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BITCOIN BOX SCORE

Exchange Rate: $60,980
Market Capitalization: $1.21T
Hash Rate (90 days): 633.0 EH/s
Transactions (30 days): 17,706,319
Network Fees (economy): 3 sat/vB
Bitcoin Dominance: 58.27%

What do these numbers mean?

John Maynard Keynes derided gold as a "barbarous relic," but his critique extended beyond gold's technological limitations. At its core, Keynes hated the notion of sound money (defined by Ludwig von Mises as money devised as an instrument for the protection of civil liberties against despotic inroads on the part of governments).

To Keynes, sound money's role in restricting governments from using monetary and fiscal tools during wartime and economic crises held humanity back.

Keynes was wrong then, and he has been proven wrong by history. Today, central banks enable global conflicts, rampant inflation, and wealth erosion. And yet, the legacy of Keynes persists, with regime economists strongly advocating for inflation as a necessary driver of economic growth.

Since Keynes published his seminal work in 1936, The General Theory of Employment, Interest, and Money, money technology has advanced significantly. Bitcoin is the most advanced form of money yet invented, and it objectively demonstrates that sound money does not hinder progress. On the contrary, it fosters resilience and long-term prosperity.

Today, 75 years after Ludwig von Mises published Human Action (which influenced the early cypherpunks), bitcoin directly challenges the mainstream assertion that inflation is indispensable for economic vitality and that money must be state-controlled.

NEWS

 📈 Will “Uptober” come this year?

Bitcoin's dollar exchange rate is down over the last day but closed up for the month of September – giving it its best September rally since 2013. Historically, October is one of the best months for bitcoin’s dollar exchange rate, illustrated in the table below.

As highlighted in last week’s newsletter, global liquidity has so far been a dependable correlate for bitcoin’s exchange rate. Central bank policies that affect global liquidity may well determine whether Uptober comes this year.

💰 Americans depend on government more than ever

A recent Wall Street Journal article highlights a dramatic increase in U.S. counties relying significantly on federal government assistance, jumping from around 300 in the year 2000, to nearly 2,000 today. Driven by programs like Social Security, Medicare, and Medicaid, almost 22% of the U.S. population now depends on government aid. This surge is most prominent in battleground states such as Michigan, Georgia, and North Carolina, where economic challenges and an aging population have allowed politicians to promise solutions through redistribution of wealth.

🦢 Swan sues former mining employees

Sensational news in the bitcoin industry emerged this week when Swan Bitcoin filed a lawsuit against several former employees and consultants, alleging they orchestrated the theft of its bitcoin mining business with assistance from Tether, a major stablecoin provider. The suit claims that individuals stole proprietary code, optimization techniques, and financial models to establish Proton Management, a replica of Swan's mining operations. The alleged coup led to significant disruptions for Swan, including the cancellation of its IPO, shutting down its managed mining unit, and laying off 45% of its staff.

How involved is Tether?

According to the lawsuit, Tether played a role by supporting the ex-employees actions, although Tether denied any wrongdoing and was not named as a defendant. Swan asserts that Tether's advisors encouraged the departure of key personnel, undermining the company's stability and forcing a drastic reduction in its valuation. More information is bound to emerge over the coming months.

💵 US adds hundreds of billions of debt in single day

Treasury Secretary Janet Yellen welcomed Americans to the beginning of the fiscal year by adding hundreds of billions to the national debt. Additionally, the budget deficit reached $1.897 trillion by the end of August, a 24% rise from $1.525 trillion the previous year. The Congressional Budget Office attributes this growth to escalating expenses in Social Security ($98 billion increase), Medicare ($76 billion increase), and the Department of Defense ($52 billion increase), alongside significantly higher interest payments on public debt due to elevated interest rates.

Neither presidential candidate has made fiscal responsibility central to their campaign, even as the U.S. government has spent more in a single day than ever before.

It’s a good bet that Lyn Alden’s favorite phrase will apply for the foreseeable future.

🇱🇧 What does hyperinflation feel like?

Most of us read about Lebanon’s currency collapse in 2020 and saw the images of people bringing guns to banks just to try to get their own deposits out. Tony Yazbeck, co-founder of The Bitcoin Way, experienced the collapse firsthand, watching his businesses crumble as basic goods like bread and fuel became unattainable luxuries.

We caught up with Tony and interviewed him to learn what it felt like for him and his community to go through this wrenching experience. Read the full article in Bitcoin Magazine.

BITCOIN ADOPTION CONTINUES

Japanese investment firm Metaplanet continues its "Bitcoin First, Bitcoin Only" strategy by purchasing an additional 108 BTC, bringing its total holdings to over 500 BTC.

MicroStrategy is poised to exceed Grayscale’s bitcoin holdings by deploying over $1 billion in new funds to acquire additional BTC, potentially becoming the fifth largest bitcoin holder.

OCEAN introduces the DATUM protocol, enabling individual miners to control block creation and reducing reliance on large mining pools to enhance bitcoin’s decentralization.

Maelstrom, Arthur Hayes’s family office, awarded bitcoin developer Jon Atack a one-year grant to support Bitcoin Core and BIPs.

Boltz’s new BTCPay Plugin allows merchants to accept bitcoin via Lightning and automatically store it non-custodially on the Liquid Network without running a node.

HOW BITCOIN WORKS

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

Bitcoin doesn’t need DeFi

Decentralized Finance, or DeFi, refers to a broad range of financial applications built on blockchain technology that operate without traditional intermediaries like banks or brokerages. These applications facilitate lending, borrowing, trading, and earning interest on bitcoin and altcoin holdings in a decentralized manner.

Many believe that DeFi is the future of finance and, therefore, combining DeFi technology with bitcoin is necessary for bitcoin's growth as a store of value and medium exchange. This perspective is misguided and overlooks the fundamental strengths that make bitcoin uniquely valuable.

First, many “DeFi” apps are built on networks that are creeping toward centralization to achieve faster transaction throughput, like Solana. As Edward Snowden stated at Token 2049:

"A lot of people, and I don't want to name names, but Solana, are taking good ideas and they're just going...well what if we just centralized everything? It'll be faster, it'll be more efficient, it'll be cheaper. And yeah, sure, it is, you're right...but nobody's using it, but for like memecoins and scams, because if anybody puts anything significant on it and then all the states begin moving towards it, it's going to be a system that has levers that people can simply just take from you. You have to be thinking for the adversarial case, as opposed to the convenient case."

Second, bitcoin has already achieved product-market fit as a reliable store of value and a decentralized monetary payment network that empowers individuals to transact without the need for government approval or intermediary institutions. These core functionalities provide significant value on their own, independent of DeFi. Bitcoin protects your wealth from currency debasement and lets you securely transfer value anywhere else on Earth.

Its robust network, decentralized consensus mechanism, and resistance to censorship make it a trustworthy and resilient monetary asset. These attributes ensure that bitcoin remains a stable foundation for financial autonomy and security, without the need for additional layers of complexity and centralization introduced by DeFi-focused networks and applications.

On The Bitcoin Standard Podcast, our own Dave Birnbaum talks about how Coinbits.app is using bitcoin to build an innovative operating system for money. Listen now: Spotify | YouTube | Apple | Fountain

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COIN CHECK

How do Keynesian and Austrian economic theories differ in their views on the concept of sound money?

1. Keynesians advocate for sound money to control inflation, while Austrians prefer fiat money.

2. Austrians prioritize sound money principles, whereas Keynesians support flexible monetary policies.

3. Both theories advocate strictly for the gold standard.

4. Keynesians focus on income redistribution via sound money; Austrians do not.

Check your answer at the end of the page.

FROM THE MEME POOL

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ANSWER

2. Austrians prioritize sound money principles, whereas Keynesians support flexible monetary policies.

   The Austrian economic school staunchly supports sound money principles, emphasizing a monetary system backed by a physical commodity like gold, which inherently limits the government's ability to arbitrarily expand the money supply. Austrians argue that such discipline prevents inflation and economic imbalances that can result from excessive monetary intervention. In contrast, Keynesian economics advocates for flexible monetary policies, permitting significant governmental control over monetary tools to manage economic cycles. This approach, Keynesians suggest, stabilizes demand and mitigates recessions. However, it also introduces the risk of policy-induced economic distortions and undermines the long-term stability and value of the currency, as government interventions often prioritize short-term outcomes over sustainable economic health.

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