how it decentralizes the monetary system. Myers envisions a future where deregulation and decentralization of energy markets, enabled by Bitcoin, will lead to more efficient and responsive systems.

Impact of Bitcoin Mining on Energy Consumption

Bitcoin mining is portrayed as a flexible and responsive consumer of energy that can adapt to real-time market needs, thus contributing to the stability of the grid. It's also seen as a catalyst for innovation and investment in new energy infrastructure.

The Future of Energy Production

The guest predicts that human ingenuity and innovation will lead to increased energy production and consumption without endangering the planet. He suggests that a Bitcoin standard could unlock human potential and lead to an energy-rich and prosperous society.

[

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/)

Best Quotes

1. "Whether it stays the same or it increases by ten times, the planet can sustain that level of energy growth and energy production." - Andrew Myers, highlighting the potential for sustainable energy expansion.
2. "The utilities in California have a wholesale cost for power...but for layers of bureaucracy and mismanaged infrastructure, the retail price to the end consumer ends up being so much higher." - Andrew Myers, criticizing the inefficiencies in California's energy sector.
3. "They are the gatekeepers, and they add a year, two years or more to the process of building out new load or new generation." - Andrew Myers, on the monopolistic control of transmission lines.
4. "Bitcoin...brings money and decision-making power back into the hands of entrepreneurs and innovators and investors who can build out that grid of the future." - Andrew Myers, on the transformative potential of Bitcoin in the energy sector.
5. "We will see a growing class of entrepreneurs, investors and everyday people eager to produce and consume more energy to make their dreams a reality." - Andrew Myers, envisioning an energized future driven by Bitcoin adoption.

Conclusion

The podcast episode with Andrew Myers offers an insightful look into the energy industry's challenges and the unique role Bitcoin mining plays in driving toward a decentralized and efficient future. Myers effectively argues that concerns over the planet's ability to sustain higher energy consumption are unfounded and stem from a lack of understanding of the potential for technological advancement and sustainable growth. He also underscores the inefficiencies of centralized energy markets and the bureaucratic hurdles that inflate costs and stifle innovation.

By drawing parallels between the decentralization in the monetary system brought about by Bitcoin and the potential for similar transformations in the energy sector, Myers provides a compelling argument for the use of Bitcoin as a tool for market liberation. His vision for the future is one where energy production flourishes, driven by a class of forward-thinking entrepreneurs and consumers enabled by a Bitcoin standard.

This conversation not only sheds light on the intersection of energy and Bitcoin but also on the broader implications for society's progress towards a more self-sovereign, innovative, and resource-rich future. It serves as a call to action for continued advocacy for deregulation, market reforms, and the embrace of technologies that can reshape the energy landscape for the betterment of all.

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Business owners are currently facing the challenge of protecting their assets against the dual threats of US dollar inflation and Bitcoin's historical volatility. Inflation erodes the purchasing power of the dollar, while Bitcoin's price swings can introduce risk into a company’s financial strategy. This presentation provides an analytical approach to navigating these issues.

Inflation and its Impact

The purchasing power of the US dollar has significantly diminished since 1980, with a notable increase in the rate of this decline in recent times. Inflation rates are a critical concern for business owners as they directly affect balance sheets and the cost of doing business. The M2 monetary base, an important measure of the money supply, has surged from $8.27 trillion in January 2009 to approximately $21 trillion recently. This represents an increase of $13 trillion since the inception of Bitcoin.

Furthermore, the total federal debt has grown from around $10.7 trillion in 2009 to over $34 trillion. The ratio of national debt to the M2 money stock has increased from 1.26 to 1.68 within the same period, suggesting that debt expansion has outpaced monetary base growth. These factors indicate that inflation is unlikely to be tamed shortly and may worsen if the Federal Reserve cuts rates.

[

Bitcoin’s 15 Years In Perspective | Marty Bent

Today is a better day than most to put the current problems people are facing into perspective. To do this, let’s take a look at what the monetary and debt landscape looking like around the time bitcoin was launched.

TFTC – Truth for the CommonerMarty Bent

](https://tftc.io/bitcoin-15-years/)

Bitcoin’s Price Volatility

Bitcoin's price has been highly volatile since its creation in 2009. For instance, daily volatility can sometimes reach 5%, with significant price swings occurring within short timeframes. This volatility is attributed to the fact that Bitcoin is a new monetary good, monetizing in real-time during the past decade. As Bitcoin is a novel asset class undergoing rapid adoption, its price fluctuations are a natural consequence of its evolution.

Despite this, historical data indicates a trend of decreasing volatility over the years. As understanding and confidence in Bitcoin grow, its role as a long-term savings vehicle becomes more pronounced, potentially leading to a stabilization in price volatility. When viewed on a logarithmic scale, Bitcoin's price trend shows a consistent upward trajectory despite short-term fluctuations.

Strategies for Business Owners

Business owners seeking to hedge against inflation using Bitcoin should approach the situation with a clear plan. This involves analyzing their balance sheet, cash flows, and profits to determine an appropriate Bitcoin allocation strategy. Rather than making impulsive decisions, a disciplined approach, such as dollar-cost averaging, can mitigate the risks associated with price volatility.

Planning for Bitcoin exposure on the balance sheet also requires a psychological shift. Rather than focusing solely on the downside risk, business owners should consider the potential for Bitcoin to appreciate in value over time. Allocating a percentage of profits or cash flow to Bitcoin as part of a long-term savings strategy can capture this upside potential.

In addition to traditional cash flow management, businesses can explore innovative ways to generate "sats flows," which refer to revenue streams denominated in Bitcoin's smallest unit, satoshis. Utilizing platforms like Podcasting 2.0 allows businesses to receive Bitcoin tips directly from customers, creating an additional revenue stream that can be accumulated without immediate conversion to fiat currency.

[

Bitcoin Treasury - The Fourth Lever to Equity Value Growth

While building products and services in the growing bitcoin ecosystem will not ensure success, a company’s proclivity for success is inevitably correlated to bitcoin’s upside.

TFTC – Truth for the CommonerGrant Gilliam

](https://tftc.io/bitcoin-treasury/)

Conclusion

In conclusion, business owners must remain vigilant in the face of rising inflation and Bitcoin volatility. By understanding the economic landscape, developing a well-thought-out investment strategy, and adopting new technological solutions for revenue generation, businesses can navigate these dueling forces effectively. Planning, discipline, and a forward-thinking approach are essential to managing the balance sheet risks associated with inflation and Bitcoin's volatility.

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Key Takeaways

The episode of The Bitcoin Frontier podcast from Unchained featured Drew D'Agostino, CEO of Crystal (also referred to as Crystal Knows), a SaaS company leveraging machine learning to predict personality traits and improve communication in business settings. Here's an in-depth analysis of the key insights:

• Bitcoin as a Treasury Strategy: Drew discussed the decision to diversify his company's treasury by adopting Bitcoin, especially after the Silicon Valley Bank crisis highlighted the risks of the traditional banking system. It was a strategic move to mitigate counterparty risk, and it required overcoming technical, social, and governance challenges.
• Personal Journey with Bitcoin: Drew's personal investment philosophy has evolved from being interested in precious metals to seeing Bitcoin as a more valuable asset. He has come to treat his cash as less valuable compared to Bitcoin, leading to more disciplined financial decisions, a phenomenon that has extended to his company's balance sheet.
• AI and Investment Dynamics: The conversation touched on the current state of AI and its adoption curve. Drew sees generative AI as a transformative tool for enhancing productivity but is cautious about its investment potential, noting it could be a commodity rather than a high-return asset. He expressed skepticism about the rapid technological progress narrative and sees more evidence of stagnation, especially in the physical world.

[

Bitcoin Treasury - The Fourth Lever to Equity Value Growth

While building products and services in the growing bitcoin ecosystem will not ensure success, a company’s proclivity for success is inevitably correlated to bitcoin’s upside.

TFTC – Truth for the CommonerGrant Gilliam

](https://tftc.io/bitcoin-treasury/)

Best Quotes

1. "It would be foolish to move my company's capital into any one institution or any one instrument, including US dollars and the US banking system." - Drew D'Agostino, highlighting the risks of traditional financial systems and advocating for diversification in treasury management.
2. "As soon as it transforms into Bitcoin, it becomes more valuable to me, even if it's the same exact price level." - Drew D'Agostino, illustrating the psychological shift in valuing assets once they are converted into Bitcoin.
3. "We don't know if AI itself is actually a good investment right now." - Drew D'Agostino, expressing uncertainty about the investment returns of AI despite its transformative potential.
4. "I think we're actually in a period where we believe things are progressing really quickly, but we're actually in significant amount of stagnation." - Drew D'Agostino, challenging the notion of rapid technological progress and pointing out areas of stagnation in the physical world.

Conclusion

This episode of The Bitcoin Frontier podcast provided a nuanced perspective on the intersection of technology, investment, and corporate strategy. Drew D'Agostino's decision to incorporate Bitcoin into his company's treasury was not just about seeking asset appreciation but also about adopting a sound money philosophy that encourages disciplined decision-making. The conversation also delved into the state of AI, with Drew highlighting its transformative impact on productivity but also questioning its current investment value. The episode concluded with reflections on technological progress, suggesting that while the digital realm advances, the physical world may be experiencing stagnation, and the role Bitcoin might play in addressing this disparity. This discussion underscores the complex nature of innovation and the importance of considering both technological potentials as well as their broader economic and societal implications.

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Introduction to Bitcoin’s Supply

Bitcoin is a decentralized digital currency that operates without the need for a central authority, such as a government or a central bank. One of the fundamental aspects of Bitcoin is its fixed supply limit of 21 million coins. This feature is critical to its value proposition as a form of digital gold and a hedge against the inflationary nature of fiat currencies.

Enforcement of Bitcoin's Fixed Supply

The enforcement of Bitcoin's fixed supply is not managed by any single entity but is instead upheld by a combination of social consensus, technical protocols, and energy expenditure by miners.

Social Consensus

The fixed supply of Bitcoin is enforced by the collective decision of the participants in the Bitcoin network. Unlike fiat currencies managed by central banks, Bitcoin operates on a consensus mechanism where every user agrees to maintain the supply limit. This consensus is not just about agreement in principle; it involves active participation in the network's protocols and practices.

Technical Protocols

Bitcoin's supply limit is hardcoded into its software, which spells out the number of Bitcoins that can ever exist (21,000,000) and how they will be issued. The software that users can run independently verifies all transactions and the entire ledger dating back to Bitcoin's creation in 2009. It ensures that only legitimate, rule-abiding transactions are confirmed and included in the blockchain. Any attempt to transact with invalid Bitcoin or alter the supply is automatically rejected by the network.

Miner Contribution

Miners play an essential role in enforcing Bitcoin's supply. They do not create new Bitcoin but instead validate transactions and add them to the blockchain. The reward miners receive for this service is predetermined and decreases over time through an event known as halving, which ensures that the rate of new Bitcoin entering the system slows down and the total supply cap is never exceeded.

Historical Precedence

In 2017, a group of Bitcoin participants attempted to change the software in a way that was incompatible with the existing rules, creating a fork known as Bitcoin Cash. Despite having significant resources and backing, Bitcoin Cash failed to replace Bitcoin because it lacked the broad consensus of the user base. The market response was swift, as many opted to sell their Bitcoin Cash for more Bitcoin, reinforcing the value of the original network and its fixed supply.

Implications and Conclusions

By operating Bitcoin, every user is effectively casting a vote for a monetary system with a fixed supply. Miners, by securing the network through energy expenditure, reaffirm the commitment to a non-inflationary currency. The collective actions of participants ensure that Bitcoin's supply remains fixed and that any attempt to alter this policy will likely be rejected by the community.

In essence, Bitcoin's fixed supply is not just a feature of the software; it's a commitment by its users to uphold a specific monetary policy. This commitment is what gives Bitcoin its value and distinguishes it from traditional fiat currencies that are subject to inflation and devaluation through increased supply.

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Key Takeaways

In this episode of The Bitcoin Frontier podcast, host Joe Burnett from Unchained sits down with Peter Dunworth and Luke Broyles to engage in a deep dive into the profound implications of Bitcoin's immutable and absolute scarcity. Here's an analysis of the key topics and insights discussed:

• Bitcoin as a New Era for Humanity: The episode starts with the idea that Bitcoin represents a third phase in human history, following pre-written word and written word eras. It is argued that Bitcoin's immutable ledger ushers in an era with a recorded history of everything, potentially impacting how humanity moves forward.
• Bitcoin's Scarcity vs. Traditional Assets: The conversation shifts to how traditional assets like gold, stocks, and political currency only have artificial scarcity enforced by institutions, whereas Bitcoin's scarcity is verifiable and outside of human control. This fundamental difference makes Bitcoin an optimistic bet on humanity's future, pricing in not only past and present energy but also future potential energy creation.
• Valuing Bitcoin: Assessing the value of Bitcoin is a significant challenge since it doesn't have cash flows like traditional equities. The guests discuss comparing Bitcoin's market cap to that of gold, which is seen as the most comparable store of value, suggesting that Bitcoin should aspire to be valued at multiples of gold's market cap due to its superior attributes.
• Bitcoin and Human Ingenuity: The discussion points out that investing in Bitcoin is, in a way, investing in the belief in human progress and ingenuity—a stark contrast to traditional assets that can represent a bet against humanity's future success.
• Bitcoin Adoption and Inheritance Tax: The episode touches on global Bitcoin adoption rates, the relatively small median holdings indicating early stages of adoption, and the potential for Bitcoin as a vehicle for efficient inheritance planning, especially in jurisdictions with high inheritance taxes.

Best Quotes

1. "Bitcoin is this unit of account. It is this true first scarcity outside of human control." - Luke Broyles
   Context: Luke explains the significance of Bitcoin's scarcity, which is not subject to human manipulation, unlike traditional scarce resources.
2. "Bitcoin allows us to buy actual verifiable scarcity that we can use to price in all of the energy, the sum total of energy in all the industries for today and theoretically, in the future." - Luke Broyles
   Context: Further emphasizing Bitcoin's role as a store of value for energy past, present, and future.
3. "The most important thing you can do for number go up is self custody bitcoin off exchange so that it can't be sold or rehypothecated." - Peter Dunworth
   Context: Peter outlines the importance of self-custody for both securing one's Bitcoin and contributing to its price appreciation.
4. "There's only one thing that has to do with price, and that is going to force price up dramatically." - Peter Dunworth
   Context: Peter predicts the impact of steady capital inflows on Bitcoin's price due to the ETF's approval.

Conclusion

The episode of The Bitcoin Frontier podcast delivers a thought-provoking discussion on Bitcoin, highlighting its role as a new paradigm in human history, its unique scarcity, and the optimistic view it represents for humanity's future. The hosts and guests argue that Bitcoin's immutable ledger and scarcity make it a groundbreaking asset that transcends traditional forms of value storage. The conversation also touches on practical aspects of Bitcoin investment, such as the implications of ETF approval, inheritance planning, and the critical nature of self-custody. The overarching message of the episode is clear: Bitcoin is not just a financial instrument, but a vote of confidence in human progress and a call to rethink value in the digital age. The implications of Bitcoin's continued adoption and integration into financial planning could have profound effects on individual wealth and the broader economic landscape.

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Key Takeaways

This episode of The Bitcoin Frontier podcast with Will Cole features a multifaceted discussion on the evolving landscape of financial surveillance, the importance of self-sovereignty in Bitcoin custody, and the future of Bitcoin payments. The conversation delves into the current state of financial censorship and how it may drive people towards Bitcoin, the role of multisig in enhancing security, and the potential for Bitcoin to serve as a primary method of payment.

Will highlights his journey from working at Unchained to his current venture with Zaprite, underscoring the significance of enabling individuals and businesses to obtain Bitcoin directly through commerce rather than solely through exchanges. He emphasizes the progress made in Bitcoin custody solutions and how the focus is now shifting towards optimizing those solutions and facilitating Bitcoin earnings through goods and services.

[

Zaprite: The Ultimate Bitcoin Payments Solution for Merchants

Merchants looking for a seamless way to accept bitcoin payments need not look further than Zaprite. This innovative platform offers an easy-to-use onboarding mechanism that integrates with both on-chain transactions and the Lightning Network, as well as other payment methods.

TFTC – Truth for the CommonerStaff

](https://tftc.io/zaprite-bitcoin-payments/)

Will also predicts that the catalyst for a broader adoption of Bitcoin payments will be an individual decision – people demanding to be paid in Bitcoin and merchants providing incentives for Bitcoin payments. He foresees a feedback loop where the acceptance of Bitcoin by more businesses could lead to a viral effect, incentivizing others to follow suit.

Lastly, the discussion touches upon the increasing use of financial censorship tools by governments and the potential implications this has for individual freedoms and the adoption of Bitcoin as a censorship-resistant alternative.

Best Quotes

• "It is underappreciated the level of financial surveillance and censorship that is coming for us." – Will
• "The most important problem to work on in Bitcoin was custody." – Will
• "Multisig is not a weird thing anymore." – Will
• "The catalyst is going to come from people demanding to be paid in Bitcoin." – Will
• "Canadian trucker protest...seeing how you can be debanked, not in some conspiratorial manner, but as a matter of policy." – Will
• "China...they're showing us what's coming to the west. They're beating us in financial censorship." – Will
• "The difference between today and, say, 2019, when I joined Unchained, it's very different." – Will
• "We have more control. You want to buy a gun? We have more control." – Will
• "I think there's a lot of things at play in this. Right. You have people that want Bitcoin in their treasury, so they go out and buy Bitcoin." – Will
• "The more centralized and small these businesses are, I think they'll be the first adopters of this." – Will

Conclusion

The podcast episode provided an insightful exploration of the intersection between Bitcoin, financial sovereignty, and commerce. It reflects the growing concern about financial surveillance and the potential for Bitcoin to empower individuals and merchants to take control of their financial future.

The guest's experiences and predictions suggest that while the Bitcoin custody space has matured, the next frontier lies in making Bitcoin a viable and preferred option for everyday transactions. The episode concludes with a sense that Bitcoin's role as a tool against financial censorship will become increasingly critical, and the decisions of individuals and businesses to embrace Bitcoin could be the driving force for change.

The discussion poses thought-provoking questions about the future of financial autonomy and the potential for Bitcoin to reshape our understanding of value exchange. It leaves listeners with the idea that Bitcoin’s time may come not through a single catalytic event but through a series of individual choices that collectively signal a shift towards a more decentralized and censorship-resistant financial system.

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After months of hype and several highly entertaining false starts, the SEC finally approved 11 spot bitcoin ETFs on Wednesday of this week – exactly 15 years after Hal Finney’s iconic “running bitcoin” tweet – with trading commencing the following day. While the dust has yet to settle on exactly how early flows will shake out and the market’s hysterics leading up to the approval were undoubtedly a sideshow, we do expect these vehicles will make it easier for traditional pools of capital to flow into bitcoin, with positive implications for bitcoin’s price over time. More importantly, though, these ETFs represent the latest piece of clear evidence of Ten31’s thesis that bitcoin is eating the world. After years of deriding bitcoin as not just uninteresting but even outright harmful, the leaders of the legacy financial system just spent the last several weeks in a sprint to not only secure approval for their bitcoin ETFs but also to outdo each other in extolling bitcoin’s unique virtues on mainstream news appearances. Most notably, Larry Fink, who just a few years ago called bitcoin an “index of money laundering,” took to multiple broadcasts to promote bitcoin as an “asset that protects you.” 

[

Bitcoin is Eating the World

An Investor’s Case for the Biggest TAM on Earth.

TFTC – Truth for the CommonerJohn Arnold

](https://tftc.io/bitcoin-is-eating-the-world/)

While Larry clearly still doesn’t fully get it, this diametric shift in tone is emblematic of the fact that, sooner or later, every self-interested economic actor will have to embrace bitcoin. We expanded on the derivative implications of this reality in a longform piece out this week titled Bitcoin is Eating the World, where we walk through what growing mainstream acceptance of and interest in bitcoin means for the still highly underappreciated bitcoin infrastructure ecosystem. The ETFs are certainly a bullish milestone and signpost, but they are still just a very early indication of the wave of mainstream adoption we see coming over the next decade, and this wave will have seismic implications for early investors in bitcoin’s enabling technologies. 

Portfolio Company Spotlight

Unchained, Strike, Coinkite, Mempool.space, and AnchorWatch are all great examples of products and services that allow anyone to easily buy, protect, and use bitcoin in a native and optimally secure way. Strike and Unchained provide intuitive and high quality on-ramps for both small and large purchases of verifiable, on-chain bitcoin; Coinkite offers the most secure, battle-tested way to protect bitcoin without the layers of counterparty risk inherent in an ETF and offers product for users of all skill levels; Mempool.space gives users unmatched data to make smart decisions about their bitcoin transactions; and platforms like Unchained and AnchorWatch allow for additional layers of abstraction that combine minimized counterparty risk with an easy, hands-off experience for clients. The technology supporting native use of bitcoin is still in its early days, but many companies in the Ten31 portfolio have already rolled out offerings that can collectively provide the same easy UX of ETF ownership with substantially better security guarantees. 

Selected Portfolio News

Unchained offered an update on its 2024 roadmap:

Unchained also announced a new institutional lending program:

Media

Strike Founder and CEO Jack Mallers appeared on Bloomberg TV to discuss the impact of the bitcoin ETF approvals. 

Parker Lewis, Ten31 Advisor and Zaprite Head of Business Development, joined the Bitcoin Frontier podcast to discuss some of his recent work. 

Market Updates

After ten years since the first filing, months of speculation in 2H 2023, and countless Twitter Spaces discussions by newly-minted ETF experts, the SEC finally approved 11 spot bitcoin ETFs (after an errant tweet fiasco from its account, which apparently did not have 2FA). 

All filings from major issuers including BlackRock, Fidelity, Ark, Bitwise, and more were approved, and those institutions issued late-breaking filings early in the week to reduce fees to near-zero levels, presumably indicating expectations for substantial flows over time. BlackRock and Fidelity lowered their fees to 25bps, and most issuers are offering no fees for the first 3-6 months. 

As expected, the products broke records for day one ETF launches, with total volume across the vehicles exceeding $4.6 billion (and ~$2.5 billion net of GBTC activity). 

Multiple legacy finance executives took to mainstream airwaves to promote bitcoin, with Larry Fink calling it “an asset that protects you” and WisdomTree CEO Jonathan Steinberg noting its 15-year track record is “superior to every other asset class.”

The week also saw a few notable updates on the macro front, as the CPI reading for December 2023 came in above expectations, potentially complicating the recently growing consensus around near-term Fed rate cuts. 

That said, New York Fed President John Williams indicated earlier in the week that, in the Fed’s view, rates are now sufficiently high to get price inflation back to the central bank’s ostensible 2% target. 

In the latest negative headline for commercial real estate, vacancy in US offices hit a new record of nearly 20% last year, the highest level on record since 1979. 

Banks’ use of the Fed’s BTFP Facility – allegedly set to expire in March – soared to another high this week, as banks continue to arbitrage the spread between BTFP borrowing costs and interest paid on reserves at the Fed.

Regulatory Update

In its latest effort to make itself as irrelevant to global finance as possible, the UK’s Financial Conduct Authority (FCA) enacted new regulations that will require retail investors to pass a series of certifications and tests before being able to use centralized cryptocurrency exchanges. 

Noteworthy

BitWise, issuer of the BITB spot bitcoin ETF, announced it would donate 10% of its profits from ETF fees to OpenSats for the next 10 years to help fund bitcoin and open source software development. VanEck, issuer of the HODL ETF, announced a similar 5% donation to Bitcoin Core development through Brink. 

Multiple new Nostr-based media hosting applications have been released over the past several weeks, including an image hosting service and a video-sharing and directory application called Flare.

While BlackRock executives were busy pumping their bitcoin ETF this week, the Financial Times noted its various ESG initiatives have experienced a “catastrophic” decline in support among asset managers. 

Travel

• Nashville BitDevs and Bitcoin Meetup, January 16-17
• Nashville Energy and Mining Summit, January 18-19
• Austin BitDevs, February 15

Learn more about Ten31, our investment thesis, portfolio companies, and funds by visiting our website.

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Key Takeaways

In this podcast episode with Jimmy Song, a Bitcoin educator, developer, and entrepreneur, the conversation largely revolves around Bitcoin and its role in disrupting current economic systems. Here are some of the key points discussed:

• Bitcoin Derangement Syndrome: Jimmy explains this phenomenon as a shift where individuals who were once Bitcoin proponents turn against it, often moving towards altcoins. This usually happens with non-technical people but can affect technical individuals as well. Factors such as ego and a lack of understanding of Bitcoin's underlying economics play a role in this syndrome.
• Role of Technical Knowledge: Being technically proficient helps in understanding Bitcoin but isn't a foolproof guard against derangement. The humility that comes from technical problem-solving and a strong grasp of economic principles are both important to stay grounded in the Bitcoin space.
• Economic Understanding: Jimmy emphasizes that Bitcoin's success relies on people gaining a deep economic understanding of it, rather than just using it for transactions. It takes time and effort to understand the true value proposition of Bitcoin.
• Bitcoin Adoption: The adoption curve has been unpredictable, with periods of rapid growth and slow development. Jimmy believes it may take another generation for Bitcoin to achieve widespread adoption.
• Fiat Money Critique: Jimmy criticizes the current fiat system, which he views as promoting rent-seeking behavior and hindering technological progress. He argues that better money, like Bitcoin, will prevail as it adheres to the laws of economics.
• Global Monetary Imperialism: Fiat money has enabled certain governments to perpetuate cycles of debt and inflation in developing countries, often supporting dictators over democratically elected officials due to their compliance with Western interests.
• Future of Bitcoin: Jimmy expects more corporations to adopt Bitcoin as they recognize its potential to preserve wealth and offer better returns than traditional investments.

Best Quotes

• "Bitcoin is not about you. It's a humbling experience trying to fix a bug, and you find out later that it was because you didn't fully understand what was going on." – Reflecting on the humility required in the technical aspect of Bitcoin.
• "The better qualities of money win. Harder money wins, just economically, those are some of the laws of economics." – Highlighting the inherent strength of Bitcoin's economic principles.
• "We were under the impression that if we can just get people to hold a little Bitcoin or use Bitcoin in a transaction... that would automatically get them all to understand it... what I found out is that no, that's not how adoption works." – On the misconception of Bitcoin's adoption process.
• "We've peaked, and we've started to go backwards... We should have cars that run on nuclear power; you don't ever need to refill it for like 10 years or something like that." – Criticizing the stagnation or regression in technological progress due to fiat money systems.
• "I'm sure a lot of people think I'm crazy about a lot of things and that's okay... I need first principle arguments, I need logical deduction and stuff like that." – Emphasizing the importance of critical thinking over conventional wisdom.

Conclusion

This podcast episode with Jimmy Song offers a deep dive into the world of Bitcoin, challenging the status quo of current economic systems and advocating for a sound monetary standard. The conversation sheds light on the complexities of Bitcoin adoption, the pitfalls of fiat currency, and the potential of Bitcoin to foster genuine innovation and economic progress. Through an exploration of technical insights, economic principles, and societal observations, Jimmy provides a nuanced perspective on the transformative power of Bitcoin. The episode serves as a reminder that the path to widespread Bitcoin adoption is paved with education, patience, and a steadfast commitment to economic truth.

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Key Takeaways

Bitcoin's Role in Inflation and Currency:
Bitcoin is not merely a hedge against inflation; it is a solution to it. Unlike real estate or equities, which can hedge inflation, Bitcoin operates independently of the dollar and is designed to replace it. Bitcoin's unique value proposition lies in its finite supply of 21 million coins, which cannot be altered by any government or entity, making it a fundamentally American concept that aligns with the principles of individual rights and freedom from government-endowed money.

Understanding the Federal Reserve System:
The Federal Reserve's creation of base money is the root of monetary expansion and inflation. Bank reserves are lent out, and the credit system grows or contracts based on the Fed's actions. When the Fed injects more base money, it prevents the natural contraction of credit that would occur when debts are unsustainable. This continuous expansion of base money is unsustainable and leads to the failure of money as a medium of exchange, resulting in a decline in the quality of life as goods become scarce.

Bitcoin Adoption and Government Response:
As more individuals and businesses adopt Bitcoin, it becomes an existential threat to government-controlled fiat currencies. The logical progression suggests that governments will only attempt to ban Bitcoin when it becomes so successful that it challenges their monetary monopoly. However, by that time, Bitcoin's widespread adoption and decentralized nature will likely make it resistant to such bans.

The Importance of Bitcoin Payments:
Bitcoin's value as a store of wealth is only as strong as its ability to be exchanged freely in the future. Therefore, building redundant payment rails that do not rely on fragile fiat systems is crucial. Zaprite, a platform for enabling Bitcoin payments, aims to facilitate this by providing tools for businesses to accept Bitcoin payments directly, without the need for intermediaries.

Best Quotes

• "There's nothing less American than the US dollar."
• "You can't solve a broken form of money with a new car or a new house or a new roof. The only thing that can solve a broken form of money is a better form of money."
• "Money doesn't grow on trees and ain't no such thing as a free lunch. Well, they're printing free lunches faster than ever before, and it's unsustainable."
• "Humans are adaptive. When you think about in the context of history of bubonic plague, and we're all here because some resilient people kind of powered through that."
• "The thing that matters most, the actual printing of money, is the base money."

Conclusion

Bitcoin represents a paradigm shift in the concept of money, offering a solution to the inflationary practices of traditional fiat currencies. Its design as a decentralized, finite currency aligns with the fundamental American values of individual rights and freedom from government control. As Bitcoin continues to gain traction, it poses a significant challenge to the existing financial system, prompting a need for redundant payment systems like Zaprite that empower direct Bitcoin transactions. The transition to Bitcoin is not merely a financial decision but a cultural and philosophical one that echoes the resilience and adaptability of humanity.