Bitcoin Shortage Looms Post-Halving as ETFs Eat Up Mined Supply

https://bitcoinnews.com/markets/bitcoin-halving-2024-shortage-looms-etfs/?utm_source=rss&utm_medium=rss&utm_campaign=bitcoin-halving-2024-shortage-looms-etfs

After the Bitcoin halving 2024, a complex interplay of factors could influence the market. While the reduction in newly mined bitcoin may lead to a potential shortage, the increasing involvement of ETFs adds another layer of complexity.

Short-Term Traders vs Diamond Hands

Bitcoin long-term holders, also known as “Diamond Hands”, remain optimistic due to their belief in its transformative technology and fixed supply, which they anticipate will drive value appreciation over time.

They see Bitcoin as a hedge against fiat currency devaluation and view its expanding adoption as a testament to its growing utility. Additionally, the maturation of Bitcoin’s market infrastructure enhances user’s confidence, facilitating easier access and fostering a more robust ecosystem for long-term growth.

Wallets that HODL bitcoin are in a consistent upward trend despite price action, holding more than 50% of the current bitcoin circulating supply.

Short-term traders vs long-term holders — Source
Bitcoin ownership distribution
Bitcoin ownership distribution (February 2024) — Source

Companies and Nation States

MicroStrategy, spearheaded by CEO Michael Saylor, has initiated the new year with a robust surge in bitcoin acquisitions. In January 2024 alone, the company bolstered its holdings with the purchase of 850 bitcoin. 

The consistent pattern of bitcoin acquisitions indicates that Saylor and MicroStrategy are consistently adding to their holdings every month, occasionally with brief intervals of one or two months between purchases. Currently, MicroStrategy holds 190,000 bitcoin as Michael Saylor reported on his X account.

MicroStrategy Bitcoin acquisitions - saylor tracker
MicroStrategy Bitcoin acquisitions – SaylorTracker — Source

Nation states are also buying bitcoin for their reserves. Countries like El Salvador disclose their buy marks and holdings. El Salvador now possesses 2,762 bitcoin as Forbes reports. 

Other Small countries like Montenegro are in the works for having bitcoin in their reserves.

large bitcoin holders
Large Bitcoin Holders ($1B+) — Source

Bitcoin Halving 2024 and Supply

Bitcoin Halving is an event programmed into the Bitcoin protocol that occurs approximately every four years or 210,000 blocks. During this event, the reward that miners receive for confirming transactions and securing the network is halved.

This reduction in rewards ultimately decreases the rate at which new bitcoin is created, enforcing scarcity. The purpose of the Bitcoin Halving is to control the inflation rate of Bitcoin and ensure that the total supply remains limited to 21 million, making it a deflationary asset over time.

Before the halving event, around 900 bitcoin will be mined each day. Following the halving, this rate decreased to about 450 bitcoin mined daily. Based on these figures, it’s estimated that after April 20th, 2024, approximately 114,750 bitcoin will be mined each year, or around 14,343 bitcoin each month until the next halving, expected by 2028.

Bitcoin halving 2024

ETFs And Bitcoin’s Mined Supply

All Bitcoin ETF holdings and purchases
All Bitcoin ETF holdings and purchases — Source

A Bitcoin ETF, or Exchange-Traded Fund, is a type of investment fund that tracks the price of bitcoin and allows individuals and institutions to gain exposure to Bitcoin without needing to own or store it themselves directly. Instead, users can buy shares of the ETF, representing ownership of the underlying bitcoin held by the fund.

The current landscape of the Bitcoin market is witnessing significant shifts, with Bitcoin ETFs holding a total of 726,090 bitcoin at present. Concurrently, there are substantial outflows from the Grayscale Bitcoin Trust (GBTC), dispersing its bitcoin holdings among other ETFs. 

Investment researcher and founder of Lyn Alden Investment Strategy, Lyn Alden, shared her insights on the potential implications of a Bitcoin ETF during an interview on the “What Bitcoin Did” podcast. Alden delved into the multifaceted impacts that a Bitcoin ETF could have on the market and beyond.

Conclusion

Approximately 1.85 Million bitcoin are held on exchanges, as reported by CoinGlass. This confluence of factors, including the involvement of large companies, nation-states, long-term holders, the halving mechanism, and the surge in ETF activity, presents a perfect storm scenario for a severe bitcoin shortage.

As larger entities such as ETFs continue their aggressive purchasing spree, there’s a looming risk of scarcity for other major players in the industry. Exchanges may resort to limiting withdrawals or imposing significantly higher fees to manage the strain on available bitcoin reserves. Consequently, smaller exchanges might find themselves priced out of the market due to the dwindling circulation of bitcoin.

As the bull market drives up on-chain bitcoin fees, the shortage could worsen for smaller retailers and individuals. This underscores the critical importance of layer 2 solutions like the Lightning Network, which can alleviate congestion on the Bitcoin network and facilitate more efficient and cost-effective transactions. 

The post Bitcoin Shortage Looms Post-Halving as ETFs Eat Up Mined Supply appeared first on Bitcoin News.

The Bitcoin Thousandaire: Michael Saylor Net Worth

https://bitcoinnews.com/adoption/michael-saylor-net-worth/?utm_source=rss&utm_medium=rss&utm_campaign=michael-saylor-net-worth

Michael Saylor’s bold embrace of Bitcoin has rewritten the rules of corporate strategy. Saylor has not only secured his company’s future but also created the first Bitcoin thousandaire publicly traded company in history, boosting Michael Saylor net worth significantly.

About Michael Saylor

Michael J. Saylor, an American entrepreneur and business magnate, is widely recognized as the CEO of MicroStrategy, a leading business intelligence and analytics firm. 

Born on February 4, 1965, in Lincoln, Nebraska, Saylor’s upbringing in a middle-class family shaped his journey toward success. Growing up on various Air Force bases worldwide due to his father’s service, Saylor developed a global perspective from an early age. His academic pursuits led him to enroll at the prestigious Massachusetts Institute of Technology (MIT) in 1983, where he earned a double major in aeronautics and astronautics, alongside science, technology, and society. 

During his time at MIT, Saylor’s path intersected with Sanju Bansal, a fellow member of the Theta Delta Chi fraternity, who would later become his co-founder at MicroStrategy.

“He is also the founder of Alarm.com (ALRM), named inventor on 48+ patents, & author of the book “The Mobile Wave”. He founded the Saylor Academy (saylor.org), a non-profit that has provided free education to over 1.8 million students.”

Source: https://www.michael.com

Saylor’s Career Origins

Michael Saylor on X: “Doin’ whatever it takes since ‘92. #BitcoinSource

Saylor’s entrepreneurial journey began during his college years at MIT, where he studied aerospace engineering and computer science. 

In 1988, Saylor worked as an internal consultant at DuPont. During this time, he focused on crafting computer models aimed at assisting the company in forecasting market fluctuations. These simulations notably forecasted an impending recession across several of DuPont’s primary markets, particularly in anticipation of the downturn expected in 1990.

Using the funds from DuPont, in 1989, Saylor founded MicroStrategy with Sanju Bansal, his MIT fraternity brother, who served as the company’s COO. Michael graduated from MIT with a double major in aeronautics and astronautics; science, technology, and society.

MicroStrategy

Our mission is to make every enterprise a more intelligent enterprise.

We provide powerful software solutions and expert services that empower every individual with actionable intelligence.

Source: About Us (microstrategy.com)

In the early years, MicroStrategy faced challenges typical of many startups, including financial difficulties and fierce competition in the software industry. However, Saylor‘s vision and determination drove the company forward, and by the late 1990s, MicroStrategy had become a prominent player in the business intelligence market.

The turning point in Saylor’s career came during the dot-com boom of the late 1990s and early 2000s. MicroStrategy experienced rapid growth, and Saylor’s wealth soared as the company’s stock price surged. At the height of the dot-com bubble, Saylor’s net worth peaked, making him a multimillionaire.

michael saylor net worth
The Seven Billion Dollar Man – Washingtonian — Source

However, MicroStrategy faced a significant setback in 2000 when the company became embroiled in an accounting scandal. The U.S. Securities and Exchange Commission (SEC) accused MicroStrategy of inflating its revenue and earnings through improper accounting practices.

“The Commission alleges that from the time of its initial public offering in June 1998 through March 2000, MicroStrategy, a Vienna, Virginia-based software company, materially overstated its revenues and earnings from the sale of software and services contrary to Generally Accepted Accounting Principles.  The company’s public financial reports during this time showed positive net income.  In fact, the Commission alleges, MicroStrategy should have reported net losses from 1997 through the present.”

Source

In the aftermath of the accounting scandal, Saylor shifted his focus to rebuilding MicroStrategy’s reputation and restoring investor confidence. Under his leadership, the company implemented stricter financial controls and refocused its business strategy.

Saylor Introduction to Bitcoin

saylor bitcoin days are numbered
Source

Despite his success in the technology industry, Saylor initially expressed skepticism about Bitcoin. Like many traditional investors and business leaders, he viewed Bitcoin with suspicion, questioning its legitimacy and long-term viability as an asset.

Saylor’s “Lightbulb” Moment

Eric Weiss shares the moment that Michael understood the value proposition of Bitcoin:

“So you’re looking for a solution how do you preserve the toils of yours and your employee’s labor and everything that you’re trying to do and preserve… You just feel like you’re on a treadmill… He [Michael Saylor] evaluated all the alternatives, and I was there to help make sure that Bitcoin was one of the alternatives… Answer whatever questions with as much bias as I could foster…”

Bitcoin Thousandaire: Michael Saylor Net Worth

MicroStrategy stands out as the pioneering public company to allocate Bitcoin to its treasury reserves, marking a significant milestone in corporate finance history. Today, MicroStrategy maintains a formidable position with a holding of 190,000 bitcoin, establishing itself as one of the foremost bitcoin holders worldwide.

Michael Saylor revealed in October 2020 that he purchased 17,732 bitcoin at an average price of $9,882 per coin, amounting to a total investment of $175 million at the time. This single purchase is now worth over $900 million at todays market price. With this timely investment, Michael Saylor boasts a formidable net worth of $2.1 billion, as reported by Forbes.

“He fell from the billionaire ranks after questionable accounting led to a restatement of financial results and the dot-com bust crashed the stock. He’s a billionaire again thanks to timely bitcoin investments.”

You can track MicroStrategy buy marks and tweets at SaylorTracker.com.

The post The Bitcoin Thousandaire: Michael Saylor Net Worth appeared first on Bitcoin News.

Montenegro Welcomes Bitcoin Hydro Bonds

https://bitcoinnews.com/adoption/montenegro-welcomes-bitcoin-hydro-bonds/?utm_source=rss&utm_medium=rss&utm_campaign=montenegro-welcomes-bitcoin-hydro-bonds

Following in the footsteps of El Salvador, which pioneered the concept of Bitcoin-backed bonds, Montenegro is now exploring the potential of Bitcoin Hydro Bonds, a groundbreaking initiative that leverages the country’s abundant hydroelectric resources.

Discovering Montenegro

Montenegro, a small Balkan country nestled between Croatia, Bosnia and Herzegovina, Serbia, Kosovo, and Albania, boasts stunning landscapes that range from rugged mountains to pristine Adriatic coastline. Its rich history is evident in its ancient towns such as Kotor.

In recent years, the country has been gaining attention as a tourist destination, drawing visitors with its picturesque beaches, charming coastal towns, and opportunities for outdoor activities like hiking, sailing, and skiing. Despite its small size, it offers a wealth of experiences, whether exploring its historic sites, enjoying its natural beauty, or enjoying its immersive culture.

In June 2006, Montenegro asserted its independence from Serbia and Montenegro after a decisive referendum, establishing the modern-day entities of Montenegro and Serbia. As a result, it now stands as one of the most recently recognized sovereign nations globally, marking its emergence on the international stage.

Notably, the country is also known for the arrest of Do Kwon, the founder of the cryptocurrency scam Terra/Luna. Do Kwon was arrested in the Balkan country and expects extradition to the U.S. or South Korea.

Following El Salvador’s Steps

El Salvador’s Volcano Bonds were introduced by the president of El Salvador, Nayib Bukele.

“Volcano Bonds, more accurately referred to as Volcano Tokens, are digital assets that act as government bonds. Essentially, this allows the government of El Salvador to raise funds for public investment.

In the case of Volcano Tokens, the “bonds” are backed by bitcoin.”

– Previous report by BitcoinNews — Source

In a similar vein, Montenegro is exploring the concept of “Hydro Bonds,” capitalizing on its abundant water resources to generate excess energy through hydroelectric stations. By tapping into this renewable energy source, it aims to create a sustainable pathway toward economic freedom.

montenegro powerstation
 List of power stations in Montenegro — Source: Wikipedia

Welcoming Bitcoin

In December 2023, JAN3, a pioneering company specializing in nation-state adoption of Bitcoin, initiated discussions with the Prime Minister, Milojko Spajić, regarding the potential integration of Bitcoin mining to power the bonds. 

Prince Phillip of Serbia, the Chief Strategy Officer for JAN3, emphasized Montenegro government’s growing interest in Bitcoin and its potential applications, from establishing Bitcoin-friendly communities to incorporating bitcoin into national reserves. The collaboration between JAN3 and Montenegro underscores a shared vision of leveraging Bitcoin as a catalyst for economic freedom.

At the Bitcoin Oasis 2024 conference that took place in Dubai, Prince Phillip shared the following insights in an interview with Stephan Livera:

“Also we’re in conversations with Montenegro, with the Prime Minister Montenegro who’s a friend, and he’s into crypto he’s not fully orange-pilled yet but he understands he gets it.. And  last June we had a meeting with him and we talked about loads of different things, from a community like a Bitcoin Beach…To putting Bitcoin on their reserves, to mining it. So I think we are now going to go in a meeting with him in the next couple of months…To talk about some mining projects”

Conclusion

Montenegro’s embrace of Hydro Bitcoin Bonds heralds a new era of innovation and progress, positioning the country at the forefront of the global Bitcoin revolution. The country paves the way for a sustainable future powered by renewable energy and Bitcoin mining.

This is a paradigm shift towards a more resilient financial ecosystem. With its breathtaking natural beauty and progressive outlook, this Balkan country stands poised to become a key player in the industry.

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Dubai Bitcoin Oasis 2024: Stephan Livera’s Report

https://bitcoinnews.com/adoption/bitcoin-oasis-2024-dubai-stephan-livera/

From February 7th to 9th, Dubai became the epicenter of Bitcoin innovation as industry enthusiasts gathered for Bitcoin Oasis 2024. The interview spearheaded by the esteemed Bitcoin advocate Stephan Livera, introduced 5 interviewees who were asked questions relevant to their expertise.

About the Interviewer: Stephan Livera

Stephan Livera is a Head Educator at Swan Bitcoin, a partner venture, and contributor for outlets and publications for Bitcoin companies. He is the creator and host of the Stephan Livera Podcast, recognized as one of the world’s leading Bitcoin podcasts. It is focused on educational interviews about the economics and technology of Bitcoin.

Stephan Livera Podcast — Source

Alejandro De La Torre

Alejandro De La Torre

Alejandro De La Torre is currently the CEO of a Bitcoin mining company called DEMAND, a Stratum V2 mining solution.

In a captivating discussion, Alejandro De La Torre shares insights into revolutionizing Bitcoin mining. De La Torre explores strategies to enhance decentralization within the mining process.

Alejandro advocates for the utilization of alternative revenue streams such as heat recapture, and challenges misconceptions surrounding Bitcoin’s environmental impact. De La Torre’s innovative approaches underscore the potential for Bitcoin mining to be both profitable and environmentally sustainable.

Livera: “And that definitely Cuts against this whole ‘oh no Bitcoin mining boiling the oceans bad for the climate’ I mean it’s simply not true. How would you explain that quickly to people?”

De La Torre: “An ignorant statement because a lot of the people who are mining right now are using otherwise stranded energy… But let’s give an example: I’ve worked with an operation that uses pig manure that generates methane. They capture that methane with equipment and they generate electricity, and so, they’re basically capturing that methane that otherwise would have been into the environment…”

Luke Dashjr

luke dashjr

Luke Dashjr, is the current CTO and chairman of OCEAN Mining, which aims to radically decentralize Bitcoin Mining, permitting miners to construct their block templates.

Luke Dashjr offers a unique perspective on combating spam on the Bitcoin blockchain while simultaneously enhancing miner earnings. 

Luke emphasizes the use of gradual updates to node software (also known as a soft-fork) and the implementation of innovative payout systems, proposing solutions to ensure the integrity and efficiency of the Bitcoin Network. His insights shed light on the intricate balance between security, scalability, and profitability within the Bitcoin ecosystem.

Livera: “How would you define spam on the Chain?”

Dashjr: “Using Bitcoin, I would agree, is permissionless but attacking Bitcoin is quite different. Spam is generally and broadly defined as anything that people have not consented to participate in or don’t want to participate in, but they’re being forced to against their will”.

Prince Philip of Serbia

price philip serbia

Prince Phillip of Serbia is the current CSO of JAN3, a company focused on nation-state adoption of Bitcoin.

Prince Phillip shares his vision for driving nation-state adoption of Bitcoin, through initiatives like Aqua, a user-friendly wallet designed to simplify access to Bitcoin, stablecoins, and the Liquid Network. Phillip aims to bridge grassroots movements with top-down strategies, particularly in regions like Latin America. Phillip and his team at JAN3 are paving the way for the widespread adoption of Bitcoin as a transformative force in global finance.

Prince Phillip elaborated on the rationale behind integrating stablecoins into Aqua Wallet:

Livera: “Let’s chat a bit about Aqua… Trying for LATAM adoption there?”

Prince Phillip Replied: “When I was in Argentina in November 2022, I saw that they like to have exposure to the US dollar because their Peso had horrible inflation… Samson saw the Gap that there’s no wallet out there that is predominantly Bitcoin Centric, with usdt on Liquid that allows people to have their saving savings account in Bitcoin, but also, their spending account in usdt on liquid… So, [Aqua] its trying to fill that Gap… People want the dollar exposure but also that savings account, and they can go between in and out of one and the other.”

Pete Rizzo

pete rizzo

Pete Rizzo is a Bitcoin journalist and current Editor of Bitcoin Magazine.

Pete Rizzo, through insightful discussions on the implications of spam and ordinals, challenges the Bitcoin community to confront underlying motivations and engage in authentic conversations. By exploring the influx of intellectual capital and its impact on Bitcoin’s growth, Rizzo highlights the dynamic nature of the Bitcoin ecosystem and the opportunities it presents for innovation and development.

Livera: “Let’s start with this question of the spam, as I like to call it, or maybe the ordinals as you like to call it. In your view is it good or bad for Bitcoin?”

Rizzo: “[If] Bitcoin aligns everyone’s incentives, then we’re simply dealing with a group of people who right now aren’t as aligned but eventually will be aligned… They come and they build a lot of things that aren’t useful [from a monetary standpoint] but they’re not adding transactions or bringing Capital to the crypto apparatus which we agree is negative.

Giacomo Zucco

Giacomo Zucco

Giacomo Zucco, Director of Plan B Network, which focuses on Bitcoin Education.

Giacomo Zucco confronts challenges within the Bitcoin ecosystem while embracing opportunities for innovation. By defining spam “as unwanted information within an information-sharing system”, Zucco sheds light on the complexities surrounding filtering solutions. Through critical analysis of narratives surrounding spam and the rise of alternative solutions like Liquid or Federated sidechains, Zucco encourages the Bitcoin community to remain vigilant in preserving Bitcoin’s core principles while adapting to evolving technological landscapes.

Livera: Also with fees being very variable, there is kind of talk of people pushing off to use let’s say Liquid or use things like Fedimints for new coiners. Do you see concern there or do you see that it’s just ‘look that’s just the way it has to go’? 

Zucco: “People will already gravitate to the simple Direction anyway instinctively… So we should not teach ‘for your use case just use custody’ It’s better, it’s true, but it’s better if we don’t… [Is] Not necessarily realistic… But you don’t say what is realistic you say what people need to hear. So we should never use custodial, but actually we will”

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Fidelity’s Paradigm Shift: Bitcoin ETF Keys in Self-Custody

https://bitcoinnews.com/adoption/fidelity-bitcoin-etf-keys-in-self-custody/?utm_source=rss&utm_medium=rss&utm_campaign=fidelity-bitcoin-etf-keys-in-self-custody

The approval of Bitcoin Spot Exchange-Traded Funds (ETFs) by the Securities and Exchange Commission (SEC) marked a significant milestone. Fidelity Investments, with a user base of nearly 50 million in the U.S. alone, signaled a paradigm shift in the storage of digital assets within the framework of traditional finance.

Fidelity Bitcoin ETF And Self Custody Early On

The company’s journey into holding bitcoin began in 2014 when it established the Fidelity Digital Assets division to explore the potential of blockchain technology and digital assets.

Initially, Fidelity’s attention was more focused on research and understanding the underlying technology behind Bitcoin, however, as institutional interest in Bitcoin grew, Fidelity recognized the need for secure custody solutions to attract these investors.

In 2018, Fidelity Digital Assets announced its plans to offer custody and trade execution services for Bitcoin, targeting institutional investors such as hedge funds, family offices, and market intermediaries. They implemented robust security measures, including cold storage solutions and multi-level authentication protocols, to safeguard clients’ digital assets.

In 2020, the company launched the Fidelity Bitcoin Index Fund, one of the precursors of the now-known Bitcoin ETFs, allowing accredited investors to gain exposure to Bitcoin through a regulated investment vehicle.

Unlike traditional ETFs where third-party custodians typically hold the keys to the underlying assets, Fidelity took a groundbreaking approach by holding the keys to its bitcoin directly.

Fidelity’s Omnibus Storage Structure

Fidelity Investments launched its omnibus structure for bitcoin custody in 2018. This structure allows Fidelity to hold bitcoin on behalf of institutional clients without creating separate wallets for each client.

Here is an example given by the Fidelity Team:

“Simply put, an omnibus structure means all client assets are stored together but recorded individually. An omnibus structure allows Fidelity Digital Assets to pull assets from a single source vs. multiple accounts. For example, let’s use quarters to represent bitcoin. The idea of an omnibus structure is to have a communal jar of quarters vs. a separate jar for each person.”

Source

Omnibus graphical Example — Source

This approach gives Fidelity an easier way to manage the funds than the otherwise individual hot wallets. Their method ensures that all the funds that are not actively traded are stored in cold storage, and only the traded funds are moved to a wallet connected to the internet and actively used for transactions.

fidelity bitcoin safe
Fidelity bitcoin safe — Source

Fidelity Signals Paradigm Shift in TradFi

The Bitcoin ethos shared all around the world is “Don’t Trust, Verify”, Fidelity’s decision to self-custody their funds is a testament to the understanding of Bitcoin.

By holding their keys, Fidelity can implement and control stringent security measures tailored to their needs and standards, such as geographical redundancy, offline storage, anti-radio frequency rooms, etc. Surely there are many other safety measures that are not shown to the public. 

Third parties can introduce liabilities for the company’s funds. Security breaches, operational efficiency and regulatory compliance, among many others, can be problematic for the fund manager.

bitcoin etf custodians - Fidelity Bitcoin ETF self custody
Bitcoin ETF Custodians

ETFs vs Real Bitcoin

“If you understand the risks and are deciding between buying bitcoin directly or a spot bitcoin ETP, the differences might be best summed up as functionality versus convenience. Buying bitcoin will give you access to the features Nakamoto envisioned”

– Fidelity Investments. “What is a spot bitcoin ETP? | Fidelity.” Fidelity Investments, 10 January 2024 – Source

Matthew Kratter from Bitcoin University YouTube Channel, explains the differences between a Bitcoin spot ETF and the bitcoin asset itself, also encouraging the viewer to explore the real bitcoin path instead of owning an IOU.

“Bitcoin makes everything better and ETFs are no exception. Bitcoin spot ETF will indeed help to preserve your purchasing power and protect you from the money printers of the central Bankers… The high inflation that we’ve been seeing and that the dollar really has seen since the founding of the Federal Reserve in 1913…So in Conclusion here I would say buy the Bitcoin ETF or one of the Bitcoin ETFs if you must, but I would wish something even better for you… ”

Source

While holding ETFs IOUs seems convenient, the trade-offs between functionality, convenience, and privacy are always in play. The route to the real bitcoin path might seem scary at first glance for many users and institutions, but Fidelity’s Digital Assets branch is a testament of what can be achieved by companies and individuals alike.

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Mostro: A P2P Decentralized Lightning Exchange Built on NOSTR Rails

https://bitcoinnews.com/lightning/mostro-a-p2p-decentralized-exchange-nostr/

As authoritarian regimes tighten their grip on digital spaces, the necessity for censorship-resistant protocols becomes increasingly evident. Enter Mostro: a Peer-to-Peer decentralized Lightning Exchange. It not only facilitates seamless peer-to-peer exchanges but also pioneers a new frontier in financial sovereignty, adding a new use case for the NOSTR protocol.

Mostro: A Lightning and NOSTR Integration

In its beta phase, Mostro emerges as a beacon of financial liberation, offering users the ability to seamlessly trade bitcoin via the Lightning Network for various fiat currencies accepted by sellers. Serving as a testament to resilience, it integrates seamlessly with NOSTR, fortifying its foundation for long-term sustainability and its hard-to-censor nature.

“This is where enter nostr as a platform where the bot can live without the possibility of being censored by a powerful entity”

“Development started.” November, 11th 2022

Behind the Innovation: Francisco Calderón

Francisco Calderón, also known as “negrunch“, is a Venezuelan software engineer, advocate for Free and Open Source Software (FOSS), and a Bitcoin supporter, as stated on his NOSTR profile.

negrunch on nostr
Negrunch Nostr Profile — Source

Francisco also built other programs and web apps that are worth mentioning, with one being a very popular lightning p2p bot on Telegram (precursor of Mostro), and a lightning event registration called “danta”.

negruch github
Negrunch Github — Source

The Human Rights Foundation Grants

In a testament to its potential for catalyzing societal change, Mostro alongside 17 other groundbreaking projects was awarded a grant of $500,000 distributed between them, by The Human Rights Foundation (HRF) in December 2023. This endorsement underscores it’s pivotal role in advancing financial freedom and human rights worldwide.

“Funding will support Mostro’s progress in helping users in restrictive financial environments buy and sell bitcoin in a censorship-resistant way.”

Adams, Vasilia. “HRF Grants $500000 to 18 Projects Worldwide.” Human Rights Foundation, 19 December 2023Source

Negrunch replied to the HRF, stating:

HRF started to support Mostro’s development and gave Mostro a grant which allows me to keep coding an entire year exculsively to Mostro development, let’s keep working and give this Non-KYC and Censorship-resistant #Bitcoin peer-to-peer tool to the world.
Join us and help us building Mostro.
Thank you so much HRF
.

Mostro’s Precursor

Before Negrunch started to develop the app, he was working on a Peer-To-Peer bot on Telegram, that allowed thousands of people to buy and sell bitcoin without KYC (Know Your Customer). This bot does not require you to have any expertise in coding, it works with simple commands.

Francisco was part of a video conference at Alianza Blockchain’s YouTube channel, where he explained how NOSTR solved the possibility of Telegram banning the bot:

Telegram Lightning Bot: lnp2pBot

lnp2p bot on telegram
lnp2pBot — Source

The problems with this bot were addressed by Negrunch who stated the following:

“Although the bot works excellent, it’s running on top of Telegram, a great platform but we do not know if one day it will be reached by the tentacles of a powerful government asking for political dissidents or simply awkward public person.
This is where enter nostr as a platform where the bot can live without the possibility of being censored by a powerful entity”

How Does Mostro Work?

how does mostro work
How does it work? — Source

Criptopanas, a YouTube channel that creates Bitcoin tutorials and content in Spanish said the following on stacker.news:

“Mostro’s operation is based on Lightning network nodes that route payments through generated invoices, and these nodes, called “Mostros,” are run by users who receive commissions for their services. The reputation of these nodes is crucial, as users can rate them, incentivising their participation in the platform’s payment processing.”

– Criptopanas. “Mostro. No one can stop you from buying Bitcoin.” stacker news — Source

Mostro works with a p2p communication on top of NOSTR. It will be the escrow that allows buyer and seller to operate reducing the risk for both parties.

It relies on 3 premises to work: 

  1. Client: Buyers and sellers will need the clients to buy/sell bitcoin, and a Lightning wallet.
  2. Removing Single Point of Failure: Making Mostros (nodes) as easy as possible to implement for non-coders or programmers. These nodes will route the payments and take a fee cut for each seller’s successful order.
  3. Reputation System: Users will be able to rate sellers, thus, providing organic growth and competition between sellers to obtain more buyers.
how to test mostro
How to test Mostro — Source

A web client was announced in January of 2024, making it possible for people to start testing and finding possible bugs, and the learning curve is exponentially lower.

Road Ahead

In a world marked by increasing authoritarianism and digital surveillance, Mostro emerges as a beacon of hope, giving individuals the tools they need to trade within dictatorial states like Venezuela or Cuba.

Through its seamless integration of The Lightning Network and the NOSTR protocol, it not only facilitates peer-to-peer exchanges but also fosters a community rooted in transparency, and resilience. Looking ahead, Mostro signifies a paradigm shift in our perception of financial transactions. In this evolving landscape, intermediaries are more often present, and reputation no longer plays a pivotal role in the transaction process.

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“Lack in Privacy”: What it Means and How NOSTR Can Help

https://bitcoinnews.com/opinion/lack-in-privacy-nostr/

It is no wonder that by today’s standards, most people live in a world of ever-increasing surveillance. Privacy refers to the right of an individual or group to keep their information, behavior, or thoughts to themselves, away from public scrutiny and unauthorized access. A lack in privacy takes all these rights away.

Attacks on Privacy Have Been Normalized

The Evolution of Privacy: A timeline of events reshaping identity-based tracking and analytics — Source

The disintegration of privacy rights has been in constant preparation, affected by technological changes, societal changes, and autocratic moves by all governments. In pre-digital age, privacy attacks were localized, governments didn’t have the technical capabilities they have today, so they had to rely on more interpersonal approaches. 

“The art of espionage is an evolving one, adapting to new technologies and geopolitical conditions, yet often driven by human motivations – including greed, ideology, and revenge – that have changed little over the course of 250 years.”

– “Evolution of Espionage.” INTEL.govSource

In the early 2000s, concerns arose over government surveillance programs, highlighted by revelations such as the USA PATRIOT Act and the warrantless wiretapping program in the United States. The post-9/11 security climate justified these measures in the name of national security, sparking debates about the balance between civil liberties and counterterrorism efforts.

Related reading: Blockchain Forensics: Balancing Crime and Privacy Rights

The rise of social media and online platforms further accelerated the loss of privacy. Individuals willingly shared personal information, habits, and preferences on these platforms, unknowingly contributing to the creation of extensive digital profiles. The revelations by Edward Snowden in 2013 exposed mass surveillance programs conducted by intelligence agencies, triggering global discussions on the far-reaching implications of state-sponsored surveillance on privacy rights.

Numb Citizens

People today suffer from constant surveillance syndrome. Trade-offs always exist in every aspect of our lives where convenience and privacy are opposites in most cases.

Today, the integration of technology into daily life has normalized the notion of being observed. The widespread use of smartphones, social media, and smart devices further contributes to this acceptance, as individuals willingly share personal information, locations, and activities online.

Moreover, government surveillance programs and security measures, often justified in the name of public safety, contribute to the sense of being constantly monitored. In some cases, the normalization of surveillance may lead to a resigned acceptance, with individuals feeling powerless to resist or challenge these practices. 

Using words such as ‘Terrorism’ and ‘Money Laundering’, and tying them up with an idea they want to stop, is the playbook of bureaucrats and politicians worldwide.

What’s Best for Them: A Lack in Privacy

How often have you heard the saying or said this to yourself:  “If you are not hiding something you shouldn’t be afraid”. We’ve been led to believe that hiding is a bad thing.

Walking Through Definitions

  1. Hide: to conceal from sight; prevent from being seen or discovered.
  1. Privacy: refers to the right of an individual or group to keep their information, behavior, or thoughts to themselves, away from public scrutiny and unauthorized access.
  1. Secrecy:  involves actively hiding information from others, often for a specific purpose. Secrecy can be used to protect privacy, but it can also be used for unethical or illegal purposes.

Privacy is a right to keep personal information away from public scrutiny, while secrecy is the act of deliberately hiding information from others to commit wrongdoings. And yes, it is a gray line, but one that should not be crossed by the State to surveil its citizens.

Habits

A lack of privacy will increase the risk of your information falling into the wrong hands. 

This image shows the breaches of data over the last 10 years. Not counting the Twitter (formerly known as X today) breach last year.

breaches of data
Top data breaches of the decade — Source

It all comes down to best practices, and not letting tech giants and social media companies know more than they should know.

Owning Your Digital Footprint

Introducing Key Pairs

A public key is a unique, cryptographic identifier that can be shared publicly. It is used to receive and store data, similar to a bank account number, or social media username. A private key, on the other hand, is a secret (a form of privacy), cryptographic identifier that is used to sign transactions and transfer ownership. Only the owner of a private key can transfer ownership of the assets (data) associated with its corresponding public key.

With cryptography, users of a network can transfer value (data) across the internet. Having the private key of your public key will by definition, make you the sole owner of this data.

NOSTR: An Alternative to Social Media Honeypots

Legacy social media vs nostr protocol
Legacy social media vs the NOSTR protocol, by Awayuki — Source

NOSTR stands for “Notes and Other Stuff Transmitted by Relays”. Like HTTP or TCP-IP, Nostr is a protocol; an open standard upon which anyone can build. Nostr itself is not an app or service that you sign up for.

Nostr is designed for simplicity and enables censorship-resistant and globally decentralized publishing on the web.

Jack Dorsey’s Endorsement

Jack Dorsey, an early user of The NOSTR protocol and co-founder and former CEO of what was known as Twitter, stated on his X account:

jack dorsey nostr profile
Jack Dorsey is on Nostr (njump.me)

Conclusion

NOSTR’s decentralized approach to information flow and user data protection presents a promising solution in an era dominated by constant surveillance. The use of public and private key pairs further empowers individuals to take control of their digital information securely. As we navigate the complexities of the digital age, innovations like NOSTR stand as beacons for a more privacy-centric future.

The post “Lack in Privacy”: What it Means and How NOSTR Can Help appeared first on Bitcoin News.

Honda Accepts Bitcoin, But There’s a Catch

https://bitcoinnews.com/adoption/honda-accepts-bitcoin-but-theres-a-catch/?utm_source=rss&utm_medium=rss&utm_campaign=honda-accepts-bitcoin-but-theres-a-catch

Recently, rumors were circulated fervently that Honda accepts bitcoin, sending shockwaves through the Bitcoin community. However, the truth behind these speculations has a twist. This article dissects the situation, highlighting the role of FCF Pay and the broader implications for the automotive industry.

The Honda-Bitcoin Saga

The speculation about Honda Motor Co., Ltd., (NYSE: HMC) a Japanese multinational automaker, accepting bitcoin as a direct form of payment for their vehicles circulated widely in early October, contributing to the surge in bitcoin’s value against the dollar.

However, these rumors were debunked by an American Honda spokesperson later in the month. The spokesperson clarified that contrary to the rumors, Honda’s vehicles were not directly available for purchase using bitcoin, and the company’s policies remained unchanged.

Honda Accepts Bitcoin: FCF Pay Paving the Way for Bitcoin Payments

While Honda’s official stance on Bitcoin remains unchanged, a noteworthy alternative emerges through FCF Pay. The NASDAQ reported in one of its articles:

“Looking to offer new opportunities for consumers across the world, Honda Motor Co Ltd. (NYSE: HMC) expanded its payment options.
What Happened: Tokyo-based car company, Honda Motor partnered with the blockchain payment system, FCF Pay”

Many might wonder why this news seems so important to others. Canadian Bitcoiners offered their view on Honda’s stance on Bitcoin, as well as the tax burdens for buying a vehicle with Bitcoin.

“Tax implications, is always about the tax implications” said Joey, one of the commenters from the Canadian Bitcoiners Clips channel.

About FCF Pay

“French Connection Finance (FCF) is a group of companies, including a Canadian-based software company and various other LLCs around the world. The FCF team has undergone the appropriate KYC process and the FCF project has been audited by Certik, the results of which show no major or serious issues.”

FCF Pay / About page

Joe Parkin, the Chief Operating Officer of FCF Pay, emphasizes that Honda is not the sole automobile manufacturer accessible through their service. Other industry giants like Ford, BMW, Nissan, Mercedes-Benz, and Mitsubishi also accept bitcoin payments through the FCF Pay platform.

FCF Pay is gearing up to expand beyond the United States and is actively exploring collaborations with countries in Latin America and other regions worldwide, including Asia and parts of Africa.

As of September 2023, the platform has enabled customers to make purchases using bitcoin, with a fee structure of $3 plus 2% of the transaction.

Expanding on FCF Pay’s mission, Parkin highlighted the platform’s ambition to encourage companies of various sizes and industries to accept direct bitcoin payments. While an enthusiastic supporter of Bitcoin, FCF Pay itself has not entered into exclusive partnerships with companies, including Honda, to enable direct Bitcoin transactions. Parkin emphasized, “Customers can transact in Bitcoin, but the 21,000 companies integrated with our system receive payments in fiat.”

FCF Pay X Account

The revelation regarding FCF Pay’s operations aligns with their endeavors to revive their presence on X. Parkin links their account suspension on October 5 to misinformation and purported sabotage attempts from potential rivals or opposing factions.

FCF Pay X account suspension — Source: X

Recent Developments and Rebranding

A recent development worth noting is the acquisition of FCF Pay by Zyptopay, a private company headquartered in Łódź, Poland. The acquisition has triggered a rebranding and migration transition for FCF Pay as it aligns with Zyptopay’s strategic vision and goals.

The evolving landscape of digital currency payments and FCF Pay’s global ambitions suggest an intriguing future for Bitcoin and those exploring innovative payment solutions in the automotive industry.

The Landscape of Bitcoin in Automotive

This isn’t the initial occurrence of a Japanese automobile company welcoming Bitcoin. SBI Motor, another significant player in the industry, had previously welcomed Bitcoin as a payment method. Furthermore, the electric vehicle giant Tesla gained attention when it announced bitcoin was accepted for vehicle purchases.

The partnership between Honda and FCF Pay, along with these other noteworthy alliances, marks a significant step toward the acceptance of bitcoin and the incorporation of blockchain technology. As the Bitcoin landscape continues to develop, such groundbreaking initiatives are poised to transform the financial and commercial landscape, presenting fresh opportunities and possibilities for consumers globally.

Honda’s Terms and Conditions

American Honda’s website shows the following in “Accounts & Profile” section:

“Our online payment features, including EasyPay for recurring payments, allow you to electronically pay bills including but not limited to your scheduled monthly payment, NSF fees, and property taxes. If you choose to set up this feature, the EasyPay Enrollment Process Terms and Conditions will apply in addition to these Terms.”

– “Legal Terms and Conditions.” American Honda Finance CorporationSource

Honda has not made any more comments about bitcoin as a direct payment method for their vehicles.

Bitcoin’s Terms and Conditions

Bitcoin, as a decentralized and open-source protocol, operates with principles rather than formal terms and conditions. Users engaging with the Bitcoin Network acknowledge its decentralized nature, where no single entity controls the system. 

Satoshi’s whitepaper explained the need for a decentralized system. He stated the following:

“What is needed is an electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party.

In this paper, we propose a solution to the double-spending problem using a peer-to-peer distributed timestamp server to generate computational proof of the chronological order of transactions.”

Bitcoin transactions are generally irreversible. Once confirmed, they cannot be undone. Users are encouraged to verify transaction details before confirming.

It’s important to emphasize that these “terms and conditions” are not enforced by any central authority but are rather general principles upheld through mathematics and rules of the entire Bitcoin Network.

The post Honda Accepts Bitcoin, But There’s a Catch appeared first on Bitcoin News.

Nick Szabo: Pioneering the Foundations of Digital Currency

https://bitcoinnews.com/adoption/nick-szabo-foundations-of-digital-currency/

Born in May 1965 in New York City and raised in California, Nick Szabo is a multifaceted individual—a computer scientist, legal scholar, cryptographer, and entrepreneur. Influenced by his mathematician parents, Szabo earned a Bachelor’s degree in Computer Science at the University of Washington and later pursued law at George Mason University School of Law. During his studies, Szabo embarked on various projects related to digital currency and contract systems.

Nick Szabo profile picture – Source: Facebook

In 1998, Szabo published “Bit Gold,” a pioneering paper that envisioned a decentralized digital currency system based on cryptographic techniques, predating Bitcoin by over a decade. His involvement in The Cypherpunk‘s mailing list reflected his advocacy for free markets as a means to enhance production and competition for human prosperity.

Ideologies and Contributions

Nick Szabo’s ideologies center on the convergence of technology, economics, and law. Despite his Blogspot being inactive for nearly six years, Szabo’s impact on the digital currency landscape remains profound.

“I didn’t want it to be dependent on government and that perhaps was more for ideological reason creative reasons.”

– Nick Szabo, on Bit Gold, What Bitcoin Did ClipSource

nick szabo blog
A snapshot of Nick Szabo’s Blog — Source

Bit Gold: The Foundational Theory for Bitcoin

Szabo’s introduction to the world of fame among freedom-minded individuals started in 1998 with his introduction of Bit Gold. Bit Gold was never implemented and was more like a theory waiting to be developed later, but this laid the foundational ground for others to work on.

Bit Gold aimed to provide a decentralized digital currency system based on cryptography backed by physical assets like gold; a pretty “simple” idea, yet game-changing. The reason why Bit Gold was not implemented, was due to the reliance on trusted third parties for redemption. This introduced centralization concerns, reflecting the broader difficulties faced by earlier digital currency proposals.

Nick Szabo take on governance
Nick Szabo’s take on governance – Source: X

“A long time ago I hit upon the idea of bit gold. The problem, in a nutshell, is that our money currently depends on trust in a third party for its value.”

– Szabo, Nick. “A Bit Gold problem.” Unenumerated, 27 December 2008Source

You can learn more about Nick Szabo’s take on Bit Gold by listening to his interview with “What Bitcoin Did” Podcast.

How Bit Gold Would Have Functioned if Implemented

  1. Proof of Work: To generate Bit Gold coins, participants needed to solve a computationally intensive puzzle called a hashcash problem. Solving this problem required significant computational resources, making it difficult for any single entity or group to dominate the network.
  1. Double Spending Prevention: Once a participant solved the hashcash problem, they would receive a new coin along with a unique identifier called a “chained hash.” The chained hash linked the newly minted coin to all previous coins in the chain, preventing double-spending.
  1. Distributed Ledger: Each transaction involving Bit Gold coins would be recorded on a distributed ledger maintained by nodes across the network. This ledger ensured transparency and prevented fraudulent activities.
  1. Redemption Centers: Bit Gold relied on trusted third-party entities known as redemption centers to exchange physical goods or services for Bit Gold coins. Users could redeem their coins at these centers, which then verified the authenticity of the coins using the distributed ledger.

The key distinction between Bit Gold and Bitcoin lies in the latter’s decentralized, immutable ledger distributed across the world. 

They share similarities in their proof-of-work concepts and early exploration of digital currency ideas. However, Bitcoin has achieved practical implementation and widespread adoption, while Bit Gold remains a historical precursor that contributed to the evolution of digital currencies.

Is Nick Szabo Satoshi Nakamoto?

nick szabo bitcoin

There are a lot of similarities between Szabo’s groundwork and Bitcoin. No wonder people theorized that he was the creator of Bitcoin. Firstly, his background encompasses roles as a computer scientist and engineer, a graduate of law school, and a proficient economist. All this knowledge seems to be applied to Bitcoin’s code.

Secondly, the dates just match. Laying the foundation for Bitcoin in the late 90’s, and continued to work on it as a pseudo-character of its own. He decided to reach out to Cypherpunk’s to test his theories and implementations.

Thirdly, some people theorize that he alone didn’t put together Bitcoin’s code; but a collaborative work between Szabo, Hal Finney, and other freedom-minded people. Some people believe that Bitcoin touches and perfects too many areas of expertise for a single persona to work and develop.

Here is a timestamped video of Nick Szabo on The Tim Ferris show when he confused Bitcoin and Bit Gold for a second.

Hacker News Forum Discussion
The discussions of relations between Szabo and Satoshi have been had countless times (Click for larger image) — Source

On the other hand, there is just no conclusive evidence. Geniuses are born now and then, maybe Satoshi was one of these geniuses. Nick has denied it numerous times publicly, even saying that “he is used to it.”

Research by financial author Dominic Frisby provided circumstantial evidence but, as he admits, no proof exists that Satoshi is Szabo. In a July 2014 email to Frisby, Szabo said “I’m afraid you got it wrong doxing me as Satoshi, but I’m used to it.”

– Wikipedia. “Nick Szabo on Satoshi.” Source

The question of whether he is Satoshi may remain unanswered, but it is evident that Nick remains a part of the Laser Eyes team.

nick szabo lazer eyes
Nick Szabo’s X (twitter) profile picture — Source

The post Nick Szabo: Pioneering the Foundations of Digital Currency appeared first on Bitcoin News.