Modern financial technology enables powerful applications. Venmo, for example, allows individuals to send each other money using their smartphones instantly. That said, there are trade-offs associated with the rise of digital finance.

Like its predecessors, digital finance is centralized. Individuals and institutions must rely on intermediaries to transact. However, unlike brick-and-mortar finance, financial institutions can now cancel, censor, and block financial transactions easily because transactions are digital.

Further, financial institutions rely on central banks to control the money supply, adding another layer of centralized control. Increasingly centralized financial systems threaten our economic freedom, no matter how well-intentioned institutions might be.

Fortunately, in the 1990s and early 2000s, a group of computer scientists, economists, and technologists, recognizing the threat centralized digital finance poses, worked to create decentralized digital money. With the launch of bitcoin in 2009, their decades-long effort proved successful.

Because the bitcoin network is decentralized, individuals and institutions can transfer value across it without approval by intermediaries. Bitcoin allows for permissionless transactions enabling individuals to achieve unprecedented financial sovereignty.

In the face of increased surveillance and censorship, bitcoin’s technological innovation works in the opposite direction, towards financial freedom.

News

🔌 White House proof-of-work mining report

The White House released a crypto asset and climate report last week. Although the report notes bitcoin's environmental benefits, it also condemns proof of work mining and cites the potential advantages of a CBDC. Venture Capitalist Nic Carter produced an incredible annotated version of the report dispelling its falsehoods.

🚀 Nasdaq launches bitcoin/crypto custody services

Nasdaq is preparing to launch a bitcoin and crypto custody service for institutional clients. While the stock exchange has provided services to the industry, this move signifies a significant shift into the digital asset market. The institutional custody offering currently awaits regulatory approval.

🚨 Big week for global monetary policy

The Federal Reserve conducted its FOMC meeting this week, deciding to raise interest rates another 75bps. Chairman Powell's forward guidance focused on taming inflation, and Powell stated that lowering inflation may require economic pain and job loss. Markets dropped after the news.

It's a big week of meetings for other central banks, including the Bank of England, Japan, and Sweden, which shocked markets Tuesday, raising rates a full 1%. The BoE expects another rate hike while Japan still holds its rates at record lows.

🤡 Bloomberg all time bad take: Bitcoin looks like a fad

How many times have we heard "Bitcoin is dead?" This week, Bloomberg journalist Jake Lloyd-Smith regurgitated the hilarious proclamation, concluding, "Bitcoin Looks Like a Faded Fad as Fed Goes All In on Rate Hikes." Bitcoiners mocked the article, referencing previous wrong predictions on the future of technology and the economy. See one of our favorites below.

BITCOIN ADOPTION CONTINUES

Colorado becomes the first state to accept bitcoin and other cryptocurrencies for tax payments.

The Royal Family of Dubai's company Seed Group launched a partnership to build a user-friendly bitcoin platform where UAE citizens can buy, sell, send, receive, and custody their bitcoin.

Best Buy is now selling bitcoin and digital asset hardware wallets at 900 locations across the U.S.

One of Ukraine's largest grocery store chains, VARUS, is now accepting bitcoin and other digital assets for payments.

Microstrategy buys 301 more bitcoin for a purchase price of $6 million.

Over 900,000 addresses now hold over 1 BTC, a new record.

Bitcoin proponent Pierre Poilievre achieves a stunning victory in Canada's parliament, giving him a great chance to become the future Prime Minister.

HOW BITCOIN WORKS

Learn one key idea about bitcoin each week. This week: Bitcoin is sovereignty.

Sovereignty is an important concept. Its application impacts political institutions and our ability to live in freedom.

Historically, it referred to the right of Kings to govern with "supreme power or authority." Today, governments are also "sovereign," which means they rule themselves and their citizens.

Simultaneously, there is "self-sovereignty," or "complete independence and self-government" at the personal level.

Yet, what does sovereignty mean concerning our everyday lives? And how does it impact our ability to live in freedom?

Depending on where we live, governments and institutions affect personal sovereignty to various degrees.

Lebanon, for example, faces an inflationary spiral and banking crisis. The Lebanese Lira has lost more than 95% of its value since 2019. Banks refuse withdrawals, leading desperate citizens to take up arms and storm them, demanding their money. The Lebanese people are gathering to support these "bank robbers."

While those in the United States cannot relate to the Lebanese, their suffering is a warning. As the US faces 40-year high inflation, proposed central bank digital currencies (CBDCs), and ESG-related social credit scores, maintaining sovereignty is essential.

In the face of governments and institutions bent on limiting self-sovereignty, there appears to be one - and possibly only one - way out.

Bitcoin allows individuals to opt out of the traditional financial system. Since it's decentralized, Bitcoin is outside of the government's control. No government or financial institution can tell you what to do with your money. Or prevent you from accessing it.

You're free to spend, save, invest, or donate however you see fit.

In contrast, modern banking de facto limits sovereignty by requiring individuals to rely on intermediaries (banks) to transact. Financial institutions can restrict, stop, or cancel transactions anytime, while bank holidays and slow wire transfers make the process cumbersome.

But with Bitcoin, anyone can send and receive payments instantly, 24/7/365 - regardless of location.

Sovereignty is a big word with many implications. However, at its core, it's about being in control of your own life. And regarding our finances, very few things are more important than sovereignty.

Thanks to its decentralized nature, Bitcoin gives us true financial sovereignty, which is why it's so important.

Visit your Coinbits account to see what's new and manage your bitcoin savings.

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 words are in a seed phrase?

1. 10-20 words

2. 21 million words

3. 1 word

4. 12-24 words

Check your answer at the end of the page.

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ANSWER

4. 2-24 words

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