๐Ÿ” Can bitcoin be controlled?

Power tends to centralize and consolidate. Bitcoin distributes this power back to the people. Will it succeed?

What makes something useful as money?

A good monetary medium must be divisible, durable, transportable, scarce, and fungible.

Starting from first principles, we would not expect anyone to choose money that is made from arbitrary numbers, surveilled, and administered by a single entity.

Unfortunately, our monetary freedom has been rolled back gradually for over a hundred years, and most people are unaware that there is an alternative to the status quo. Now that bitcoin threatens change, political leaders across the globe are moving quickly to maintain, and even strengthen, their stranglehold on money with Central Bank Digital Currencies (CBDCs).

Fortunately, we have a way out โ€“ one that is so powerful that governments cannot stop it. With bitcoin, individuals can opt out of government money and opt in to a secure, depoliticized digital currency with a scarce supply. Thanks to bitcoin, the days of government's money monopoly are numbered.

News

๐ŸŽ† Happy Bitcoin Independence Day

August 1st marked the fifth anniversary of the "Blocksize War." In retrospect, this period is often characterized as a battle between users and larger entities over the best way to scale the Bitcoin network. Users prevailed.

๐Ÿ’€ ECB takes shot at bitcoin, Saylor proves them wrong

The European Central Bank published a research paper titled "Towards the holy grail of cross-border payments," boosting CBDCs while criticizing bitcoin. The ECB pointed to bitcoin's lack of speed and volatility, ignoring layer two solutions and bitcoin's youth as a global currency.

Earlier this week, Michael Saylor posted a screenshot of a bitcoin transfer he made for $200,000, with a fee of $0.04, on a Sunday, when banks were closed.

๐Ÿš€ Saylor steps down as CEO to focus on bitcoin

The bitcoin maximalist announced he is stepping down as Microstrategy CEO to assume a role as Executive Chairman. In a statement, he said, "As Executive Chairman I will be able to focus more on our bitcoin acquisition strategy and related bitcoin advocacy initiatives."

๐Ÿคจ Fed Official "doesn't feel pain of inflation"

The President and CEO of the San Francisco Federal Reserve produced a disturbing viral soundbite on inflation. Smiling, the Fed President noted she "doesn't feel the pain of inflation" because she "has enough and many, many Americans have enough." With two-thirds of Americans living paycheck to paycheck, her statement justifiably caused outrage.

BITCOIN ADOPTION CONTINUES

Bitcoin is on its way to the UAE as the National Bank of Ras Al Khaimah is set to offer digital assets to citizens through their local banks.

Oxford City Football Club is set to begin accepting bitcoin as payment for tickets, food and beverages at their stadium.

Forbes cites path for parabolic BTC adoption and its prediction for global BTC adoption to reach 10% by 2030. The article mentioned this key metric marking the transition from "early adopters" to "early majority."

Brazil's Nubank has already reached one million cryptocurrency customers in less than a month since offering bitcoin and ethereum on its platform. The CEO stated "reaching 1 million crypto users was a goal for a year from now."

HOW BITCOIN WORKS

Learn one key idea about bitcoin each week. This week: Bitcoin is decentralized. โ€

Bitcoin Independence Day commemorates a multi-year battle pitting bitcoin users and developers against miners and exchanges.

The disagreement was predicated on block size. However, the debate was a proxy for a more fundamental question: "Who controls bitcoin?"โ€

"Big blockers," supported by large companies, wanted to scale bitcoin by increasing the block size limit. Increasing the block size would increase the speed of payments, which might have dramatically accelerated adoption by merchants.

In contrast, the "small blockers," mainly users and developers, believed large blocks would make the network vulnerable to centralization. Small blockers thought of bitcoin as a challenge to central banks, not simply a more efficient payment network. Even though small blocks would mean that bitcoin would take additional years, or ever decades, to scale, it was better to forego near-term adoption to cultivate a truly revolutionary movement.

Both sides had good arguments, but the small blockers prevailed, to everyone's benefit.

The larger the blocks became, the more difficult it would be for an average user to run a node. We see this with networks like Ethereum and Solana. Centralized blockchains are less secure and routinely fall prey to hacks and disruptions.

Small blocks keep bitcoin decentralized because more people can validate transactions and help decide protocol changes on the bitcoin network.

Ultimately, the Blocksize War ended in a hard fork with the creation of a new digital token called Bitcoin Cash. Today, bitcoin's market cap sits around $450 billion, while Bitcoin Cash's market cap is $2 billion.

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COIN CHECK

What does bitcoin's design optimize for?

  • A. Security

  • B. Speed

  • C. Volume

  • D. Convenience

Check your answer at the end of the page.

FROM THE MEME POOL

BITCOIN ROUNDUP PODCAST

If you love our newsletter, youโ€™ll love our podcast, too.

ANSWER

A. Security

Thatโ€™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 whatโ€™s happening in the world of bitcoin. What did you think of todayโ€™s newsletter? Reply to this email and let us know what youโ€™d like to see more of.

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