Bitcoin News Roundup: September 13th, 2023
Watch this episode on YouTube or listen wherever you get your podcasts.
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Greetings and salutations my fellow plebs. My name is Walker and this is THE Bitcoin Podcast.
It’s Wednesday, September 13th, 2023. At the time of recording, the Bitcoin block height is 807,450 and the value of one Bitcoin is still one Bitcoin.
Today’s episode is the Bitcoin News Roundup. I’m going to go over the big stories, run through a few rapid fire news, then zoom out and give you some perspective…
You can find all the links and accounts mentioned in this episode via the article version of this show, linked in the show notes, or by going to bitcoinpodcast.net/words
Earlier this week I released my latest Bitcoin Talk episode of THE Bitcoin Podcast with Preston Pysh. You can watch the full video interviews at BitcoinPodcast.net, on Twitter @WalkerAmerica, or YouTube.com/@WalkerAmerica
And of course you can always listen to these episodes wherever you get your podcasts.
Without further ado, let’s get into the Bitcoin News Roundup.
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Lightning Strikes Coinbase
It looks like Coinbase is finally poised to add Lightning Network integration… Here’s a very high-level background:
On July 26th, Jack Dorsey asked Coinbase CEO Brian Armstrong: “Why do you continue to ignore Bitcoin and lightning? what "crypto" is a better money transmission protocol and why?”
On August 1st, Armstrong quote tweeted Jack saying: “We’re looking into how to best add Lightning. It’s non-trivial, but I think worth doing. I’m all for payments taking off in Bitcoin. Not sure why you think we’re ignoring Bitcoin - we’ve onboarded more people to Bitcoin than probably any company in the world. Let’s build it together.”
On August 2nd, Viktor Bunin, Protocol Specialist at Coinbase Cloud quote tweeted Armstrong saying: “Friends, I'm happy to say that I'm leading up this effort. DM me if you'd like to grab some time to chat Lightning support at @Coinbase. Particularly keen to get insights on lift to add support, UX flows, open source tooling, service providers, and edge cases. Thanks!”
Now fast forward to yesterday. Brian Armstrong tweeted “The team did a great job digging into this, and we've made the decision to integrate Lightning. Bitcoin is the most important asset in crypto and we're excited to do our part to enable faster/cheaper Bitcoin transactions. Will take some time to integrate so please be patient.”
First and foremost, this is great news. Coinbase is a giant, both in terms of Bitcoin and also “crypto.” For Brian Armstrong to publicly state “Bitcoin is the most important asset in crypto” while simultaneously saying Coinbase is moving forward with Lightning–a Bitcoin Layer 2 that invalidates all the shitcoin “use cases”–is a huge deal. That being said, if you’re a Bitcoiner, you may find the statement “Bitcoin is the most important asset in crypto” to be absurd, and based on the false premise that Bitcoin and “crypto” are even comparable in any way. It’s like saying “BREAKING NEWS: WATER IS WET.” But while this may be painfully obviously to anyone who has studied Bitcoin vs Shitcoins, it is non-obvious to the countless people who have been sucked in by the false narratives promoted by shitcoin shills trying to pump their own bags.
This integration will expose countless “crypto” folks to the power of the Bitcoin Lightning Network, and hopefully will be a reality check for many of the naysayers who believe “Bitcoin doesn’t scale” or “Bitcoin doesn’t work for payments.” Lightning isn’t perfect–nothing is–but if you’ve used it, you know that it feels like magic. I’m looking forward to more people being given direct exposure to the power of Lightning through this Coinbase integration. Now let’s see how many blocks tick by before this integration actually goes live…
The Emir of Qatar Comes to El Salvador
Yesterday, Co-founder of El Zonte Capital, Stacy Herbert, who worked to establish the Bitcoin Office in El Salvador, announced “The Emir of Qatar has landed in El Salvador.”
El Salvador’s President, Nayib Bukele, posted a video saying “El Emir de Qatar, Su Alteza @TamimBinHamad, ha llegado a nuestro país… Y con estilo.”
For you monolinguists, that means “The Emir of Qatar, His Highness @TamimBinHamad, has arrived in our country… And with style.”
According to the Embassy of Qatar in El Salvador: “The visit of His Highness the Emir to El Salvador will open new doors to promote commercial cooperation between both countries”
Like El Salvador, Qatar is a small but energy-rich country, but instead of hydroelectric and geothermal volcano power, Qatar has massive natural gas reserves and production.
As Bitcoin Archive mused, “Imagine Qatar adopting #Bitcoin and also mining with flared gas!”
I think this is a very interesting and very real possibility. Here are some numbers for you…
Qatar flares about one billion cubic meters of gas (bcm) each year. For context, the USA flares a little under 9 billion cubic meters of gas annually, but the USA has a population of over 330 million, compared to just under 3 million people in Qatar.
It would be pretty amazing to see all this wasted energy from flared gas put to work mining Bitcoin…
The timing is also quite fitting. After all, just over two years ago, on September 7th, 2021, El Salvador became the first nation-state to adopt Bitcoin as legal tender.
I’m sure these two leaders have much to discuss, but I have to imagine that Bitcoin and Bitcoin mining will be a key topic of conversation.
It seems that we’ve truly entered the era of Bitcoin diplomacy, with El Salvador leading the charge.
CPI, Oh My!
Today, the Bureau of Labor Statistics announced that year-over-year CPI increase came in at 3.7% for August 2023.
From the BLS: “The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.6 percent in August on a seasonally adjusted basis, after increasing 0.2 percent in July, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 3.7 percent before seasonal adjustment.
The index for gasoline was the largest contributor to the monthly all items increase, accounting for over half of the increase. Also contributing to the August monthly increase was continued advancement in the shelter index, which rose for the 40th consecutive month. The energy index rose 5.6 percent in August as all the major energy component indexes increased. The food index increased 0.2 percent in August, as it did in July. The index for food at home increased 0.2 percent over the month while the index for food away from home rose 0.3 percent in August.”
President Biden’s social media team tweeted the following on behalf of our aging leader:
“Core inflation has fallen to 2.4% over the last three months – the lowest level in over two years. But despite the drop, I know families are feeling last month’s increase in gas prices. That's why lowering costs for families, from the pump to the pharmacy, remains my priority.”
Thanks for the empty platitudes and bullshit metrics, White House social media intern.
Honestly, I don’t want to spend too much time on CPI, because it’s just exhausting… But I will say this as a reminder:
CPI is a year-over-year measure based on an arbitrary and changing basket of goods that politicians, bureaucrats, central bankers, and fiat economists use to obfuscate the fact that our money is broken, and they are stealing the value of your time and energy by slowly destroying the purchasing power of your money through the silent tax of inflation.
In August 2023, there was a 3.7% year-over-year increase since August 2022…
In August 2022, there was an 8.3% increase year-over-year since August 2021…
In August 2021, there was a 5.3% year-over-year increase since August 2020…
And so on and so forth…
Inflation *compounds* and your purchasing power continues to decline.
PayPal Fat Fingers
On September 10th, Mononaut revealed that someone had MASSIVELY overpaid for a Bitcoin transaction.
How much did they overpay? They paid 8,182,079 sats/vB, equating to a total transaction fee of 1,982,108,632 sats, or $510,750… This is overpaying by 479,867 times…
Most folks took the opportunity to have a good laugh at this, and many mempool memes were made.
Others tried to figure out how the hell this could have happened. Jameson Lopp theorized “The transaction that paid nearly 20 BTC ($500,000) fee a few hours ago looks like an exchange or payment processor with buggy software. They've received 60,000+ txns and sent 60,000+ txns from the same address (bad practice) and likely calculated their change output incorrectly.”
Today, Mononaut announced a revelation: The fat fingers belong to PayPal
Quoting Mononaut:
“I had initially discounted that possibility, but after receiving a tip-off I took another look.
The overpaid fee came from a hot wallet reusing the address bc1qr3...zpw3, which started operating in June of this year.
The on-chain activity is consistent with automated processing of fiat-denominated withdrawals, and also closely matches the behavior of a now inactive wallet bc1qhs...kx4n, which is labelled as PayPal on http://oxt.me
In fact, the transition from the old wallet to bc1qr3...zpw3 is clearly visible on-chain, via an intermediate address bc1qlm...yva
To make doubly sure, I verified by looking up some actual known PayPal withdrawals on-chain.
Of course, it's possible this is run by a third-party vendor, but as far as I know PayPal manages their Bitcoin in-house.
All evidence now points to a software bug like this as the cause of the error.
I really feel for the developer who wrote that code - it's such an easy mistake to make, and it should have been caught in review.
More importantly, there should have been monitoring and sanity checks in place to prevent actual loss of funds.
In reality, the system was apparently running *completely unmonitored*, since PayPal didn't notice or halt withdrawals for almost 24 hours
- Single-address wallets are terrible for privacy. It was trivial to unravel PayPal's entire wallet structure and payment history from one known tx.
- Bitcoin software is complex and unforgiving.
- Big companies are way worse at it than you might expect.”
Thanks to @mononautical for this investigation and analysis. It’s a great reminder that there are no take-backs in Bitcoin. So double check those transactions before you send them.
And, of course, thanks to PayPal for your generous donation to Bitcoin Miners.
Rapid Fire News
Via Bitcoin Archive: $1.5 Trillion Asset Manager Franklin Templeton has filed for a spot #Bitcoin ETF.
This adds to the list of other Bitcoin Spot ETF applications:
- BlackRock ($10T AUM)
- Fidelity ($4.5T)
- Invesco Galaxy ($1.5T)
- WisdomTree ($87B)
- VanEck ($61B)
- GlobalX ($40B)
- ARK Invest ($14B)
- Bitwise ($1B)
- Valkyrie ($1B)
Bringing the total AUM value to $17.7T
Via BTC Times: "We're trying to turn #Bitcoin into a global payment network…we’re still in the fax era of global payments and that’s what we’re attempting to solve,” says @lightspark CEO @davidmarcus
Via the Kobiessi Letter: The debt-to-income ratio for all homebuyers in the U.S. just hit 40% for the first time in history.
Via House Majority Whip Tom Emmer: If not open, permissionless, and private – like cash – a CBDC is nothing more than a CCP-style surveillance tool that can be weaponized to oppress the American way of life.
Via Francis at Bull Bitcoin: Bull Bitcoin is the first and only exchange in Costa Rica to allow Bitcoin <-> Colones conversion using the national fiat mobile payment system, allowing instant low-cost access for millions of Costa Ricans and an off-ramp for tourists and businesses
Via Cointelegraph: Binance.US is said to have cut a third of its staff with president and chief Brian Shroder also leaving the crypto exchange amid suits from the SEC and CFTC.
Via the Kobiessi Letter: Banks in the US just saw their biggest weekly deposit outflows since the collapse of SVB. Total bank deposits (on a seasonally-adjusted basis) plunged by $70 billion last week alone. This puts bank deposits at their lowest levels since May. At the same time, usage of the Fed's emergency bank funding facility just hit a record high $108 billion.
Via Riot and Pierre Rochard: In August, Riot provided over 84,000 megawatt hours of energy to the market in Texas to reduce overall demand, lower consumer prices, and stabilize the grid during a heat wave. They received $7 million from ERCOT and $24 million for selling pre-purchased energy to its energy provider, TXU, pursuant to its long-term power purchase agreements.
And to wrap it up, Ted Cruz tweets: I'm bullish on Bitcoin. Texas is the natural home for the digital asset industry since Texans love freedom and so do digital asset bulls. This innovation is already benefiting Texas' economy and grid.
Zoom Out
To wrap up today’s show, I’m going to do something a little different and read an excerpt from a piece I wrote a while ago called “It’s Time to Wake Up”. I think I’ll read the entire thing on an upcoming Bitcoin Out Loud episode, but I want to give you a taste of it today. Here it is:
Perhaps you are searching for the truth, unsuccessfully wading through a fetid swamp of disinformation, arguing with strangers online about inconsequential distractions fed to you by algorithms designed to keep you ignorant of the truth.
The truth is our money is broken.
Broken money paves the path to the collapse of empires. When the money breaks, everything else breaks with it. Ordinary citizens pay the price for the avarice of those who wield true power.
This is not opinion or conjecture, this is historical fact proven time and time again. History doesn’t repeat itself, but it does rhyme.
They will try to hide this truth, to paper over the ever-widening cracks with the creation of more money. They are naught but counterfeiters in expensive suits, stealing the value of your hard work. Thieves of time and energy.
All they can do is lie. All we must do is tell the truth.
Bitcoin is truth, and the truth will set us free.
Nostr is the open pulpit from which we will speak. Nostr is how we make our voices heard.
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And that’s a wrap on this week’s Bitcoin News Roundup.
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Bitcoin is scarce – there will only ever be 21 million–but Bitcoin podcasts are abundant. So thank you for spending your scarce time to listen to another fucking Bitcoin podcast.
Until next time, stay free.