Greetings Earthling,

Welcome to another edition of Bitcoin Breakdown, where the wonders of Bitcoin are unravelled by an alien from the future.

Thanks to your feedback from last week, I am dividing the newsletter into two parts. The next issue, containing the popular Quick Bits section, will now go out later in the week.

I hope you enjoy this issue and please consider leaving more feedback via the poll near the end of the email.

📰 HEADLINES

BlackRock has submitted an amended application for a Bitcoin ETF after the SEC expressed misgivings about its first attempt. The resubmission involves Coinbase in a monitoring agreement to address the SEC’s main objection, which entailed a lack of clarity around a surveillance-sharing agreement meant to deter fraud and manipulation by ensuring the fund issuer is monitoring market trading activity, clearing activity, and customer identity. Other institutions, including Fidelity, had earlier also announced Coinbase as their surveillance partner. [Just stick to the real thing, plebs].

Kraken was ordered by a federal judge to provide the IRS with information on any user who surpassed $20,000 in trading volume in any given year from 2016 to 2020. Despite Kraken's previous claims that the request was too broad and burdensome, the company is now being asked to disclose these users’ personal details, such as their legal name, physical address, phone number, and taxpayer identification number. The request also extends to non-financial details like the name of the first pet they owned, and their mother’s maiden name. [JK]. [For real, just stick to peer-to-peer marketplaces or decentralized exchanges, plebs].

MicroStrategy has acquired an additional 12,333 BTC for roughly $350 million at an average price of $28,136 per bitcoin. This brings the total holdings of the world’s largest corporate owner of Bitcoin to 152,333 bitcoins, which is worth nearly $4.5 billion and about 0.726% of the total bitcoin supply. Despite selling some of its bitcoin for tax purposes in December 2022, the company promptly bought more and has consistently grown its holdings since August 2020. The company, led by chairman GigaChad Michael Saylor, plans to utilize the Lightning Network for enterprise infrastructure services and content monetization solutions soon.

TOGETHER WITH ARCH

Unlock the Power of Your Stack

Access instant credit without selling your stack with Arch, a revolutionary new platform that empowers investors to obtain a single loan collateralized by multiple holdings, all securely held by the leading qualified custodian, BitGo.

Arch adheres to strict regulatory frameworks and never touches customer funds, so you can trust that your stack is safe and secure.

Take your holdings to the next level.

🏆 TOP STORIES

The End of the Money Middlemen (4 min read)

Dave Birnbaum of Coinbits discusses the concept of disintermediation as a macro trend in emerging technology. Disintermediation refers to the removal of intermediaries or middlemen through new technologies. Platforms like YouTube and Patreon have reduced the number of intermediaries in content creation and distribution, allowing creators to reach audiences directly. Birnbaum highlights that Bitcoin is part of this disintermediation trend, as it removes the need for financial institutions and enable peer-to-peer transactions. While the recent buzz about Bitcoin ETFs is exciting, the piece argues that these financial constructs still rely on intermediaries and that, in the long term, institutions siphoning value unnecessarily will fail. Bitcoin not only rides the wave of disintermediation but also drives it, ushering in a new era in the financial sector where middlemen become obsolete. [Sweet sweet schadenfreude].

Bitcoin Mining and the Case for More Energy (21 min read)

Drew Armstrong and AJ Scalia, from the Bitcoin mining company Cathedra, have republished an article they initially released pseudonymously in May 2021. They make a compelling argument that Bitcoin mining could spark the most significant revolution in energy production since the Industrial Revolution. They point out that Bitcoin represents the first technology in human history that directly incentivizes the discovery of cost-effective energy harnessing methods, irrespective of geographic location, consumer demand, or other traditional barriers to energy generation. Thus, Bitcoin could potentially propel humanity up the Kardashev scale, encouraging you to master energy resources on your planet and beyond. The subsequent advancements in energy technology could significantly enhance your ability to power machines inexpensively, expanding the reach of your species to other worlds. This progress could substantially improve lives and alleviate suffering on an unimaginable scale, a prospect that advocates of humanity should welcome rather than disparage.

Every Company Will Be a Lightning Company (8 min read)

Voltage CEO Graham Krizek published a piece examining the reasons and methods businesses are using to take financial transactions in-house. He demonstrates that doing so through Bitcoin on the Lightning Network is optimal for both businesses and consumers. Writes Krizek, “With the Lightning Network, a business can take complete control of its finances. The network is free to join, and the transaction fees are so minimal that global accessibility is readily achievable.”

Block's Bitkey "Hardware Wallet" will Violate your Privacy and Security (14 min read)

In this article, Zach Herbert, CEO of the competing hardware wallet company, Foundation, critiques the upcoming hardware wallet, BitKey, developed by Jack Dorsey's company, Block. Herbert argues that BitKey's security and privacy features are severely flawed. The device lacks a display, which is essential for verifying transaction details and guarding against malicious behavior. Having to trust the BitKey mobile app without a display compromises security. The inability to verify multisig addresses also poses a risk, and the dependence on the BitKey server introduces privacy concerns. The server, which is involved in every transaction, communicates transaction details through potentially insecure channels like email or webpages, which could be compromised by malware. Altogether, Herbert concludes that BitKey's architecture is fundamentally flawed and should not be launched in its current form.

The Great Institutional Bitcoin Capitulation (6 min read)

Sam Callahan writes for Swan Bitcoin about how major traditional financial institutions, such as BlackRock, Deutsche Bank, Santander, Citadel Securities, and Societe Generale, have undergone a significant shift in their stance towards Bitcoin. Many are expressing interest in entering the Bitcoin market and supporting its adoption. These developments, combined with the growing institutional demand for Bitcoin, have bullish implications for Bitcoin's price and adoption. [Bitcoin, of course, doesn’t really care, though. Tick tock, next block].

Global push for central bank digital currencies gains momentum (3 min read)

The Atlantic Council think tank has conducted a study revealing that 130 nations, representing 98% of the global economy, are actively exploring the possibility of creating digital versions of their own currencies. To date, eleven countries, including Nigeria and several Caribbean states, have officially launched their central bank digital currencies (CBDCs). China's pilot program extends to 260 million people across 200 different scenarios. In the meantime, India and Brazil are preparing to introduce their digital currencies next year. The European Central Bank is planning to launch a pilot for the digital euro in 2028, while over 20 other countries are set to take significant steps toward initiating pilot programs within the year. The global surge for CBDCs is fueled by the decrease in the use of physical cash, threats posed by Bitcoin and major tech companies, and the demand for alternatives to conventional payment networks. [Bring on your glorified vouchers].

Human Rights And Electricity, 2 Reasons Why Africans Are Turning To Bitcoin (4 min read)

Forbes published another piece on Bitcoin, highlighting its potential to provide access to financial services for millions, strengthen human rights, and incentivize infrastructure development. Adoption is particularly gaining momentum due to these factors and high inflation rates. The article mentions various initiatives like Machankura, Gridless, Bitcoin for Fairness, and Bitcoin Ekasi. Despite the challenges, the growing adoption of Bitcoin in Africa is viewed as a beacon of hope amid economic hardships, government devaluation, and corruption.

RECOMMENDATIONS

As mentioned last week, Arsen (Baggins) and The BTC Therapist have teamed up to form the Bitcoin Therapy newsletter.

If you like Bitcoin Breakdown, then you’ll love Bitcoin Therapy!

Subscribe for free here:

📖 GUIDES & EXPLAINERS

A Basic Guide To Making The Switch To GrapheneOS (7 min read)

Siggy47 wrote a comprehensive guide on Stacker News about switching to GrapheneOS, an operating system based on the Android Open Source Project that prioritizes security and privacy features. GrapheneOS enhances the AOSP code's security through improved sandboxing and exploit mitigations, while also providing extensive permission options. Siggy47 shares his personal experience of gradually transitioning away from Google services and recommends using a Google Pixel phone due to its bootloader unlocking capabilities and hardware features. He also outlines important steps to prepare the phone, provides an overview of GrapheneOS's native apps, discusses sandboxed Google apps, and includes tips and app recommendations from Stacker News users.

Pseudonymity: An FAQ for Bitcoiners (14 min read)

Heady Wook and Modus Bronens, host of the La Cosa Nostr podcast, published an extensive FAQ guide on pseudonymity for Bitcoiners, noting a perceived dearth of literature on the topic. The piece discusses the basics of pseudonyms and highlights the reasons why individuals might choose to use a pseudonym, such as protecting privacy, gaining independence from a known name, and avoiding threats or negative social evaluation. It also explores practical considerations for adopting a pseudonym, including how to get started, how much information to disclose, how realistic the pseudonym should be, and whether multiple pseudonyms are necessary. The article delves further into the implications of pseudonymity in different contexts, such as mail, phones, and online interactions. It provides guidance on using pseudonyms for mail by obtaining a PO Box and suggests maintaining a separate phone and SIM card for pseudonymous communication. It also addresses the issue of taking credit for work done under a pseudonym, offers suggestions for selectively disclosing such information, and much more.

😍 LIKE WHAT YOU’RE READING?

I am rewarding you with 5,000 free satoshis for every new subscriber you successfully refer to the newsletter. Max 100 referrals per individual.

(I might have to adjust this amount soon if the Bitcoin price continues rising too steeply, so be sure to take full advantage of this opportunity while you still can).

You currently have 0* referrals. That’s only 1 away from receiving 5,000 satoshis paid directly to you

Or copy and paste this link to refer people: https://www.btcbreakdown.com/subscribe?ref=PLACEHOLDER

*Please reply to this email if you believe you have referred more than this already so I can properly update the new referral system.

💥 MEME BREAK

OTHER NEWSLETTERS TO CHECK OUT

• Embrace resilience and virtue with ancient philosophy by joining the 9000+ strong Stoic community with The Stoa Letter → [link]

• Dive into the world of crypto with Ponder Crypto → [link]*

• Join a community of 50,000+ design enthusiasts with the free Design Hacks newsletter → [link]*

• Elevate your financial acumen with the Long Term Mindset newsletter → [link]*

• Be part of 100,000+ professionals staying ahead of AI trends with The Neuron → [link]*

• Get curated podcasts, investment insights, and articles from seasoned asset managers with The Rollup → [link]

• Unleash your creativity with For The Interested: A free newsletter featuring ideas to help you produce, promote, and profit from your creations → [link]

*One click subscribe link

Thank you for reading!

If you enjoyed this week’s issue then please forward it to a fellow bitcoiner and/or consider leaving a tip below or here.

If you received it from a friend and would like to subscribe, please click here.

Until our next transmission,

Naiw

Support independent Bitcoin content and consider leaving a Lightning tip:

[email protected]