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📈 Cheap Sats as BTC Dips, 🇦🇷 Bitcoiner Wins Argentinian Primary, 🇪🇺 EU Gets 1st BTC ETF

📈 Cheap Sats as BTC Dips, 🇦🇷 Bitcoiner Wins Argentinian Primary, 🇪🇺 EU Gets 1st BTC ETF

Naiw
August 18, 2023 • Estimated Reading Time: 17 minutes

Greetings Earthling,

Welcome to issue #27 of the Bitcoin Breakdown, where you save countless hours of information mining to sift the signal from the noise.

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📰 HEADLINES

BTC dips by nearly 8% to a two-month low before staging a recovery. An hour of frenzied trading and sell-offs by newbs and paper hands coincided with 1) a report in The Wall Street Journal stating that SpaceX had written down the value of its BTC holdings by $373M in the past two years, and 2) news that China’s second largest property developer filed for chapter 15 bankruptcy in New York. This also comes just as everybody was complaining that BTC was range bound. Not surprisingly, most highlighted the opportunity to buy sats on the cheap. As always, all unregulated securities mimicked the dip.

Javier Milei, 52, a congressman, economist, former television pundit and Bitcoin-friendly Argentinian presidential candidate, wins the country’s primaries, making him the front-runner in the general elections scheduled for October. Milei, the representative of the group La Libertad Avanza (‘Liberty Advances’), is emphatic about the need for change (Argentinian inflation sits at around 118%) and wants to adopt the US dollar as official currency. He is however a defender of Bitcoin, self-identifies as an anarcho-capitalist, and calls the country's central bank ‘a fraud’. His dogs are all clones of the same underlying dog and all named after Austrian School economists. In an act not at all reminiscent of banksters intentionally crashing the US economy when Andrew Jackson was elected president on an anti-bank platform, Argentina’s peso was intentionally devalued by 18% and its interest rate hiked by 21% in response to the ‘upset’ his win caused.

Jacobi Asset Management lists Europe's first spot Bitcoin exchange-traded fund on Euronext Amsterdam. Jacobi first won approval for the fund in October 2021 with plans to launch it in 2022. However, the firm decided to postpone the launch due to unprecedented market conditions aided by the collapse of the Terra ecosystem and the bankruptcy of crypto exchange FTX. The ETF will trade under the ticker BCOIN and investors will pay a 1.5% annual management fee to be able to indirectly ‘own’ BTC in their portfolios, which of course defeats the whole point of Bitcoin disintermediating unnecessary counterparty risks to begin with.

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🏆 TOP STORIES

Bitcoin Wrecks Your Hurdle Rate: 3 Assertions That Break the World of Finance (Aug 17 | 5 min read)

Bitcoin maxi, Jesse Myers makes three assertions, which, if true, will allow anybody to outperform every Wall Street capital allocator this decade. Firstly, Myers argues that Bitcoin is a low-risk asset due to its predictable supply mechanics and increasing scarcity, positioning it alongside US Treasuries in terms of risk. Secondly, Bitcoin will continue to provide high annualized returns owing to its halving mechanism and value propositions. Thirdly, he contends that every capital allocator worldwide is using an incorrect hurdle rate for investment decisions, typically referencing US Treasuries as a low-risk benchmark, when Bitcoin's properties make it a more suitable reference point for evaluating capital allocation choices. Holding Bitcoin, with its combination of venture capital-like returns and US Treasury-like risk and liquidity, should be the default choice for prudent capital allocation.

Tomer Strolight: Bitcoin is the Natural Choice for Artificial Intelligence (Aug 14 | 4 min read)

Strolight summarizes the case for why AIs will choose to settle on Bitcoin in this article for Swan Bitcoin. He argues that Bitcoin is the most suitable currency for AI agents due to its permissionless nature, instant settlement capabilities, and micropayment support, which align with the requirements of AI-driven commerce. Strolight further envisions a future where AI agents engage in transactions using Bitcoin, highlighting the potential synergy between AI and Bitcoin.

Bitcoin's ESG Benefits for a Sustainable Future (Aug 14 | 9 min read)

Jirayr Kembikian of Citrine Capital highlights the many ESG benefits of Bitcoin in this piece. Similar to past disruptive technologies such as automobiles and the internet, Bitcoin has faced criticism and skepticism, but it is positioned to challenge and reshape the legacy financial system. Kembikian addresses concerns about Bitcoin's energy usage, comparing it to the inefficiencies seen during the early stages of other innovations like solar power and electric vehicles. He furthermore highlights Bitcoin’s positive environmental impact; Bitcoin mining uses stranded and renewable energy sources, aiding in emissions reduction and conservation efforts. Social benefits include financial inclusion, empowerment in authoritarian regimes, and facilitating cross-border transactions. The governance model of Bitcoin, based on decentralization and permissionless nature, is a more transparent, secure, and reliable alternative to traditional financial systems.

Bitcoin Takeover Podcast: Fadi Barbàra on DMix & Bitcoin Privacy (Aug 16 | 1:27:21 min watch)

Fadi Barbàra appeared on the Bitcoin Takeover Podcast to speak about his project, DMix, that promises to offer better privacy than coinjoins by integrating a pre-mix transaction that makes use of Taproot multisigs. Unlike traditional coinjoins, DMix strives to eliminate the need for a central coordinator, enhancing privacy. Its potential for scalability, liquidity, and privacy improvements is significant, although it currently operates within open settings. Exchanges could leverage DMix to bolster privacy and security, while large wallet holders might find appeal in its private transaction capabilities. Development funding and user feedback are being sought, with plans for integration with Bitcoin Core and potential light wallets.

An Anarchist’s Pragmatic Plan of Government for Argentina (Aug 16 | 6 min read)

Manuel García Gojon writes for the Mises Institute about Bitcoin-friendly Argentinian presidential candidate, Javier Milei’s pragmatic plan that addresses economic and crime issues. The anarcho-capitalist economist’s proposed measures include reducing government ministries from 18 to 8, privatizing state-owned companies, cutting public spending, eliminating 90% of taxes, reforming labor regulations, implementing a private unemployment insurance scheme, pursuing unilateral free trade, initiating a monetary reform to eliminate the Argentine Peso, overhauling energy subsidies, fostering investment in various sectors, implementing judicial, welfare, educational, health, and security reforms, and promoting a shift towards private health and education services. The plan aims to reduce the state's burden, encourage economic growth, and address social challenges while incorporating an anarchist perspective.

Book Prologue: Life in 2033: Monetary Apartheid (Aug 12 | 7 min read)

Mark E. Jeftovic, aka The Bitcoin Capitalist, has published the prologue for his forthcoming book: The CBDC Survival Guide: Preserving your wealth, freedom and sanity in the coming Age of Collectivism. In the near future, there is a significant divergence in lifestyles linked to a major event called ‘The Great Bifurcation,’ which marked a shift in the global financial system. One brother, Roger embraces the decentralized digital economy, investing in Bitcoin, while his twin brother, Reggie, relies on government-provided Universal Basic Income and faces financial stress. Roger's path represents the success of sovereign individuals who navigated this new landscape by holding decentralized wealth, while Reggie embodies the challenges faced by those who relied solely on government support. The story highlights the importance of financial foresight and adaptability in the face of changing economic systems.

The Unethical Foundations of ‘Halal Blockchains’ (Aug 11 | 9 min read)

Bitcoin Majlis writes that many Muslims interested in Islamic finance and banking that are dissatisfied with the involvement of Riba (usury) in the current financial system, have turned to Bitcoin. Some Muslims are however exploring the idea of creating their own ‘halal’ cryptocurrencies with seemingly Shariah-compliant blockchains, aiming to revolutionize Islamic finance and tap into the industry. These projects however miss the true innovation and value proposition of Bitcoin and often involve unethical practices, including unfair token distribution through premines and ICOs, centralization, conflicts of interest with scholars endorsing the projects, and lack of real economic productivity. In contrast, Bitcoin's ethical foundation lies in its fair and transparent distribution, decentralized nature, and permissionless participation. All-in-all, Bitcoin's ethicality is not contingent on equal distribution and is aligned with Islamic principles of equitable distribution rather than strict parity.

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📖 GUIDES & EXPLAINERS

GrapheneOS: De-Google your Phone and Improve your Privacy (Aug 16 | 20 min read)

₿itcoinQnA has written a brilliant guide on GrapheneOS, the preeminent privacy-focused mobile operating system based on Android that prioritizes user privacy and security. GrapheneOS is designed to minimize attack surfaces, prevent vulnerability exposure, and fortify app sandbox containment. ₿itcoinQnA outlines the transition process to GrapheneOS, suggesting a gradual shift from existing devices and services. He provides instructions for installing GrapheneOS on supported Pixel phones and discusses app alternatives available through platforms like F-Droid and Aurora Store. He also touches on customizations, pre-installed apps, and alternative solutions for messaging, web browsing, VPNs, eSims, and more to enhance user privacy and security. Here’s an additional list of applications for GrapheneOS.

What Is An Atomic Swap? (Aug 7 | 5 min read)

The Bitcoin Manual explains the concept of atomic swaps, which are designed to enable peer-to-peer exchanges without relying on centralized intermediaries. Bitcoin was conceived as a decentralized financial tool, eliminating the need for third-party trust during transactions. However, most users buy or trade BTC through centralized exchanges that offer familiar trading experiences, liquidity, and a platform connecting buyers and sellers. The downside is users must entrust their funds to these platforms and undergo thorough KYC verifications. Atomic swaps, introduced in 2012, facilitate decentralized exchanges between two users without a trusted intermediary. They operate using Bitcoin smart contracts, the Hash Lock and the Time Lock. As Bitcoin adoption grows, atomic swaps' utilization is projected to increase, simplifying and securing transactions.