Bitcoin

Bitcoin is ‘resistance money’ | AIER

Published

5 months ago

14 June, 2024

Chain Feed Staff

A terrestrial bitcoin hotspot in Tomaszów, Poland.

Bitcoin looks different to everyone who observes it, a modern parable of the blind man and the elephant.

To economists, it seems inferior money since there is no a supply response.

To regulators, it seems sneaky money laundering attempts and evade taxes.

To the general public, it looks something like the hideous offspring of financial speculators and technology preppers. Most people therefore ignore this.

With Resistance Money: A Philosophical Case for Bitcoin by Andrew Bailey, Bradley Rettler, and Craig Warmke, philosophers have entered the arena. The trio, professors at Yale-NUS, the University of Wyoming and Northern Illinois University, consider nothing more important than bitcoin and have consequently ended all their other research agendas. After some initial research articles and reports (here, hereIt is here) — including, for outreach, an AIER workshop sponsored by the Bitcoin Policy Institute — a book was inevitable.

“This is by far the most difficult and important intellectual project I have ever completed,” Bailey said a few months ago about the book, released this week by the academic publisher Routledge. It is a calm and serious book, accessible to curious beginners and those who have not yet sold Bitcoin as a quick solution for all the ills of society.

Bitcoin is, in John Oliver’s famous words, “Everything you don’t understand about money, combined with everything you don’t understand about computers.” Some technical explanations are inevitable, but the reader is not subjected to an avalanche of technical nonsense, nor to impassioned battle cries that approach sales pitches.

The authors openly say that they own bitcoin and think it is a benefit to the world. This confession should not dismiss his many arguments. The looking approach financing or financial incentives and dismissing arguments along these lines is lazy: “We humbly assert that crude criticism turns things around. We defend bitcoin because we believe in it after years of study; we haven’t studied bitcoin in years because we own bitcoin.” Therefore, “our arguments stand or fall on their merits.”

And there is a lot of merit. The authors do not exaggerate, as many bitcoiners tend to do, but they situate their argument right from the start:

“Despite the hopes of many bitcoin diehards, it will not end war, restore the traditional family, or fix the housing market. It will not improve nutrition, inspire a return to Renaissance-style art, or revive 19th-century architecture. Bitcoin doesn’t solve everything. It fixes some things – and even breaks others.”

Definitely criminal

What many people believe about bitcoin is true: it is for criminals. But it is also for freedom fighters, for those who are cut off from the global monetary system, for those who are kept financially ostracized by the laws or customs of their lands. It’s for Russian or Nigerian dissidents trying to receive and spend funds, it’s for Afghan women under patriarchal rule, it’s for refugees trying to cross a border with their (financial) assets intact. It is for Westerners, who try to escape the worst consequences of inflation, for marijuana dispensaries whose business is legal in the states where they operate but illegal at the federal level (and therefore unable to make use of the banking system which is under heavy control and centralized).

In fact, all of these uses are the same thing – many parts of the same elephant. The nature of money is to be usable between enemies who otherwise cannot trust or force each other to behave. (Friends can use credit and favors.) It is a bearer instrument that does not require identification, bank account or government authorization.

“Bitcoin,” Bailey, Rettler, and Warmke write powerfully and succinctly, “is resistance money.” It is a monetary way of opting out, of avoiding obstacles. No wonder criminals like it too.

Resistance Money is not a libertarian book, singing the free-market case for bitcoin or reflecting on the collapse of the dollar. These books exist. The trio, are explicitly not libertarian, instead, try to create something bigger. They investigate not whether the things that bitcoin breaks are worth breaking, but “whether we should prefer a world with bitcoin to a world without bitcoin.” They do so with prudence and meticulousness, using the philosophical tool of The Veil of Ignorance by John Rawls.

Assuming you don’t know who you are, what country you were born in, and what your skills, interests, and opportunities are (that is, trying to strip readers of your monetary and financial privilege) — would you still support the existence of bitcoin?

Under the veil framework, the authors attempt to make as close to an airtight case for bitcoin as possible. This is admirable and valuable. Not seeing a problem with censorship and financial oppression is equivalent to believing that only Bad People™ have problems with (benevolent) authorities. In reality, “good guys and girls are often censored as well.”

Resistance Money asks you to look further back in time and across the world: “If you could imagine yourself in a position where you would need resistance money or need to teach someone else how to use resistance money, you would be wise to learn how use bitcoin.” This is the reality for some four billion people who live under authoritarian governments that restrict, capture, oppress or otherwise punish dissidents for doing or saying the wrong things. Freedom money, wielded by its users and resistant to capture, identification and censorship, does not dispel unjust laws or make bad rulers disappear – but almost nothing else does, so it is an unjust standard. The use of bitcoin makes it much more difficult to spend and move money for these governments.

This is an obvious improvement, a benefit to humanity. Bitcoin is freedom money, a escape hatch under the heavy boot of a tyrant. Behind the veil, we have a good chance of being one of these people.

Still, this framework is a little too low level. For an economist, it is certainly an undemanding construction: expanding the set of decisions and available opportunities can more or less benefit only the users (independence from irrelevant alternatives). More options are better. Given different individual preferences and circumstances, the state of the world with bitcoin is an improvement for some. Therefore, it is quite trivial to conclude that it is better for these people to have access to bitcoin than not.

A world with bitcoin has some costs. There is a certain amount of money laundering, ransomware, and diversion of government income through taxes and seigniorage that wouldn’t have occurred if something like bitcoin had never been invented (well, uncovered…). The authors admit that such things, to the extent they are enabled by bitcoin, are negative for the world, but that they are “not a serious threat to the overall net benefit of bitcoin to the world.”

In a sense, Resistance Money is the natural continuation of Alex Salter, Pete Boettke and Dan Smith. Money and the Rule of Law.. “As far as monetary institutions are concerned,” write Bailey, Rettler, and Warmke, “bitcoin brings the rule of law to the world of money and is an attractive alternative and optional money, especially for the billions suffering under bad conditions.” conditions. monetary rulers.”

And they are quite radical regarding the implications of this monetary institution:

“Bitcoin is a monetary institution that aims for predictability and radical disintermediation. It exists, not to seek price stability or full employment, but to completely eliminate the need for money creators, mediators and central managers.” We need serious books about money and bitcoin. ResistanceMoney is exactly that.

Book of Joachim

Joakim Book is a writer, researcher and editor on all things money, finance and financial history. He holds a master’s degree from the University of Oxford and was a visiting fellow at the American Institute for Economic Research in 2018 and 2019.

His work has been featured in the Financial Times, FT Alphaville, Neue Zürcher Zeitung, Svenska Dagbladet, Zero Hedge, The Property Chronicle and many other outlets. He is a regular contributor and co-founder of the Swedish freedom website Cospaia.seand frequent writer in CapX, NotesOnLibertyIt is HumanProgress.org.

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Bitcoin

Grayscale Unveils Bitcoin Mini Trust ETF

Published

3 months ago

31 July, 2024

Chain Feed Staff

Grayscale Unveils Bitcoin Mini Trust ETF

Bitcoin Currency

Grayscale Investments The Bitcoin Mini Trust began trading on Wednesday with a 0.15% expense ratio, offering a lower-cost option for bitcoin exposure in the market.

The Mini Trust, which has the symbol BTC and trades on NYSE Arca, is structured as a spin-off of the Grayscale Bitcoin Trust (GBTC). New shares will be distributed to existing GBTC shareholders with the fund contributing a portion of its bitcoin holdings to the new product. According to a company press releaseBTC’s S-1 registration statement became effective last week.

“The Grayscale team has believed in the transformative potential of Bitcoin since the initial launch of GBTC in 2013, and we are excited to launch the Grayscale Bitcoin Mini Trust to help further lower the barrier to entry for Bitcoin in an SEC-regulated investment vehicle,” said David LaValle, Senior Managing Director and Head of ETFs at Grayscale.

The Bitcoin Mini Trust’s debut comes amid growing interest in ETFs based on the current price of the two largest cryptocurrencies by market cap, bitcoin and ether. Spot bitcoin ETFs have generated nearly $18 billion in inflows since the first ones began trading on Jan. 11, though GBTC has lost nearly $19 billion in assets.

This fund differs from other funds because it is a conversion of an existing fund and has a 1.5% fee, the highest among spot bitcoin products that have received SEC approval this year.

Mini Bitcoin Trust Low Fee

On a Post X On Wednesday, Bloomberg senior ETF analyst Eric Balchunas noted the Bitcoin Mini Trust’s “lowest fee in the category…”

“[Important] to recognize how incredibly cheap 15bps is — about 10x cheaper than spot ETFs in other countries and other vehicles,” Balchunas wrote, adding that this pricing strategy reflects the competitive nature of the U.S. ETF market, which he referred to as the “ETF Terrordome.”

“This is what Terrordome does to fund [cost]. It reaches 1.5% [and] end in 0.15%, how to go from [a] country club to the jungle. But that’s why all the flows are here, investor paradise,” he noted.

Bitcoin was recently trading at around $66,350, virtually flat since U.S. markets opened on Wednesday.

Grayscale also offers two spot Ethereum ETFs, the Grayscale Ethereum Trust (ETHE) and the Grayscale Ethereum (ETH) Mini Trustwhose performance is based on ETHE. ETHE outflows exceeded $1.8 billion in its first six days of trading, while ETH added more than $181 million in the same period, according to Farside. The remaining seven ETFs generated about $1.2 billion in inflows.

The story continues

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Bitcoin

Bitcoin (BTC) Price Drops Below $65K After FOMC as Middle East Tensions Rise

Published

3 months ago

31 July, 2024

Chain Feed Staff

Bitcoin (BTC) Price Drops Below $65K After FOMC as Middle East Tensions Rise

Cryptocurrencies fell sharply on Wednesday as rising geopolitical risks captivated investors’ attention following the conclusion of the Federal Reserve’s July meeting.

Bitcoin (BTC) fell to $64,500 from around $66,500, where it traded following Federal Reserve Chairman Jerome Powell’s press conference and is down more than 2% in the past 24 hours. Major altcoins including ether (ETH)sunbathing (SUN)Avalanche AVAX (AVAX) and Cardano (ADA) also fell, while Ripple’s XRP saved some of its early gains today. The broad cryptocurrency market benchmark CoinDesk 20 Index was 0.8% lower than 24 hours ago.

The liquidation happened when the New York Times reported that Iran’s leaders have ordered retaliation against Israel over the killing of Hamas leader Ismail Haniyeh in Tehran, raising the risk of a wider conflict in the region.

Earlier today, the Fed left benchmark interest rates unchanged and gave little indication that a widely expected rate cut in September is a given. The Fed’s Powell said that while no decision has been made on a September cut, the “broad sense is that we are getting closer” to cutting rates.

While digital assets suffered losses, most traditional asset classes rose higher during the day. U.S. 10-year bond yields fell 10 basis points, while gold rose 1.5% to $2,450, slightly below its record highs, and WTI crude oil prices rose 5%. Stocks also rallied during the day, with the tech-heavy Nasdaq 100 index rebounding 3% and the S&P 500 closing the session 2.2% higher, led by 12% gains in chipmaker giant Nvidia (NVDA).

The different performances across asset classes could be due to traders’ positioning ahead of the Fed meeting, Zach Pandl, head of research at Grayscale, said in an emailed note.

“Equities may have been slightly underutilized after the recent dip, while bitcoin is coming off a strong period with solid inflows, while gold has recovered after a period of weakness,” he said.

“Overall, the combination of Fed rate cuts, bipartisan focus on cryptocurrency policy issues, and the prospect of a second Trump administration that could advocate for a weaker U.S. dollar should be viewed as very positive for bitcoin,” he concluded.

UPDATE (July 31, 2024, 21:30 UTC): Adds grayscale comments.

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Bitcoin

Donald Trump’s Cryptocurrency Enthusiasm Is Just Another Scam

Published

3 months ago

31 July, 2024

Chain Feed Staff

Donald Trump's Cryptocurrency Enthusiasm Is Just Another Scam

Former US President Donald Trump spoke at the Libertarian National Convention in May and lent his a strong support to crypto: “I will also stop Joe Biden’s crusade to crush crypto. … I will ensure that the future of crypto and the future of bitcoin is made in the US, not taken overseas. I will support the right to self-custody. To the 50 million crypto holders in the country, I say this: With your vote, I will keep Elizabeth Warren and her henchmen out of your bitcoin.”

Trump continued to court the cryptocurrency industry in the months that followed; he he appeared at the Bitcoin 2024 Conference in Nashville this week, along with independent presidential candidate Robert F. Kennedy Jr.’s parting words to Trump — “Have fun with your bitcoin, your cryptocurrency and whatever else you’re playing with” — were less than enthusiastic, but the industry itself remains packed with ardent Trump supporters.

This turnaround came as a surprise, given Trump’s previous strong opposition to cryptocurrency. When Facebook was floating its Libra cryptocurrency in 2019, Trump tweeted: “I am not a fan of Bitcoin and other cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air.” Former national security adviser John Bolton’s White House memoir, The Room Where It Happened, quotes Trump as telling Treasury Secretary Steven Mnuchin: “Don’t be a trade negotiator. Go after Bitcoin.” [for fraud].” In 2021, Trump counted Fox Business that bitcoin “just looks like a scam. … I want the dollar to be the world’s currency.”

Why the change? There doesn’t seem to be any crypto votes. Trump’s “50 million” number comes from a poorly sampled push survey by cryptocurrency exchange Coinbase which claimed 52 million cryptocurrency users in the United States starting in February 2023. But one survey A survey conducted last October by the US Federal Reserve showed that only 7% of adults (about 18.3 million people) admitted to owning or using cryptocurrencies — down from 10% in 2022 and 12% in 2021. Many of these people are likely wallet owners who were left holding the bag after crypto plunged in 2022 — and are not necessarily new fans.

What Trump wants from the cryptocurrency industry is money. The cryptocurrency industry has already raised more than US$ 180 million to run in the 2024 US elections through his super PACs Fairshake, Defend American Jobs and Protect Progress.

Fairshake spent $10 million on taking Rep. Katie Porter in the primary battle for Dianne Feinstein’s California Senate seat by funding Porter’s pro-crypto rival Adam Schiff. This put $2 million to knock out Rep. Jamaal Bowman in the Democratic primary for New York’s 16th District in favor of pro-crypto George Latimer. In the Utah Senate Republican primary, Rep. John Curtis defeated Trent Staggs with the help of $4.7 million from Defend American Jobs. In Alabama’s House District 2, the majority of campaign expenses came from the cryptocurrency industry.

Fairshake is substantially financed by Coinbase, cryptocurrency issuer Ripple Labs, and Silicon Valley venture capital firm Andreessen Horowitz, or a16z. Silicon Valley was awash in cryptocurrencies during the 2021 bubble, and a16z in particular continues to promote blockchain startups to this day — and still holds a huge amount of bubble crypto tokens that he wishes he could cash in on.

Many in Silicon Valley would like an authoritarian who they think will let them run wild with money — while bailing them out in tough times. Indeed, Trump promised Bitcoin 2024 participants that he hold all bitcoins that the United States acquires. (Never mind that it is usually acquired as the proceeds of crime.) Silicon Valley explicitly sees regulation of any kind as its greatest enemy. Three a16z manifestos — “Politics and the Future” It is “The Techno-Optimist Manifesto” and 2024 “The Small Tech Agenda—describe co-founders Marc Andreessen and Ben Horowitz’s demands for a technology-powered capitalism unhindered by regulation or social considerations. They name “experts,” “bureaucracy,” and “social responsibility” as their “enemies.” Their 2024 statement alleges that banks are unfairly cutting off startups from the banking system; these would be crypto companies funded by a16z.

Trump’s vice presidential pick, Senator J.D. Vance, is a former Silicon Valley venture capitalist. He was once employed by Peter Thiel, who bankrolled Vance’s successful 2022 Senate run; Vance has been described as a “Thiel creation”. He has increased support for the Trump ticket among his venture capital associates. Vance is a bitcoin holder and a frequent advocate of encryption. He recently released a draft bill to review how the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) control crypto assets. In 2023, he circulated a bill to prevent banks from cutting out cryptocurrency exchanges.

Minimal regulation has been tried before. It led to the wild exuberance of the 1920s, which ended with the Black Tuesday crash of 1929 and the Great Depression of the 1930s. Regulators like the SEC were put in place during this era to protect investors and transform the securities market from a jungle into a well-tended garden, leading to many prosperous and stable decades that followed.

Crypto provides the opposite of a stable and functional system; it is a practical example of how a lack of regulation allows opportunists and scammers to cause large-scale disasters. The 2022 Crypto Crash repeated the 2008 financial crisis in miniature. FTX’s Sam Bankman-Fried was feted as a financial prodigy who would perform economic miracles if you just gave him carte blanche; he ended up stealing billions of dollars of customers’ money, destroying the lives of ordinary people, and is now in a prison cell.

U.S. regulators have long been concerned about the prospect of cryptocurrency contagion to the broader economy. Criminal money laundering is rampant in cryptocurrency; even the Trump administration has made rules in December 2020 to reduce the risk of money laundering from crypto. Meanwhile, the crypto industry has persistently tried to infiltrate systemically risky corners of the economy, such as pension funds.

Four U.S. banks collapsed during the 2023 banking crisis, the first since 2020. Two of them, Silvergate Bank and Signature Bank, were deeply embedded in the crypto world — Silvergate in particular appears to have collapsed directly from its heavy reliance on FTX and failed a few months after that. Silicon Valley Bank was not involved in crypto but collapsed due to a run on the bench due to panic among venture capital deposit holders, particularly Thiel’s Founders Fund.

Project 2025the Heritage Foundation mammoth conservative wish list The plan, which Trump and Vance have both endorsed and tried to distance themselves from at various times, emphasizes the importance of party loyalists, noting especially financial regulation. The plan recommends replacing as much of the federal bureaucracy as possible with loyalists and “trusted” career officials rather than nonpartisan “experts.” Vance defended in 2021 that Trump should “fire every mid-level bureaucrat, every civil servant in the administrative state” and “replace them with our people.” Loyalty will likely trump competence.

Crypto is barely mentioned directly in Project 2025 — suggesting it has little active support among the broader conservative coalition. But near the end of the manifesto is a plan to dismantle most U.S. financial regulations and investor protections put in place since the 1930s, suggesting the exemption the crypto industry seeks from current SEC and CFTC regulations.

Bitcoin, the first cryptocurrency, started as an ideological project to promote a strange variant of Murray Rothbard’s anarcho-capitalism and the Austrian gold-backed economy—the kind we abandoned to escape the Great Depression. Crypto quickly co-opted the “end of the Fed” and “establishment elites” conspiracy theories of the John Birch Society and Eustace Mullins. It’s a way for billionaire capitalists like Thiel, Andreessen and Elon Musk to claim they’re not part of the so-called elite.

If a second Trump administration were to limp along with financial regulators and allow cryptocurrencies to have free rein, it could help foster the collapse of the U.S. economy that bitcoin claimed to prevent. But Trump is more likely to be happy to take the crypto money and run.

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Bitcoin

Trump’s Bitcoin (BTC) Reserve Plan Seen as Just a ‘Small Token Stash’

Published

3 months ago

31 July, 2024

Chain Feed Staff

Trump's Bitcoin (BTC) Reserve Plan Seen as Just a 'Small Token Stash'

Donald Trump’s recent promise to create a “strategic national stockpile of Bitcoin” may not turn out to be as big a commitment as the hype surrounding the announcement makes it seem.

“Trump’s proposal is extremely modest,” said George Selgin, director emeritus of the Center for Monetary and Financial Alternatives at the Cato Institutea Washington-based public policy group. “It doesn’t have much economic implication.”

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