The great bitcoin debate: #ossification vs. #innovation   🗣 The #bitcoin community has contrasting opinions on the future of the bitcoin network.   Some people are “monetary #maximalist” and believe that Bitcoin should remain as it is, as it’s already performing the function it was aimed for: transferring value across the world, in a censorship-resistant manner, with close to immediate finality and at a low cost 💸 .   Other people are “platform maximalist” and believe that Bitcoin protocol should extend its functionalities well beyond its monetary use case and that introducing new features is necessary to address #scalability issues, improve user experience, and expand use cases beyond store of value.   ⛔ This debate is as old as Bitcoin and it will probably never end.   Advocates of ossification strongly believe in the fundamental properties of #decentralization, #security and #immutability of the network: Bitcoin has these three properties and we should not risk extending its utility beyond its monetary use case.   Any change to the protocol, despite being tested and retested by core developers, might bring unintended consequences and create vulnerabilities and potential attack surfaces to Bitcoin.   The Taproot update was thought to increase privacy, scalability and security, but has created the possibility to create “inscriptions” and to mint ordinals on-chain. 🤡 Monkey jpegs and other valueless NFTs, originally created on other blockchains, started to be written also on the Bitcoin blockchain, driving away extremely scarce and valuable blockspace from transactions to pure gambling activities.   This is a major unintended consequence of a protocol upgrade and represent a risk that ossificators don’t want to face.   Platform maximalists would like Bitcoin to be the everything protocol, where you can directly interact with various decentralized applications (dApps) and smart contracts, similar to platforms like Ethereum 💩 .   They envision a future where Bitcoin serves as the foundational layer for a wide range of financial services, decentralized exchanges, and even social networks, all built on top of its secure and censorship-resistant infrastructure.   👨‍💻 Introducing additional functionalities to Bitcoin's protocol requires careful consideration of trade-offs between innovation and maintaining the network's core principles. There are concerns about potential security risks, scalability issues, and decentralization.   Satoshi gifted humanity the best form of money ever invented. Absolutely scarce, transparent, and immutable money which removes state monopoly on the creation of currency and can grant real freedom to individuals, by allowing them to travel the world with their wealth transported in their minds 🤘 . 🐢 I believe that #innovation in Bitcoin shall come as fast as a turtle with a broken leg. What’s your position?

Demand-Response (DR) Programs: Another Benefit of #Bitcoin #Mining   🚨 Energy grids serve the function of bringing energy from anywhere it is produced to the end users: residential buildings, offices, industrial companies, and any other sector of the economy.   Technical offices of engineers monitor daily maps of energy distribution, demand and load flexibility, to direct energy where it is required at any specific time, so to not overcharge or undercharge the grid and create imbalances.   🔌 Energy grids facilitate the transmission of electricity generated from fossil fuel sources or renewable plants and allow to carry it around via specific infrastructure.   Fossil fuels tend to generate #baseload #electricity, where energy is produced constantly. #Renewable sources (e.g., solar and wind) tend instead to produce peak-load power due to the intermittent nature of their sources and create imbalances to the electric grid any time the immediate supply doesn’t meet the exact energy demand.   Production peaks 📈 cause the owners of the PV or wind farm to sell electricity at negative prices 📉 during hours when electricity demand is low, not allowing the plant to be economically feasible and survive without any government subsidy.   DR programs are created to stabilize the grid and mitigate the effects of excess supply or demand: specific buyers in need of electricity can turn on when energy is abundant (and cheap) and curtail activity once the energy is needed elsewhere.   ⛓ Both consumers and grid operators benefit from DR. For consumers, DR programs can lead to lower energy bills by offering incentives for shifting usage to off-peak hours when electricity prices are lower. Grid operators enjoy higher grid stability, reduced reliance on expensive peaker plants, and improved overall efficiency.   Bitcoin miners represent one of the best flexible loads to make effective DR, via: - adjusting their energy consumption patterns to times of the day when renewable energy is abundant and traditional electricity demand is low ⬇ . - quickly ramp up or down energy usage in response to fluctuations in grid demand, helping to stabilize the grid and prevent blackouts or brownouts. - temporary reduction or suspension of their mining activities ⛏ during periods of high electricity demand or grid congestion by voluntarily curtailing their energy consumption, while earning incentives or rewards from grid operators.   In a world where the energy mix is tilting towards the intermittent nature of sources like solar and wind that create imbalances in supply and demand and destabilize the grid, Bitcoin miners can step in as a flexible energy consumer that allows renewable sources to be properly integrated with the electric grid.   ✳ DR programs are a win-win strategy for all stakeholders involved, promoting cheaper electricity prices to consumers, a more balanced grid, and allowing a decentralized, immutable monetary network to work on the cheapest electricity available.

Hey #nostr community I’ve been offline for about 10 days, who can tell me more about @Michael Saylor and @ODELL situation, as well as about 10 mining pools having one single custodian? Really eager to learn here. Thanks in advance

💡 Waste Heat: A Benefit from #Bitcoin #Mining   Bitcoin mining is an energy-intensive business which transforms any source of #electricity into global #capital.   During the #mining process, electricity is used to power specific computers that perform a trial-and-error process to find the correct solution to a mathematical puzzle.   ♨ This computational effort creates #waste #heat as a byproduct of mining, which is one of the reasons why Bitcoin in the past has been attacked for “heating the world”.   Different mining companies have started to develop strategies to capture and manage the waste heat and make it useful for other purposes.   In the 🇳🇱 , natural gas was the energy used to generate heat in greenhouses to let tulips flourish during the cold winters. Since 2022, when Russia invaded Ukraine and the gas price spiked, Bitcoin Brabant developed a way to use waste heat from Bitcoin mining to warm greenhouses containing tulips 🌷 . The servers and computers are powered by solar panels on the building’s roof, creating an environmentally sound carbon-negative way to mine Bitcoins and grow tulips.   In 🇦🇹 and 🇩🇪 , 21energy has been developing space heaters that harness waste heat from mining and provide sustainable heating in residential or industrial complexes. In this way, the cost savings from not using gas to heat the home are redirected into electricity to mine Bitcoin. Waste heat keeps the house warm and the mining process generates revenues in bitcoin over the medium term.   🚜 Another application comes in the so-called Agriculture Mining sector:   In 🇸🇪 , EcoDataCenter has partnered with a local agriculture cooperative to utilize waste heat as a warming method for vegetable cultivation. By channelling waste heat into the greenhouse, crop growth is enhanced and the growing season extended, leading to increased agricultural productivity and profitability.   In the 🇳🇱 , @Koepon Farm has implemented bitcoin mining to use heat byproduct to maintain optimal temperatures in its barns and dairy facilities 🐄 . This innovative approach allows to reduce heating costs while increasing energy efficiency and sustainability in agricultural operations.   @Green Tech Solutions, in collaboration with the local municipal authorities, has been the pioneer of a district heating project in 🇳🇴 . They have developed a specific heat recovery system, which converts the heat directly in the data centre in a more usable form, to then be channelled to the district heating network 🌡 . The district heating network delivers hot water or steam to buildings, where it is used for space heating, domestic hot water, and other heating purposes.   Overall, the harnessing of waste heat from mining operations presents a dynamic frontier in sustainable energy innovation. ♻ Efficiently repurposing waste heat not only drives cost savings and energy efficiency within mining operations, but could also drive many #sustainability initiatives for a greener future.

👑 #Bitcoin 2024-2034: The Ultimate Gold Mining Rush   In the history of human civilization, there have been moments when the discovery of precious metals sparked unprecedented economic booms and reshaped societies.   From the California Gold Rush of the XIX century to the Klondike Gold Rush of the early XX century, these periods of rushing into mining and finding new #gold discoveries symbolize the need to store wealth into something sound and created many opportunities 🧠 and applications around the metal.   Bitcoin’s fixed supply schedule, with new coins mined on average every 10 minutes, is about to undergo its 4th halving whereby the new mined coins per block will halve from 6.25 to 3.125.   ~19.7 million bitcoin are in circulation, about 94% of the total supply. The #halving coming in April will mark one of the last two époques where a “significant” amount of bitcoin can be mined every ten minutes.   In 2028, the total supply mined will be 97%.   In 2032, 98.4%.   👀 By 2034, 99% of the total bitcoin supply will already be in circulation and the world will have to contend the remaining 210.000 bitcoin to be issued across approx. 106 years, until 2140.   Public media has always attacked bitcoin #mining as bad for #environment, wasting major sources of electricity and creating huge CO2 #emissions – therefore marking a negative news flow on Bitcoin (the asset and the network).     But such narrative has started shifting during 2023 as new research has brought to light objective benefits resulting from bitcoin mining. 🌱 The harnessing of any stranded source of energy, the efficiency improvements to energy grids, the development of energy infrastructure in rural areas of Africa or South-East Asia which was not economically feasible before bitcoin mining.   Bitcoin mining monetizes any type of #stranded #energy in a global, incorruptible, and censorship-resistant form of capital 💰 Any energy company will integrate bitcoin miners ⛏ in their operations, as it will make their business more efficient and less prone to waste. Many other companies will also integrate mining in their activities and will use waste heat from mining computers to dry crops, power heat pumps or provide a new form of district heating. Applications are numerous today and will be many more in the years to come.   As the Bitcoin network grows further and onboards its first billion users while the mining sector becomes the most competitive on the planet, the period from 2024 to 2034 could be aptly described as the "Ultimate Gold Mining Rush" of the digital age.

#Corporate #strategy of the future   💰 Treasury management in a company must always weigh the benefit of investing the excess cash in capital expenditures (CapEx) or strategic acquisitions against the option of increasing shareholder value via the payment of #dividends or share #buybacks.   Since the Global Financial Crisis, interest rates have been lowered to zero and the go-to strategy for many entities to increase shareholder value has been to implement share buybacks, instead of investing the excess cash into #treasuries or other accreting short-term instruments.   📉 The low cost of debt gave companies the possibility to increase the amount of share buybacks due to the use of leverage and by avoiding depleting all their excess cash reserves. The mixed used of excess cash and new low-cost debt taken on by the target company has the effect to boost company’s Earnings Per Share and support its stock price.   This move creates value to shareholders as the amount of shares outstanding is reduced and the nominal value of the shares outstanding increases by the same amount of the “cancelled” shares. A significant cash reserve can still be maintained by the company as a strategic reserve or to fund potential projects.   But since the creation of #Bitcoin and its growing acceptance in the traditional investing world, companies may now have better ways to increase shareholder value than making share buybacks ⚡ .   Given the past low interest rates environment, companies like MicroStrategy ($MSTR), led by Michael Saylor, utilized excess cash to increase their Bitcoin Per Share ratio. Any time the cost of debt is lower than Bitcoin's historical #CAGR, which has exceeded 50% in recent years, borrowing funds to invest in Bitcoin becomes an attractive strategy to enhance shareholder value 📈 .   Investing in a highly #deflationary asset instead of distributing cash to shareholders favours the principles of good #corporate #governance by prioritizing the long-term value creation rather than engaging in short-term financial engineering through buybacks. Companies demonstrate a commitment to preserving and growing shareholder value over the long run.   ❇ Embracing Bitcoin early on can position companies as forward-thinking and innovative leaders in their industries. By demonstrating a willingness to adapt to emerging technologies and alternative financial instruments, corporations can enhance their competitive advantage and appeal to investors with a long-term vision.   How many more $MSTR are we going to see in the market as the price of Bitcoin rises to new highs and the value-creation strategy proves to be effective?

Hey #bitcoin community on #Nostr 🦩 I am working on a simple guide for people from any background to understand Bitcoin as money. Any feedback on the same is much appreciated 🙏🏼

Exploring Bitcoin: The Evolution of Money and the Emergence of a New Monetary System

1. INTRODUCTION

Price discovery is upon us! No more clouds and blue skies ahead 😎⚡️ 🍊💊 to friends becomes officially easier to give. #bitcoin

Controversial thoughts on Satoshi Nakamoto’s treasury ⚱️ Much is being said about Bitcoin’s creator lately, due to the false claims from Craig Wrigth that he is the inventor of #Bitcoin. He, she or they, whomever #Satoshi actually is. This topic should not bother anyone. The greatest invention of our time, digital, peer-to-peer money with no trusted intermediary was given as a gift to humanity and should be all that matter. 🥷🏻 Satoshi did not premine any coin for himself. He did not allocate bitcoin to a company’s foundation. He created and made available to the world the best money ever invented without looking for any personal recognition or acknowledgment. His only desire is to remain anonymous. And many people are just trying senselessly to attribute a face to him/her/them. When people ask me “How can you trust money which has been invented by someone anonymous?” I always make efforts not to care, while I point at the brilliance and simplicity of the system he has created. Bitcoin operates on a #transparent, #decentralized #ledger where trust is not placed in any single individual but in the collective power of the network's participants ⚡️, which are expending energy to keep it decentralized and secure. Others seem to be worried that Satoshi’s wallet contains approx. 1 million bitcoin. This is true. Satoshi’s wallet has only accumulated btc in the early days, mining ⛏️ the coins like anybody can do, and never spent any output – it is one of those few wallets appearing in the #Hodl waves with holding time > 10 years. In his communications with the cypherpunk community, Satoshi defined any lost coin as a “donation to other bitcoin holders” as that btc supply remains inaccessible and is therefore contributing to increase the value of the other coins. For how I see it, Satoshi’s wallet could be activated 10 or 15 years from now and could be the catalyst to drive price down 📉 from $ 1,500,000 a coin to $ 300,000 a coin. Would this change my view on the reliability of the Bitcoin network or Bitcoin’s value proposition? NO. I would see this as an additional gift to humanity, considering that coins available by then will only be those who are left to be mined, and Satoshi’s 1 million bitcoin could improve the distribution of coins in the world and allow many “plebs” to increase their bitcoin position. 🔅 In the end, Satoshi's anonymity and the mystery surrounding his identity serve as a testament to the decentralized and #trustless nature of Bitcoin itself. Satoshi’s wallet, whether will be activated or not, ultimately represents an opportunity for redistribution and further decentralization within the Bitcoin ecosystem. Whether these coins remain dormant or are eventually reintroduced to market, their impact on the network's integrity and the principles of decentralization will be nil.

Bitcoin mining #trilemma ⛏   Bitcoin mining is known to be one of the most competitive industries on the planet, as working at the intersection between energy and money, two key items for the development of society, is a compelling task requiring being very strategic on the operational strategy to foster business sustainability 💹 over the long term.   Similar to blockchain’s trilemma ♻ which is based on #decentralization, #security and #scalability, where two conditions of the three can be fulfilled together but the last one ultimately resolves in not being optimised, bitcoin mining has its own trilemma.   Mining’s trilemma is based on availability of (i)          capital to deploy , (ii)         mining machines, and (iii)        cheap source of energy. These three conditions are key for strategic decision-making that miners need to navigate so to mine profitably and sustainably. Due to market dynamics, one condition of the three can never be optimised.   In mining, access to capital💲is a strong barrier to entry in the industry. Significant upfront costs need to be incurred by miners to get the necessary hardware, secure suitable sources of energy and cover the initial operational expenses. Once a site has been setup, capital is also required to remain competitive and being able to upgrade machines with more efficient ones, scale operations or weather market fluctuations due to changing bitcoin price or fees, the two revenue outputs from mining.   Once capital is secured, being able to acquire the right mining equipment does not come without issues. Mining machines 🖥 have complex manufacturing processes, require very specific microchips and their demand is tightly linked to bitcoin’s price – creating bottlenecks during bull runs and not finding many buyers during bear phases. Also, the obsolescence rate of mining equipment is very high and miners need to choose a balance between having more efficient machines and investing significant CapEx into them, or optimise their production by running older, less efficient machines, but at very low energy costs.   Energy is the main source of OpEx of miners🔌. Due to bitcoin fixed monetary policy and difficulty adjustment, access to the cheapest sources of energy can determine whether a miner is able to remain profitable after halving and other volatility events, or whether their OpEx are too high and lead to an unprofitable business. Finding cheap energy come with regulatory and geopolitical risks, as each country has its own specific environment concerning mining regulation, public perception of the activity and other social frictions.   Mining conditions are constantly changing within the trilemma due to market dynamics, investors’ sentiment, supply chain functioning, macroeconomics, and other factors. Bitcoin miners need to be dynamically adapting to different scenarios while growing their business, so to keep the Bitcoin network as safe and decentralized as possible. H/t @Bob Burnett

The vanishing of low time preference. In a world where instant gratification and short-term thinking are the basis of society, the concept of low time preference is fading away and leaves many lives without hopes. Delaying gratification and prioritize long-term goals over immediate desires has always been considered as the cornerstone for the development of society, but such values have melted away.   In such a hyperconnected world we live in, we have never felt so lonely. We are driven by #consumerism and by the willingness to show who we are (not) in exchange for a few likes and some acknowledgment that we look cool. We always strive to have more: travel more, dress more, dine more and show more!   #Patience, prudence, and foresight are being overthrown by impulsivity and instant satisfaction. People don’t invest time in meaningful relationships. The concept of family has faded away: parents don’t try to fix things in their relationship but take the easier route of finding a new partner, leaving the education of existing kids to single parents and their new couple.   The erosion of low time preference has profound implications for economic stability and prosperity. If consumption is always prioritized over savings and investment, individuals become trapped in a cycle of debt and insecurity that does not allow to build wealth. Without sacrificing present #consumption for future prosperity, innovation disappears and economies stagnate.    As a #Bitcoiner and supporter of #Austrian economics, I am a believer that the fading of low time preference is due to the lack of a #hard #money standard. Having a finite, scarce asset as the basis of how and when currency is produced, changes everything regarding long term planning, financial stability and the empowerment of individuals.   As hard money requires a certain investment of time and resources to procure such asset, it removes incentives for governments to create currency due to the need of backing it with real world resources.   Hard money leaves a certain degree of predictability and stability in societal activities. If individuals know that their money will buy them more over time, they’ll be less incentivised to consume and they’d be more focused on saving for the future. #Saving should be the basis of capital accumulation and creation, as savers can allocate their unspent resources into productive activities. A supportive and stable economic environment would encourage entrepreneurship, foster job creation, and favour technological advancement. #Debt accumulation would be disincentivised and people would live within their means. Natural #deflationary forces brought by #technology could finally play out and let everything become cheaper over time.   As purchasing power increases over time, people would have more time to dedicate to eat healthy food and practice sport, cultivate meaningful relationships, educate kids and think about the future.   Is it such an utopic world the one based on hard money?

More than 600 million Africans don’t have access to reliable electricity. 🔌 Blackouts are very frequent, even in more developed central cities, and don’t allow the creation of a developed society. Hospitals, schools, and other industries cannot run their businesses with such frequent electricity interruptions.   The problem with Africa, however, is not that they don’t have electricity generation capacity. They have it, and it is abundant. 💧 Hydro, dams and geothermal sources are quite spread across the continent, but they create energy not available where and when it’s needed, resulting in huge amounts of waste #energy that cannot be used nor monetized. 💸 The lack of infrastructure does not allow the creation of an energy market and not mining bitcoin would effectively be a waste of energy.   The Green Africa Mining Alliance 🤝 has been created by different pioneers such as Gridless and @Trojanmining with the goal to bring mining companies in Africa and support the electrification and advancement of rural communities via the #monetization of the #stranded energy available.   Bondo, a small cluster of villages in Malawi, underwent the installation of a mini grid composed of three turbines propelled by a small hydro scheme to exploit the significant region’s rainfall. The integration of bitcoin #miners brought direct monetization of any unused energy, and its revenues allowed the creation of infrastructure to power 1,800 homes ⚡now connected to the mini grid.   Virunga National Park, in Congo, abundant in hydro power but lacking basic monetary resources to cover its operating budget, has been saved thanks to a mini grid mining bitcoin. 🏞 The park was at risk of deforestation and loss of biodiversity due to sale of the land to oil companies, but proceeds from the sale of Bitcoin stopped sale activities and are helping to pay for park salaries and for infrastructure projects like roads and water pumping stations.   Other similar initiatives are ongoing in Ethiopia, Nigeria, Kenya, Ghana and will allow the creation of off grid #electricity sources, able to power little communities and effectively turn free, otherwise wasted electricity into global incorruptible capital.   Energy sites in Africa are normally built via #donation programs 💰, which take long time, leave total dependence of the community on the donor and do not make economic sense for communities nor grid operators. If governments need money to fund a project, they could ask for #IMF support, sell bonds in their local #currency, reduce fiscal expenditures or raise taxes – all of which are unpopular methods. Investing in Bitcoin miners could be the last request for funding to unlock energy abundance and access to free capital.     In addition, African countries would normally have to sell goods to USA or Europe to earn $ or € and spend them on the international markets💲. #Bitcoin removes such friction and allows them to have direct access to international money. @gladstein

#Bitcoin as the best #collateral The features of bitcoin make it one of the most valuable forms of financial collateral available in markets – and most people don’t know it yet! 👀   In the financial world, collateral is needed anytime that a person or corporation wants to increase its spending capacity via the use of #debt 🏦 , and it is used as a form of #guarantee to the lender in case the loan is not repaid within its schedule or the borrower defaults.   Shares in listed companies or private funds, real estate assets, bonds, commodities or other objects can be used as a pledge to borrow funds 💶 . But each of these types of collateral has some shortcomings linked to their nature, geographical location, liquidity, divisibility and other features.   Bitcoin’s properties, on the contrary, make it stand out as a high-quality collateral.   Bitcoin loans work under the principle of #overcollateralization ⚖ , so that by providing more collateral of what would be needed to obtain the loan, the lender has a greater #security package available. #Dynamic #collateralization techniques, allowing the volume of the collateral to vary based on its market value 🎢 , can be included in loan contracts so to leverage on bitcoin’s scarcity, which makes it likely to grow in value over time and therefore leaves the possibility to reduce the total collateral granted.   Bitcoin divisibility ✂ allow for a total adaptation of the collateral tailored to the target loan amount, where loans can now be extended to a wide variety of borrowers, including #micro-loans.   Bitcoin’s #portability allow for collateralized transactions to occur quickly and efficiently without the need to have physical presence and intermediaries.   Bitcoin #transparency makes sure that the collateral is highly verifiable ✅ at each moment over the loan contract, removing the need for any third-party to verify and confirm the existence, valuation and other crucial aspects of collateral management.   Moreover, bitcoin’s global accessibility 🌍 allows borrowers and lenders from different backgrounds to participate in collateralized transactions without imposing any geographical constraint. Such accessibility is a considerable step forward also concerning the inclusion of unbanked people onto an open monetary network, spurring innovation in many underdeveloped economies.   Applying automation procedures in the management of the bitcoin collateral can also strongly mitigate #counterparty #risk, as collateral management activities will be reduced to zero and no counterparty will directly have to manage the collateral, but all conditions can be verified via smart contracts instead of intermediaries.   I am excited to see another great real world application to Bitcoin and how it will develop in the future.

How does #collaborative #custody work and why it can be a key element for the future of bitcoin custody?   In response to the global financial crisis of 2008 and the consequent loss of faith in financial intermediaries, Satoshi created bitcoin as the perfect bearer-asset that would solve the problem of #trust when it comes to who is in control of your #money.   Asymmetric cryptography, via its public and private key pair, allows everyone to be self-sovereign as it permits to store wealth on the bitcoin network via encryption. Upon the creation of a digital wallet by a user, a new pair of keys is created which can be used to transact in a pseudonymous way. Self-custody, by allowing the user to store independently his private key represented by a combination of 12 or 24 words, can freely access his holdings anywhere in the world.   However, despite being the best option to be completely self-sovereign, storing private keys can become a burdensome task for non-technical people and it is a big responsibility as it leaves everyone entirely in charge over their own wealth. By not existing any intermediary in bitcoin, if stored and used correctly via non-custodial wallets, the loss or compromise of the private key would translate in lost access to the wealth stored in bitcoin.   To try to solve these issues and give more comfort to bitcoin owners, while encouraging them to remove their bitcoin from exchanges and custodial solutions, leader players like Unchained and @theBitcoinAdviser are working on collaborative custody solutions with the goal to improve the user experience and safety of storing bitcoin, by sharing the responsibility of owning private keys between different parties.   #Multi-signature (multisig) solutions allow to split the control over the private key among multiple parties (typically 3), therefore leaving a share of the private key to each party. Once somebody needs to initiate a transaction at a #multisig address, it would need 2 out the 3 keys to authorize the moving of funds.   This setup allows for enhanced security over your wealth by eliminating a single point of failure on who would otherwise store the single private key. Also, professional custodians can offer security enhancement via multi-factor authentications or specific approval workflows.   The most interesting part to me is that collaborative custody helps solve the problem of “what happens to my bitcoin if tomorrow I get hit by a bus”? Collaborative custody players support you in the creation of a succession plan over your wealth to facilitate a smooth transition and continuity over your assets’ ownership, so that in case of unexpected events, the bitcoin is not lost.   Collaborative custody is a growing solution among bitcoiners. The next bull run will likely push the wealth of many towards new highs. It would be interesting to see if #hodlers would still feel comfortable managing their private key or if they switch to new options.

Update on #Bitcoin #ETF #inflows and available supply.   Since the launch of the Spot Bitcoin ETFs in January 2024, these instruments have been buying significant amounts of Bitcoin. What is their trend and how does it impact the overall sector?   The approval of the Spot Bitcoin ETF from the #SEC has been a major step forward for global bitcoin adoption and recognition in the traditional financial world. Big #institutional #investors including pension funds, sovereign wealth funds, banks and insurance companies, to name some, were prohibited by their mandates to own bitcoin directly and were therefore excluded to participate in this asset class.   Grayscale Bitcoin Trust ($GBTC), with over 660,000 bitcoin, was the only product available to institutions before the spot ETF was approved but it suffered significant problems due to the redeemability mechanism of the shares and its related premium/discount on NAV. With the ETF approved, $GBTC was converted into an ETF and decided to keep its management fees at 1.5% of AuM, significantly higher compared to all other ETF issuers.   In the first weeks of trading, $GBTC outflows have been compensating total inflows from other participants ($IBIT of BlackRock, $FBTC of Fidelity or $ARKB of Ark Investments), as their fees were 3x to 4x higher than the other issuers. Such outflows, in the range of $350mln to $640mln a day, where offsetting most of the demand from other players and as such, ETF buying activity had a close-to-zero impact on bitcoin available supply.   However, since last week, outflows from $GBTC have slowed and are in the range of $70mln to $100mln a day. Current demand from the other nine issuers is strong and in the range of approx. $500mln a day, translating in a total demand of ca. 10,000 bitcoin a day, or 11x the current daily issuance of 900 bitcoin.   Considering that available bitcoin on exchanges is approx. 1.9 million (Coinglass) and that in two months the #halving would cut daily supply issuance to 450 btc, if demand from ETFs stays flat at ca. $500mln a day, the total bitcoin supply could fall to zero in 182 days!   I am no great fan of Bitcoin ETFs due to the shortcomings related to which instrument you are actually buying, instead of having direct access to the perfect bearer-asset in history. ETFs brings significant centralization issues to the table by keeping the underlying bitcoin in custody at crypto exchanges and TradFi institutions – while the whole purpose of bitcoin should be to eliminate intermediaries.   I am hopeful, however, that with the rise in price of bitcoin caused by more demand chasing an ever shrinking supply, people will spend more time and attention to understand the type of asset they own, to then eventually sell their ETF shares to buy and self-custody the underlying! #Bitcoin #BitcoinSpotETF #SpotETF #inflows #GBTC #IBIT #FBTC #ARKB #supplydemand

#Circular #economies based on #Bitcoin   After 15 years from its creation, people in the world which have an understanding of Bitcoin or have used it so far are still far below 10% of the global population. Many still don’t know, or better, don’t mind knowing, that the problems society is currently facing are brought by #broken #money. By not understanding the concept of money, people don’t feel the need to acknowledge Bitcoin and its value proposition.   Things are running decently smooth in the Western world, people have good ways to transfer money nationally for goods and services and Bitcoin is used by few as a saving vehicle, to keep some assets outside of the system. But in other parts of the world Bitcoin is used primarily as a medium of exchange for daily payments.   Despite #adoption rates are still low globally, the number of local bitcoin communities is steadily growing and it’s allowing the creation of circular economies.   In Central America, the case of @BitcoinBeach in El Salvador can be considered as the first attempt of people to use bitcoin for payments. Considering the high level of unbanked in the country, bitcoin and the #lightning network represent a way to allow the exchange of value for goods and services at high speed and very low cost. Needing only a phone and internet connection, bitcoin allows for inclusion to everyone, close to zero onboarding process and no need for a credit history.   In Uvita, Costa Rica, @BitcoinJungleCR is doing a similar job and is focusing on educating people about the benefits of bitcoin and the personal empowerment it allows. Many merchants are accepting bitcoin as payment and local bitcoin meetups are organized frequently.   In Lake Atitlan, Guatemala, @BitcoinLake and @Lakebitcoin are trying to teach merchants about bitcoin on onboard them on the lightning network. Hostels, restaurants, shops and tuk-tuk drivers are accepting Bitcoin for payment.   In South America, @BitcoinBeachBR is working on adoption in Jericoacoara, Brazil. Many merchants have embraced bitcoin and use Bitcoinize pos terminals to present bills to their customers and receive direct payments to their business wallets.   In South Africa, @BitcoinEkasi is training kids to surf and is educating them on the powers of a #decentralized money network, outside the reach of the state. Ghana has organized the first bitcoin conference in Africa and many local and international bitcoiners have gathered to understand the adoption and #innovation happening in Africa.   In Boracay, Philippines, and Danang, Vietnam, @BitcoinBeachPH and @BitcoinBeachVN are trying to follow El Salvador’s example and build a circular economy based on bitcoin. Neutronpay is used to onboard people on lightning.   The trend is clear and with #halving and institutional adoption coming in Bitcoin in 2024, I believe we will see the development of many more communities like these ones, as well as significant growth in the existing ones.

Why can #Bitcoin #blockspace be considered as a #commodity?   Understanding the implications of blockspace in Bitcoin is a crucial element to understand Bitcoin itself. Satoshi created Bitcoin in 2009 with a limited blockspace of 1 megabyte (MB). This choice was probably taken to prevent spam transactions and ensure the stability of the network during its early stages.   Such limit did not allow more than 2,000 to 3,000 transactions, depending on their size, per block. When Bitcoin was not known to many this limit was working well, but as its popularity started to grow, more transactions needed to be included in each block, driving transaction fees higher and creating network congestion.   Blockspace increasingly became a topic of debate within the Bitcoin community, where some argued that increasing the block size would allow more transactions per block, lowering fees and eliminating congestion.   But increasing the block size has significant implications for the #decentralization and #security of the network, considering the higher amount of MB that each block would weight on the #blockchain. Its consequences on the costs of the infrastructure would price out normal people from running #nodes and keep an entire version of the #ledger in their PCs, leaving the exclusivity to secure the network and validate blocks to small elites and corporations.   The #Blocksize #war of 2017 has occurred exactly for this reason, where some developers ultimately came to propose a #hard #fork of the Bitcoin blockchain to increase block size to 8 MB, without having much success.   Different upgrades made to the Bitcoin network such as #SegWit and #Taproot helped the Bitcoin network to improve transaction privacy, security and scalability without touching the initial block size limit hardcoded by Satoshi on the network.   If we think of Bitcoin as a global settlement network for billion $$ transactions, the #scarcity and #utility of block space as a commodity becomes quite clear. Just as #oil is used for #energy or #gold is used for jewelry and investment, blockspace is essential to inscribe valuable, immutable transactions in the blockchain.   Miners tend to prioritize transactions with higher fees, creating a market for blockspace where users compete to have their transactions included in the next block. Such fees represent the value that users pose on having their transactions confirmed quickly and securely on a censorship-resistant network.   Transaction fees can therefore be considered as the price for such a commodity, being captures by #miners for the work done in keeping the Bitcoin network secure.

Starting the read of the newly arrived 🤩 #brokenmoney @Lyn Alden

Yesterday I went to the barber and managed to #orangepill him! He downloaded #Muun wallet and accepted a lightning payment 🟠💊⚡️ #bitcoin #lightning

Finally bought the ticket for my first #bitcoin conference - going to Amsterdam in October! Who will be there and is willing to connect? #bitcoinamsterdam2023