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BIP 2021: Bitcoin’s Path Toward Reserve Currency Status Is Set

After a momentous 2020, this will be the year that bitcoin takes major strides toward becoming the world’s reserve currency.
The post BIP 2021: Bitcoin’s Path Toward Reserve Currency Status Is Set appeared first on Bitcoin Magazine.

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2020 was unforgettable, especially for Bitcoin. To help memorialize this year for our readers, we asked our network of contributors to reflect on Bitcoin’s price action, technological development, community growth and more in 2020, and to reflect on what all of this might mean for 2021. These writers responded with a collection of thoughtful and thought-provoking articles. Click here to read all of the stories from our End Of Year 2020 Series.

The short, 12-year history of Bitcoin is filled with exciting times. From the immaculate conception birthed through Satoshi Nakamoto to the extreme polarity between face-melting pumps, catastrophic corrections, infamous exchange hacks and internal Bitcoin civil wars; not many years were as exhilarating for Bitcoiners as 2020 was. 

As the infamous Bitcoin crowd has “Paul Revere’d” for years, it seems “the institutions” are finally coming. The new demand over the coming years will propel Bitcoin to become the next world reserve currency.

The Case For A Modern Store Of Value

As we approach the end of 2020, over 5 percent of the total supply of bitcoin is held as a treasury reserve asset on the balance sheet of 20-plus public and private companies, a trend that began to materialize this year. 

Over the same period, the M1 money stock of USD — a metric used by economists to quantify the amount of money in circulation in a particular country —  increased by over 60 percent. The reckless monetary and fiscal policy instituted by central banks and governments as a global response to COVID-19 catapulted bitcoin into the limelight as a potential, new store of value.

M1 Money Stock

This direct liquidity injection of USD into the United States and the broader global economy is known as quantitative easing (QE) or “printing money.” The Fed’s commitment to increase the money supply at will distorts price signals, reduces real wages, increases wealth inequality and ultimately destroys the free market. Savers are punished as their time and wealth is plundered out from under them through the cancerous process of inflation. Although the dollar’s global reserve currency status creates inherent demand, it does not seem this trend of monetary debasement can continue long into the future. The case for a currency with a hard-capped supply that cannot be manipulated at will by governments and institutions has never been stronger.

In steps the Bitcoin Bull Bull Bull, Gigachad Michael Saylor. 

Saylor, one of the longest-standing CEOs of a publicly-traded tech company, became the Bitcoin rookie of the year this year after purchasing nearly $1.3 billion worth of Bitcoin (about 70,000) with the balance sheet of his company, MicroStrategy. He is not the only one spotting this trend. 

Paul Tudor Jones, Stanley Druckenmiller, Scott Minerd —  names all associated with institutional hedge funds —  have opened their minds and portfolios to an allocation of bitcoin. Large, private banks such as CitiGroup have come out with $300,000 to $400,000 price predictions for the next year. As we continue to destroy the purchasing power of the USD, this game-theoretical trend of scarce asset allocation will only continue to increase in the future.

Last, and certainly not least, the beautiful NgU (Number Go Up) technology integral to Bitcoin continues to drive us to new highs. On December 16, bitcoin broke the previous 2017 all-time high, rising above $20,000 for the first time. The further appreciation in bitcoin’s price over the next decade will drive the mainstream adoption of it as a corporate treasury reserve asset. A higher price will catch new eyes, leading to more awareness and eventually less volatility. Bitcoin remains a gleaming beacon of hope in a world built on monetary enslavement.

Protocol Improvements And Ecosystem Innovation

As a technologist, the improvements to the different layers in the Bitcoin protocol remain some of the most exciting advancements of 2020. Schnorr Signatures/Taproot/Tapscript, through a multitiered Bitcoin Improvement Proposal (BIP), was merged into the core codebase earlier this year. “Taproot,’’ as it is commonly known as, drastically improves the digital signature algorithm used by Bitcoin. Massive improvements in on-chain privacy, scalability and transaction efficiency are baked into the Taproot upgrade. This series of upgrades will further increase the adoption of the Lightning Network, multisignature transactions and CoinJoins, ultimately leading to a more secure and private Bitcoin experience.

Outside of the improvements to the core protocol, the ecosystem of innovation surrounding Bitcoin continues to improve the tools available to Bitcoiners. I’d like to give a shoutout to some of my favorites:

  • Swan Bitcoin: A new way to buy bitcoin that forces you into a long-term mindset by dollar-cost averaging.
  • Specter: A desktop interface that integrates with hardware wallets and enables easy-to-use multisig.
  • Strike: A payment application that empowers users to pay an invoice in bitcoin using USD.
  • ColdCard: A secure way to store private keys with a device not connected to the internet.

Outside of Bitcoin tools, developer grants through corporate and nonprofit entities have started to normalize throughout 2020. Organizations such as the Human Rights Foundation, Square, Kraken and more have started to sponsor developers to encourage them to work on improving Bitcoin full time. Sites such as BitcoinDevList and BitcoinACKs have incentivized your average Bitcoiner to contribute to the Bitcoin circular economy by donating sats to developers.

Finally, thought leadership continues to improve the Bitcoin educational experience, colloquially known as “falling down the rabbit hole.” Podcasts, books, articles, conferences and personalities on Bitcoin Twitter all continue to suffocate the complexity of Bitcoin with digestible and entertaining content suitable for precoiners and Bitcoiners alike. As more and more people commit their lives to Bitcoin, the influx of intelligence and ingenuity will slingshot humanity into the stratosphere of innovation in the coming decades. This synergy of thought leadership will improve all those who seek it.

Looking Forward: The Battle Ahead

As we approach the new year and imagine the road ahead, a few trends seem to be emerging. The first will be in the introduction of central bank digital currencies (CBDCs) which will seek to replace the private banking sector through a combination of central banking and fintech. New currencies such as the digital dollar and the digital yuan seek to accelerate the Orwellian future we are marching toward through direct taxation, capital controls, financial surveillance and a universal basic income.

I would like to be explicitly clear: These currencies are no more of a threat to Bitcoin than any fiat currency is today. Over 90 percent of U.S. dollars are already digital, with most governments looking to phase out cash completely in the next few years. Creating a CBDC does not solve the problem of monetary debasement or the problems of financial surveillance and censorship. Bitcoin remains the only incorruptible money that exists today.

The second trend will attempt to regulate Bitcoin. We are already starting to hear rumors of self-custody restrictions floating around. Full on self-custody bans are unlikely, but withdrawal limits and additional KYC regulations are almost certain. Over the next few years, there will be direct attacks on anyone who attempts to use Bitcoin privately. We must fight back on this. Privacy, in and of itself, is not illegal and is the bedrock for liberty. If Bitcoiners give up the ability to self custody their bitcoin by handing it over to institutions, this is one of the only real threats to Bitcoin.

The Bitcoin protocol is engineered on the binding incentives of social consensus. Anyone who chooses to use Bitcoin must agree to a set of rules which are validated by others on the network. When you self-custody bitcoin, you agree to these rules. When you run a Bitcoin node and verify your own transactions, you agree to these rules. When you mine bitcoin and contribute to securing the network through energy and work, you agree to these rules. Relinquishing the ability to self-custody bitcoin and independently audit the supply voids the social consensus of the Bitcoin protocol and allows those rules to be changed. Individuals must be willing to fight for what they believe in. I believe in Bitcoin and I am ready to fight for it.

Lastly, after all the attempts to counterfeit Bitcoin have failed, governments will have no choice left but to adopt it or risk facing obsolescence. This is the final stage left in the road to a Bitcoin Standard. Competing game theory will force the hands of governments to begin acquiring bitcoin by any means necessary, namely through mining. After all of the tools in governments’ arsenals are exhausted, a new world reserve currency will emerge. It will be bitcoin.

This is a guest post by Kaz Bycko. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

The post BIP 2021: Bitcoin’s Path Toward Reserve Currency Status Is Set appeared first on Bitcoin Magazine.

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Government

Survey Shows Declining Concerns Among Americans About COVID-19

Survey Shows Declining Concerns Among Americans About COVID-19

A new survey reveals that only 20% of Americans view covid-19 as "a major threat"…

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Survey Shows Declining Concerns Among Americans About COVID-19

A new survey reveals that only 20% of Americans view covid-19 as "a major threat" to the health of the US population - a sharp decline from a high of 67% in July 2020.

(SARMDY/Shutterstock)

What's more, the Pew Research Center survey conducted from Feb. 7 to Feb. 11 showed that just 10% of Americans are concerned that they will  catch the disease and require hospitalization.

"This data represents a low ebb of public concern about the virus that reached its height in the summer and fall of 2020, when as many as two-thirds of Americans viewed COVID-19 as a major threat to public health," reads the report, which was published March 7.

According to the survey, half of the participants understand the significance of researchers and healthcare providers in understanding and treating long COVID - however 27% of participants consider this issue less important, while 22% of Americans are unaware of long COVID.

What's more, while Democrats were far more worried than Republicans in the past, that gap has narrowed significantly.

"In the pandemic’s first year, Democrats were routinely about 40 points more likely than Republicans to view the coronavirus as a major threat to the health of the U.S. population. This gap has waned as overall levels of concern have fallen," reads the report.

More via the Epoch Times;

The survey found that three in ten Democrats under 50 have received an updated COVID-19 vaccine, compared with 66 percent of Democrats ages 65 and older.

Moreover, 66 percent of Democrats ages 65 and older have received the updated COVID-19 vaccine, while only 24 percent of Republicans ages 65 and older have done so.

“This 42-point partisan gap is much wider now than at other points since the start of the outbreak. For instance, in August 2021, 93 percent of older Democrats and 78 percent of older Republicans said they had received all the shots needed to be fully vaccinated (a 15-point gap),” it noted.

COVID-19 No Longer an Emergency

The U.S. Centers for Disease Control and Prevention (CDC) recently issued its updated recommendations for the virus, which no longer require people to stay home for five days after testing positive for COVID-19.

The updated guidance recommends that people who contracted a respiratory virus stay home, and they can resume normal activities when their symptoms improve overall and their fever subsides for 24 hours without medication.

“We still must use the commonsense solutions we know work to protect ourselves and others from serious illness from respiratory viruses, this includes vaccination, treatment, and staying home when we get sick,” CDC director Dr. Mandy Cohen said in a statement.

The CDC said that while the virus remains a threat, it is now less likely to cause severe illness because of widespread immunity and improved tools to prevent and treat the disease.

Importantly, states and countries that have already adjusted recommended isolation times have not seen increased hospitalizations or deaths related to COVID-19,” it stated.

The federal government suspended its free at-home COVID-19 test program on March 8, according to a website set up by the government, following a decrease in COVID-19-related hospitalizations.

According to the CDC, hospitalization rates for COVID-19 and influenza diseases remain “elevated” but are decreasing in some parts of the United States.

Tyler Durden Sun, 03/10/2024 - 22:45

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International

Rand Paul Teases Senate GOP Leader Run – Musk Says “I Would Support”

Rand Paul Teases Senate GOP Leader Run – Musk Says "I Would Support"

Republican Kentucky Senator Rand Paul on Friday hinted that he may jump…

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Rand Paul Teases Senate GOP Leader Run - Musk Says "I Would Support"

Republican Kentucky Senator Rand Paul on Friday hinted that he may jump into the race to become the next Senate GOP leader, and Elon Musk was quick to support the idea. Republicans must find a successor for periodically malfunctioning Mitch McConnell, who recently announced he'll step down in November, though intending to keep his Senate seat until his term ends in January 2027, when he'd be within weeks of turning 86. 

So far, the announced field consists of two quintessential establishment types: John Cornyn of Texas and John Thune of South Dakota. While John Barrasso's name had been thrown around as one of "The Three Johns" considered top contenders, the Wyoming senator on Tuesday said he'll instead seek the number two slot as party whip. 

Paul used X to tease his potential bid for the position which -- if the GOP takes back the upper chamber in November -- could graduate from Minority Leader to Majority Leader. He started by telling his 5.1 million followers he'd had lots of people asking him about his interest in running...

...then followed up with a poll in which he predictably annihilated Cornyn and Thune, taking a 96% share as of Friday night, with the other two below 2% each. 

Elon Musk was quick to back the idea of Paul as GOP leader, while daring Cornyn and Thune to follow Paul's lead by throwing their names out for consideration by the Twitter-verse X-verse. 

Paul has been a stalwart opponent of security-state mass surveillance, foreign interventionism -- to include shoveling billions of dollars into the proxy war in Ukraine -- and out-of-control spending in general. He demonstrated the latter passion on the Senate floor this week as he ridiculed the latest kick-the-can spending package:   

In February, Paul used Senate rules to force his colleagues into a grueling Super Bowl weekend of votes, as he worked to derail a $95 billion foreign aid bill. "I think we should stay here as long as it takes,” said Paul. “If it takes a week or a month, I’ll force them to stay here to discuss why they think the border of Ukraine is more important than the US border.”

Don't expect a Majority Leader Paul to ditch the filibuster -- he's been a hardy user of the legislative delay tactic. In 2013, he spoke for 13 hours to fight the nomination of John Brennan as CIA director. In 2015, he orated for 10-and-a-half-hours to oppose extension of the Patriot Act

Rand Paul amid his 10 1/2 hour filibuster in 2015

Among the general public, Paul is probably best known as Capitol Hill's chief tormentor of Dr. Anthony Fauci, who was director of the National Institute of Allergy and Infectious Disease during the Covid-19 pandemic. Paul says the evidence indicates the virus emerged from China's Wuhan Institute of Virology. He's accused Fauci and other members of the US government public health apparatus of evading questions about their funding of the Chinese lab's "gain of function" research, which takes natural viruses and morphs them into something more dangerous. Paul has pointedly said that Fauci committed perjury in congressional hearings and that he belongs in jail "without question."   

Musk is neither the only nor the first noteworthy figure to back Paul for party leader. Just hours after McConnell announced his upcoming step-down from leadership, independent 2024 presidential candidate Robert F. Kennedy, Jr voiced his support: 

In a testament to the extent to which the establishment recoils at the libertarian-minded Paul, mainstream media outlets -- which have been quick to report on other developments in the majority leader race -- pretended not to notice that Paul had signaled his interest in the job. More than 24 hours after Paul's test-the-waters tweet-fest began, not a single major outlet had brought it to the attention of their audience. 

That may be his strongest endorsement yet. 

Tyler Durden Sun, 03/10/2024 - 20:25

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Government

The Great Replacement Loophole: Illegal Immigrants Score 5-Year Work Benefit While “Waiting” For Deporation, Asylum

The Great Replacement Loophole: Illegal Immigrants Score 5-Year Work Benefit While "Waiting" For Deporation, Asylum

Over the past several…

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The Great Replacement Loophole: Illegal Immigrants Score 5-Year Work Benefit While "Waiting" For Deporation, Asylum

Over the past several months we've pointed out that there has  been zero job creation for native-born workers since the summer of 2018...

... and that since Joe Biden was sworn into office, most of the post-pandemic job gains the administration continuously brags about have gone foreign-born (read immigrants, mostly illegal ones) workers.

And while the left might find this data almost as verboten as FBI crime statistics - as it directly supports the so-called "great replacement theory" we're not supposed to discuss - it also coincides with record numbers of illegal crossings into the United States under Biden.

In short, the Biden administration opened the floodgates, 10 million illegal immigrants poured into the country, and most of the post-pandemic "jobs recovery" went to foreign-born workers, of which illegal immigrants represent the largest chunk.

Asylum seekers from Venezuela await work permits on June 28, 2023 (via the Chicago Tribune)

'But Tyler, illegal immigrants can't possibly work in the United States whilst awaiting their asylum hearings,' one might hear from the peanut gallery. On the contrary: ever since Biden reversed a key aspect of Trump's labor policies, all illegal immigrants - even those awaiting deportation proceedings - have been given carte blanche to work while awaiting said proceedings for up to five years...

... something which even Elon Musk was shocked to learn.

Which leads us to another question: recall that the primary concern for the Biden admin for much of 2022 and 2023 was soaring prices, i.e., relentless inflation in general, and rising wages in particular, which in turn prompted even Goldman to admit two years ago that the diabolical wage-price spiral had been unleashed in the US (diabolical, because nothing absent a major economic shock, read recession or depression, can short-circuit it once it is in place).

Well, there is one other thing that can break the wage-price spiral loop: a flood of ultra-cheap illegal immigrant workers. But don't take our word for it: here is Fed Chair Jerome Powell himself during his February 60 Minutes interview:

PELLEY: Why was immigration important?

POWELL: Because, you know, immigrants come in, and they tend to work at a rate that is at or above that for non-immigrants. Immigrants who come to the country tend to be in the workforce at a slightly higher level than native Americans do. But that's largely because of the age difference. They tend to skew younger.

PELLEY: Why is immigration so important to the economy?

POWELL: Well, first of all, immigration policy is not the Fed's job. The immigration policy of the United States is really important and really much under discussion right now, and that's none of our business. We don't set immigration policy. We don't comment on it.

I will say, over time, though, the U.S. economy has benefited from immigration. And, frankly, just in the last, year a big part of the story of the labor market coming back into better balance is immigration returning to levels that were more typical of the pre-pandemic era.

PELLEY: The country needed the workers.

POWELL: It did. And so, that's what's been happening.

Translation: Immigrants work hard, and Americans are lazy. But much more importantly, since illegal immigrants will work for any pay, and since Biden's Department of Homeland Security, via its Citizenship and Immigration Services Agency, has made it so illegal immigrants can work in the US perfectly legally for up to 5 years (if not more), one can argue that the flood of illegals through the southern border has been the primary reason why inflation - or rather mostly wage inflation, that all too critical component of the wage-price spiral  - has moderated in in the past year, when the US labor market suddenly found itself flooded with millions of perfectly eligible workers, who just also happen to be illegal immigrants and thus have zero wage bargaining options.

None of this is to suggest that the relentless flood of immigrants into the US is not also driven by voting and census concerns - something Elon Musk has been pounding the table on in recent weeks, and has gone so far to call it "the biggest corruption of American democracy in the 21st century", but in retrospect, one can also argue that the only modest success the Biden admin has had in the past year - namely bringing inflation down from a torrid 9% annual rate to "only" 3% - has also been due to the millions of illegals he's imported into the country.

We would be remiss if we didn't also note that this so often carries catastrophic short-term consequences for the social fabric of the country (the Laken Riley fiasco being only the latest example), not to mention the far more dire long-term consequences for the future of the US - chief among them the trillions of dollars in debt the US will need to incur to pay for all those new illegal immigrants Democrat voters and low-paid workers. This is on top of the labor revolution that will kick in once AI leads to mass layoffs among high-paying, white-collar jobs, after which all those newly laid off native-born workers hoping to trade down to lower paying (if available) jobs will discover that hardened criminals from Honduras or Guatemala have already taken them, all thanks to Joe Biden.

Tyler Durden Sun, 03/10/2024 - 19:15

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