Month: January 2024
Nasdaq Files Amendment for BlackRock’s Spot Bitcoin ETF, Nears Approval Deadline
The Nasdaq has submitted an amendment for BlackRock and Valkyrie’s Spot Bitcoin Exchange-Traded Fund (ETF) 19b-4 filings, inching closer to the looming approval deadline this coming Wednesday. The amendment filing comes was the next step forward in the regulatory process, indicating progress in the bid to secure approval from the U.S. Securities and Exchange Commission (SEC).
The Nasdaq’s latest amendment filing for the BlackRock and Valkyrie Spot Bitcoin ETF signals an intensified effort to address regulatory queries and concerns within the specified timeframe. As the approval deadline approaches, the amendment filing underscores Nasdaq’s commitment to refining and finalizing the proposal, ensuring alignment with SEC standards.
The BlackRock Spot Bitcoin ETF has garnered significant attention within the Bitcoin and financial sectors, representing a potential breakthrough in offering a direct and regulated investment avenue for BTC to institutional and retail investors.
The recent filing by Nasdaq amplifies anticipation within the Bitcoin community, with stakeholders eagerly awaiting updates on the ETF’s progress through the SEC’s evaluation process. The amendment submission stands as a pivotal move, bringing the BlackRock Spot Bitcoin ETF one step closer to regulatory approval, potentially marking a monumental moment in the integration of Bitcoin into traditional financial markets.
Then They Fight You
All great revolutions encounter resistance as social change moves its way through the people. This can happen gradually then suddenly, but resistance will be there. People do not easily change their world views. We (Americans) are about to experience the next chapter in the great monetary war, by way of a Bitcoin ETF approval. This approval will change the course of Bitcoin adoption for better or worse, and is a good reason to be warned of what is to come.
The Bitcoin ETF approval will send a huge message to money managers around the world, that is that “We, the US Government, deem bitcoin a safe asset for you to invest in”. Now If you’re like me, you could care less what the SEC says or does, this is freedom money. But for millions of people across America, this is a big green flag that it is safe to have BTC exposure.
If you have spent any time on Twitter or have followed financial markets news then you are probably sick and tired of hearing about Bitcoin ETF application form updates, pushed deadlines, insider whispers, and all the nonsense that goes along with this big moment. For good reason this is getting a massive amount of coverage, and for that reason alone you should take a pause to contemplate what is about to happen. The tin foil hat in me is buzzing. Whenever media coverage is in lockstep, this usually means something is being coordinated.
“First they ignore you, then they laugh at you, then they fight you, then you win.”
– Mahatma Gandhi
So what exactly is being coordinated you ask? Good question, I don’t have the answers, only speculation. I expect the ETF approval to send shockwaves through markets in one way or another resulting in both intended and unintended consequences. The part that worries me is that we are well in the crosshairs of the US Government as a threat to the regime. In the words of Gandhi, we are firmly in the “then they fight you” stage of the revolution, the only thing about this fight is that the US Government is likely fighting unconventionally. There is 100% guarantee that they are executing psychological operations on social media and trained talking heads have been running their lines for months. Both of these activities will increase which will set the stage for US Government intervention and a possible confiscation scenario. There are so many things happening right now with the ETF, the halving, the election, the state of the overall macro economy, the war in the East… so how will this play out?
VAGUE TIMELINE
ETF ApprovedNY Banking Cartel start heavy accumulationWaves of new experts enter the scene, spewing fud, they are here to “fix’ bitcoin.US Government raises more flags about the threat of Bitcoin to US sovereigntyNY Banking Cartel accumulation increases as interest soars (Streisand Effect)US Government issues 6102 BitcoinUS Government launches peg of a CBDC aka Stablecoin variant pegged to newly confiscated BTCCriminalization of ethical Bitcoin (KYC-free)Fork war of statecoin and BitcoinUS Government learns the hard way about how Bitcoin the network defends itself
This could all be a delusional fantasy from a conspiracy guy, but it’s worth thinking through to at least consider what we are up against. In the best case scenario, the US Government does nothing to intervene with the markets and Bitcoin will take us to the stars. In another plausible scenario, we could see Mark Goodwin’s Bitcoin dollar thesis come into reality as the US Government discovers that bitcoin is the most pristine asset and instrument to back the infinite US Treasury market. Based on the track record of the US Government, I expect them to intervene in a very negative way, and a lot sooner than anyone could imagine because bitcoin’s value will shoot up like a rocket. “Gradually then suddenly” will make a lot more sense as we enter the “suddenly” stage of the fight.
Despite my doomer outlook on what I expect from the US Government, I am very optimistic on the individual. I have seen more building in the Bitcoin space over the past halving epoch than I could imagine. This war will not be easy and I know for certain that we will enter the “then you win” stage soon enough.
Breez Announces FiatLink: A Lightning To Fiat API Standard
Today Breez announces FiatLink, an open API standard for the integration of on and off ramps directly inside of Lightning wallets and applications. Currently there are many issues with seamless integration of Bitcoin to fiat exchanges inside of applications, chief among them being lack of Lightning support by many brokerages. In addition to that, each brokerage service in the market builds proprietary APIs for integration with their services, increasing the overhead of integration of multiple options by application and wallet developers. Breez SDK’s support for the FiatLink API can facilitate a single solution to both problems.
FiatLink, as an open interface standard, would also allow seamless integration of multiple brokerage options inside a Lightning application or wallet. Rather than have to independently integrate each option’s individual API, any brokerage service that has integrated FiatLink would be usable within an application with no extra development overhead. This can help foster an interoperable ecosystem of multiple brokers and multiple applications all seeking the optimal price point in order matching between users needing to acquire fiat or Bitcoin. Swiss Bitcoin operations, such as Relai and Pocket Bitcoin, were consulted in tailoring the API design to meet the needs of existing brokerage services.
Multiple payment options (SEPA, credit cards, and bank transfers) are supported. API providers allow users to request price and cost estimates, final quotes, and then finally confirm a specific order quote and finalize it by inputting their payment information. In Switzerland, users are able to make transactions up to 1000 CHF (Swiss Franc) in value per transaction between Swiss brokerages and regulated non-Swiss banks without requiring additional KYC beyond the payment method.
Withdrawals from a brokerage service to the users wallet is processed through LNURL-Withdraw. This is a function in the LNURL protocol that allows a static QR code to be saved and scanned by the user at their leisure, negotiating in the background over HTTP providing an actual Lighting invoice to receive their Bitcoin. It allows an optional on-chain address to be included to facilitate withdrawal on-chain if it fails to process over Lightning for any reason.
The API does support Address Ownership Proof Protocol (AOPP) required by some jurisdictions under the Travel Rule, but in the case of Lightning wallet and applications can generate a random Lightning node pubkey to use for a single withdrawal.
FiatLink, if widely adopted, could offer a competitive and streamlined solution to integrating fiat to Bitcoin transfers for wallet and application developers to integrate.
Former SEC Chair: Spot Bitcoin ETF Approval Is Inevitable, “There’s Nothing Left to Decide”
A bold statement has emerged from a former U.S. Securities and Exchange Commission (SEC) Chair Jay Clayton, suggesting that the approval of a Spot Bitcoin Exchange-Traded Fund (ETF) is inevitable, stating that “there’s nothing left to decide,” in an interview with CNBC today.
The former SEC Chair’s confident proclamation hints at an imminent breakthrough in the regulatory landscape for Bitcoin-related financial products. This assertion aligns with the growing sentiment within the Bitcoin community, eagerly anticipating the approval of a Spot Bitcoin ETF.
“I think approval is inevitable, there’s nothing left to decide,” Clayton said. “Is the Bitcoin underlying trading market something that is robust enough, efficacious enough, where you can rely on it? It is much better today than it was five years ago.”
These statements imply that key concerns or considerations previously hindering the approval process have been sufficiently addressed, paving the way for an inevitable green light from the SEC.
This bold declaration underscores the evolving sentiment within regulatory circles, reflecting a growing acceptance and understanding of Bitcoin. The potential approval of a spot Bitcoin ETF is anticipated to mark a watershed moment in the financial sphere, enabling broader access for traditional investors seeking exposure to BTC through regulated investment vehicles.
“The last thing, and I think this is missed, is the technology to actually provide the product,” the former SEC Chair continued. “The custodying, the create, the redeem. This is a big step, not just for Bitcoin but for finance generally.”
The SEC is expected to approve spot Bitcoin ETFs by the end of day Wednesday. Bloomberg reported yesterday that if approved, the ETFs could be listed and starting to trade as soon as the next business day.
Spot Bitcoin ETFs Could Trade Live on Thursday or Friday: CNBC
Spot Bitcoin Exchange-Traded Funds (ETFs) could potentially commence live trading as early as Thursday or Friday, with approval happening this Wednesday, sources close to the matter told CNBC.
This news comes amid intense anticipation for the launch of Spot Bitcoin ETFs, a significant milestone anticipated to provide mainstream investors with a regulated avenue to gain direct exposure to Bitcoin.
“Two sources close to the process now telling me it’s looking like Wednesday, which is also the deadline for Cathie Wood’s ARK and 21Shares bid,” said CNBC anchor Kate Rooney. “Then I’m told trading would happen Thursday or Friday, but it has been a moving target here on dates.”
The imminent possibility of live trading for these ETFs signals a significant leap forward in the integration of Bitcoin into traditional financial markets. CNBC’s report adds to the growing speculation surrounding the imminent introduction of these ETFs, which have been eagerly awaited by both institutional and retail investors.
Should the live trading commence as projected, it would mark a historic moment for the Bitcoin industry, reflecting a seismic shift in the perception and adoption of BTC among traditional investors.
While the specific details and exact launch time remain speculative, the potential realization of Spot Bitcoin ETFs trading live signifies a culmination of rigorous regulatory evaluations and market readiness, bringing Bitcoin one step closer to wider acceptance and legitimacy within the financial landscape.
Mercury Layer: A Massive Improvement On Statechains
CommerceBlock is releasing Mercury Layer today, an improved version of their variation of a statechain. You can read a longer form explanation of how their Mercury statechains work here. The upgrade to Mercury Layer represents a massive improvement against the initial statechain implementation, however unlike the initial Mercury Wallet release, this is not packaged as a fully consumer ready wallet. It is being released as a library and CLI tool other wallets can integrate. Here’s a quick summary of how they work:
Statechains are essentially analogous to payment channels in many ways, i.e. they are a collaboratively shared UTXO with a pre-signed transaction as a mechanism of last resort for people to enforce their ownership. The major difference between a Lightning channel and a statechain is the parties involved in collaboratively sharing the UTXO, and how ownership of an enforceable claim against it is transferred to other parties.
Unlike a Lightning channel, which is created and shared between two static participants, a statechain is opened with a facilitator/operator, and can be freely transferred in its entirety between any two participants who are willing to trust the operator to be honest, completely off-chain. Someone wishing to load a statechain collaborates with the operator to create a single public key that the creator and operator both hold a share of the corresponding private key, with neither having a complete copy of the key. From here they pre-sign a transaction allowing the creator to claim their coins back after a timelock unilaterally.
To transfer a statechain the current owner collaborates with the receiver and operator to sign a cryptographic proof with their keyshare that they are transferring the coin, and then the receiver and operator generate a new pair of keyshares that add up to the same private key and sign a timelocked transaction for the new owner with a shorter timelock than the original (to ensure they can use theirs sooner than past owners). This process is repeated for every transfer until the timelock cannot be shortened anymore, at which point the statechain must be closed out on-chain.
Owners transfer the entire historical chain of past states with each transfer so that users can verify timelocks have been properly decremented and the operator timestamps them using Mainstay, a variant of Opentimestamps where each piece of data has its own unique “slot” in the merkle tree to guarantee that only a single version of the data is timestamped. This let’s everyone audit the transfer history of a statechain.
In The Land Of The Blind
The big change Mercury Layer is bringing to the original version of statechains is blinding. The operator of the statechain service will no longer be able to learn anything about what is being transferred: i.e. the TXIDs involved, the public keys involved, even the signatures that it collaborates with users to create for the pre-signed transactions necessary to claim back your funds unilaterally.
Introducing a blinded variant of Schnorr MuSig2, Mercury can facilitate the process of backout transaction signing without learning any of the details of what they are signing. This necessitates some design changes in order to account for the fact the operator can no longer see and publish the entirety of a statechain’s transfer history. They are not even capable of validating the transaction they are signing at all.
In the prior iteration, uniqueness of a current statechain owner/transaction set was attested to by the operator through the publishing of the entire transfer history of the statechain with Mainstay. That is not possible here, as in the blinded version the operator learns no details at all about these transactions. This necessitates a new way of the operator attesting to current ownership of the statechain. All of this data is pushed entirely to a client side validation model. The operator simply keeps track of the number of times it has signed something for a single statechain, and tells a user that number when it is requested. The user then receives the transactions of past statechain state’s from the user sending to them, and verifies entirely client side that the number of transactions match what the operator claimed, and then fully verifies the signatures are all valid and the timelocks decremented by the appropriate amount each time. In lieu of publishing the full statechain transactions and transfer order to Mainstay, because it is designed to be unaware of all of that information, it publishes its share of the public key (not the full aggregate public key) for the current user for each statechain user. This allows any user receiving a statechain to verify the transfer history and current state is legitimate against the transaction data sent by the sender.
The operator server keeps track of unique statechains to count past signatures by assigning each statechain a random identifier at creation, stored with its denomination and its private key and public key shares (not the entire aggregate public key). The new coordination scheme for sharding and re-sharding the key is done in a way where the server passes its share of the key to the user, and the data necessary for a resharding is blinded so the server is incapable of ever learning the user’s full public key share, allowing it to create the full aggregate public key and identify the coin on-chain.
The design doesn’t even allow for the operator to know when it has signed a cooperative closure with the current owner rather than a pre-signed transaction for a new off-chain owner; it doesn’t see any details to distinguish the two cases from each other. This is safe however for users who could be attacked by someone trying to “double spend” a statechain off-chain providing a fake transaction that couldn’t be settled. Firstly, that user would see on-chain that the UTXO backing that statechain was spent. Secondly the transaction history, because the operator must sign all state updates, would only have a clear cooperative closure in the chain of past transactions. Both of these things would allow the user to refuse the transaction knowing it was not legitimate.
Statechains also allow Lightning channels to be “put on top” of the statechain by having the statechain pay out to a multisig address between two people, and the two of them negotiating a conventional set of Lightning commitment transactions on top of it. It would need to close the statechain on-chain before closing the Lightning channel so would need to use longer timelock lengths for Lightning payments, but otherwise would function perfectly normally.
Overall with the massive privacy improvements of the new iteration of statechains, and the composability with Lightning, this opens many doors for the economic viability and flexibility of second layer transactional mechanisms on Bitcoin. Especially in light of the recent radical changes in mempool dynamics and the resulting fee pressure.
It offers the same type of liquidity benefits of Ark, i.e. being able to be freely transferable without needing receiving liquidity, but unlike Ark is live and functional today. It is undeniably a different trust model than something like Lightning alone, but for the massive gains in flexibility and scalability, it is definitely a possibility to explore.
Blue Check Manifesto
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Freedom is not granted; it is taken and defended. Our freedom is being eroded on nearly every front yet few push back, blinded by greed and lust. Most with influence in our society shepherd us toward darkness for more power and more money. The incentives are designed by massive, corrupt institutions and billion-dollar companies focused on squeezing out as much money as possible from billions of digital slaves.
Tracked. Manipulated. Censored. Sold. This is our reality.
Can you see it? Can you see where this leads? “Everything I do is tracked. It is already a lost cause” is a common narrative, disappointing and frustrating. Millions see the problems, but most have given up hope.
How did we end up here? Humans have relied on trust since the dawn of time. We built families. We built communities. We built businesses. We built new technologies. We built governments. Trust is how humans have improved our standing in the world. Trust will always be essential, but at scale it remains vulnerable. Systems that require trust are easily corrupted. In the modern age, this vulnerability is amplified due to the scale of these systems, controlled by a powerful few whose incentives are at odds with the millions who trust and rely on them blindly.
I was once a Twitter power user — my only social media for the past decade. It was not without fault, but it was an incredibly powerful tool. It held the promise of billions being able to communicate freely and build off of each other’s thoughts and ideas. Then censorship escalated. Then identity checks began. Refusing to comply effectively shadowbanned you. In retrospect, it was inevitable. Trust does not scale. The systems we rely on are too easily corrupted.
The massive centralized institutions that govern so much of our lives are broken. What has worked in the past is not sufficient for the future. We can do better. We must do better. Nobody is coming to save us. We have to save ourselves.
We have the tools — the tools that empower individuals and minimize trust. Protocols such as Bitcoin and Nostr that are not controlled by any entity enable us to communicate and interact freely and without permission. Freedom tech is our hope, but real change will require millions to stand up and take responsibility for our future. Say no to TikTok, Google, WeChat, PayPal, Facebook, Twitter/X, and the countless digital slavery companies that join their ranks. Their incentive is to control you and they are winning. Build, support, and utilize freedom tech tools instead.
If not us, then who? If not now, then when?
We will not live in a pod.
We will not eat the bugs.
We will not get the blue check.
We will not use CBDCs.
Use Freedom Tech.
Live Free or Die.
– – ODELL (https://primal.net/odell)
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Brian’s Big ETF Bags
What is the dollar amount where the Banking Cartel starts asking tough questions like “Who’s holding the bag?” and ”Who’s holding our coins?” As we are near the approval of the ETF, I can’t help but wonder to myself “Who’s carrying the bags?” And while everyone on Twitter seems to be ETF experts and are breaking news on punctuation changes to applications, Coinbase has quietly positioned themselves in perhaps one of the most important roles in the future of paper Bitcoin. Coinbase is now listed as custodian on 9 of the 12 Bitcoin Spot ETF applications. Read that again.
Bitcoin Spot ETF Custodian List
Source: Bloomberg Intelligence, SEC Filing
With their role in these ETFs all but across guaranteed for Coinbase, it makes you wonder what is happening behind the scenes. Less than 10 days ago, Coinbase made a remarkable change in leadership by nuking their custody CEO, Aaron Schnarch, and brought in 30 year Wall Street veteran Rick Schonberg1 to lead the business. So let me get this straight, two weeks before the ETF approval, Coinbase has 75% of the custodian roles in all US Spot Bitcoin ETF business locked down, and they nuke their Custody boss and replace him with the most on-brand guy possible. Call me crazy but this is how the NY Banking Cartel operates. You think outsiders are welcome? You think the NY Banking cartel will simply bend the knee to bay area grays2?
Besides the idea of some shady dealings with the NY Banking Cartel, the position Coinbase is in is worth some scrutiny, especially if you care3 about custodial risk. Custodial risk is associated with entrusting a third party, often known as a custodian, with the safekeeping and management of financial assets.
Custodial Risk. the risk associated with entrusting a third party, often known as a custodian, with the safekeeping and management of financial assets.
This risk can take various forms:
Operational Risk: The risk of loss due to the custodian’s operational failures, such as administrative errors, technology failures, process breakdowns, and losing the keys.Fraud Risk: The risk that the custodian could engage in fraudulent activities, such as misappropriation of assets or manipulation of records.Credit Risk: The risk that the custodian might become insolvent or unable to fulfill its obligations, potentially leading to the loss of assets.Legal and Regulatory Risk: The risk of loss due to non-compliance with laws and regulations, which could result in fines, penalties, or legal actions.Counterparty Risk: In situations where the custodian enters into transactions with other parties on behalf of the client, there is a risk that the counterparty may default or fail to honor its obligations.Security Risk: The risk of theft or loss of assets due to poor security measures, both physical and digital.
As I look through this list I am putting a mental checkmark next to every line item as legitimate custodial risk since 75% of the Bitcoin ETFs are going through Coinbase’s hands. Now look, I am not writing this to be a concern troll. I am just saying that the change in leadership is very weird, and the concentration of funds into a single custodian is a major red flag. If anything this situation leads to a more probable 6102 Bitcoin scenario.
The developments surrounding Coinbase’s role as custodian for nine out of twelve Bitcoin Spot ETF applications raise significant concerns regarding custodial risk. With over 75% of the market share locked up under Coinbase’s control, investors should carefully consider the potential dangers associated with relying on a single entity for the storage and management of their paper bitcoins’ reserves. The convenience offered by centralized custody services may seem appealing, but the risks can’t be ignored. It’s crucial for individuals to do their own research and understand the implications of custodial arrangements before investing in any Bitcoin ETF. By doing so, they can make informed decisions and minimize exposure to threats posed by 6102 bitcoin, regulatory seizures, cyber attacks, and other unforeseen events. Ultimately, the ETF is going to be approved, things are going to get very weird, the NY Banking Cartel will sink their teeth into Bitcoin, and then there’s Brian’s Big Bags.
FOOTNOTES
This man’s resume is so on-brand for the role, just have a look if you like to schizo on these things. The point I am making is that they brought in a stud to do this job. ↩︎The term “grays” was coined (to my knowledge) by Balaji last year when he went on the epic 3 hour podcast rip with Marty, but the idea of a gray is that the country is divided into Blues and Reds as political tribes, but there is a third tribe which he calls the grays who have no allegiance to either party. Grays are capitalist builders who just want to build. ↩︎I don’t really care about this product as I am not a customer, I am just noticing the elephant in the room. Not your keys not your coins. ↩︎
Jevons Paradox: What It Actually Means For Bitcoin
From an economic standpoint, Jevon’s Paradox is arguably the foundation of the scaling road we have started walking down for Bitcoin. Pushing things off-chain is attempting to make the use of the scarce resource that blockspace is much more efficient to accommodate a materially larger user base than the blockchain can facilitate on its own. Jevon’s Paradox states that in the presence of elastic demand for something, when the efficiency of using that thing increases, i.e. the cost per use decreases, the aggregate demand for that thing among participants will increase.
The typical example given is the fuel efficiency of cars. If cars suddenly become twice as efficient at using gasoline, people will travel more as the cost of travel has been cut in half. With people traveling more often because the cost to the individual has lowered, the net increase in demand for fuel can exceed the original aggregate demand for fuel before the gain in efficiency was realized. This is the point where the paradox occurs, aggregate demand surpassing what it was before a realized efficiency in the use of that thing.
This is the entire economic thinking behind why second layers are a viable solution. One of the huge contentions from big blockers during the Block Size Wars was that going off-chain will essentially steal money from miners and undermine the game theoretical stability of miners surviving purely off of transaction fees in the distant future. The factor they completely ignored during those debates is Jevon’s Paradox, and many of them still to this day completely ignore this dynamic.
The Contentions
The counter argument, at least the valid one, is that demand rebounding after efficiency improvements does not always exceed the aggregate demand seen before that efficiency gain. It still rebounds in many cases almost to the point it was at, but does not surpass it. This comes down to the inputs that ultimately set a cost on producing something. In the case of the fuel example, the reality is that the cost of fuel is not the only factor in people’s ability to travel with their own car. The cost of producing that car, i.e. the labor, materials, energy for production, etc. and the ultimate cost of the car itself factor into this as well. These factors generally dampen the rebound in demand, preventing it from exceeding the levels it was at before efficiency increases.
Here’s the thing about Bitcoin though: the cost to produce a block is the only factor of “input costs” in producing blockspace. The real kicker is that no matter what happens to that input cost, the available amount of blockspace stays exactly the same on average. This is the entire novelty and value of the difficulty adjustment in Bitcoin, no matter what the price and net hashrate do, the network circles around this Schelling point of the same average amount of blockspace available. The only way that will change is a consensus change to alter the blocksize, or block interval, or other such core variables that will have an impact on the amount of space available.
Therefore the only real factor to consider when applying Jevon’s Paradox to Bitcoin, is how efficiently can users make use of that existing blockspace. One person owning a UTXO on their own and directly transacting on-chain can be seen as a baseline. Lightning, allowing two people to share a single UTXO and conduct numerous transactions off-chain before settling them on-chain, is the first major efficiency gain. After Lightning, something like Ark or a channel factory would be the next level of efficiency gain. In all of these cases, there are no extraneous factors to consider. If you have Bitcoin, and the ability to use that Bitcoin gets cheaper and cheaper, you are more likely to put that Bitcoin to actual use. There are no extra barriers to Bitcoin other than having the Bitcoin. You don’t HAVE to buy a super expensive hardware device to use it, it might be best security practices to do so if you have a large sum of money, but it is not necessary.
Ordinals and BRC-20 tokens kind of prove this point in my opinion. Shoving jpegs into the blockchain, which are pretty big pieces of data relative to the blocksize limit, is a highly inefficient use of blockspace. BRC-20 tokens, which are simply tiny JSON blobs, are relatively efficient relative to jpegs. Which one of these things really drove the demand for blockspace driving up fees lately? The BRC-20 tokens, not the jpegs.
It’s Going To Happen Anyway
The cold hard reality in my opinion is that blockspace use will get more efficient, and we will see Jevon’s Paradox play out regarding the market for that blockspace, regardless of anything we do. If using blockspace directly becomes prohibitively expensive for users transacting, they will find ways to abstract that away. They don’t need covenants, or forks in general, or anything we are building on layer twos to do so.
Custodians.
All they need is custodians. Using blockspace more efficiently comes down to a single thing: people sharing their UTXOs with each other. The trust model of how they do that, whether they can reclaim their money unilaterally without permission, who they have to interact with to withdraw their money, all of these things are completely and utterly irrelevant to Jevon’s paradox playing out.
If blockspace gets too expensive for people, they will stop using it. Demand will drop off, if not in aggregate, then for a class of users. Unless they want to just entirely stop using Bitcoin, they will seek out more efficient ways to use Bitcoin (which inherently requires using blockspace, no matter how abstracted that use is). The only truly scalable way to do this in the long term right now is through custodians.
That means without actually addressing the problem of “what does Bitcoin need to scale in a self custodial way” we are essentially implicitly admitting that the economic incentives of how this system works inherently forces people into custodial platforms and mechanisms for making use of their Bitcoin. To deny that is to deny the realities of what makes Bitcoin work: economics and incentives.
It has been argued quite a lot recently that “spam filtering” is simply another way for Jevon’s Paradox to occur. It is not, and it has no relationship to Jevon’s Paradox at all. Stopping a particular use case from competing with another is not increasing the efficiency of the other use case, it is simply trying to distort and manipulate the market of them both competing for the same resource. That argument fails to understand what Jevon’s Paradox actually is. It doesn’t care about one use case versus another, or which uses are “legitimate”; it is completely agnostic to specific use cases of a resource. It simply speaks to any use case of a resource becoming more efficient, and in the absence of unaccounted for input costs, what the results of that efficiency gain will be on aggregate demand for the use of that resource by that specific use case.
If we are right, this will play its course no matter what we do. The only influence we have on any of this is what the trust model of any efficiency gains in blockspace use are, we have no control over whether those efficiency gains will happen.
Spot Bitcoin ETFs Are A “Done Deal”, Trading To Start Thursday: FOX Business
Charles Gasparino, FOX Business Senior Correspondent, has reported that the long-anticipated Spot Bitcoin Exchange-Traded Funds (ETFs) are indeed a “done deal,” with trading slated to commence this Thursday.
This confirmation from FOX Business cements earlier speculations, affirming that the final green light for Spot Bitcoin ETFs has been granted, signaling an imminent leap into the regulated investment sphere for Bitcoin.
The potential commencement of trading on Thursday would mark a watershed moment for the Bitcoin industry, providing a gateway for both institutional and retail investors to access BTC exposure through traditional financial instruments.
It is important to note that the SEC has not yet officially approved any spot Bitcoin ETFs at the time of writing. But with the approval or denial decision due tomorrow, it is expected by industry experts that the ETFs will be approved.
As the countdown begins towards tomorrows expected approval and Thursdays potential launch, anticipation builds among market participants, eager to witness this historic milestone that is poised to reshape the dynamics of Bitcoin investments and potentially pave the way for further institutional adoption of Bitcoin.