BTCNews.Today
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Tweets: @DylanLeClair_ @TXMCtrades @paulg @Leishman @biancoresearch @DylanLeClair_ @balajis @AltcoinPsycho @biancoresearch @FossGregfoss @balajis @biancoresearch @EpsilonTheory @zerohedge @gladstein $At its core, Bitcoin is a transaction database. Every 10 minutes, a new collection of such transactions, called a block, is queued up on Bitcoin, immutable for all eternity. Satoshi Nakamoto, the mysterious mastermind behind the first and most popular cryptocurrency, created that first transaction block themself. But Bitcoin is also a political project — at least, the idea behind it was and always will be political. Nakamoto inserted a message into the code that still forms the start of the decentralized Bitcoin database: “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.” This political message is as relevant these days as it was in early 2009 when a global financial crisis seethed anger and enraged people worldwide. The banks whose recklessness caused this crisis were not punished, but rewarded with taxpayer money. Governments have claimed since then to have learned their lesson.
$Please tag @BTCNEWS_TODAY on Twitter to submit tweets.
Tweets: @jameslavish @ericwallerstein @TimDraper @ericyakes @Andrew_J_Howard @DylanLeClair_ @balajis @LynAldenContact @twobitidiot @DSBatten @luke_broyles @CaitlinLong_ @twobitidiot @jack @unchainedcap @DylanLeClair_ $Credit Suisse is taking decisive action to pre-emptively strengthen its liquidity by intending to exercise its option to borrow from the Swiss National Bank (SNB) up to CHF 50 billion under a Covered Loan Facility as well as a short-term liquidity facility, which are fully collateralized by high quality assets. This additional liquidity would support Credit Suisse’s core businesses and clients as Credit Suisse takes the necessary steps to create a simpler and more focused bank built around client needs. That said don't hold your breath for some breathtaking surge: once the market sees though this rescue for what it is - yet another temporary stop gap measure - it will demand much more, especially after the ECB hikes rates which this "band-aid bailout" will allow the Central Bank to do, in the process guaranteeing an even bigger bailout down the line.
$El Salvador’s Bitcoin Office has announced a new six month educational program entitled “CUBO+” that aims to produce elite-level Bitcoin and Lighting developers through the Salvadoran university system. The program, beginning in May, will consist of a relatively small group of students, under 25, narrowed down from some of the brightest students in El Salvador’s universities. The program will be led and taught by some of the brightest minds in Bitcoin who will be announced soon. Classes will range in topics from high-level technical development specific to Bitcoin, to distributed technologies such as Holepunch, Nostr and Web5. The first two months of the program will be online, followed by a two week in-person bootcamp, featuring intense full-day courses located in San Salvador. The remaining months will include close online mentorship with the top names in Bitcoin. Students who complete the course will be presented with various options for continuing their Bitcoin journey, including the option to take on a full-time job at reputable Bitcoin companies. Otherwise, entrepreneurial opportunities and continuing education will be available.
Tweets: @BitcoinMagazine @bitcoinofficesv @bitcoinofficesv @gersonmartinez @bitcoinofficesv @bitcoinofficesv $Market observers are on alert to find out just how much extra funding the Federal Reserve’s new bank backstop program will ultimately add into the system, with analysts at JPMorgan Chase & Co. positing that it could inject anywhere up to $2 trillion in liquidity. The Bank Term Funding Program should be able to inject enough reserves into the banking system to reduce reserve scarcity and reverse the tightening that has taken place over the past year, the JPMorgan strategists wrote.
$Please tag @BTCNEWS_TODAY on Twitter to submit tweets.
Tweets: @100trillionUSD @PeterMcCormack @Austen @jimmysong @balajis @RadarHits @dhruv @CaitlinLong_ @bradmillscan @bitcoinbrink @_WolfNYC @TheBlueMatt @jameslavish @jameslavish $"... why did they react so harshly to what they said was our inability to give them the sufficient data? I believe it was probably to send the message that even though we were doing crypto stuff responsibly, they don’t want banks doing crypto. They denied that in their statement, but I don’t fully believe that. I think that they overreacted to what they saw was our problem with data, which may well have existed, but the data was improving. I think sloppy data is not a reason to close a bank that you have not decided was insolvent, and they’ve never said we were insolvent."
Tweets: @nic__carter @nic__carter @nic__carter @nic__carter @nic__carter @nic__carter @nic__carter @unusual_whales @nic__carter @nic__carter $The fundamental lesson we have to relearn is that even in a modest crisis deposits cannot be sacrificed, and rules on haircuts for provision of liquidity will go out of the window. Banks are wards of the state partly because they are at the heart of the credit system, but even more because their deposit liabilities are so politically important. The marriage of risky and often illiquid assets with liabilities that have to be safe and liquid within undercapitalised, profit-seeking and bonus-paying institutions regulated by politically subservient and often incompetent public sectors is a calamity waiting to happen.
Tweets: @anatadmati @FinancialTimes @Edelweiss_Cap @ftopinion $In its downgrade of the entire sector, the rating agency noted the extraordinary actions taken to shore up impacted banks. But it said other institutions with unrealized losses or uninsured depositors still could be at risk. The Federal Reserve established a facility to ensure that institutions hit with liquidity problems would have access to cash. The Treasury Department backstopped the program with $25 billion in funds and vowed that depositors with more than $250,000 at SVB and Signature would have full access to their funds. But Moody’s said that concerns remain. The firm said it expects the U.S. economy to fall into recession later this year, further pressuring the industry.
$Please tag @BTCNEWS_TODAY on Twitter to submit tweets.
Tweets: @getAlby @JordanSchachtel @saylor @nic__carter @jameslavish @River @charliebilello @LynAldenContact @RufasKe @dougboneparth @BitMEXResearch @lopp @BTC_LN @lopp @AleResnik @BTC_LN @balajis @BitMEXResearch @DSBatten @bitcoinoptech @marcrjandrew @gladstein @balajis @_k3tan @stackhodler @TuurDemeester $Following generations of taxpayer support and government involvement, politicians, regulators, and lobbyists have supplanted the market in determining what counts as capital, how it is calculated, and how much is enough. This artificial mechanism has resulted in a decline of both the level and quality of capital among the world’s largest banks. As the regulators have supplanted the market in setting bank capital standards, they increasingly rely on ever more arcane and complicated methods to determine how much capital a bank should hold. They assign risk weighs to the different asset categories held by banks. In contrast, the absence of the largest banks having sufficient equity capital as they entered the Great Recession, required governments to infuse public funds into many of them. It will be at significant public cost if that lesson must be relearned should bank capital weaken.
$Following the failure of Silicon Valley Bank — the biggest bank bust since the dark days of 2008 — and with Monday’s closure of Signature Bank, bitcoin has surged nearly 20% in the past 24 hours. While traditional banks struggle to maintain the trust of their customers, bitcoin’s decentralized system is suddenly looking at least a little appealing. As Satoshi Nakamoto, bitcoin’s enigmatic creator, once put it, “The root problem with conventional currency is all the trust that’s required to make it work." Well, turns out bitcoin’s trustless system has its own allure.
$The way the banking system works is, essentially, banks take your deposits and lend them out at higher interest rates than they pay you. They often keep reserves in U.S. treasury bonds, among other things, and everything seems to work until it doesn’t. Regional banks will bear the brunt of this hit, as demonstrated by the recent collapse of SVB. Federal regulators are desperately trying to prop up confidence in the system by backing 100% of depositors’ money, but at what cost? The scenario playing out before us is a stark illustration of what happens when trust starts to break down in a system fundamentally based on the idea of trusting, rather than verifying. Bitcoin is fundamentally different. You can eliminate reserve requirements, duration and interest rate risks, counterparty risks and the like. There is no trust in Bitcoin. There is only code.
Tweets: @The_Real_Fly @balajis @GRDecter @lisa_hough_ $Because only the first $250,000 of each deposit at a U.S. bank is insured by the Federal Deposit Insurance Corporation (FDIC), last week's collapse of SVB sparked concerns that its small-business clients would be unable to pay employees. Some 89% of around $200 billion in deposits held by SVB at the end of 2022 was uninsured, according to the FDIC. Regulators have now removed that risk. But in doing so "they took another step towards demonstrating that they are unwilling to allow free markets to sort themselves out," said Toronto-based independent proprietary trader Kevin Muir. Some analysts said the U.S. actions were not a bailout, because shareholders and unsecured debtholders of SVB would not be covered.
Tweets: @GRDecter @RepThomasMassie $Please tag @BTCNEWS_TODAY on Twitter to submit tweets.
Isaac led the FDIC in the early 1980s amid widespread bank failures and high interest rates. In a Politico article published Sunday, he said of the SVB failure, “There’s no doubt in my mind: There’s going to be more. How many more? I don’t know. How big? I don’t know. Seems to me to be a lot like the 1980s.” On Saturday, the FDIC asked officials at small and midsize lenders, including First Republic Bank, about their financial situations, Bloomberg reported. They also reportedly discussed setting up a new special vehicle to reassure depositors—and help contain any panic.
$Please tag @BTCNEWS_TODAY on Twitter to submit tweets.
Tweets: @nic__carter @cz_binance @naval @TuurDemeester @jackmallers @RegulatoryJason @alexbosworth @Amanda_Cavaleri @marcrjandrew @ericyakes @DzambhalaHODL @Eric_BIGfund @marcrjandrew @dhruv @Excellion @RegulatoryJason @Leishman @gladstein @MartyBent @BrianTheMint @RegulatoryJason @bramk @RegulatoryJason $Federal regulators announced that depositors of Silicon Valley Bank will be paid in full In a statement released Sunday, the Treasury, Federal Reserve and the FDIC said they would "fully protect" depositors with funds in the bank. SVB was shut down Friday afternoon after a stock price crash, leaving customers panicking. The government statement issued on Sunday stated that "Shareholders and certain unsecured debtholders will not be protected. Senior management has also been removed. Any losses to the Deposit Insurance Fund to support uninsured depositors will be recovered by a special assessment on banks, as required by law."
Tweets: @heavilyarmedc @DylanLeClair_ @heavilyarmedc @OGBTC @NathanLevy10 @FedGuy12 @RepThomasMassie @saylor @MebFaber @GordonJohnson19 @CaitlinLong_ @CaitlinLong_ @LynAldenContact @unusual_whales @Pledditor @DylanLeClair_ @alexbosworth @NeilJacobs $Regulators have closed down crypto-friendly lender Signature Bank in an attempt to stave off a banking crisis. The Federal Reserve, Federal Deposit Insurance Corporation (FDIC) and U.S. Treasury announced the New York-based bank’s closure under a “systemic risk exception” Sunday (March 12) evening, two days after the collapse of Silicon Valley Bank. According to the statement, Signature Bank was closed Sunday by the New York Department of Financial Services (NYDFS), which turned over control to the FDIC. “All depositors of this institution will be made whole. As with the resolution of Silicon Valley Bank, no losses will be borne by the taxpayer,” the statement said. “Shareholders and certain unsecured debtholders will not be protected. Senior management has also been removed. Any losses to the Deposit Insurance Fund to support uninsured depositors will be recovered by a special assessment on banks, as required by law.” Signature Bank had about $110.36 billion in assets and total deposits of about $88.59 billion as of the end of 2022, NYDFS said Sunday.
Tweets: @gurgavin @NickTimiraos @lhfang @BitcoinMagazine @josephzeballos $One unique aspect of SVB was its decades-long focus on the venture capital industry. The bank’s loan growth had been slowing as interest rates rose. Meanwhile, when announcing its $21 billion dollars in securities sales on Thursday, SVB said it had taken the action not only to lower its interest-rate risk, but because “client cash burn has remained elevated and increased further in February, resulting in lower deposits than forecasted.” SVB estimated it would book a $1.8 billion loss on the securities sale and said it would raise $2.25 billion in capital through two offerings of new shares and a convertible bond offering. That offering wasn’t completed. So this appears to be an example of what can go wrong with a bank focused on a particular industry. The combination of a balance sheet heavy with securities and relatively light on loans, in a rising-rate environment in which bond prices have declined and in which depositors specific to that industry are themselves suffering from a decline in cash, led to a liquidity problem.
$Please tag @BTCNEWS_TODAY on Twitter to submit tweets.
Tweets: @LynAldenContact @anilsaidso @alexbosworth @BitcoinMagazine @TuurDemeester @LynAldenContact @skwp @anilsaidso @AnitaPosch @nlw @lopp @alexbosworth @gladstein @dhruv @MacroAlf @ErinEMalone @balajis @CitronResearch @TimDraper @AnitaPosch $prominent blockchain venture capitalists (VCs) have over $6 billion worth of assets held by the now-defunct financial entity. These include $2.85 billion from Andreessen Horowitz (a16z), $1.72 billion from Paradigm and $560 million from Pantera Capital. A16z currently holds active investments in projects such as Alchemy, Sky Mavis and Yuga Labs, and was previously an investor in cryptocurrency exchange Coinbase. Paradigm has invested in projects such as Compound, Cosmos and Uniswap. Meanwhile, Pantera Capital holds stakes in projects such as 1inch, Ankr and Zcash.
Tweets: @balajis @BillAckman @BillAckman @terronk @Cointelegraph @spencernoon @Cointelegraph @davidmarcus $First, SVB was an FDIC insured bank, meaning that up to $250,000 of every insured depository account (checking account, etc.) in the bank is safe. If you have $250,000 or less in an SVB account, it’s no problem — the government will pay you your cash. The problem here is that most of the deposits in SVB — 93%, by most reports — were not FDIC insured, because they were over the $250,000 limit. These deposits will be partially paid off by the FDIC, which will sell SVB’s assets and pay deposit-holders an “advance dividend” sometime in the next week.
Powell pointed to multiple industry collapses beyond the FTX exchange and several high-profile instances of fraud to illustrate “that regulated financial institutions should be quite cautious in doing things in the crypto space.” “We have to be open to the idea that — somewhere in there — there is technology that can be featured in productive innovation that makes people’s lives better … we don’t want to stifle innovation,” Powell told the committee members, adding that he would welcome Congress stepping in with a new “workable legal framework” for the crypto industry. Silvergate Bank, a former favorite of FTX and a perennial caterer to the crypto industry, has been serving as a real-time example of the dangers the regulators highlighted of mixing crypto with traditional banking services. Silvergate’s exposure to the crypto sector has proved to be disastrous for its business prospects, and the bank’s ability to operate is now under question, as most of its crypto customers have withdrawn their deposits from the institution.
Tweets: @NickTimiraos @business @TheBlock__ @PeterSchiff @Crypto_Crib_ @ramahluwalia $Ads
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Tech & Dev
BOLT, which stands for "Basis of Lightning Technology", refers to a set of technical specifications or protocols that define the rules and procedures for how the Lightning Network should operate. BOLT was first introduced in 2017 by a group of developers working on the Lightning Network, and since then, it has undergone several updates and revisions. The protocols are open source and available to anyone who wants to use or develop Lightning-related applications and services. There are several layers to BOLT, each of which defines a specific set of rules and protocols. Overall, BOLT provides a comprehensive specification for the Lightning Network, allowing different implementations to interoperate with each other seamlessly.
$While Secure Elements sound like a fantastic place to store something like a Seed Phrase, they’re also closed source, proprietary chips that cannot be openly verified due to NDAs the manufacturers force everyone to sign. So if you want your Hardware Wallet to be entirely FOSS (Free and Open Source Software), you can’t use them. Many of the top Hardware Wallets out there all use the same STM32 microcontroller, which becomes a problem because now you have the vast majority of Hardware Wallets all using the same product from the same manufacture: STMicroelectronics.
$Nostr is a revolutionary protocol for social media because it provides a decentralized, monetizable, incentive-aligned, market-driven, and open-source platform for social interaction. Nostr has the potential to create a new era of social media that prioritizes user sovereignty and free market competition.
Tweets: @lopp $The only Bitcoin spending conditions in widespread use today are simple single-sigs and simple multisigs, even though Bitcoin Script, the language used to encode spending conditions in Bitcoin transactions, is much more powerful than that. The reason for this is that Bitcoin Script, while appearing to be a simple stack-based language on the surface, is actually very difficult to use in practice. For every new spending condition a developer might want to create, a lot of time has to be spent making sure it is correct and sound under all circumstances, which can be hard to reason about.
$Bitcoin is an open-source project that is permissionless, meaning anyone can join the network and become part of the network. While Running a bitcoin node can help secure the network for all users, ensure faster transactions, and contribute to a decentralised economy that exists without a centralized server, it does require some operational and security practices. This article is essential if you plan on running a node or run one and want to ensure you’re plugging some of the possible gaps for an attack.
$BIP-300, which enables a feature called Drivechains on the Bitcoin network. Normally, one would hope that the author of a BIP is not very central or relevant to whether or not it gets attention, but as Sztorc seems to be the major voice continuing to push for Drivechain after being essentially rejected or ignored on the forums and mailing list, it might be worth knowing this brief background & motivation. Sztorc is no intellectual slouch, and he's very open about his conviction that the success of Bitcoin is fully dependent on its adoption of Drivechain. Drivechains fundamentally change the transaction validation mechanism from “all spends must provide cryptographic proofs” to “some spends do not require cryptographic proofs”. It fundamentally changes the ability to attack the network from “the attacker must acquire 51% of the hash rate” to “the attacker must propose a transaction and fight out ownership in meatspace”. It fundamentally changes attack response from “move hash away from the bad actor” (e.g., out of a pool, or by adding more honest hash) to “convince all the miners or nodes to do a UASF in favor of one party over another”.
Tweets: @barackomaba $Building a Bitcoin wallet is no easy task, but with the right tools and frameworks, developers can build robust and secure wallets that provide a seamless user experience. The use of Flutter, BDK, and other standards and protocols provides a powerful and reliable platform for building Bitcoin wallets.
Tweets: @Anipy1 @Anipy1 @Anipy1 @Anipy1 $What’s the best solution for you? The best solution is the one that fits your personal needs best. Every wallet has different features, as well as up- and downsides. It is on you to figure out your needs and possibilities and then to find the optimal solution for those. Non-custodial Lightning wallets might be a little less convenient to use and come with an initial cost when setting up the channels, but you are in full control over your own funds. You are financially sovereign.
Tweets: @AnitaPosch @TheGemHodlers @BTC_LN $lnurl-auth is very unique in the sense that it doesn’t even need a Lightning wallet to work, it is a standalone authentication protocol that can work anywhere. The basic idea is that each wallet has a seed, which is a random value (you may think of the BIP39 seed words, for example). Usually from that seed different keys are derived, each of these yielding a Bitcoin address, and also from that same seed may come the keys used to generate and manage Lightning channels. What lnurl-auth does is to generate a new key from that seed, and from that a new key for each service (identified by its domain) you try to authenticate with.
Tweets: @dergigi @dergigi @k00bideh @kerooke $It's great to see Bitcoiners joining Nostr, the decentralized social network. This is a good, short post from ConsentOnChain blog that all Nostriches should read.
Tweets: @jack @pleblira @jb55 @andreneves @cameri @melvincarvalho @derekmross @JeffBooth @yeg0rpetrov @pippellia @notgrubles @cameri @jameslavish @SovrynM @vishalxl @fiatjaf @fiatjaf @CaptFrancisDank @nitesh_btc @spiralcrunch @shukla @nvk @shukla @nvk @resistancemoney @BTCNEWS_TODAY $Podcasts
| Date | Name | Episode |
|---|---|---|
| 2023-03-10 | Coin Stories with Natalie Brunell | The Path to $10 Million per Bitcoin with Jesse Myers (@Croesus_BTC) |
| 2023-03-04 | What Bitcoin Did | WBD Live - NYC: Junseth on Ordinals with Junseth |
| 2023-03-01 | Coin Stories Podcast | Caitlin Long: The Battle with Washington D.C. Over Crypto & Bitcoin ("Then They Fight Us") |
| 2023-02-28 | Stephan Livera Podcast | Bitcoin Multi-signature with Craig Raw |
| 2023-02-28 | Coin Stories with Natalie Brunell | Caitlin Long: The Battle with Washington D.C. Over Crypto & Bitcoin ("Then They Fight Us") |
| 2023-02-26 | Stephan Livera Podcast | Bitcoin Multi-Signature With Craig Raw |
| 2023-02-24 | Bitcoin Magazine Podcast | Bitcoin vs the Dollar w/ Preston Pysh and Dylan LeClair |
| 2023-02-22 | Bitcoin.Review Podcast with NVK & Guests | Demystifying and Understanding Bitcoin Core Development ft. Sjors, Schmidty & James O'Beirne |
| 2023-02-20 | The Bitcoin Layer | The 24 Risks of Equities with Michael Saylor |
| 2023-02-16 | What Bitcoin Did | Bitcoin Mining & the Energy Grid Transition with Troy Cross & Shaun Connell |
| 2023-02-16 | Swan Signal - A Bitcoin Podcast | Dr. Jeff Ross & James Lavish | Hedge funds, Inflation and Bitcoin | Swan Signal E96 |
| 2023-02-15 | Stephan Livera Podcast | Q1 And Bitcoin Security With NVK |
| 2023-02-14 | POD256 | Bitcoin Mining News & Analysis | State of the Network, Industrial Scale Miner Consolidation, Special Guest: Casey Rodarmor - Creator of Ordinals |
Longform
This article details why the incumbent global financial system is irreversibly broken, how it got to this point, and what the world will look like coming out the other side of the present crisis. It uses the frameworks presented in Ray Dalio’s Principles for Navigating Big Debt Crises along with author's own analysis to contextualize the global economic landscape, and details how the emergence of bitcoin as a global monetary asset will serve as a release valve.
$It's easy to see how early adopters of real estate on some forbidding frontier earned their wealth, even if it was only by being early and willing to risk ruin. We also have little trouble celebrating early investors in Amazon or Google or Apple for their foresight and daring to bet on a bold vision of the future. And yet, many people seem unwilling or unable to grant the same recognition to early Bitcoin adopters. When it comes to Bitcoin, the broader public is quick to label early adopters as somehow lucky for the riches they didn’t seem to earn. Ultimately, it doesn’t matter whether you think Bitcoin’s wealth distribution is fair or not. All that really matters is whether you decide to secure some acreage for the benefit of your family and its future generations, as Juan Camarillo did.
Tweets: @Beautyon_ @Croesus_BTC @marcrjandrew $In the United States, the banking system as a whole has $22.9 trillion in assets and $20.7 trillion in liabilities. The problem, of course, is that their assets are riskier and less liquid than their liabilities, and so they face both liquidity risks and solvency risks if things aren’t managed well, or if they face external shocks that are larger than they can deal with. The majority of bank liabilities are deposits for individuals and businesses, and these deposits currently total $17.6 trillion. That’s what you and I consider to be our “money”. They offer very low interest rates, especially for checking and savings accounts. Banks currently have just $3 trillion in cash to back up their $17.6 trillion in deposits. The majority of this cash is just a ledger entry with the U.S. Federal Reserve, and so it is not tangible. Somewhere around $100 billion of it ($0.1 trillion) is held by banks in the form of actual physical banknotes in vaults and ATMs. So, the $17.6 trillion in deposits are backed up by just $3 trillion in cash, of which perhaps $0.1 trillion is physical cash. The rest is backed up by less liquid securities and loans. Regulators want banks to be reasonably safe, but not “too safe”. They want all banks to be leveraged bond funds to a certain degree, and won’t allow safer ones to exist.
$Open commerce requires the transfer of both information and value. Therefore, both open monetary networks and open information networks (and their actual usage rather than merely their existence) matter for the study of economics, geopolitics, and various long-range investment outcomes. In general, any jurisdiction that is attractive in the sense that people and capital want to come to it, and information can be shared freely within it and with the rest of the world, should welcome such technologies. Open monetary and information networks, especially if their usage spreads around the world in ways that are hard to prevent, enable and accelerate more value flowing into these freer jurisdictions from elsewhere. Borders become less relevant from an economic point of view. On the other hand, any jurisdiction that is unattractive in the sense that people and capital want to escape it, and information is restricted within it and with the rest of the world in order to protect the rulers, should fear such technologies. Open monetary and information networks create more leaks of capital and information into and out of their jurisdictions, empowering their people, or forcing more expenditure by their rulers to increase the existing restrictions to maintain their isolation.
$One of the more misunderstood topics in the world is banks. How they work, how they succeed, and how they fail are all things that are typically described with some mix of factual accuracy, factual inaccuracy, deliberate obfuscation, and straight up confusion so profound it is neither correct nor incorrect, but rather so incoherent it seems like it originated from another dimension. To that end, in light of the current Silvergate situation, I am going to endeavor to do three things with this post: 1. Describe a deliberately oversimplified model of how a bank works 2. Describe how banks typically fail, in light of this model 3. Apply points one and two to the current situation at Silvergate
Tweets: @CampbellJAustin @nic__carter @CampbellJAustin $As Powell and the Federal Reserve are emboldened to tighten policy into a global slowdown, with the dollar strengthening to new highs on a weekly basis and energy prices skyrocketing around the world, we view it as increasingly likely that something breaks in a massive way over the next six months. Six months may even be too generous of a timeline. Given the Fed plans to begin quantitative tightening next month, reducing its balance sheet to the tune of $95 billion per month, we expect something under the surface will crack in financial markets. With this being said, we think what “breaks” is liquidity in the U.S. Treasury market, as a soaring dollar, skyrocketing energy prices and subsequently contracting global productivity lead to a sell-off in dollar-denominated assets. There still is a massive implicit short dollar position around the world (USD-denominated debt). We still have yet to see the blow-off top short squeeze in the USD. In that environment only two places are safe, volatility (as an asset class) and dollars. Everything else sells. Bitcoin won't be insulated, nothing will. When that time comes, the Fed will be forced to print into an inflation spike. This is when bitcoin comes back with a vengeance.
$Bitcoin mining is currently one of the most competitive and fragmented industries in the world. Our Porter’s Five Forces analysis indicates that the bitcoin mining industry will remain ultra-competitive and fragmented. The industry has exceptionally low barriers to entry, meaning there will be a constant flow of new entrants into the sector. The low barriers to entry are great for decentralization but put pressure on the profit potential of existing players. The ultra-competitive nature of bitcoin mining has two implications. Firstly, the industry will likely stay decentralized, and secondly, only the lowest-cost operators will survive and thrive over the long term.
Tweets: @JMellerud $While bitcoin’s usefulness as a store of value and medium of exchange is becoming more widely appreciated, those choosing to adopt it tend to cluster into stages. These stages are: Learn, Insure, Save, Allocate, Commit, and Endure
Tweets: @unchainedcap @unchainedcap @unchainedcap @unchainedcap @unchainedcap @unchainedcap @unchainedcap @unchainedcap $“Bitcoin” encompasses two related but distinct concepts. First, individual bitcoins (lowercase b) are units of (fiat) digital currency. Second, the Bitcoin protocol (uppercase B) governs the decentralized network through which thousands of computers across the globe maintain a “public ledger”—known as the blockchain—that keeps a fully transparent record of every authenticated transfer of bitcoins from the moment the system became operational in early 2009. In short, Bitcoin encompasses both (1) an unbacked digital currency and (2) a decentralized online payment system. Whether Bitcoin becomes a bona fide money is still an open empirical question, but at this point—since Bitcoin is already a medium of exchange—Mises’s regression theorem doesn’t have any bearing on the outcome.
$Transcript of the 24 Risks of Equities with Michael Saylor from the Bitcoin Layer Podcast. Michael covers the following risks: #1: Governance Risk #2: Operational Risk #3: Strategic Risk #4: Financial Risk #5: Competitive Risk #6: Technology Risk #7: Political Risk #8: Facilities Risk #9: Regulatory Risk #10: Employee Risk #11: Vendor Risk #12: Customer Risk #13: Reputational Risk #14: War Risk #15: Currency Risk #16: Tax Risk #17: Weather Risk #18: Customs Risk #19: Legal Risk #20: Tort Risk #21: Patent Risk #22: Health Risk #23: Lifecycle Risk #24: Dilution Risk
$Nostr is for developers. It’s an open-source project for builders that serves as a broadcast platform and content hub aggregate. From the architecture alone, we can start to differentiate it from Twitter or any other existing platform. This protocol is newly, actively developed — so while it tugs at the root of topics like free speech and privacy, the tech itself is in its nascent stages. Nostr aims to decentralize private communications and data while allowing us to interact in new ways. For all of those reasons, we should learn about it — perhaps in the same way some of us should have learned about Meta products before dishing our credentials.
$On one side of this, a sharp and persistent increase in the broad money supply is the biggest quantifiable correlate with price inflation. On the other side, sharp changes in the supply of goods and services (e.g. a major boom or a major loss in productive capacity) also significantly affect price inflation. We can see this with long-term charts of several different developed countries as examples. These charts show the five-year rolling cumulative amount of broad money supply growth and consumer price index growth. Areas where money supply growth greatly exceeded changes to consumer price index were generally due to some sort of productivity boom. combination of high debt, high interest rates on that debt, aging demographics, geopolitical tensions, and tight energy supplies are likely to result in ongoing waves of inflation. For periods where we generally get inflation under control, it will likely be due to global demand suppression and economic stagnation, rather than what we actually want: global disinflationary growth.
$Greg Foss thinks Bitcoin should be considered default insurance on the entire global fiat currency system—like a CDS on the US dollar, Canadian dollar, British pound, euro, yen, yuan, and all the rest of the government currencies. Some proponents believe the endgame for Bitcoin is to eventually emerge as the world’s dominant form of money. It’s a process called “hyperbitcoinization”—or what I like to call The Bitcoin Supremacy. That’s why Bitcoin is even better than a CDS. It provides insurance against the failure of the entire worldwide fiat currency system, has no counterparty risk, and doesn’t expire.
$Would the collapse (in terms of redemptions) of a stablecoin cause contagion in the traditional financial system? To answer this, first we have to clarify the starting point, and then there is actual data that can answer many of these questions.
Tweets: @PaxosGlobal @cz_binance @Schuldensuehner $history of debt in bitcoin mining, examined key principles of debt, and looked at some of the most common structures available to bitcoin miners. Now that we understand the landscape, we will take a look at the considerations for borrower and lender alike, the effect of leverage on mining returns, and discuss how the future of the market might look. Here are the main topics covered in Part 2: Key considerations from a lender's point of view and from miners' point of view, a case study, comments on the future of debt in Bitcoin mining, shortcomings of ASIC-backed debt, cost of capital being king, and The Forever Forthcoming Hash Rate Marketplace.
$Computation is competition. While the quantum computing threat is not something we expect to be worth worrying about for many years, it is better to be proactive rather than wait for it to come for us. Security is the science of staying ahead. The very act of wealth preservation is comprised of staving off the many attempts to steal it.
$Over the past 10+ years, there has been a growing movement of people adopting a low-time-preference strategy of saving and investing with the goal of achieving financial independence early in life, putting themselves in a position to retire earlier than the traditional age of 65. Hence the acronym, FIRE: Financial Independence, Retire Early. Bitcoin allows you to mitigate the certainty of dollar debasement without exposing yourself to the risks of investing. A deep dive into the bitcoin rabbit hole tends to lead to the conclusion that its adoption will continue apace, leading to its value rising exponentially. Bitcoin represents the greatest asymmetric bet the world has ever seen.
Tweets: @ts_hodl $The longstanding compromise on transaction sizes, how Taproot and SegWit inadvertantly blew it up, and the nascent NFT protocol emerging in its wake.
Tweets: @resistancemoney @AsherHopp $Abstract: In this piece we explore why Dapps are typically built on Ethereum rather than Bitcoin, which takes us all the way back to March 2014. We examine a debate about whether and how a Dapp protocol called Counterparty should use Bitcoin’s blockchain. This was sometimes called “The OP_Return Wars”. We explain the history of OP_Return usage and sidechains in Bitcoin. We conclude by arguing, whether one likes it or not, that it was the culture in the Bitcoin development community in 2014 and the negative view of using Bitcoin transaction data for alternative use cases, which played a major role in pushing developers of these Dapps onto alternative systems like Ethereum, along with other factors.
Tweets: @fiatjaf @resistancemoney @benthecarman @alexbosworth @brian_trollz @astridwilde1 @BitMEXResearch $Part I of the two-part series covers the following topics: (1) The History of Debt in Bitcoin Mining (2) Principles of Debt: Capital stack overview, Creditworthiness, Collateral, Covenants, Cost of capital, Back-end financing (3) Debt Products for Bitcoin Miners: Asset-backed debt, Corporate Debt and (4) Summary Comparison.
Tweets: @BraiinsMining @BraiinsMining @emilyjnicolle $Disconnect from price. Secure your bitcoin for the next 10x. Avoid short-term capital gains. Tread carefully with lending opportunities. Develop your own market analysis. If you want to truly change your fortune, use your bitcoin journey as an opportunity for education, rather than a search for overnight riches. Develop new skills. Keep learning about money, technology, economics, and all the problems Bitcoin was designed to solve. The more you understand and appreciate bitcoin, the closer you come to making a splash of your own.
$Exasperated with a conversation, I asked my friend directly, "What do you think the probability is that Bitcoin hits $1M per coin?" My friend replied without hesitation, "0.001%." I laughed and said I put it at 80%. We had a conversation about my friend's skepticism, and I wondered if there was some information asymmetry, or if it was self-motivated beliefs. My friend group is full of people like this, highly intelligent and successful, yet resistant to Bitcoin. I've found it to be a topic of fascinated frustration. I believe that my friends are resistant to Bitcoin because of their trust in the current system, and see Bitcoin as a radical departure from it. In contrast, I see Bitcoin as a necessary response to the flaws in the current system and a trust-minimized store of value.
Tweets: @BitcoinAudible @sunny_satoshi @sunny_satoshi @epodrulz @stephanlivera @TheGuySwann @petermiyoung @jakeeswoodhouse $Many speculate that Bitcoin’s security will lapse with the end of the mining subsidy. But other factors will continue to incentivize miners. Two prominent and likely factors are: (1) Higher transaction fees due to base layer settlement activity for higher layers which in turn is the result of increased adoption and (2) Bitcoin miners can act as an auxiliary tool for other business practices, an example being the highly-overlooked development in the mainstream involving the Bitcoin miners’ incentive to pursue stranded, wasted or excess energy.
$Bitcoin provides the ultimate form of transferable value because it preserves the encapsulated wealth. This is an opinion editorial by Leon Wankum, one of the first financial economics students to write a thesis about Bitcoin in 2015.
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