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BITCOIN BOX SCORE

Exchange Rate: $60,470
Market Capitalization: $1.19T
Hash Rate (90 days): 608.6 EH/s
Transactions (30 days): 18,043,145
Network Fees (economy): 6 sat/vB
Bitcoin Dominance: 57.44%

What do these numbers mean?

The free market is revealing some hard truths, especially for those who once saw Ethereum as a viable competitor to bitcoin.

Although the dollar-exchange rate of bitcoin has hovered below its all time high for weeks now, without the sudden appreciation expected by many after the halving, altcoins are faring worse.

Ethereum's journey has been marked by unfulfilled promises, from "world computer" to "ultrasound money," but reality is setting in. The ETH/BTC ratio is now below a paltry 0.05.

Bitcoin's strength lies in its simplicity and commitment to being sound money – a mission that Ethereum proponents never fully grasped. While confidence in bitcoin's fixed monetary policy continues to attract inflows, the Ether token's supply dynamics have sputtered and whirred. The much-hyped "ultrasound money" narrative crumbled when the Ethereum Foundation made a decision by fiat to resume inflation of the supply of ETH.

Joe Consorti puts it well in a recent article on the topic:

As the only worthwhile asset in cryptocurrency becomes accurately priced by the market, so too does the suite of imitators that formed around it, as seen clearly with Ethereum.

Even as traditional finance experiments with Ethereum and Solana blockchains, no altcoin is likely to ever compete with bitcoin as a store of value. Money must be stable and predictable. As digital money, bitcoin stands alone. There is no second best.

NEWS

☠️ Operation Chokepoint 2.0 continues

NFT platform OpenSea received a Wells Notice from the SEC, signaling the agency's intent to sue the platform for violations of securities law. The move is part of the Biden administration's broader attack on the bitcoin and crypto industries, which has sparked widespread backlash and caused crypto policy to become a factor in the 2024 presidential election.

Industry figures, including Tyler Winklevoss, Sheila Warren, and former CFTC Commissioner Brian Quintenz, have criticized the agency's actions.

The Wells Notice comes on the heels of the Federal Reserve imposing an enforcement action on Customers Bank for its compliance "deficiencies." Customers Bank is a partner to many fintech and digital asset institutions. Enforcement actions like this one will likely result in even fewer banks wanting to do business with the industry.

The all-out regulatory assault on bitcoin, crypto, and even fintech has significantly harmed their ability to do business, resulting in thousands of layoffs in 2024. Custodia Bank CEO Caitlin Long’s summarizes the current state of things below:

Study: CBDCs decrease individual well-being

Preliminary research suggests that Central Bank Digital Currencies (CBDCs), often touted as increasing well-being by encouraging financial inclusion, may have the opposite effect.

A new study analyzing data from 2019 to 2023 indicates that countries adopting CBDCs have seen limited economic benefits and even negative impact on individual well-being, particularly among young people and low-income groups.

The research challenges government narratives that CBDCs are a public good, highlighting risks like financial instability and reduced privacy, and demonstrating the negative impacts of unsound money being forced upon citizens.

Remembering Hal Finney

This week marks the tenth anniversary of the passing of Hal Finney, a key figure in the creation of bitcoin. Finney, a renowned programmer, received from Satoshi Nakamoto the very first bitcoin transaction. He also contributed pioneering work on reusable proof-of-work (RPOW) systems. Even while battling ALS, Finney's contributions to bitcoin continued until his death in 2014.

His legacy remains a source of inspiration for the bitcoin community, with many retweeting his iconic "running bitcoin" tweet on the anniversary of his death. You can watch one of Finney's speeches, recently unearthed, below:

BITCOIN ADOPTION CONTINUES

Australia's spot Bitcoin ETFs continue steady inflows, highlighting growing mainstream demand for bitcoin exposure.

Leading bitcoin miner GDA plans to expand its Texas data center from 60 MW to 400 MW, taking advantage of the state's innovation-friendly policies to strengthen its mining operations.

Lightspark launched Lightspark Extend, letting businesses offer instant, low-cost lightning payments.

Hilbert Group and Xapo Bank partnered to launch a $200 million bitcoin-denominated hedge fund in September 2024, aiming to offer institutional investors structured ways to grow their bitcoin investments.

HOW BITCOIN WORKS

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

Bitcoin is not an altcoin.

Bitcoin is the first and most widely utilized cryptocurrency. Over a decade ago, it established itself as a decentralized, immutable store of value with a fixed supply of 21 million coins. Its only purpose is to separate money from state. Bitcoin’s simplicity and robust security make it uniquely positioned to fulfill this role.

On the other hand, altcoins such as Ethereum and Solana sought to offer fancy new features like smart contracts and faster transactions. However, these additional features came at the cost of complexity, centralization, and reduced security. For instance, when Ethereum introduced smart contracts, it created a swath of new issues, from scalability to high transaction fees. Later, a change in its consensus algorithm to Proof of Stake, which reduced energy consumption at the cost of decentralization (and thus, security).

Besides Ethereum, other altcoins have tried to carve out niches for themselves. The names are many – Filecoin, Render, and thousands of others – but they all struggle to maintain relevance after an initial buzz. Many are plagued by governance issues, centralization of control, and reliance on hype cycles rather than proven use cases.

Bitcoin's core advantage lies in its stability, predictability, and unmatched security. Its fixed monetary policy, maintained via Proof of Work (PoW), ensures that bitcoin remains decentralized and resistant to censorship. In contrast, altcoins dilute their purpose by trying to be everything to everyone and failing to serve simply as money.

On The Bitcoin Standard Podcast, our own Dave Birnbaum talks about how Coinbits.app is using bitcoin to build an innovative operating system for money. Listen now: Spotify | YouTube | Apple | Fountain

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COIN CHECK

Which of the following is unique to bitcoin and not shared by altcoins?

1. Fixed immutable supply of 21 million coins

2. Proof of stake consensus mechanism

3. Smart contract functionality

4. Unlimited supply

Check your answer at the end of the page.

FROM THE MEME POOL

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ANSWER

1. Fixed immutable supply of 21 million coins.

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