Weekly Newsletter[Block#832,097]
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A. Bitcoin Ecosystem
1. The new Satoshi Emails: early developer Sirius releases 120 pages detailing work on bitcoin
2. Jack Dorsey’s Block is sitting on $207M gain on its bitcoin bet
3. MicroStrategy’s X account got hacked
4. Grayscale’s GBTC outflows is slowing
B. Regulation
1. Texas Blockchain Council and Riot secure win against US energy officials
2. Virginia subcommittee proposes funding for state’s blockchain and cryptocurrency commission
C. Macroeconomy
1. US inflation stalls
2. Bitcoin is now 7th largest base money in the world according to Porkopolis Economics
D. Bitcoin Tech Development
1. Improved reproducible ASMap creation process
2.Notable code and documentation changes
A. Bitcoin Ecosystem
1. The new Satoshi Emails: early developer Sirius releases 120 pages detailing work on bitcoin
Satoshi Nakamoto’s earliest collaborator Martii ‘Sirius’ Malmi has released his entire email correspondence with Bitcoin’s creator. Spurred by an ongoing lawsuit in the U.K., the new emails are the most significant addition to the canon of what we know about Bitcoin’s still anonymous creator. A headed debated today remains whether Bitcoin is money, or whether it can or does have other ancillary uses. In this email exchange, Satoshi seems to offer some insight on the debate, noting his belief the blockchain can be used as a distributed time-stamping server. This is akin to what has happened in Guatemala, where the blockchain has been used to certify contentious elections in recent years.
Satoshi discussing how Bitcoin might gain adoption. Of note is his emphasis that Bitcoin was easy to obtain given that you could mine it on a computer. He also goes to postulate how the nature of a market trading for Bitcoin would evolve, discussing how skeptical people might be of its value, stating he was confident the increasing mining difficulty would prove its scarcity to people. Very different from how we think about Bitcoin today in terms of acquiring it, but demonstrating a prescience of how people would mentally value it in the future.
Reference:
https://bitcoinmagazine.com/culture/newly-revealed-satoshi-email-correspondence-with-martti-malmi
2. Jack Dorsey’s Block is sitting on $207M gain on its bitcoin bet
Block, in its fourth-quarter earnings report released Thursday, reported a remeasurement gain of $207 million on its bitcoin holdings. As of Dec. 31, 2023, Block held approximately 8,038 bitcoin for investment purposes with a fair value of $340 million. The Jack Dorsey-owned company made $66 million in gross profit on bitcoin sales last quarter through Cash App, a banking services platform, representing a 90% increase year over year. “The total sale amount of bitcoin sold to customers — which we recognize as bitcoin revenue — was $2.52 billion, up 37% year over year,” according to the report.
3. MicroStrategy’s X account got hacked
Business intelligence firm MicroStrategy’s X account has been hacked, posting several malicious links to claim a fake airdrop of a nefarious $MSTR token to its nearly 200,000 followers. Once a user clicks on the link they are directed to a copycat MicroStrategy webpage which directs them to connect a wallet and claim the fake $MSTR airdrop. Once users accept a series of permissions in their Web3 wallet, the attackers can automatically drain the tokens out of the user’s wallet. According to independent blockchain sleuth ZachXBT and anti-scam platform Scam Sniffer, losses incurred from the scam have already tallied over $440,000.
Reference:
https://cointelegraph.com/news/microstrategy-x-account-hacked-phishing-scam
4. Grayscale’s GBTC outflows is slowing
Crypto asset manager Grayscale has continued to see a slowdown in outflows from its spot Bitcoin ETF — though observers believe there’s still room for further bleeding. According to data from Bianco Research and Farside, the total outflow of funds from the Grayscale Bitcoin Trust (GBTC) since it converted to a spot Bitcoin ETF reached $7 billion on Feb. 16. However, while the rate of outflow has slowed considerably.
Reference:
https://cointelegraph.com/news/grayscale-gbtc-outflows-reach-7b-when-will-it-stop
B. Regulation
1. Texas Blockchain Council and Riot secure win against US energy officials
The Texas Blockchain Council (TBC) and Bitcoin mining firm Riot Platforms have won a favorable ruling from a United States District judge in a lawsuit against several U.S. energy officials. On Feb. 22, the TBC and Riot alleged the U.S. Department of Energy, Energy Information Administration (EIA), the Office of Management and Budget (OMB), and their respective leaderships sought invasive data collection from cryptocurrency miners. According to a Feb. 23 filing in the U.S. District Court for the Western District of Texas, the TBC and Riot convinced the judge that irreversible harm would happen without a temporary restraining order (TRO) against further data collection. As a result, the court enforced a TRO that prohibits the EIA from requiring crypto miners to respond to the survey, as well as prohibiting the EIA from sharing any data that has already been received from the survey.
Reference:
https://cointelegraph.com/news/texas-blockchain-council-riot-platforms-eia-omb
2. Virginia subcommittee proposes funding for state’s blockchain and cryptocurrency commission
Virginia’s Subcommittee on General Government of the Senate Finance and Appropriations Committee recommended a combined fund allocation of $39,240 for two new commissions on cryptocurrency and artificial intelligence. The Blockchain and Cryptocurrency Commission, responsible for studying distributed ledger technologies and expanding their use within the state, would receive a general fund of $17,192 for 2025 and 2026. Earlier this month, the Senate unanimously passed a bill to amend the Code of Virginia to establish the aforementioned blockchain and crypto commission. The state also recently introduced crypto-mining legislation, which is widely considered favorable for individual miners and crypto-mining businesses. Specifically, the bill looks to exempt crypto-miners from requirements to obtain money transmitter licenses.
Reference:
https://www.theblock.co/post/277975/virginia-blockchain-cryptocurrency-commission-funding-proposal
C. Macroeconomy
1. US inflation stalls
The US government reported that inflation in January was higher than investors had expected. This led investors to reevaluate expectations as to when the Federal Reserve will start to cut interest rates. The result was that equity prices fell, bond yields rose, and the value of the US dollar increased against major currencies. In January, the consumer price index (CPI) was up 3.1% from a year earlier, down from 3.4% in December but the same as in November. In fact, the annual rise in the CPI has fluctuated between 3% and 3.7% since June. Before June, the inflation rate had been steadily declining since mid-2022. Thus, it could be that inflation is getting stuck.
Reference:
https://www2.deloitte.com/us/en/insights/economy/global-economic-outlook/weekly-update.html
2. Bitcoin is now 7th largest base money in the world according to Porkopolis Economics
World base money is $27.8 trillion equivalent. This means all physical cash & coin, and all bank reserves (‘accounts’) at central banks, total $27.8 trillion. The top five currencies in the world make up 82%. Bitcoin is now the 7th largest base money in the world including Gold and Silver.
Reference:
https://twitter.com/1basemoney/status/1759580900684079343
D. Bitcoin Tech Development
1. Improved reproducible ASMap creation process
Fabian Jahr posted to Delving Bitcoin about advancements in creating a map of autonomous systems (ASMap) that each control the routing for large parts of the internet. Bitcoin Core currently tries to maintain connections to peers from a diverse collection of subnets of the global namespace so that an attacker will need to obtain IP addresses on each subnet to perform the simplest type of eclipse attack against a node. However, some ISPs and hosting services control IP addresses on multiple subnets, weakening this protection. The ASMap project aims to provide approximate information about which ISPs control which IP addresses directly to Bitcoin Core.
2. Notable code and documentation changes
Bitcoin Core #27877 updates Bitcoin Core’s wallet with a new coin selection strategy, CoinGrinder. This strategy is intended to be used when estimated feerates are high compared to their long-term baseline, allowing the wallet to create small transactions now (with the consequence that it may need to create larger transactions at a later time, hopefully when feerates are lower).
BOLTs #851 adds support for dual funding to the LN specification along with support for the interactive transaction construction protocol. Interactive construction allows two nodes to exchange preferences and UTXO details that allow them to construct a funding transaction together. Dual funding allows a transaction to include inputs from either or both parties. For example, Alice may want to open a channel with Bob. Before this specification change, Alice had to provide all of the funding for the channel. Now, when using an implementation that supports dual funding, Alice can open a channel with Bob where he provides all of the funding or where they each contribute funds to the initial channel state. This can be combined with the experimental liquidity advertisements protocol, which has not yet been added to the specification.
