If you venture near a bitcoin mine, you'll hear computers hard at work with industrial fans humming away. That's the sound of the most secure computing network in the world keeping your money (bitcoin) safe.

Welcome to Bitcoin Roundup #6.

Sound money is money that retains its value and cannot be easily debased. You may be surprised to learn that the term comes from the audible sound that traditional forms of scarce money, such as gold, silver, or copper coins, would make when struck against a hard surface.

This sound served as validation that the coins were authentic. While not scientific or optimal, it served its purpose.

In 2022, sound money doesn't have to make an audible sound to prove its legitimacy. Or does it?

24 hours a day, 7 days a week, bitcoin mining machines hum as they work. Every watt of power that is spent on mining bitcoin adds more security to the network, as every transaction is verified by thousands of anonymous nodes across the world.

This process of consensus-building hardens the hardest money ever invented.

NEWS

Germany feels the brunt of inflation 🛒

Already reeling from record high inflation, Germany was hit with another blow Monday, as retailers are reportedly increasing food prices another 20-50%. Increased energy prices that began even before the Russian invasion are hitting the supply chain harder, leading to skyrocketing production costs. This story is becoming all too familiar as the world braces for more consequences of bad policy and flawed money.

19 (of 21 million) bitcoin have been mined! 📉 

Bitcoin's scarcity was especially visible this week. The network's fixed issuance schedule produced the 19 millionth bitcoin, leaving only 2 million coins left to be mined. 90% of the total bitcoin supply that will ever exist is now in circulation. Bitcoin's supply continues to get more limited by the day.

This week: Bitcoin Conference 2022 🌴

The 2022 Bitcoin Conference kicks off this week on Wednesday in Miami. Each year, the conference seemingly grows as fast as bitcoin. The world's first bitcoin conference consisted of a meeting of about 50 people in New York. Last year's conference saw over 12,000 people. This year, organizers expect over 35,000. Huge news is expected, with Samson Mow, formerly of Blockstream, stating "If they only knew the magnitude of what’s to come."

Intel's new bitcoin mining chips are ready for launch 🚀

Intel announced their new mining chips will be ready in the second half of 2022. They boast more efficiency than existing products on the market. Intel's investment in mining technology is also a boost for decentralization, since mining chip manufacturing is limited to a handful of companies.

HOW BITCOIN WORKS

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

The proof is in the work.

You may have heard about the concept of "sound money" or "hard money." But what makes money hard?

Gold is a good example of hard money, because it requires a lot of labor and machinery to extract it from the earth. Nobody can produce gold easily. Because of this, you know that any gold you encounter must have been formed through a long process of energy-intensive work.

Similarly, bitcoin uses Proof of Work (PoW) to validate transactions. Miners validate transactions and are rewarded with new bitcoin, but this comes at a cost of physical resources. In order to win the mining reward, miners use energy to power computer processors in a competition to solve a puzzle. The race is to guess a number, and transactions are validated only by miners who are willing to expend enough energy to make lots of guesses, solve the puzzle, and create new blocks on the blockchain.

This setup ensures that the network stays decentralized, because anyone can participate in mining, with no permission required. No central party can control the network or buy influence, because nobody can guess any better than anyone else. The only way to participate is to expend energy and compete with other voluntary participants (miners). Proof of Work has resulted in "the most secure digital system in the world and the most reliable monetary system ever invented."

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COIN CHECK

What causes bitcoin’s volatility? When you pay a fee to make a bitcoin transaction, who receives it?

1. The exchange on which the transaction is executed

2. The U.S. federal government

3. The bitcoin developer community

4. The miner who validates your transaction

Check your answer at the end of the page.

BITCOIN ROUNDUP PODCAST

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ANSWER

4. The miner who validates your transaction

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