MicroStrategy announced that it has acquired 13,005 additional bitcoin for approximately $489 million in cash, at an average price of around $37,617 per bitcoin, including fees and expenses. The company, headed by Bitcoin bull Michael Saylor, now holds 105,085 bitcoin, acquired at an average purchase price of about $2.741 billion — averaging $26,080 spent per bitcoin. Saylor spoke at the Bitcoin 2021 conference in early June in Miami and his company owns much more bitcoin than any other publicly-traded company. The only entity known to hold more bitcoin at this point is investment manager Grayscale, with 654,885 BTC held in its bitcoin trust on behalf of investors — currently worth more than $24 billion. At the conference, Saylor reflected on the fantastic impact that Bitcoin will have on the world. “For the first time in history, we can grant property rights to seven billion people,” he said. The proceeds of MicroStrategy’s latest bitcoin purchase came from an offering of senior secured notes that the business intelligence company completed last week. Although the net proceeds of the sale amounted to approximately $488 million after expenses, it reportedly received more than $1.5 billion in orders from institutional investors. The offering, which assures a 6.125% annual interest rate, was announced two weeks ago when the bitcoin price was at a monthly low of around $33,400. But Saylor has not been involved in Bitcoin only by HODLing the asset. The CEO has become a Bitcoin evangelizer on Twitter, an account which he didn’t use much before falling into “the rabbit hole.” “#Bitcoin is a swarm of cyber hornets serving the goddess of wisdom, feeding on the fire of truth, exponentially growing ever smarter, faster, and stronger behind a wall of encrypted energy,” Saylor’s pinned tweet reads at the time of writing. In addition, Saylor has recently been involved in the Bitcoin energy consumption debate. The MicroStrategy CEO met with Elon Musk and some North American bitcoin miners in May. After the closed-door gathering, the Bitcoin Mining Council was announced and launched a couple of weeks afterward. The council, whose initial meeting was heavily criticized by some bitcoiners in the industry, is now open for any bitcoin miner to join. However, those who do are allegedly required to promote Bitcoin’s core principles of a decentralized, peer-to-peer, censorship-resistant and open-source protocol. MicroStrategy is an independent, publicly-traded analytics and business intelligence company. Its analytics platform, used by many companies worldwide, empowers MicroStrategy’s main corporate goal of growing its enterprise analytics software business. And the company’s second corporate goal is to acquire and hold bitcoin.

  BITCOIN SOVEREIGNTY: PART ONE So, you have taken the orange pill and are now going down the Bitcoin rabbit hole. You may be wondering what’s at the bottom? What is the core innovation of Bitcoin, from which all of wonderland is created? The answer may surprise you. Along your Bitcoin adventure, you will meet many fascinating characters. They will tell you Bitcoin is many things: digital gold, a store of value, digital scarcity, peer-to-peer cash, proof of work. But at the bottom of the rabbit hole, we find something even deeper, an entirely new type of property rights — an entirely new type of ownership. What we can own, and how we protect those property rights, lies at the very core of the type of society we live in, and the sovereignty we have to lead the lives we choose. If we can’t own the things that are important to us, we can’t own our own destiny, our choices are constrained, and we’re impoverished. Freedom is a very abstract term, but it is made concrete when you recognize that it means ownership. Freedom is ownership of yourself, your choices and your property. The way we operationalize freedom is through property rights. Every single human right is effectively a form of property rights. Your ability to make sure nobody attacks you, that’s ownership of your body. Your ability to decide whether or not to get a vaccination, that’s ownership of your health. Your ability to travel, to speak your mind, to create things, these are all forms of ownership of your body and mind. At the end of the Bitcoin rabbit hole is a new kind of ownership, more subtle and powerful than any we have had before. A new type of property with more powerful rights protection than any we have had before that provides us all with an unprecedented path to self-sovereignty and freedom. BITCOIN IS DIGITAL PROPERTY RIGHTS Until Bitcoin came around, there was no such thing as digital ownership. Sure, you could be on the internet, but you couldn’t own anything on it. Music? Copied. Your search history? Owned by Google. Your connections with friends? Owned by Facebook. Your opinions? Owned by Twitter and censored by Twitter. Even PayPal, which was supposedly designed to provide you with a free market in which you could buy, sell and own things, saw them reserve the right for themselves to kick you off their platform, confiscate all your funds or censor your transactions. A world without ownership is a public toilet. Nobody cares about public toilets, and they are very frequently disgusting. Everyone uses them, no one wants to keep them clean. A lack of property rights on the micro level gives you a public toilet. A lack of property rights on the societal level gives you the Berlin Wall. Berlin was split into two, almost as a natural experiment in what happens when you provide one group of people with secure ownership and leave another group without it. What happened in Germany was what happened everywhere this same experiment has been tried: People in the place with property rights became more prosperous, while those in the place that didn’t provide those rights had to build a wall to keep people in because the people didn’t own property, the people became property. THE MYSTERY OF MISSING PRODUCTIVITY GROWTH This helps us to understand a mystery. For over 25 years now we’ve had the world wide web and people were predicting that by connecting the world the internet would create phenomenal prosperity and greatly increase economic growth but instead we’ve seen economic stagnation. Wages have stagnated, economic growth has slowed and become completely reliant on money printing, just to stay above zero. The mystery is how could this be? Well, part of the answer is we married this 21st century technology, the internet, to a system of economic sophistication straight from the bronze age. Therefore, the internet owners, like Mark Zuckerberg and Jeff Bezos, are the only sovereigns — modern day pharaohs — who instead of controlling the Nile and the water streams control the servers and the data streams. This leaves you, we, us, as the serfs. The pharaohs have thrived while we have stagnated. But then there is Bitcoin, a democratic revolution for the digital sphere in the same way that Athens and Rome were democratic revolutions for the ancient world. Democratic in the original sense: Demos meaning the common political unit of the people. Bitcoin is the invention that provides a way of protecting the rights of individuals. Bitcoin is a global jurisdiction of a new kind: Providing borderless, permissionless property rights to all its censorship-resistant citizens. Permissionless because it relies on no pharaoh. Censorship resistant because no pharaoh can stop it. BITCOIN IS A NEW FLOURISHING Societies flourish when people are provided with such secure property rights and know that what they create and exchange voluntarily with others will remain theirs. Until Bitcoin, the power to protect and secure ownership rights was based on the logic of violence: Either you needed to protect yourself from violence or had to rely on governments or other powerful groups to protect those rights for you. Bitcoin created a conception of rights based not on the power of violence but on power of a different kind: the logic of cryptography, math and shared truth. It replaced violence with cooperation. That is why it’s important to take the Bitcoin rabbit hole all the way to the end so we understand what’s at stake here. Digital rights which can be enforced for all people, globally, across borders, without violence. Bitcoin, this new power, finally puts us — the individual — in the driving seat, with sovereignty over our own lives. Bitcoin also has created a newly powerful Demos, a wealthy community of Bitcoiners who together control a global jurisdiction. This gives us the opportunity and responsibility to create a new civilization, based on the free cooperation of sovereign people. Now we

  Bitcoin offers an alternative to a universal security system backed by men with guns. It creates a new model of security based on cryptographic proof that can resist unlimited applications of violence, making a bulletproof network. NOZOMI HAYASE Since it came to life in early 2009, Bitcoin has begun disrupting the world of finance. Over the years, this decentralized digital currency came to mean different things for different people. For some, it presented opportunities for prosperity, becoming the best performing asset in their portfolio. For others, this peer-to-peer cash for the internet represents a non-confiscatable digital gold that could enable financial sovereignty. For those who are concerned about civil liberty, Bitcoin’s censorship resistance and permissionlessness define it as free speech money. “Yellow Vest” protesters occupying in the streets of Paris found allies in this rebel crypto that promises to end the tyranny of central banks. As Bitcoin reached its 10-year anniversary last month, this breakthrough of computer science now further reveals its value proposition. Perhaps the fundamental ethos of this technology is hidden in the mystery surrounding the identity of its creator, the pseudonymous Satoshi Nakamoto. The genesis of Bitcoin is rooted in anonymity. Behind the mask of this Japanese character, a deeper vision of Bitcoin is found in the story of Japan, the first and only nation to experience the horror of nuclear weapons. The devastation that this country went through at the end of the World War II teaches us consequences of war and calls for people to come together for peace. This commitment to peace is embodied in Japan’s pacifist constitution, with its notable Article 9 clause that renounces war as a means to solve conflicts. In our contemporary post-Cold War world, this enshrinement of peace has shown itself to be vulnerable to international and domestic pressures to destroy it. In recent years, as North Korea’s repeated missile tests threaten stability in the Pacific region, there has been a push toward Japan’s remilitarization. Now, from the internet, Satoshi, a representative cultural survivor of atomic bombs, brings to humanity a means to secure this peace, opening a new path for us to never repeat the tragedy of the past. MONOPOLY OF VIOLENCE The weakness of the Japanese peace constitution is found in its foundation. Article 9 of Japan’s renunciation of the sovereign right of war is part of the constitution that was imposed by General MacArthur after the United States defeated Japan’s imperialism in 1945. The integrity of this model of governance called “democracy” that Japan adopted after its surrender relies on the U.S.–Japan security alliance that placed Japan under the umbrella of U.S. protection. The security and stability of this system is backed by a monopoly of violence. Its nucleus was developed during WWII by physicists working on the Manhattan Project and by the establishment of a large, armed industry that has now morphed into the military industrial complex. With creation of nuclear weapons, humanity tried to outdo the force of nature, unleashing power that could bring total annihilation of life on the planet. Around this elusive power, those who are driven by an urge for domination have created a network of security to protect their private interests. The global security state has established a secret law that violates our fundamental right to life: the right not to be vaporized or eradicated by warfare. By using the threat of weapons of mass destruction, transnational corporations engage in conquest of territory. They control world resources, with central banks printing money out of thin air and weaponizing large financial institutions like the International Monetary Fund and the World Bank. The superpower state has caused the entire world to fear an uncontrolled fission chain reaction in order to keep all nations under the thumb of its military command, imposing petrodollar hegemony. Armies of economists, legislators and regulators apply pressure to maintain monopoly of the market, putting sanctions, trade embargoes and blockades against those who challenge the legitimacy of the corporate state. CRYPTOGRAPHIC PROOF Now, in this digital age, man’s subversion of nature has come online, forming patronage networks that act like one giant computer. The internet has been effectively militarized with the penetration of intelligence agencies and the CIA cyber weapon, along with giant tech companies engaging in censorship. This occupation of cyberspace is maintained by private paying processing companies like Visa, PayPal and Mastercard controlling the flow of money, freezing assets and restricting transactions. Bitcoin offers an alternative to this universal security system backed by men with guns. It creates a new model of security based on cryptographic proof that can resist unlimited applications of violence, making a bulletproof network. Bitcoin is free software where users control the programs. Everyone can read, study and participate in the development of its code. Bitcoin is developed and stewarded by a group of cypherpunks. They are a new wave of scientists who take up moral obligations to shift the balance of power and to help individuals counter illegitimate authority derived from violence. Cypherpunks don’t conquer nature. They liberate wisdom inherent in nature by keeping its source code open. Cypherpunks write code. They try to preserve a repository of scientific knowledge that belongs to humankind and build applications that benefit all. By using cryptography for social change, they challenge a model of governance that fuels wars of aggression and surveillance capitalism. Through designing a new security based on mathematics, they aim to make the subversive state secret law obsolete. SECURITY BACKED BY NATURE Bitcoin’s core consensus algorithm is an innovation that is created through application of laws of nature. Satoshi found the force that governs nature manifested in the law of physics, specifically thermodynamics — principles concerning heat, temperature and their relation to energy. Combining this understanding of natural law with the knowledge that human nature contains the paradox of man being selfish as well as being altruistic, the creator of Bitcoin found a way to coordinate human actions to build economies of scale. Tech entrepreneur and author Andreas Antonopoulos acknowledged

  Whether it’s how people live, their ability to travel to different places or how assets are all completely digitized, the world is swiftly changing. In the cryptocurrency industry, we operate in an entirely digital format while many of us strive to maintain privacy and preserve the sovereignty of the individual. This means not only the sovereignty of one’s assets, but also the sovereignty of how you work, where you work, where you live and what you live for. My favorite book is “The Sovereign Individual” by James Dale Davidson and William Rees-Mogg. I see it as a roadmap for the blockchain ecosystem. Bitcoin is an aperture for what the book describes and where the future is going. The authors state that the cybereconomy, not China’s legacy one, could become the greatest economic phenomenon of our age. It all comes down to first principles. What does it mean to be free? What does it mean to be a sovereign individual? The idea is simple: we are each our own individual with our own identity. We can own assets, as well as opt into and out of systems as we see fit. Whether that be opting into a country, a network, a communication system, a financial service or a lending or loan system, it’s all about the individual. To be sovereign is to be able to control that, and to find that freedom and have choice. The book argues for decentralization: “Other things being equal, the more widely dispersed key technologies are, the more widely dispersed power will be, and the smaller the optimum scale of government,” the authors wrote. When I speak with regulators, and they ask about decentralization, I tell them that the real measure of decentralization is censorship resistance, not distribution. Everyone is learning here, and they definitely are still a ways off from truly understanding. In the world today, we’ve lost the ability to choose. We’re instead forced into systems. But Bitcoin unshackles the individual from forced opt-ins. It creates more choice and freer markets. In the Bitcoin industry’s pursuit of sovereignty, identity plays a critical role. Aggregating the data and the interactions one has, while keeping control of that data with the individual, would open many doors. Furthermore, what if better identity solutions could solve the privacy problem? WhatsApp has forced its users to opt into its service and fork over all of their data. That shouldn’t be a binary ask. How do users preserve their right to consent to the use of our data? How do we start aggregating all of the different data we create every day into systems or a system owned and controlled by the individual? That doesn’t mean everyone has to control all of their data, all of the time. But, at least we’d have the choice. Such as the choice to opt into or out of a country, for instance. You could theoretically port your identity out in a digital fashion. Why not? Ultimately, the more that you can distribute information, and refrain from taking everyone’s first and last names and then transferring that data everywhere, the more the individual can fully control the entirety of that data set. When we sign off on a Bitcoin transaction, that signature is a form of identity; it is a part of our financial identity. Bitcoin has driven this concept of decentralization forward. Bitcoin has changed the way people think. We’re creating a change in social consciousness. Individual sovereignty and ownership give us more choices. Sovereign individuals are the new elite. Just like Atlas wrote on BitcoinTalk so many years ago: “I am pretty confident we are the new wealthy elite, gentlemen.” Even if you don’t have your own sovereignty, while many sovereign individuals will, then countries will become like companies, and people will be able to shop between jurisdictions. Countries will have to offer attractive policies to customers, lest they pack up and move away. The possibilities of identity are endless. With decentralized technologies like Bitcoin, identities can empower the unbanked to access credit or own a piece of property with land titles. Just think, what if we could use our reputations as a new form of credit creation? Imagine a world of lending systems, not based on antiquated ways, but on the tools and indicators available to us today in a digital world. Bitcoin has spurred systems that will allow humanity to protect individual sovereignty and accelerate freedom. And that’s the Holy Grail.

  Something about the way Bitcoin Magazine’s Nick W. described the previous bitcoin price bull run instilled a sense of peaceful confidence in me.  His emphasis on self-reflection in order to learn about the future was a great perspective that I had not yet heard on the show. Along with discussing his previous experience in the bitcoin market, we touched on his fantasy football gateway into being orange pilled, how his previous creative work has helped with work he’s done for Bitcoin Magazine, his expectations for the future and much more. Be sure to check out this magnificent conversation with one of the smartest people in the industry in both podcast form and written form below. How were you first introduced to Bitcoin? My first touchpoint with Bitcoin came in 2014. I was working on a web design project, and it was brought up in a group chat amongst myself and a few developers.  I had just won a few thousand bucks from DFS sports betting (DraftKings, FanDuel) and was looking to roll those gains into something more significant. I still have screenshots of that chat. It is pretty rough to look back on that discussion today, because with the benefit of hindsight I can see the enormous opportunity cost that came as a result of me not digging in, and doing the homework to understand what Bitcoin is. And of course, I sold a few months later.  I returned again during the 2017 cycle, still not learning my lesson. I chased multiple altcoins, ICOs and participated in all the ridiculous hype. Thank god the bubble popped a year or so later. I’m not sure I would have learned my lesson otherwise. Having that multi-year bear market was an incredible opportunity to learn what I had just been a part of. The key part for anyone who goes through this is that they must have the curiosity to learn.  Curiosity is what fuels the education process. So, you have to want to know the answers to the questions: What did I just witness? Has this happened before? Why does bitcoin always seem to outlast others? What’s with these maximalists, and why are they so adamant about Bitcoin only? What’s the primary “life lesson” that you have learned from your time in bitcoin? Don’t trust, verify. Bitcoin has a way of requiring you to investigate the root causes of what’s happening in the world around you. Understanding Bitcoin requires an approach from first-principles thinking. It forces you to challenge your assumptions, and to seek out and verify information on your own.  One of my favorite quotes that I’ve come across recently is from biologist and writer, E.O. Wilson, where he states, “The real problem of humanity is the following: we have paleolithic emotions, medieval institutions, and god-like technology.”  I think we’ve reached a critical point where our paleolithic brains have not evolved enough to process the world around us. With the ubiquity of the internet, the sheer volume of information is too much for us to process. We’re bogged down with noise surrounding us everywhere, and so much of our lives are plugged into these dopamine-dripping machines. Our cell phones, cable TV, social media, etc.  I remember reading a piece a few years back that broke down the habit-forming loops built into these systems, designed with similar principles to slot machines. Pulling levers, and refreshing our feed in hopes of finding that next dopamine hit. All built with the intention to hijack our attention for as long as possible, and extract consumer data and profits for those on the other end.  For me, discovering Bitcoin was a way to clear away a lot of that noise, and focus on signal. Finding what is true and honing in on it. Digging through the incentive structures of systems that govern our everyday lives and finding that many of these systems are corrupted, and likely irreparable. How has your professional creative experience contributed to the work you’ve done so far at BTC Inc/Bitcoin Magazine? It definitely has. Startups and small agencies gave me a front row seat for the constant iteration processes necessary for building something new. In addition, it was extremely beneficial for me to be part of an agency where our role was essentially to build out an online presence for other businesses.  Not only did this give me the opportunity to learn how a lot of other businesses work, but because the company was small, I had to wear many hats. At college and in my first job, I learned design principles and how to use the different creative tools. At my next job, I spent over five years adding to my tool belt. Marketing, designing, building for web, even things as small as writing ad copy for design work has benefitted to some degree today. It forced me to be somewhat of a Swiss army knife. I can do a lot of things decently, and I think that having that generalist knowledge allowed me to visualize how a digital product could be built.  It helps to be able to build a rough sketch of the tech stack needed for a project, i.e., what programs, plug ins, SaaS, content and branding is needed and how can it be packaged together into a working system or product.  My aim is to build web-based systems that help achieve these things. And in doing so, hopefully create products that help others to build a positive habit loops. I see my current role having three main tenets: one, reduce friction (for user acquisition), two, separate signal from noise, three, educate newcomers. What are you most looking forward to in the Bitcoin space? If I had to choose something today, I think the idea of having a decentralized identity with something like Lightning is incredibly important. This would be the ideal foundation for a Web 3 infrastructure, instead of logging in with Google, or Facebook accounts, which already have massive compilations of data making up

  2021 is shaping up to be a momentous year for Bitcoin as the price hurtles toward $40,000 — more than double its 2017 all-time high. As HODLers rejoice and naysayers are left in disbelief, it’s important to note that a lot has changed in the world since 2017, making this bull run infinitely disparate from the previous one.  Global pandemic and political mayhem aside, many other things have changed in the last few years, even in the microcosm of Bitcoin. In short: Accumulation, not trading Institutions, not consumers BITCOIN, NOT SHITCOINS In 2017, bitcoin was like a gateway drug for all of crypto. People weren’t necessarily looking at bitcoin as a long-term investment. They were using bitcoin to trade altcoins and get into ICOs — gambling away fortunes in hopes of getting filthy rich. 2017 was the first time that the mainstream public had any sort of exposure to crypto assets and when it happened, it was like the Wild West. Regulation was near zero and anybody, anywhere who had some money could spin up a token and list it on an exchange. Consumer protections were nonexistent and suddenly, everybody was an expert on evaluating early-stage, blockchain-based “investments.” This led to the ICO craze where everyone from your Uber driver to seasoned Silicon Valley investors became blinded by the hype and got burned on fundamentally unsound investments. To my chagrin, this is likely how the majority of nocoiners today remember bitcoin and crypto. This New York Times article is the epitome of 2017 crypto-mania: A lot of the hype and money to be made in 2017 was outside of bitcoin, so capital flowed from fiat into bitcoin and then into pretty much every other cryptocurrency. From there, it essentially went to shit, as the creators of the tokens/early investors took everyone’s money by dumping their bags. (Reminder: Satoshi has never sold any bitcoin.) In fact, within the first half of 2018, over 86 percent of all ICOs that listed in 2017 had falled below their initial listing price, and their founders are likely either in jail or enjoying their ill-gotten wealth on a beach in some remote island paradise. This time, things are different. Money flowing from fiat to bitcoin is staying there. Bitcoin market dominance was at an all-time low during peak crypto mania in 2017 and now, it’s almost double what it was then. Altcoin volumes are relatively low, especially among retail investors. The people who are dabbling with altcoins, specifically ether, are the ones who are experienced, not newcomers. Most trading activity in crypto happens in DeFi on the Ethereum blockchain (whale-dominated decentralized exchanges which take technical experience and understanding to use), and in derivatives markets (CME/Bakkt futures and options for institutional players, and offshore derivatives exchanges such as BitMEX). Bitcoin is no longer being used for trading or as a way to move capital into other crypto assets. Instead, it’s being accumulated for the long term. ACCUMULATION, NOT TRADING In the last two years, over $30 billion dollars worth of bitcoin has been accumulated for the long term. A total of 2.814 million bitcoin are in accumulation addresses right now — that’s 15.16 percent of all bitcoin in circulation. 62.31 percent of all bitcoin in circulation hasn’t been moved in over a year, and less than 15 percent of it is actively traded on exchanges. This much bitcoin hasn’t been HODLed since pre-2017. As you can see, this number plummeted during the bull run when trading altcoins/ICO investing was popular: People aren’t trading bitcoin, they’re accumulating more and more of it over time and holding it long term (aka, “stacking sats”). This is evident not only through the raw on-chain data and exchange flows, but also through consumer behavior. People are dollar-cost averaging (DCAing), buying the dip and getting bitcoin-back rewards. Consumer Bitcoin products see this demand, and are building for it: Cash App, Rive and Swan DCA: Buy x bitcoin every y time interval Lolli and Fold: Get bitcoin back on everyday purchases Why is this shift happening from trading Bitcoin to accumulating it over time? There are two equally important explanations for this shift: The COVID-Induced Macroeconomic Environment Central banks are printing unlimited amounts of money and interest rates are near or below zero. This will inevitably lead to inflation, so capital is flowing into inflationary hedges such as bitcoin, gold and real estate. Bonds are worthless. Fiat currencies are losing value day by the day. And we’ve already seen two currency collapses in the past year (Turkey’s and Lebanon’s). People are hedging the existing financial system as well as fiat inflation by accumulating bitcoin. Further reading: “Bitcoin As Insurance: Why Investors Know $11,000 Is Just The Beginning” “Money Printing, Inflation, And The Bull Case For Bitcoin” 2. Anthropological And Monetary Theory: Evolution Of Bitcoin All organically-adopted money follows a path of evolution: collectible, store of value, medium of exchange and, finally, unit of account/reserve asset. Like gold, seashells and beads, bitcoin started as a collectible. Its scarcity, unforgeable costliness of creation and the price somebody else was willing to pay for it are the things that gave it value to the average individual. Thus, it was heavily traded from 2016 to 2018 as a speculative collectible/commodity, following the same behavioral economics patterns as baseball cards, oil and pork belly futures. Now, bitcoin is evolving into a store of value — something that will retain its purchasing power, preserving and growing wealth over time. Precious metals, interest-bearing assets, productive land, etc. have been traditional stores of value. Bitcoin is joining these ranks as consumers, public companies and, most importantly, institutional investors are all buying bitcoin as a store of value in an inflationary environment. Further Reading: “The Bullish Case For Bitcoin” INSTITUTIONS, NOT RETAIL 2017’s bull run was led by retail investors — everyday folks trying to get into bitcoin and make money. Smart investors mainly thought it was a scam, with the exception of some notable die-hards like Chamath Palihapitiya and

  Elon Musk has performed a sudden U-turn on bitcoin over concerns about its energy usage, and says his electric car firm Tesla will no longer accept the cryptocurrency as payment – but will his decision have an impact, and could Tesla turn to an alternative currency? Tesla bet big on bitcoin earlier this year with a $1.5 billion investment, and it paid off: Bloomberg estimates that the company made $1 billion on its purchase in the first quarter of 2021. At the time, Musk was criticised for investing in the cryptocurrency, with many people pointing out that the environmental damage caused by its large electricity usage was at odds with Tesla’s apparent green credentials. Now, Musk seems to have reached the same conclusion, tweeting on 12 May that Tesla would suspend bitcoin sales because of concerns about “rapidly increasing use of fossil fuels for bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel”. “Cryptocurrency is a good idea on many levels and we believe it has a promising future, but this cannot come at great cost to the environment,” he added. Bitcoins are created, or mined, using a concept called proof of work, which involves solving functionally useless and computationally difficult puzzles that consume a large amount of electricity. The currency’s annual electricity consumption is estimated to be 148 terawatt-hours and rising, or around the same amount as Poland’s. To make matters worse, some of this energy is coming from coal power stations. Musk says that Tesla will neither accept nor sell-off any bitcoins for the moment, but does plan to use its reserves once mining “transitions to more sustainable energy”. Carol Alexander at the University of Sussex, UK, says that merely holding bitcoins, rather than transacting with them, has no carbon footprint, so Musk’s move will have an effect in cutting Tesla’s future emissions. Bitcoin isn’t the only cryptocurrency that Musk’s businesses are involved with. SpaceX, one of his other companies, is reportedly already accepting Dogecoin for satellite launches, although his reference to the currency as a “hustle” during his 8 May appearance on Saturday Night Live sent the price down by 35 per cent. On 11 May, Musk tweeted a poll asking his followers whether Tesla should accept Dogecoin as payment. Tesla didn’t respond to New Scientist’s request for comment. Dogecoin uses less energy per transaction than bitcoin because the calculations used to mine coins are less complex, with bitcoin requiring 707 kilowatt hours for each payment and Dogecoin requiring just 0.12, so a switch could reduce Tesla’s environmental impact. Alternatively, there are other cryptocurrencies that take different approaches to securing transactions, such as basing control of their blockchains on the number of coins or the amount of hard disc space someone owns, although Musk has made no public statement on these. Wherever Musk’s thoughts on cryptocurrencies go next, it is clear that the billionaire’s tweets can have a substantial impact on the sector. His anti-bitcoin stance caused an immediate 15 per cent drop, but prices are rising again. Of course, given the energy use per transaction, this market frenzy has its own environmental impact.

  Distributed ledger technology has only scratched the surface of its potential, and bitcoin is in many ways bringing these possibilities into the limelight, so much so that it has sparked unprecedented global adoption. Moreover, the growing institutional embrace is a force to be reckoned with, and MicroStrategy’s accumulation is just one strong example of the accelerating purchase pace. CEO Michael Saylor has been a strong proponent of corporate balance sheet additions and institutional acceptance, even convincing Elon Musk to add over $1.5 billion of the seminal cryptocurrency to Tesla’s treasury. While bitcoin enthusiasts may view the development as contradicting their perception of decentralization, in many ways, greater institutional embrace may actually strengthen bitcoin’s appeal, and in time, its resilience. What may be lost on the decentralization and inclusivity champions is bitcoin’s still-steep learning curve preventing their vision from fully materializing. Institutional investors may – surprisingly – hold the key to unlocking its potential by promoting better asset custody methods, the Achilles’ heel of the current wallet structure. THE STORAGE CONUNDRUM Troublesome digital asset storage has long dented bitcoin’s reputation. Some estimates postulate that as much as 3.7 million bitcoin out of the approximately 18.8 million currently mined are permanently lost due to forgotten secret keys, amounting to nearly a quarter of a billion dollars at today’s prices. Whether the result of negligence, accidents, theft, or otherwise, this staggering figure highlights the true scope of the problem and just how easy it is to misplace a password. Would institutional investors enter a market where the risk of total loss was so effortless that an entire multi-million or billion investment portfolio could be compromised by a single point of failure? Probably not. If anything, they would demand robust digital asset security that isn’t necessarily widely available. For instance, you certainly don’t believe that Michael Saylor is the only holder of the 24-word seed phrase for MicroStrategy’s wallet. Imagine that he suddenly forgot the passphrase in one fell swoop and compromised the entire company’s holdings. This will not happen. The company has likely recognized this glaring risk and incorporated digital asset security measures that store private keys, restrict access, and facilitate recovery efforts if the worst-case scenario unfolds. The very complexity at the heart of bitcoin’s design is anything but a hindrance, and in fact, this same complexity is the source of bitcoin’s robust architecture. Yet, the highly complex storage matter has been at the heart of many efforts to reverse this reality. In effect, removing the single point of failure posed by human error is instrumental for preventing more widespread permanent loss, and assuring bitcoin’s long-term resilience. FUNCTIONAL RESILIENCE IN THE FORM OF REDUCED COMPLEXITY Among the answers to the storage quandary, vaults represent one of the many solutions proffered by digital asset custodians, effectively forming an offline consensus mechanism for accessing locked cryptocurrency. Offline storage is practical but nevertheless flawed, primarily if your consensus mechanism relies on people to be physically present to unlock the “vault” and bring one’s cryptocurrency out of cold storage and back online. Guaranteeing a 24-hour physical presence presents apparent obstacles. Accordingly, creating their own functional “vault” is possible but logistically tricky for institutional investors that require constant and immediate access. One alternative to this physical custody option is the multisignature (multisig) wallet. Through this wallet security model, each transaction requires multiple signatures from multiple parties, known as cosigners, to process. For instance, when creating an Electrum multisig wallet, the number of cosigners must be selected along with the number of cosigners who must sign transactions to process them. For instance, a wallet with four cosigners might require two cosigners to sign a spending transaction. Each cosigner then generates a new seed for the two seed types (Segwit or Legacy). Once generated, it is the responsibility of the cosigner to keep it secure (and not share it with the other cosigners). After confirming the seed, Electrum generates a master public key (MPK) which should be shared with the wallet cosigners. Once all cosigners have all the master public keys, the wallet can be created. Once completed, the service will generate a wallet address, which requires the cooperation of cosigners to process any spending transactions from the wallet. There are slight variations on this theme, like Specter Desktop, which allows users to list hardware devices like Trezor or Ledger S wallets as cosigners, requiring a certain quorum of the devices to sign and send transactions. Still, some of the hurdles are similar to those exhibited by vaults. While a single-signature wallet’s single point of failure problem is addressed, exploitable code vulnerabilities have arisen historically. Moreover, as teams change, signatures and permissions must be updated, not to mention the previously described availability element. Even the idea of hardware security modules (HSMs) has been promoted, but that ends up steering the conversation back to the single point of failure. HSMs effectively encrypt private keys and decrypt them for transactional use. While effective against theft, it doesn’t mean they can’t be compromised by an enterprising hacker and used to drain a wallet address. Greater still is their expense, putting them out of the reach of most ordinary bitcoin HODLers. One of the viable alternatives that can mitigate these different variables is multiparty computation (MPC). To avoid the single point of failure, MPC eliminates a single private key and replaces it with a process that involves at least three endpoints that don’t share the entirety of secret keys. This allows for a distributed signature consensus process to validate and sign transactions. Besides reducing the risk of theft and hacks by distributing secret key storage, among the most significant benefits is modifying the process or endpoints without requiring parties’ consent with signature rights like in the storage models mentioned above. According to ZenGo CMO Elad Bleistein, “MPC-powered crypto wallets don’t think a 24-word seed phrase is viable for most humans and have built this tech into their user experience. This means only you can access your assets, but also that they’re

  Before You Buy Bitcoin There are several things that aspiring Bitcoin investors need: a cryptocurrency exchange account, personal identification documents if you are using a Know Your Customer (KYC) platform, a secure connection to the internet, and a method of payment. It is also recommended that you have your own personal wallet outside of the exchange account. Valid methods of payment using this path include bank accounts, debit cards, and credit cards. It is also possible to get Bitcoin at specialized ATMs and via P2P exchanges. Be aware, however, that Bitcoin ATMs have increasingly required government-issued IDs as of early 2020. Privacy and security are important issues for Bitcoin investors. Anyone who gains the private key to a public address on the Bitcoin blockchain can authorize transactions. Private keys should be kept secret—criminals may attempt to steal them if they learn of large holdings. Be aware that anyone can see the balance of a public address that you use. The flip side to this public information is that an individual can create multiple public addresses for themselves. Thus, they can distribute their stash of Bitcoin over many addresses. A good strategy is to keep significant investments at public addresses that are not directly connected to ones that are used for transactions. Anyone can view a history of transactions made on the blockchain—even you. Although transactions are publicly recorded on the blockchain, identifying user information is not. On the Bitcoin blockchain, only a user’s public key appears next to a transaction—making transactions confidential but not anonymous. In that sense, Bitcoin transactions are more transparent and traceable than cash because all of them are available for public view, unlike private cash transactions. But Bitcoin transactions also have an element of anonymity built into their design. It is very difficult to trace the transacting parties—i.e., the sender and recipient of bitcoin—on the cryptocurrency’s blockchain. Buying Bitcoin  We have broken down the steps to buy bitcoin below. Remember that you still need to perform your research and select the best option for yourself based on your circumstances. Step One: Choose a Crypto Trading Service or Venue The first step in buying bitcoin consists of choosing a crypto trading service or venue. Popular trading services and venues for purchasing cryptocurrencies are cryptocurrency exchanges, payment services, and brokerages. Out of these, cryptocurrency exchanges are the most convenient option since they offer a breadth of features and more cryptocurrencies for trading as compared to other places. Signing up for a cryptocurrency exchange will enable you to buy, sell, and hold cryptocurrency. It is generally best practice to use an exchange that allows its users to withdraw crypto to their own personal online wallet for safekeeping. For those looking to trade Bitcoin or other cryptocurrencies, this feature may not matter. There are many types of cryptocurrency exchanges. Because the Bitcoin ethos is about decentralization and individual sovereignty, some exchanges allow users to remain anonymous and do not require users to enter personal information. Such exchanges operate autonomously and are typically decentralized, which means they do not have a central point of control. Although such systems can be used for nefarious activities, they are also used to provide services to the world’s unbanked population. For certain categories of people—refugees or those living in countries with little to no infrastructure for government credit or banking—anonymous exchanges can help bring them into the mainstream economy. Right now, however, most popular exchanges are not decentralized and follow laws that require users to submit identifying documentation. In the United States, these exchanges include Coinbase, Kraken, Gemini, FTX.US, and Binance.US, to name a few. These exchanges have grown significantly in the number of features they offer. The crypto universe has grown rapidly in the past decades, with many new tokens competing for investor dollars. With the exception of Bitcoin and certain prominent coins, such as Ethereum, not all of these tokens are available at all exchanges. Each exchange has its own set of criteria to determine whether to include or exclude trading of certain tokens.  Coinbase, Kraken, and Gemini offer Bitcoin and a growing number of altcoins. These three are probably the easiest on-ramps to crypto in the entire industry. Binance caters to a more advanced trader, offering more serious trading functionality and a better variety of altcoin choices. FTX, a fast-growing crypto exchange that has garnered a multi-billion-dollar valuation, offers a restricted number of altcoins to US investors.2 However, traders outside the US have a greater choice of tokens on its platform.   An important thing to note when creating a cryptocurrency exchange account is to use safe internet practices. This includes using two-factor authentication and a password that is unique and long, including a variety of lowercase letters, capitalized letters, special characters, and numbers. El Salvador made Bitcoin legal tender on June 9, 2021. It is the first country to do so. The cryptocurrency can be used for any transaction where the business can accept it. The U.S. dollar continues to be El Salvador’s primary currency. Step Two: Connect Your Exchange to a Payment Option After you have chosen an exchange, you will need to gather your personal documents. Depending on the exchange, these may include pictures of a driver’s license or Social Security number, as well as information about your employer and source of funds. The information you may need can depend on the region you live in and the laws within it. The process is largely the same as setting up a typical brokerage account. After the exchange has verified your identity, you will be asked to connect a payment option. At most exchanges, you can connect your bank account directly or you can connect a debit or credit card. Although you can use a credit card to purchase cryptocurrency, it is not a good idea because cryptocurrency price volatility could inflate the overall cost of purchasing a coin. Bitcoin is legal in the United States, but some banks may question or even stop deposits to crypto-related sites or

    A price system is an information exchange network. It works best when built on top of a globally-shared neutral monetary medium. The more complex society becomes, the more pressing the need for a neutral monetary standard that doesn’t introduce noise into economic signals.   KNOWLEDGE LOVES COMPANY One of the most profound insights in economics is Hayek’s take on the nature of prices. In a short and readable article called “The Use of Knowledge in Society,” Hayek explains why there wouldn’t be any exchange — nor any complex society — without the existence of prices.   Prices Are Data Reflecting The Economic RealityA modern economy generates billions of pieces of possibly-relevant information about people’s preferences, investors’ risk appetite, resource scarcity, manufacturing circumstances of particular goods and so on. We need to continually share this information to be able to coordinate our efforts. As the great economist Leonard Read pointed out, no single mind knows how to produce even a simple thing such as a pencil. Economic reality undergoes constant change. Similarly, the price system is in continuous flux, which makes it hard to paint an accurate picture of what’s really going on. When prices emerge in an unobstructed manner, they reflect reality and we can cooperate well. When prices are prevented from emerging or adjusting freely — and thus no longer reflect reality — our ability to cooperate is hindered.     As Hayek says, prices communicate the “knowledge of the particular circumstances of time and place.”. The dominant “use of knowledge in society” isn’t via books, TVs or classrooms; it’s the price system that is mankind’s main knowledge exchange network. And it’s amazingly efficient.   A brief example. Turkey grows around 80% of the world’s hazelnuts. Now imagine something happens in Turkey: a civil war, a hazelnut blight, a meteor strike. How does the rest of the world find out that something happened and that walnuts or peanuts should now be used whenever possible? Not from a TV. The skyrocketing price of hazelnuts breaks the story first. The price communicates only the most relevant information: that hazelnuts have become relatively more scarce. It doesn’t matter where in the world hazelnuts are produced or what happened there, what matters is that the nuts are now pricier and people need to economize.   “In abbreviated form, by a kind of symbol, only the most essential information is passed on and passed on only to those concerned.” -Hayek   A price system is a minimum viable medium of knowledge transfer. It allows us to cooperate globally, even if we don’t share the same language, culture or worldview, because these factors do not matter for economic cooperation. Prices are objective guides in our joint struggle to survive and prosper.   There are billions of possible pieces of information that could be relevant to any production process, consumer decision or investment opportunity. Without prices to communicate the knowledge of local circumstances, we would be groping in the dark. And that is precisely what societies without a price system ended up doing: from the Inca empire to the Soviet Union, societies without a working price mechanism turned into slave states which saw little to no progress.   OI, THAT’S NOISE MONEY YOU GOT THERE We have already established that for prices to convey economic signals properly, they need to represent the underlying economic reality. But prices are often actively prevented from doing so. There are three factors that affect how well prices do their job: how prices emerge, how they propagate and the quality of the price-carrying medium (the money).   How prices emerge: Prices need to arise out of the concept of private property, i.e. privately owned money and capital, land and buildings, machinery and technology, etc. With property in private hands, the incentives are in place to utilize it efficiently. Rewards for good decisions as well as punishments for bad ones accrue to those who are most receptive of them. On the other hand, protecting property owners from bearing the brunt of bad decisions — as is the case with bailouts or subsidies — is a sure way to cripple the price system, as prices then no longer carry the risk component. For a popular illustration of such moral hazard, see the movie The Big Short.     How prices propagate: Even if prices emerge undisturbed from the foundation of private property, price regulation can kill the signal before it is propagated. In the course of the 20th century, one of the most popular forms of price regulation was rent control. The results of rent control is best illustrated with a popular quip from Swedish economist Assar Lindbeck, who compared its effects to city bombing. This is because price regulations such as rent control leads to a degredation of capital; with prices kept below their true market value, it’s no longer worth it for the owners to repair and improve their property.   Many people are surprised when confronted with the view that interest rate manipulation by central banks is a form of price control. But the fact is that an interbank interest rate (which the central bank usually targets) is a type of price, and central banks do everything they can to control this price down to the basis point (0.01%).   Neutrality of a monetary medium: Prices do not exist on their own; they need to be expressed in terms of a monetary medium. The nature of the monetary unit plays a critical role in how well the price system can do its thing.   Let’s say a kilogram of hazelnuts used to cost $10, but then it went up to $11. Now if these prices emerged in a market economy without any government intrusion, the growth in price can reflect two things: the supply of hazelnuts decreased or the demand for hazelnuts increased. Either way, market participants don’t particularly care for the details, as long as they register the signal of increased hazelnut scarcity.   But when