Month: February 2024

Renowned whistleblower Edward Snowden has made a bold prediction on X today, suggesting that a national government will enter the Bitcoin market this year by purchasing BTC.

JUST IN: Edward Snowden predicts “A national government will be revealed this year to have been buying #Bitcoin without having disclosed that fact publicly.” pic.twitter.com/ECauNV3DvA

— Bitcoin Magazine (@BitcoinMagazine) February 28, 2024

“Prediction: A national government will be revealed this year to have been buying Bitcoin—the modern replacement for monetary gold—without having disclosed that fact publicly,” Snowden stated.

Snowden’s prediction comes amid increasing institutional, retail, and nation state interest in Bitcoin, with several major corporations and investment firms allocating significant resources to the asset. While Snowden did not specify which government he believes will make the purchase, the prospect of a second national government acquiring Bitcoin and making it legal tender, like El Salvador did in 2021, would represent another huge milestone for Bitcoin.

Earlier today, El Salvador President Nayib Bukele commented on Bitcoin’s recent price increase, stating “When Bitcoin’s market price was low, they wrote literally thousands of articles about our supposed losses. Now that Bitcoin’s market price is way up, if we were to sell, we would make a profit of over 40% (just from the market purchases), and our main source of BTC is now our citizenship program. We won’t sell, or course; at the end 1 BTC = 1 BTC (this was true when the market price was low and it’s true now); but it’s very telling that the authors of those hit pieces, the “analysts”, the “experts”, the “journalists”, are totally silent now.”

El Salvador’s bet on Bitcoin has appeared to pay off, not just from the perspective of their BTC investments increasing in value, but also from attracting large amounts of tourism from Bitcoiners and investment in the country. Other countries may be taking notice of what Bitcoin has done for El Salvador, and may want the same.

As Snowden’s prediction garners attention, it underscores the growing mainstream recognition of Bitcoin’s role in the global economy and its potential to reshape traditional financial systems.

Coinbase, one of the leading Bitcoin and cryptocurrency exchanges, experienced a significant outage today as Bitcoin’s price soared, leaving many users accounts malfunctioning. The disruption occurred amid a sharp increase in trading activity following Bitcoin’s surge in price, which briefly surpassed $64,000.

JUST IN: Coinbase has reportedly crashed.

— Bitcoin Magazine (@BitcoinMagazine) February 28, 2024

Coinbase CEO Brian Armstrong attributed the outage to a “large surge of traffic” overwhelming the exchange’s infrastructure. The sudden influx of users attempting to buy, sell, or trade Bitcoin overwhelmed Coinbase’s servers, leading to connectivity issues for many customers.

“We are aware that some users may see a zero balance across their Coinbase accounts & may experience errors in buying or selling,” Coinbase stated. “Our team is investigating this & will provide an update shortly. Your assets are safe.”

We are dealing with a LARGE surge of traffic – apologies for any issues you encounter. The team is working to remediate.

— Brian Armstrong 🛡️ (@brian_armstrong) February 28, 2024

Following the outage, Bitcoin sharply declined in price from ~$64,000 to ~$59,500, wiping out most of the gains Bitcoin had made today. Coinbase has experienced similar outages in the past during periods of intense market volatility, prompting criticism from users and industry observers.

Despite the temporary disruption, Bitcoin’s price appears to have remained resilient, as it is now back above $60,700 at the time of writing, continuing its upward trajectory amid growing institutional adoption and investor interest.

As Coinbase works to restore normal operations, the incident serves as a reminder of the challenges associated with managing large-scale Bitcoin exchanges and the importance of robust infrastructure to ensure uninterrupted service for users.

Bitcoin surged past the $61,000 mark today, edging closer to a new all-time high as spot Bitcoin ETF inflows and investor enthusiasm continues to drive up prices. The milestone comes amid increasing interest in the Bitcoin market and growing adoption by institutional investors.

JUST IN: $61,000 #Bitcoin 💥🚀 pic.twitter.com/gMLqQ7inTf

— Bitcoin Magazine (@BitcoinMagazine) February 28, 2024

The latest rally in Bitcoin’s price reflects ongoing bullish sentiment among investors, fueled by factors such as increasing institutional adoption via spot Bitcoin ETFs, inflationary concerns, and growing mainstream acceptance of Bitcoin. This week in particular has been a record breaking week for the Bitcoin ETFs. Yesterday, BlackRock’s ETF took in over $520 million in inflows, which Bloomberg Senior ETF Analyst Eric Balchunas noted it was “the biggest haul for a BTC ETF ever.” BlackRock’s ETF has done around $1.3 billion in trading volume on each of the last two days.

Whoa.. $IBIT took in $520 million all by itself yest, biggest haul for a btc ETF ever and 2nd most of any ETF yesterday, only $IVV took in more cash.. it is now $8b in aum, top 5% among all ETFs. This means a good portion of that massive volume was new buying vs arb/algo. pic.twitter.com/tnq7SaN2di

— Eric Balchunas (@EricBalchunas) February 28, 2024

Yesterday, spot Bitcoin ETFs purchased 10,050 BTC currently worth $615 million. To put into context how much this is, the amount of new Bitcoin created by miners yesterday was only ~900 BTC. The ETFs appear to be buying up all the available BTC on the market, driving up the price. It is important to note that Bitcoin’s fourth halving is approaching, where the mining reward for creating new bitcoin will be cut in half from 6.25 BTC to 3.125 BTC per block.

Wow…

(Data from Feb. 27.; h/t to @HODL15Capital) pic.twitter.com/KvttRhHyAm

— Matt Hougan (@Matt_Hougan) February 28, 2024

Bitcoin has been on a steady upward trend since the beginning of the year, with its price nearly doubling from the start of 2024. At the time of writing, Bitcoin is less than $9,000 away from a new all time high. And with inflows for the Bitcoin ETFs showing no signs of slowing down, and with the halving coming, many market participants are wondering if Bitcoin will hit a new all time high before the halving for the first time ever.

“Government agents are not active in Bitcoin developer and influencer circles.”

As the war for global monetary supremacy wages on, you have to assume that the state is actively operating information warfare. This means that the state is operating and acting in order to preserve and expand it’s own power. For that reason, it is sane and reasonable to assume that state operators are in the trenches of Bitcoin attempting to influence public perception, developer activity, and overall bitcoin adoption. If you think this is not happening then you are naive or you’re incentivized to act against bitcoin in a different way. The sabotage of Bitcoin is not some tin foil hat conspiracy, the sabotage of Bitcoin is actively playing out in real time, but the big question is where the sabotage is taking place and what can you do to identify and act to counter the sabotage?

So let’s zoom into Bitcoin of today, where conversation is happening around the future of Bitcoin in regards to dealing with Ordinals, or spam (if you are part of that camp)1. The rise of Ordinals last year and the pressure they have caused on blockspace demand has surfaced new rivalries within the bitcoin maximalist community as memetic warfare is waged on what bitcoin is and how it should be used. The purpose of this article is not to make a political stand in this fight, but to point out places in Bitcoin that are prone to sabotage and where active sabotage campaigns might be actively waged. Seeing this division in a once divided front is enough to make one pause and consider what external forces are at work.

Bitcoin’s Power Balance

As we consider the infighting happening within Bitcoin, it is important to understand the different parties within bitcoin and how each of the powers balance each other out. In 2019, Nic Carter illustrated Bitcoin’s Power Balance Model. This model shows the key roles in Bitcoin and the relationship between each one. You can see the circular feedback loop between Miners -> Devs -> Economic Nodes. In a vacuum these three roles would perpetually pump each other with nothing to keep them in check. At the heart of the model are the Users who keep Devs and Economic nodes in check.

Bitcoin’s Power Balance Model by Nic Carter source.

The one factor in the power model that touches each of the player in the model is the software of code. The software touches each of the roles in one way or another and this is probably the largest threat vector to all of Bitcoin. The simple activity of running code is how Bitcoin is eating the monetary world, so it is probably worth understanding the development process.

Bitcoin Development Process

Let’s now dig into the Bitcoin development process. As you know, making changes to Bitcoin is a slow and deliberate process. This is a big change from the “move fast and break things” mentality of Silicon Valley. Many argue that this slow methodical process is actually one of Bitcoin’s greatest strengths. In 2011, Gwern published “Bitcoin Is Worse Is Better” where he says “However, in an example of ‘Worse is Better’, the ugly inefficient prototype of Bitcoin successfully created a secure decentralized digital currency, which can wait indefinitely for success, and this was enough to eventually lead to adoption, improvement, and growth into a secure global digital currency.” This ugly inefficient code has gotten us here today, 15 years later, and in that time the slow methodical approach to Bitcoin development has been and will probably continue to be a part of the developer ethos.

The development process has even been formally documented in BIP 2 (Bitcoin Improvement Proposal). Here are the general steps in the BIP activation process:

Drafting the BIP: The first step is to draft a BIP following the template outlined in BIP2. This includes writing a detailed document or white paper that outlines the proposed changes. The BIP should be comprehensive, covering motivation, technical specifications, and rationale.Discussion and Feedback: Once the BIP is drafted, it’s shared with the Bitcoin community for discussion and feedback and usually happens on platforms like the Bitcoin Dev mailing list, GitHub, and even Twitter. The purpose is to solicit feedback, refine the proposal, and begin to build consensus around it.Assigning a BIP Number: If the BIP is deemed to have potential and is unique, it’s assigned a BIP number by a BIP editor. This is a formal acknowledgment that the BIP is under consideration.Formal Review: After the BIP is assigned a number, it enters a formal review phase. During this time, the BIP is scrutinized for technical soundness, feasibility, and compatibility with the Bitcoin protocol. This is where the devs try to break the bip and poke holes in the proposal.Revisions: Based on feedback and review, the BIP may undergo several revisions.Implementation: Once consensus is reached, the BIP is implemented in the Bitcoin Core codebase. This step involves actual coding and rigorous testing to ensure that the changes work as intended without introducing new vulnerabilities.Reaching Consensus: For a BIP to move forward, it needs to reach consensus among the Bitcoin development community. This is often the most challenging part, as Bitcoin’s decentralized nature means that a wide range of stakeholders (developers, miners, users, etc.) need to agree on the change.Deployment: After implementation & consensus, the new version of Bitcoin Core including the BIP is released. Depending on the nature of the BIP, it might require a majority of miners or nodes to upgrade to the new version for the changes to take full effect.Activation: Finally, once the required threshold of network participants has adopted the new version, the changes proposed in the BIP are activated on the Bitcoin network.

Reading through this is incredibly helpful in understanding how change happens to Bitcoin. The problem I see is where are the single point of failures in this process and who the gatekeepers2 are for each step. Conversations happening in channels now are surfacing weak points or non documented parts of the development cycle. For example, Bitcoin Inquisition. This is the in space between steps 2 and 3.

Bitcoin Inquisition

Bitcoin Inquisition is a non-documented part of the Bitcoin development process. It was proposed by and administered by AJ Towns in 2022. Here is a very brief summary of why and what it is.

“I think the weakest link in that [bitcoin development] loop is the first one: what if we did activate soft forks on the default signet prior to the code being merged into core? To that end, I’m proposing a fork of core that I’m calling “bitcoin-inquisition”, with the idea that it branches from stable releases of core and adds support for proposed changes to consensus (CTV, ANYPREVOUT, TLUV, OP_CAT, etc…) and potentially also relay policy (relay changes are often implied by consensus changes, but also potentially things like package relay).”

– AJ Towns on Bitcoin Inquisition

The reality is that the Bitcoin Inquisition is live and well. AJ runs a special separate fork of Bitcoin core and acts as the sole admin for testing BIP’s. This is not documented in BIP-2, but has just been accepted as process by core devs. This is a curious development of how tribal devs can make changes how they see fit, without documentation.

The Bitcoin Sabotage

At this point we’ve run through the roles in Bitcoin, the steps in the development process, and even identified a glaring hole in the development process. Let’s now dig into what is sabotage.

Sabotage. (noun) /ˈsæb.ə.tɑːʒ/

Definition: The deliberate destruction, damage, or obstruction of something, typically for political or military advantage. Sabotage is often carried out covertly and with the intention of hindering operations, activities, or plans of an opponent or competitor.

Verb Form: Sabotage (sabotaging, sabotaged)

Usage in a Sentence: “The bridge collapse was found to be the result of sabotage by enemy agents.”

For purpose of this article, let’s frame sabotage specifically in relation to Bitcoin Sabotage. Bitcoin Sabotage is the deliberate destruction of Bitcoin, or obstruction of Bitcoin development or adoption, for political advantage. This is the frame. This is what we are up against. With that in mind let’s now dig into how sabotage is waged. Conveniently our very own CIA is masters at sabotage and have been waging sabotage tactics in warfare for over a century.

Simple Sabotage Field Manual

In the 1940’s, the CIA shipped a field manual called Simple Sabotage Field Manual. The purpose of this was to distribute to operators a practical manual on how to conduct sabotage operations behind enemy lines. While this manual is 80 years old, it reveals some classical tactics in the art of sabotage.

Click here to download your Spook handbook today!

This “Simple Sabotage” is a unique look at how sly the military is when it comes to unconventional warfare. This manual was developed in the 1940’s and you have to wonder how many more hours and resources have gone into modernizing this same document and other classified operators manuals. For purpose of this article, we will examine the Specific Suggestions for Sabotage sections focused on Organizations and Conferences & Managers and Supervisors.

Organizations and ConferencesInsist on doing everything through “channels.” Never permit short-cuts to be taken in order to expedite decisions.Make “speeches,” Talk as frequently as possible and at great length., Illustrate your points by long anecdotes and accounts of personal experiences. Never hesitate to make a few appropriate patriotic” comments.When possible, refer all matters to committees, for “further study and consideration.” Attempt to make the committees as large as possible – never less than five.Bring up irrelevant issues as frequently as possible.Haggle over precise wordings of communications, minutes, resolutions.Refer back to matters decided upon at the last meeting and attempt to re-open the question of the advisability of that decision.Advocate “caution.” Be unreasonable” and urge your fellow-conferees to be “reasonable” and avoid haste which might result in embarrassments or difficulties later on.Be worried about the propriety of any decision – raise the question of whether such action as is contemplated Hes within the jurisdiction of the group 01’whether it might conflict with the policy of some higher echelon.

When I read Section A. Organizations and Conferences, I can’t help but think that Bitcoin development is being sabotaged, but I am a naive outsider. I am also a noticer. If I was going to sabotage Bitcoin, this field manual could easily be deployed from within developer circles. If you were a state operator with developing skills, it is reasonable to believe you could begin participating in code review process and make in roads and start having authority in matters.

Let’s outline sabotage tactics state operators could be executing:

Miners – in the great blocksize wars, some large mining pools signaled with the Big Blockers. This was an attack on Bitcoin, but it demonstrates a specific action that Mining Pool operators could carry out in order to sabotage Bitcoin. While this DID NOT work in breaking Bitcoin, we learned that Users are at the heart of Bitcoin. A bigger problem could be if large pool operators were acting in coordination with other roles.Devs – this is perhaps the biggest vector for sabotage attack. As we see more value soaked up by Bitcoin, it will become a bigger target for state actors. That means we will have state operators submitting pull requests and participating in the development process. Based on the Simple Sabotage Field Manual, operators could easily carry out many of the tactics outlined above. We are already seeing very divisive positions from developers on how bitcoin should be, so you must wonder who is the operator.Users – since users give feedback to developers, you would assume that giving bad feedback could lead to developers building something that is not in bitcoins best interest. Or users could socially attack developers into doing certain things. Right now we are seeing meme warfare being waged within the maximalist community, and it can’t all be organic discourse. Users infighting can lead to maldevelopment. Also, what happens if a group of bad actors in the users and developers camps are aligned. Or what if users coordinate to influence certain developers?Economic Nodes – they choose what transactions make it to miners via the code they run. Users tell them what code to run because users spend money with them. Economic nodes could sabotage by supporting old code, or malicious sabotaged code.

In wrapping up this piece, the complex dynamics between miners, devs, users, and economic nodes within Bitcoin creates a ripe battle ground for meme warfare and Bitcoin Sabotage. The Bitcoin development process is without flaws and as outlined in the CIA’s Simple Sabotage Field Manual, there are many simple to deploy tactics that could be used to sabotage Bitcoin. This should serve as a sobering reality that Bitcoin is under attack and you should act accordingly.

The responsibility is on you, humble frog, to keep your head on a swivel. You must stay aware and call out bullshit. Whether it is combating gaslighting, carrying out ethical trolling, or reviewing code, all these actions count and help preserve our only realistic shot at a more free future. The survival and flourishing of Bitcoin depend not just on NGU and its technological robustness but equally on the collective vigilance the users. As we navigate these uncertain times, let us be guided commitment to cypherpunk ethos, critical thinking, and unwavering support for the core principles that underpin Bitcoin which is freedom. In doing this, we might have a chance at winning the game of Bitcoin Sabotage and defeating our enemy, the state.

Today, Jack Mallers, the CEO of Strike, has announced the expansion of Strike’s suite of Bitcoin services into several African markets.

I just published Announcing Strike Africa

Today, we are launching Strike Africa, expanding our full suite of #Bitcoin services into Gabon, Ivory Coast, Malawi, Nigeria, South Africa, Uganda, and Zambia with more markets to come in the future.

LFG! 🌍🫡https://t.co/icN0DZ4bGS pic.twitter.com/khxKecltAY

— Jack Mallers (@jackmallers) February 27, 2024

Strike Africa will now be available in Gabon, Ivory Coast, Malawi, Nigeria, South Africa, Uganda, and Zambia, with plans for further expansion in the future. With this expansion, Strike aims to address the unique financial challenges faced by many African countries, including high inflation rates, devaluing currencies, and expensive remittance services.

“Strike Africa is just the beginning,” said Mallers. “Our commitment to Bitcoin has never been stronger and we will continue to launch new regions all throughout 2024.”

Through Strike Africa, users will have access to a comprehensive range of Bitcoin and Lightning services, including local fiat on and off-ramps, the ability to buy and sell Bitcoin and USDT, cross-border payments, and more. With these offerings, Strike aims to empower individuals and businesses with fast, secure, and cost-effective financial solutions.

Jack Mallers emphasized the importance of Bitcoin as a digital reserve asset and hedge against inflation in African countries experiencing economic turmoil. He highlighted the significant impact that Strike’s services can have in providing individuals with the tools to protect their property rights and preserve wealth.

Furthermore, Strike Africa will enable businesses to open accounts and access a range of services tailored to their needs. The availability of Strike’s API hopes to empower developers to build innovative Bitcoin and payment tools for customers in Africa and beyond.

Additionally, Strike Private will provide eligible clients with personalized services, including custom pricing, Bitcoin education, market analysis, and more. This tailored approach is for supporting clients on their Bitcoin journey and provide them with expert guidance and assistance.