More antics from The Paper Belt

Will they ever stop lying?

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Bitcoiners,

In the latest GDP report, a seemingly robust figure of 3.3% annualized growth for the fourth quarter surpassed expectations, painting a picture of a flourishing economy. 

However, this glosses over the underlying reality that such growth is only sustained by a staggering government deficit that hides a distressed private economy. 

Despite media laudation of these figures as "shocking" and "stunning," a closer examination reveals a concerning trade-off: the acquisition of roughly $600 billion in GDP at the expense of a $1.3 trillion increase in the federal deficit over the past year. 

This discrepancy indicates a substantial portion of economic activity is driven not by genuine wealth creation but by government expenditure, which reduces the overall wealth in the economy. 

GDP growth resulting from government spending comes about through redistribution or even depletion. GDP itself does not directly translate to wealth or prosperity. As Peter St. Onge writes,

If you dig holes and fill them, it's GDP. In fact, you could build a missile, blow up the Golden Gate bridge and every house within 5 miles of it, and it shows up as GDP. The missile cost money after all, and the government paid for it. Of course, mainstream media – indeed, mainstream economics – pretends that GDP is identical to wealth, pumping out articles celebrating GDP as prosperity.

And that's exactly what the "Paper Belt" has decided to do this year. Is the fact that there's an election around the corner merely a coincidence? We’ll leave that to you to decide.

With that, let's dive into the news.

NEWS

U.S. politicians target El Salvador, Bukele responds 🇸🇻

U.S. lawmakers, led by Representative Ilhan Omar (D-Minn.), sent a letter to Secretary of State Antony Blinken voicing concerns about alleged democratic backsliding and human rights violations in El Salvador. They highlighted the high number of arrests in the country and restrictions on multiparty democracy, emphasizing the urgency given the upcoming election where President Nayib Bukele seeks another term.

Community note, Bukele's response

Users on X added a community note citing the flaws in Omar's post, and Bukele responded in classic form:

Aqua wallet spearheads bitcoin adoption globally 🌍

BTC Sessions and other bitcoiners have recently published tutorials on the new AQUA Wallet, a user-friendly mobile wallet that allows users to interact with bitcoin on-chain and through the Lightning and Liquid networks.

The wallet is picking up steam abroad, with videos demonstrating usage in Ghana and promotional billboards in Argentina. Per the AQUA X account, the team is "dead serious about making AQUA the go-to wallet in Argentina and Latin America as a whole."

Driving adoption 🏎️

The wallet is easy to use, non-custodial, and open source. Keep an eye on it to drive adoption worldwide in the future.

Tether earns more profit than major investment banks 👀

Tether, a leading stablecoin issuer, revealed a robust balance sheet with over $2.8 billion in Bitcoin holdings, as confirmed by an audit from BDO.

CEO Paolo Ardoino expressed excitement about the company's expansion beyond USDT, investing in various strategic sectors such as AI infrastructure, bitcoin mining, and P2P telecommunications.

The company reported a $2.85 billion profit last quarter, primarily attributed to gold and bitcoin holdings, contributing to a total profit of $6.2 billion for 2023.

More money than Wall Street

Will there be Federal stablecoin legislation in 2024?

Senator Cynthia Lummis (R-Wyo.) confirmed that negotiations are underway for stablecoin legislation, with daily discussions among political parties and between the Senate and the House. 

Lummis, a key advocate for bitcoin policy, expressed optimism about the passage of stablecoin regulation this year, especially with technical feedback from the Federal Reserve and the recent focus on various bitcoin and crypto bills in the House.

Implications for bitcoin

Legal frameworks for stablecoins may facilitate collaboration between traditional banks, financial institutions, and bitcoin companies. The fact that there is less hostility toward the industry in Washington is a positive development, as legislation (or lack thereof) has often been a hurdle to progress in the United States.

BITCOIN ADOPTION CONTINUES

Ten31, a bitcoin technology investor, has announced the Nasdaq listing of its portfolio company, GRIID Infrastructure, marking a milestone as the first public listing for a bitcoin-focused investment fund's portfolio company.

In 2023, Core Scientific emerged as North America's largest publicly listed crypto mining company, mining 19,274 bitcoin worth $812 million across several U.S. states, while contributing significantly to local power grids and overcoming a challenging phase of bankruptcy to re-list on Nasdaq.

MostroP2P, leveraging the Nostr network, has completed its first peer-to-peer bitcoin exchange on the Lightning Network, enabling transactions for any fiat currency without intermediaries or KYC, marking a significant step in its development to facilitate private and global bitcoin exchange.

HOW BITCOIN WORKS

Learn one key idea about bitcoin each week. This week:

Bitcoin is for you.

Earlier this week, a Deleware judge overturned Elon Musk's board-approved pay package. The judge, Kathaleen McCormick, decided the Tesla board of directors was not actually in charge of the company and that they had failed to prove "that the compensation was fair." 

She went so far as to ask, "Was the richest person in the world overpaid?" in her decision.

The decision sent shockwaves through markets as it demonstrated that the government will now intervene in corporate governance. Musk responded by posting, "Never incorporate your company in the state of Delaware."

Many attribute the judge's attack on Musk to the growing political appetite for investigating his companies. The Department of Justice, Securities and Exchange Commission, and Federal Trade Commission have all initiated legal actions against his firms in recent months.

So, what does this have to do with bitcoin?

Musk’s case exposes dry rot in yet another institution. Going forward, board rooms will be keenly aware that their decisions can be voided by creatures of politics who masquerade as neutral arbiters in black robes.

Bitcoin is an asset that is nobody else’s liability. It can be used without centralized mediators like banks, payment processors – and even courts. Judges may issue orders to confiscate bitcoin, but no amount of political pressure can overcome bitcoin’s cryptographic security. A society on a Bitcoin Standard is one where the balance of power between citizens and the state is renewed.

The Delaware decision was outrageous, but it will not be the last time we find out a formerly esteemed institution has been corrupted by cheap money. As more people understand Bitcoin, we can expect that the private sector will use it to reestablish rightful control of its affairs.

COIN CHECK

How often does bitcoin adjust its mining difficulty?

  1. Once a month

  2. Every 100 blocks

  3. Every minute

  4. Every 2016 blocks

Check your answer at the end of the page.

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ANSWER

  1. Every 2016 blocks. This translates to roughly two weeks of calendar time, since a block is mined about every 10 minutes. The difficulty adjustment algorithm is widely regarded as one of the most elegant aspects of the Bitcoin Protocol because it balances the fluctuating purchasing power of bitcoin with the consumption of real-world resources (energy) needed to secure the network.

That’s all for this week, folks! When you signed up for this newsletter, we promised to act as your personal guide and help you understand what’s happening in the world of bitcoin. What did you think of today’s newsletter? Reply to this email and let us know what you’d like to see more of.

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