Month: January 2023

• El Salvador has voted to pass a bill that would pave the way for President Nayib Bukele’s bitcoin bond issuance.
• The bonds would be issued on Blockstream’s Liquid Network sidechain and invest half of the money into bitcoin and the other half into infrastructure necessary to build out the bitcoin industry in El Salvador.
• This new law is seen as an important milestone by Bitcoin educator and advocate Max Keiser, who believes it establishes a foundation for a new global, digital securities layer built on Bitcoin.

El Salvador Passes Bill to Issue President Nayib Bukele’s Bitcoin Bonds

El Salvador has voted to pass a bill which paves the way for President Nayib Bukele’s bitcoin bonds. The bond issuance would be done via Blockstream’s Liquid Network sidechain with funds split between investments in bitcoin and infrastructure necessary to build out the country’s bitcoin industry.

Details of Bond Issuance

The announced plan entails $1 billion in bonds yielding 6.5%, giving investors a fast-track to obtain citizenship in El Salvador. In response to today’s vote passing this bill, El Salvador’s Bitcoin Office released a statement noting that it “paves the way for the volcano bonds which we will soon begin issuing”.

Significance of This Milestone

Max Keiser, a major proponent of El Salvador’s adoption of bitcoin since the process began, believes that this is one of the most important milestones yet as it “establishes a foundation for a new global, digital securities layer built on Bitcoin”.

Background On El Savador Embracing Bitcoin

In September 2021, El Savador made history by becoming the first nation in the world to make bitcoin legal tender—putting them on the global financial map. This latest move further solidifies their dedication towards creating an innovative economy centered around cryptocurrency and blockchain technology.

Conclusion

Today marks an exciting moment not just for El Savador but also for all countries looking towards cryptocurrency innovation as they consider their own economic policies going forward. With this vote passing legislation enabling President Nayib Bukele’s bitcoin bond issuance, there is no doubt that more nations will soon follow suit in allowing citizens access to these revolutionary financial tools backed by blockchain technology.

• Fedi is launching a Bitcoin hackathon that will pay out 2.1 BTC to the winner in celebration of Bitcoin’s 14th birthday.
• Fedimint is an open source custody platform that allows users to store and extend the functionality of their bitcoin with privacy, smart contracts, and more.
• Developers are incentivized to work on projects that would drive the most impact, such as modules that enable a communal savings pool, store value in a local currency, receive payments privately, or operate a communal vote-based spending pool.

Fedi, a technology company focused on building a Fedimint-based community custody platform, is launching a Bitcoin hackathon to celebrate Bitcoin’s 14th birthday. The prize? An impressive 2.1 BTC to the winner.

Fedi is looking for developers to build out a Fedimint module that will bring real world benefits to users. The bounty is open ended, meaning that developers can code the functionality they want, but they are incentivized to work on projects that would drive the most impact. Some ideas of what those could be include modules that would enable a communal savings pool to accumulate bitcoin for a large project, storing value in a local currency like dollars, receiving payments privately via static QR codes or links (similar to CLN’s BOLT 12 offers), or operating a communal vote based spending pool.

At the heart of Fedimint is the concept of second-party custody, which involves trusting family members or friends with the custody of one’s bitcoin in a way that improves the trust and security models inherent in the classic centralized third-party custody solutions. It leverages Federated Chaumian Ecash, which means users also gain privacy. This wallet has the potential to bring strong privacy to Bitcoin users with better security than third-party custody setups and more ease of use than fully-fledged self-custody solutions.

“At Fedi, we believe that Fedimint will become the ideal open platform for the delivery of consensus-based applications on the internet,” said Obi Nwosu, Fedi CEO. “Bitcoin was created to give people the ability to take control of their own money and we want to make sure that they are given the tools to do so. We are excited to see what developers can come up with to help make this dream a reality.”

The hackathon is open to all developers, regardless of experience level. Participants who complete their projects will receive feedback from the Fedi team and can also receive support from a community of developers. The deadline for submissions is December 14th, so there is still plenty of time to get involved.

So, if you’re a developer looking to take part in this unique opportunity to help shape the future of Bitcoin, head over to the Fedi website to learn more about the hackathon and how to get involved. Good luck!

• Anita Posch, the founder of Bitcoin For Fairness, traveled to Zimbabwe in 2020 to see how the unbanked could benefit from sovereign money.
• She found a nation in distress about money due to a kleptocratic ruling elite, and discovered a few true believers in Bitcoin but no Bitcoin-only events or communities.
• With the help of sponsorships and crowdfunding, she established Bitcoin for Fairness to bring Bitcoin knowledge to the Global South and foster local communities.

Anita Posch had a mission – to bring Bitcoin knowledge to the Global South and foster local communities. Her journey began in early 2020, when she made her first visit to Zimbabwe. Her aim was to learn how the unbanked could benefit from sovereign money.

What she found was a nation in distress about money. The kleptocratic ruling elite had been defrauding and stealing from their people by inflating the national currency for decades, with corruption and military support allowing them to remain in power for over 40 years.

Though she encountered a few true believers in Bitcoin and HODLers from the early days, there were no Bitcoin-only events or communities. Instead, the cryptocurrency trading groups on WhatsApp and Facebook were rampant with scams.

In 2021, Posch had the idea to establish Bitcoin for Fairness. She applied for a donation from the Human Rights Foundation, which was the first donor to support her mission. She also received sponsorships from LEDN, Okcoin, Paxful, Coinfinity, Breez and Trezor, as well as over 500 donations from Bitcoiners all over the world.

With the help of Brad Mills, Peter McCormack, Elizabeth Stark, Sharon Dow and Jacob Strumwasser of Lightning Labs, Posch was able to create a platform to spread awareness of Bitcoin and its potential to help the unbanked. Through her project, she hopes to empower those in Zimbabwe and the Global South to take control of their own economic freedom.

• Bitcoin had a defining year in 2022, with a focus on cutting the dead weight of speculation and educating people and governments on its real-life use cases.
• The Global South is leading the way in Bitcoin adoption, with trade volume continuing to increase despite the bear market.
• Bitcoin is backed by human work, and the divide between Bitcoin and other digital currencies is expected to grow in 2023.

Bitcoin had a defining year in 2022, with a strong focus on solidifying its role in the global economy by reducing speculation and highlighting its real-life use cases. This was made evident at the Africa Bitcoin Conference in Ghana, where international leaders convened to discuss the benefits of Bitcoin, and the Built With Bitcoin Foundation opened the Bitcoin Technology Center (BTC) to educate 400 people in its first year. The BTC is a learning and training center located in Kumasi, Ghana and is a testament to the necessity of Bitcoin on the continent.

Africa is leading the way in Bitcoin adoption, and Paxful’s trade volume data predicts even further increases in both Ghana and Nigeria for 2023. This is due to Bitcoin’s cheaper and more efficient solution for sending money back home, making payments, and preserving wealth – benefits that are not affected by market conditions.

The divide between Bitcoin and other digital currencies is expected to grow in 2023. This is due to the fact that Bitcoin is backed by human work, and is seen as a more reliable form of digital currency than the rest. It is clear that Bitcoin is on its way to becoming a major player in the global economy, and is poised to onboard the next billion Bitcoiners in 2023.

The success of Bitcoin in 2022 has set the stage for an even brighter future. It is now up to the global community to educate people and governments on the benefits of Bitcoin and to ensure that it is utilized to its fullest potential. We must ensure that Bitcoin is used to bring financial inclusion to the billions that are currently excluded from the global economy. With the right support and guidance, Bitcoin stands to be a powerful force for good in the world.

• Brazilian President Jair Bolsonaro has signed a bill into law that establishes a complete regulatory framework for the trading and use of bitcoin in the country.
• The new law recognizes bitcoin as a digital representation of value that can be used as a means of payment and as an investment asset.
• The executive branch will select the government bodies that will oversee the market, with the Central Bank of Brazil (BCB) expected to be in charge when bitcoin is used as payment.

On Thursday morning, Brazilian President Jair Bolsonaro signed a bill into law that sets up a comprehensive regulatory framework for the trading and use of bitcoin in the country. The law, which was approved by Congress without any modifications, was published in the federal government’s official journal (DOU) and is set to take effect in 180 days.

The legislation recognizes bitcoin as a digital representation of value that can be used as a means of payment and as an investment asset. It states that a virtual asset is “a digital representation of value that can be negotiated or transferred electronically and used for payments or as an investment.” However, the law does not make bitcoin or any cryptocurrency a legal tender in the country.

Signing the bill into law is an important step in legitimizing the use of bitcoin in Brazil, as it provides clarity and certainty to users, traders, and investors. The next step is for the executive branch to select the government bodies that will oversee the market. It is expected that the Central Bank of Brazil (BCB) will be in charge when bitcoin is used as payment, while the country’s securities and exchange commission (CVM) will be the watchdog when it is used as an investment asset. Both the BCB and the CVM, along with the federal tax authority (RFB), helped lawmakers craft the overhaul legislation.

If the BCB is confirmed as the sector’s watchdog, the outlook isn’t the best. While the regulator can’t override the aforementioned definition of a virtual asset determined by the law, it is unclear whether it will take any proactive steps to push greater adoption of bitcoin. However, the legitimacy conferred upon BTC’s use case as payment is meaningful, and has the potential to spur greater activity in the country.

Brazil’s decision to allow and regulate the use of bitcoin is a positive sign for the cryptocurrency industry, as it indicates that more countries are beginning to recognize the potential of digital assets. It will be interesting to see how the new law affects the adoption of bitcoin in the country, and what other countries may follow suit.

• Greenidge Generation, a bitcoin miner operating in New York, has reached a restructuring agreement with its lender, NYDIG.
• This agreement calls for NYDIG purchasing 2.8 exahash per second (EH/s) of Greenidge’s bitcoin miners, eliminating $57-$68 million of debt, while requiring that the mining firm also pledge the rest of its unencumbered assets to secure the remainder of the loan.
• The average monthly cash burn rate of Greenidge in October and November 2022 was approximately $8 million, and is expected to remain at a similar rate.

Greenidge Generation, a bitcoin miner operating in New York, has recently reached a restructuring agreement with its lender, NYDIG, in order to address its debt of $74.4 million. The agreement calls for NYDIG to purchase 2.8 exahash per second (EH/s) of Greenidge’s bitcoin miners, which Greenidge will host for NYDIG. This purchase will effectively eliminate $57-$68 million of the debt, leaving Greenidge with approximately 1.8 EH/s of its own miners. Additionally, Greenidge must pledge the rest of its unencumbered assets to secure the remainder of the loan.

The financial situation of Greenidge had been dire, with the company burning through cash at an alarming rate of $8 million per month in October and November 2022. Of this total, $5.5 million per month was associated with principal and interest payments to NYDIG. This rate of cash burn could have resulted in the company running out of money as early as March 2023.

The cryptocurrency industry has been especially hard hit by the recent market conditions, with miners having to fulfill old bull market orders while the price of bitcoin held by these miners plummets. This has resulted in miners mining high and selling low, creating financial difficulties for many.

The restructuring agreement between Greenidge and NYDIG provides much needed relief for the mining firm, allowing them to reduce their debt and secure the remainder of their loan. As the cryptocurrency industry continues to experience volatility, this agreement serves as a reminder of the importance of having proper financial management and planning.

• Bitcoin mining is the process of validating and securing the bitcoin network and its transactions.
• When investing in mining, there are both asset and operational risks to consider.
• Currently, bitcoin is down more 65% from its November 2021 peak, presenting an opportunity for bitcoin miners with structured cash.

Bitcoin mining is the process of validating and securing the bitcoin network and its transactions. It is analogous to the process of extracting gold and metals, with miners being the “producers” of this digital commodity. The miners allocate computing power and electricity to ensure the bitcoin network remains safe and secure, and in turn, they are rewarded with bitcoin. Investing in bitcoin mining is different from buying the asset directly, as it provides more predictable cash flow and physical assets which can be liquidated if needed.

When considering mining investments, investors need to be aware of both asset and operational risks. On the asset side, the recent decline in bitcoin prices presents a risk for investors. On the other hand, the operational risk is related to the efficiency and professional management of the mining operation. This is where the level of leverage and debt of the world’s leading Bitcoin mining companies comes into play. Since these companies are listed, it is easy to find their financial statements and assess the risk of the operation.

Currently, bitcoin is down more than 65% from its November 2021 peak. Moments like this generate apprehension and make investors ask themselves if this is an opportunity to increase investments or a risk. For bitcoin mining operations with structured cash, this moment represents a great opportunity as Warren Buffet famously said: “It’s only when the tide goes out do you learn who was swimming naked.”

In conclusion, investors should consider the risks associated with investing in bitcoin mining, including both asset and operational risks. However, with the recent decline in bitcoin prices, this presents a great opportunity for bitcoin miners with structured cash.

• Layer 2 Labs has closed a seed round at launch, raising $3 million in funding with the goal of scaling and building out drivechains for the Bitcoin Network.
• Drivechains define a specific way through which to create Bitcoin sidechains. Sidechains are parallel blockchains to Bitcoin that enable BTC to “flow” between the two networks in a two-way peg.
• Layer 2 Labs believes that drivechains have the potential to revolutionize the way we use Bitcoin by enabling greater scalability, extensibility, privacy, and flexibility on the network.

Layer 2 Labs is a startup that is launching with the goal of scaling and building out drivechains for the Bitcoin Network. The company recently closed a seed round at launch, raising $3 million in funding from investors. Paul Sztorc, the co-founder and CEO of Layer 2 Labs, believes that drivechains have the potential to revolutionize the way we use Bitcoin by enabling greater scalability, extensibility, privacy, and flexibility on the network.

Drivechains define a specific way through which to create Bitcoin sidechains. Sidechains are parallel blockchains to Bitcoin that enable BTC to “flow” between the two networks in a two-way peg. Since bitcoin can’t actually leave the Bitcoin network, sidechains accomplish this task by locking up BTC on the Bitcoin blockchain and representing them in different ways in the sidechain. The goal is that the representation of BTC in the sidechain maintains a 1:1 peg to the actual BTC locked on the Bitcoin network.

Liquid is perhaps the most popular sidechain in the Bitcoin ecosystem today. Blockstream’s model leverages a federation to handle the on-chain lock-up and withdrawals, as well as sidechain block creations. Drivechains attempt to move away from the federated model in favor of something it deems more decentralized –– Bitcoin’s own miners. Under the drivechain model, bitcoin miners can verify and vote on sidechain transactions as part of their regular duties. This enables bitcoin users to move their coins between the two networks without having to place trust in a third-party.

Layer 2 Labs believes that drivechains have the potential to revolutionize the way we use Bitcoin by enabling greater scalability, extensibility, privacy, and flexibility on the network. The company believes that drivechains have the potential to kill altcoins, increase Bitcoin adoption, and provide the catalyst for hyperbitcoinization. Layer 2 Labs is committed to making everyone in the world a Bitcoin user. By developing drivechains, the company hopes to make Bitcoin more accessible, secure, and efficient.

• Foundation Devices has announced the closure of a seed round, raising $7 million from investors such as Polychain Capital, Greenfield Capital and Lightning Ventures.
• The company released its second edition of its flagship Passport product and is focusing on its new mobile app Envoy to serve as a standalone sovereignty toolkit complete with a Bitcoin software wallet.
• CEO Zach Herbert said that preserving freedom and privacy is more important amidst censorship, privacy violations, and reckless financial and monetary policies.

Foundation Devices, a company launched in April of 2020, has just announced the closure of a seed round, raising $7 million from investors such as Polychain Capital, Greenfield Capital and Lightning Ventures. The company had previously raised $2 million from Bolt, an early stage venture fund, just a month after the launch of its original flagship product, the Passport. The second edition of the Passport has since been released, and has seen thousands of purchases over the past 18 months.

Alongside the Passport, Foundation Devices is now focused on its new mobile app, Envoy. The app is designed to be a standalone sovereignty toolkit, complete with a Bitcoin software wallet. According to the company, Envoy is the best onboarding and user experience of any Bitcoin wallet and also offers maximum privacy using the Tor network.

Foundation Devices’ CEO, Zach Herbert, commented on the raise and said that preserving freedom and privacy is more important than ever amidst worldwide censorship, privacy violations, and reckless financial and monetary policies. Polychain Capital Founder and CEO Olaf Carlson-Wee also commented on the raise, expressing his excitement for the company and the next phase of their vision to empower self-sovereign individuals through decentralized technologies.