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🌪️ A harsh lesson about money
Money is collapsing in Ukraine and Russia. What would you do if you suddenly lost access to your bank account and credit cards?
Dave Birnbaum & Joe Lupo
March 09, 2022
Welcome to Bitcoin Roundup #2.
A few weeks back, Canadians were rudely awakened to a new reality: Much political power rests on the control of money.
Now, people in Ukraine and Russia are learning the same lesson, with more intensity. Over 2 million Ukrainian refugees abandoned their homes and businesses, leaving behind their life savings in inaccessible bank accounts and immobile assets. At the same time, ordinary Russians, regardless of whether they support the war, are seeing their money collapse before their eyes, permanently.
This crisis highlights the profound injustice of our current money system for innocent people. We take no pleasure that this lesson is being taught through a humanitarian crisis. However, it is important to understand that bitcoin offers a solution. Bitcoin is unbiased money, accessible any time, any where, with no intermediary. Do not get distracted by politicians fretting that bitcoin could be used by rogue states to avoid sanctions. The real story is that bitcoin is helping regular people survive.
NEWS
Oil shortages expected ⚠️
It's day 13 of the war and there is no end in sight. Today, the U.S. announced a ban on imports of Russian oil. Oil prices will spike, and supply will be limited. Fill your tanks now and avoid unnecessary car trips, unless you like waiting in long lines.
Bitcoin briefly decouples from equity markets 📈
Bitcoin trading volume has surged in the local currencies of Ukraine and Russia. Its price rose too, in stark contrast to traditional markets. This was short lived as energy concerns took precedence, but it was an early sign that bitcoin is coming of age as a risk-off asset.
Bitcoinization continues worldwide 🌎
The city of Lugano in Switzerland is the latest jurisdiction to recognize bitcoin as an official currency, as city leaders hope to attract crypto entrepreneurs and businesses. In other news, India's young investors prefer bitcoin over other investments.
Executive order on cryptocurrency expected this week 🏛
President Biden is expected to direct federal agencies to analyze regulatory changes for the crypto industry. While the consequences of regulation are hard to predict, it may actually increase the price of bitcoin.
HOW BITCOIN WORKS
Learn one key idea about bitcoin each week. This week:
Bitcoin is digital gold.
A good store of value is something that retains its value over a long period of time.
Gold has been the most popular store of value for thousands of years, and for good reason. It is hard money, because it is hard to produce. Mining and refining gold is a labor and energy-intensive process. The supply of gold increases 1 to 2% per year. Gold is therefore a scarce asset – and because of that, it is a safe haven for wealth.
So how is bitcoin digital gold?
Bitcoin is even more scarce. The supply of gold is limited, but it can still respond to demand. When demand is high, miners can produce more. Bitcoin however, is created on a fixed schedule. It cannot respond to demand, which is part of the reason the price is volatile.
It's easy to verify that bitcoin is real, and easy to verify who owns it. Gold needs to be melted down to prove that it's real, and is easily stolen. Bitcoin is verifiable by anyone, but can only be moved or spent with a cryptographically-secure private key.
Bitcoin can be moved easily and cheaply. Bitcoin can be sent to anyone on the internet, just like a text message. Gold needs to be physically transported. In fact, when you want to move gold, some of its value must be spent to cover shipping and insurance.
Gold's market cap is over $10 trillion. If bitcoin had the same market cap, a single bitcoin would be worth over $500,000.
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 confirmations are needed for a bitcoin transaction to be considered valid and irreversible? What year did the bitcoin blockchain start?
2005
2012
2008
2009
Check your answer at the end of the page.
ANSWER
4. 2009
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.
Until next week!
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