Privacy under attack

The bitcoin economy grows regardless.

PRESENTED BY

Coinbits is your app for seamless #HybridBanking with both bitcoin and dollars. With rich features such as Round Ups, Saving Habits, and cash accounts, it might just be the only money app you need. Check it out today!

BITCOIN BOX SCORE

Exchange Rate: $64,560
Market Capitalization: $1.27T
Hash Rate (90 days): 595.5 EH/s
Transactions (30 days): 13,892,028
Network Fees (day): 16 sat/vB
Bitcoin Dominance: 54.81%

Bitcoin is sometimes unfairly criticized for not having a use case. On the contrary, bitcoin offers a decentralized network for transactions and value storage that lies beyond the reach of censorship.

In the West, where the use of bitcoin for day-to-day transactions is less prevalent, it’s easy to misunderstand bitcoin. Since I can’t buy groceries with it, how could it be money?

In other words, if bitcoin truly is superior money, why hasn't it replaced the incumbent system?

Taxes are one factor. Excessive taxation on monies like bitcoin and gold discourages their use as currency due to artificially-high costs of record keeping and taxation.

Another is regulation. Operation Chokepoint 2.0, which is a regime-directed assault of regulatory agencies on fintech, bitcoin, crypto, BAAS, and other financial technology providers, has seriously hampered innovation within the United States.

Infrastructure is another important factor. At only 15 years old, the bitcoin economy is still young, but rapidly growing. Entrepreneurs are finding ways to meet the requirements of taxation and regulation while still delivering value to customers. For example:

  • Unchained Capital¬†secures over¬†90,000 BTC for over 7,000 clients.¬†That means that thousands of people hold enough bitcoin to feel justified in paying ongoing fees for strong security.

  • Bitcoin-native venture capital investments¬†continue to top over $300 million annually, flowing into companies incorporating¬†bitcoin¬†into¬†insurance,¬†private credit, and more.¬†Institutions are investing in companies that will power the¬†bitcoin¬†economy with innovative new offerings.

  • As of 2023,¬†roughly 20%¬†of Americans own¬†bitcoin¬†and crypto ‚Ästand ownership is increasing as confidence fades in traditional institutions.¬†The bitcoin economy expands to meet rising demand.

There are many more examples like the above. One thing is clear: A new economy is being built around bitcoin from the bottom up as entrepreneurs realize its novel capabilities.

NEWS

‚Ėá Block gets busy with bitcoin

Block, formerly known as Square, is launching a bitcoin mining initiative. The company completed a three-nanometer chip with plans to decentralize mining. Meanwhile, it integrated Square merchant services and Cash App to help merchants convert revenue into bitcoin automatically. Both moves follow the exciting release of the Bitkey hardware wallet.

Jack is bringing bitcoin to the masses

Block founder Jack Dorsey is following through on his vision of making the benefits of¬†bitcoin¬†accessible to all. In 2023, bitcoin fees¬†comprised roughly 7%¬†of Cash App's gross profit.¬†This¬†is no small amount, considering Cash App saw over $240 billion in inflows in 2023 ‚Äď making it a significant player in retail finance.

ūüĆä Bitcoin liquidity costs decrease as volume rises

In Q1 2024, bitcoin's dollar exchange rate rose rapidly, partly driven by the introduction of spot bitcoin ETFs. A new report from CoinRoutes analyzes the effects of this price run-up on bitcoin liquidity. The report finds that the increased trading volume has led to a decrease in the cost of liquidity for bitcoin trading against the dollar, with USDT (Tether) pairs offering even lower costs. 

Interestingly, the analysis reveals that the mean cost of buying and selling $1 million of BTC in USDT is roughly 30% lower than when trading U.S. dollars. However, the variability of cost is more volatile during the same period.

‚ĚƬ†Samourai shut down by DOJ, founders arrested

Federal prosecutors charged Samourai Wallet founders Keonne Rodriguez and William Lonergan Hill with conspiracy to commit money laundering, alleging their mixer facilitated over $100 million in illicit transactions. The Department of Justice also alleges Samourai facilitated roughly $2 billion in unlawful transactions since 2015. The duo faces charges including conspiracy to commit money laundering and conspiracy to operate an unlicensed money transmitting business, with potential sentences of up to 20 years and five years, respectively. The move is another example of the recent crackdown of the U.S. government on mixing tools, as well as anti-surveillance technologies more broadly.

For those interested in diving deeper, Foundation’s Seth for Privacy has written an informative blog post on the incident and its implications.

And remember:

ūüŹ† Increasing¬†number of Americans lose confidence in ability to own a home

Many American renters no longer believe in the possibility of homeownership. Per a Redfin survey, 38% of renters think they will never own a home, up from 27% less than a year ago. This sentiment is driven by escalating housing costs and stagnant incomes, highlighting the fading allure of homeownership, once considered central to the American Dream.

BITCOIN ADOPTION CONTINUES

Hashlabs Mining in Finland repurposes bitcoin mining devices to generate heat for homes through the district heating system.

Swiss bitcoiners push for a referendum to convince the Swiss National Bank to hold bitcoin reserves.

Nunchuk debuts Finney, a bitcoin wallet for families with flexible multi-signature setups, messaging, privacy features, and recovery options.

HOW BITCOIN WORKS

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

Bitcoin is not crypto.

"Crypto" usually refers to digital coins and tokens competing for value, with about 23,000 available. The distinction between bitcoin and all other crypto tokens is significant. Understanding these differences is essential for navigating them effectively.

Origins

Bitcoin is a digital currency that offers an alternative to fiat money issued by governments and central banks. Its market capitalization is over $1 trillion.

Developers have created cryptocurrencies using pieces of bitcoin's technology. Although some allege to improve bitcoin for specific use cases, bitcoin itself is still the most recognized digital money, adopted by millions worldwide. The long-term viability of other cryptocurrencies is uncertain, while bitcoin is the most secure computer network ever created.

Decentralization

Bitcoin is fully decentralized, unlike many other cryptocurrencies that have centralized structures. This decentralization protects it from corruption that can be present in different projects. Ethereum, for instance, claims to be decentralized, but elites decide its monetary policy at an opaque organization called the Ethereum Foundation.

Scarcity

Bitcoin is unique because it is absolutely scarce. Its code has a limit of 21 million bitcoins, ensuring that no one can ever change the maximum number of bitcoins in circulation. Most cryptocurrencies do not have a fixed supply, and this causes inflationary pressures and the danger of dilution value over time.

Consensus

Bitcoin uses Proof of Work to order transactions and make them immutable using electricity ‚Äď it essentially takes one commodity (electricity) and converts it directly to another (bitcoin). On the other hand, projects like Ethereum use Proof of Stake, where token holders with more tokens have more influence over the network. This approach is a replica of traditional finance, with all its flaws and inequities. IN contrast,¬†bitcoin¬†creates a fair and neutral system that anyone can use without permission, no matter how rich or how poor they may be.

Satoshi

Bitcoin's creator, Satoshi Nakamoto, disappeared in 2010. This selfless act ensured that the project of bitcoin wouldn't be tied to a founder's personality or flaws. This contrasts to other cryptocurrencies which are inevitably associated with companies and their leadership teams, marketing tactics, and other externalities.

Comparison to stablecoins

A stablecoin is a digital asset designed to maintain a stable purchasing power equal to a fiat currency. Although stablecoins modernize payments and reduce transaction costs, bitcoin offers something radically different: a money that is decentralized, borderless, and free from the control of states and central banks.

Bitcoin is a revolutionary form of decentralized digital money. Its unique attributes make it a monumental contribution to how we understand and transmit value in a vibrant, global, digital economy.

The Bitcoin Adviser simplifies the process of moving your coins off exchanges safely and securely. Get one month free when you sign up with this link!

COIN CHECK

At which block number did most recent Bitcoin Halving occur?

  1. 240,000

  2. 21,000,000

  3. 840,000

  4. 630,000

Check your answer at the end of the page.

FROM THE MEME POOL

ANSWER

  1. 840,000.

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!

What did you think of this edition of Bitcoin Roundup?

Login or Subscribe to participate in polls.

Was this email forwarded to you? Sign up here.