The Federal Reserve Act mandates that the Federal Reserve conduct monetary policy "so as to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates.”

Unfortunately, history shows us that central banks are ineffective stewards of price stability. In the United States for example, the average inflation rate was 0.2% from 1790-1913, with a 5.9% standard deviation. Since the creation of the Federal Reserve, the average inflation rate has been 3.3% from 1913 to 2019, with a standard deviation of 4.9%.

Faced with this historical data, the case for a Federal Reserve looks weak. That said, over the past 100 years it has grown powerful, holding sway in academia, government, and public opinion. In the minds of many, a world without central banking feels regressive. After all, aren’t we continuously marching towards enlightenment?

Fortunately, we don’t need to abolish or destroy the Fed. In 2008, bitcoin's invention made central banks obsolete. Individuals, families, and businesses may now use bitcoin to act as their own banks, and use bitcoin's payment network to transact with one another. And, importantly, they can do so while sidestepping the auspices of the Federal Reserve. Thanks to Satoshi Nakamoto's invention, we don't need to abolish the Federal Reserve. We can simply opt in to using a superior offering.

News

🙃 Congress set to pass the Bitcoin Acceleration Act

The $430 billion "Inflation Reduction Act" is likely to be confirmed by the House and President. Proponents claim it will reduce inflation by printing money to "combat climate change and extend health care coverage."

🔨 Ethereum wallets sanctioned

The Treasury Department sanctioned Tornado Cash, a technology that anonymizes cryptocurrency transactions, claiming the platform exists to aid money laundering. However, many use it to simply protect their privacy.

🧐 ETH Proof of Stake finally happening?

Ethereum is finally set to transition from its existing Proof of Work consensus mechanism to Proof of Stake. In PoS, block rewards are determined based on the amount of tokens "staked" by participants, a centralizing process that enriches those who already hold assets. Alternatively, PoW relies on a free market where miners seek out and develop energy resources. With bitcoin as the lone remaining PoW protocol with broad adoption, attacks on its energy consumption will surely increase.

📉 CPI finally surprises to the downside

The July CPI came in below expectations at 8.5%, bringing some much needed relief to the Federal Reserve and triggering a positive reaction in markets. However, while lower inflation is welcome, the drop signals a slowing economy. The biggest decrease came in gas prices, while food and shelter both still increased.

BITCOIN ADOPTION CONTINUES

A "Bitcoin Village" is being developed in Lagos, Nigeria. The plan is to create a new economy, centered around the use of bitcoin.

‍Senior Bloomberg commodity strategist says bitcoin will like transition to a risk-off asset in the second half of 2022.

‍The largest e-commerce company in Latin America, Mercardo Libre, will allow their Brazilian customers to buy, sell, and hold bitcoin and other digital assets. The company made a nearly $8 million bitcoin purchase in May.

‍Launch Cart, a major ecommerce platform, announced bitcoin payments. They explained bitcoin's "instantaneous and immutable payments" will eliminate some types of fraud. ‍‍

‍UAE retail giant Day to Day is now accepting bitcoin and other digital assets for payments, the first in the country to do so.‍‍

‍The Lightning Network has reached a new all-time liquidity high of 4,500 bitcoin.

HOW BITCOIN WORKS

Learn one key idea about bitcoin each week. This week: Bitcoin is the separation of money and state. ‍

On October 31, 1517, Martin Luther nailed a list of demands on the Church of Saints.

The Catholic Church had grown into an all powerful monopoly of religious and spiritual services. The Pope had complete control of the church and therefore, indirectly, the State.

For the right price, a person could "absolve" themselves or their family members of their sins and ensure their place in heaven.

The church used this influence to grow ever more powerful. (Sound familiar?)

Luther's demands propelled the Reformation and marked the beginning of the separation of church and state.

Fast forward precisely 491 years, to October 31, 2008, when Satoshi Nakamoto released the Bitcoin Whitepaper.

The separation of money and state had begun.

Similar to the disproportionate ability for the wealthy to gain favor with the Church, and therefore the State, in the middle ages, government-controlled money gives an enormous advantage to those who possess generational wealth and political connections. (For more on why, read about the Cantillon Effect)

This system has resulted in an ever increasing inequality of wealth, inflation and socio-economic division.

Bitcoin eliminates this type of cronyism by providing a fair, predictable, and auditable monetary policy. One over which no person, politician, or government has any more influence than anybody else.

As we look back on theocracy as a less enlightened form of government, will we one day look back on fiatocracy in the same way?

Just as the Reformation led to the emergence of religious liberty, bitcoin will increase economic liberty.

Ready to get started with bitcoin? Coinbits is the best option. It's fast, safe, and free to create your account.

COIN CHECK

How many bitcoin comprised the mining reward when Satoshi started the blockchain?

1. 200

2. 50

3. 100

4. 25

Check your answer at the end of the page.

FROM THE MEME POOL

BITCOIN ROUNDUP PODCAST

If you love our newsletter, you’ll love our podcast, too.

ANSWER

2. 50

Was this email forwarded to you? Sign up here.