Month: August 2024

In a strategic move to counter Donald Trump’s growing appeal within the cryptocurrency industry, Democrats have launched the “Crypto for Harris” campaign, FOX Business’ Eleanor Terrett reported today. This initiative, led by a pro-Kamala Harris advocacy group, aims to rally support from crypto voters for Vice President Harris as she vies for the presidency.

JUST IN: 🇺🇸 Democrats launch “Crypto for Harris” campaign to counter Donald Trump — FOX Business 👀 pic.twitter.com/2K9O5bP0Xg

— Bitcoin Magazine (@BitcoinMagazine) August 7, 2024

Next week, “Crypto for Harris” will host a virtual town hall featuring prominent crypto advocates such as Mark Cuban and Anthony Scaramucci, alongside several Democratic House members. The event aims to discuss support strategies for the Harris campaign and fundraising efforts. FOX Business stated that members of Kamala Harris’ campaign are also expected to be at the upcoming meeting.

As the presidential race tightens between Harris and Trump, Trump has gained significant traction within the Bitcoin and crypto sector. He recently headlined the Bitcoin 2024 Conference in Nashville, raising tens of millions of dollars and promising the creation of a strategic Bitcoin reserve if elected president in November. Trump has also recently floated the idea about using this Bitcoin to pay off the country’s $35 trillion in debt.

There is an estimated 50 million Bitcoin and cryptocurrency holders and users in the United States, and now both the Democrats and the Republicans are going to be trying their best to appeal for their vote. Earlier this year in May, Donald Trump said “I will ensure that the future of crypto and Bitcoin will be made in the USA…I will support the right to self custody to the nations 50 million crypto holders.”

“We’re not giving this issue to Trump,” Democrat U.S. Congressman Wiley Nickel told FOX Business. “We want to encourage innovation and protect consumers, but allowing crypto to become a political football is only going to set the U.S. further behind.”

FOX Business has learned that Harris, countering Trump’s influence, has added two crypto advisers to her campaign: David Plouffe, who served on the advisory board Binance, and Gene Sperling, a former Ripple board member.

Kamala Harris’ campaign staff did not return FOX Business’ calls for comment at the time of publication.

Following a year of incubation, “Community Superapp” Fedi officially launched yesterday and has announced plans to open source its freedom technology stack.

Introduced back in 2022, Fedi is a financial platform looking to empower individuals with financial access and resources by leveraging the power of local communities.

Engineered with a privacy-first mindset, the release of Fedi is a major step forward in promoting grassroots economic development and individual freedom. The Fedimint consensus protocol allows community leaders to organize common resources, support its participants’ sovereignty and stimulate social opportunities.

“A single piece of software that can replace multiple legacy apps with safe and secure alternatives powered not by corporations, but communities.”

Yesterday’s release focused on the individuals behind this effort and their unique vision for the project. In a presentation available on Fedi’s website, the company highlights how different partners including humanitarian groups are exploring ways to make communities more sustainable using the application.

“Those of us who have the care, vision and determination to make it happen,” says the company’s co-founder Obi Nwosu.

In the image of its communities

At the core of Fedi is the idea that individuals should have better agency in choosing who to trust with their money and data. In Madeira, Portugal, a non-profit organization is connecting entrepreneurs, merchants and Bitcoin enthusiasts using the Fedi application.

Free Madeira operates a federation that offers different services supporting the local Bitcoin economy. Everything is centered around the community and its members. While applications such as custody, payments, and messaging have historically been the purview of corporations and opaque service providers, Fedi allows neighbors, groups and local associations to use its technology at the service of others.

Unlike other Bitcoin protocols attempting to eliminate trust, the project seeks to enable the potential of real-world relationships and connections between its users.

“We recognize that the most advanced technology there is is community. Communities on their own are creative, innovative, and resourceful. All they need is a tool that would help raise them up and raise their potential,” shared Mary Imasuen, Global Marketing Manager, during the project’s virtual event.

Operators, called guardians, can customize their community’s experience, allowing each federation to tailor the platform to its participant’s needs. For Chef Lopez in Togo, the application is used to pioneer new microlending initiatives that improve access to agricultural resources in his region. Farming cooperations organize through the Fedi application and pool resources for delegated representatives to purchase the supplies required to sustain their operations.

To facilitate the onboarding of these communities, Fedi also revealed details about the “Fedi Order”, a group of technically skilled individuals deployed around the globe to assist with the process.

A radically new approach

Fedi is supported by a novel technology architecture based on the Fedimint protocol originally created by Bitcoin developer and Fedi co-founder Eric Sirion. Recognizing the challenges of existing self-custody solutions and being conscious of the risks associated with centralized custodians, Fedi introduces an alternative referred to as “community custody”.

Fedi relies on a federation of guardians to assume shared control of its members’ assets and eliminates trust in a single party using threshold signatures.

Think of it as a community multi-signature wallet. To improve on existing custodial solutions, the project leverages Chaumian eCash, a privacy-preserving form of digital cash that represents claims on the community’s bitcoin reserves. This allows transactions between community members to remain private and protects balances from being revealed to observers.

Before Bitcoin and blockchains, computer scientist Nick Szabo had identified the potential of using micro-organizations to secure financial operations, an idea he had dubbed “Secure Property Titles with Owner Authority”. More recently, the concept of federations was popularized by Blockstream’s implementation of the Liquid sidechain.

Beyond private, fast and highly scalable payments, Fedi’s consensus system creates a versatile platform that can unlock a variety of use cases. Thanks to its highly performant infrastructure, the protocol allows participants to deploy modular “freedom tools” such as a chat interface that supports encrypted messages, private groups and social payments. “Fedi mods” can be used by developers and third-party applications to introduce new features to the platform and distribute them to its network of federations.

“Mods are unique web apps that integrate seamlessly with Fedi and personalize your experience. They let you do things like top-up your phone, save money with friends, and buy gift cards.”

More than a simple wallet, Fedi becomes an operating system for the communities it supports, empowering them, often for the first time, to participate in the digital economy.

Notable features introduced during yesterday’s presentation are the ability to perform offline payments and “Stable Balance” used to peg users’ balances to their local currency.

The Fedi app is available today on iOS and Android. Community leaders and organizations interested in building with Fedi are encouraged to sign up for the program. A grant is available to help federations develop. 

Bitcoin addresses with a balance of over 0.1 BTC are nearing an all-time high, according to data from Bitcoin Magazine Pro. Currently, there are 4,580,424 such addresses, just shy of the record 4,586,540, and represents a month over month increase of 27,939 addresses.

The recent drop in Bitcoin’s price from around $67,500 to $49,000 provided investors a unique buying opportunity, allowing them to accumulate Bitcoin at prices below $50,000. Even with Bitcoin currently trading in the $50,000-$60,000 range, down 24% from its all-time high, buyers continue to accumulate, potentially pushing the number of addresses with over 0.1 BTC to a new record in the near future.

This chart illustrates the number of unique addresses holding at least 0.1 BTC. Tracking this metric helps gauge Bitcoin adoption and usage over time. For instance, an increase in addresses holding small amounts of Bitcoin indicates growing adoption among new users.

A Bitcoin address, consisting of 26-35 alphanumeric characters, allows individuals to send and receive Bitcoin. Each wallet can contain multiple addresses, serving as the public-facing part necessary for transactions.

With Bitcoin’s total supply capped at 21 million, approximately 19 million have been mined to date. Estimates suggest around 3 million of these may already be lost. As Bitcoin continues to gain traction, the number of addresses holding at least 0.1 BTC is expected to rise, reflecting broader adoption and increased usage across various cohorts.

For more detailed information, insights, and to sign up for a free trial to access Bitcoin Magazine Pro’s data and analytics, visit the official website here.

In a recent Bloomberg interview, Michael Saylor, executive chairman and co-founder of MicroStrategy, revealed that beyond his company’s holdings, he personally owns at least 17,732 Bitcoin, currently valued at approximately $1 billion. Saylor emphasized his commitment to Bitcoin, stating, “I haven’t sold any bitcoin, I continue to acquire more bitcoin. It’s a great capital investment asset for an individual, a family, an institution, a corporation, or a country. And I can’t see a better place to put my money.”

#Bitcoin is a capital investment you can hold for decades that a corporation, competitor, counterparty, or country can’t take away from you. It will create generational wealth for your family, corporation, or country. pic.twitter.com/amQNn4JQwR

— Michael Saylor⚡️ (@saylor) August 7, 2024

Saylor described Bitcoin as “the apex property of the United States” in light of recent political developments. He highlighted U.S. Senator Cynthia Lummis’s proposed legislation to create a U.S. Strategic Bitcoin Reserve, which aims to accumulate up to 1 million BTC over time if enacted. Additionally, former President Donald Trump has pledged not to sell the nation’s seized Bitcoin, famously advising at the Bitcoin 2024 Conference in Nashville to “never sell your Bitcoin.”

🇺🇸 Donald Trump: “Never sell your #Bitcoin” ✊ pic.twitter.com/YS9QnOHleJ

— Bitcoin Magazine (@BitcoinMagazine) August 5, 2024

Saylor then went on to note the significant shift in political perspectives, stating, “I think that the conversation has shifted and every politician in the world has started to realize that Bitcoin is the most desirable property in cyberspace – it’s the future.”

Saylor concluded the interview by emphasizing the importance of holding Bitcoin as a long-term capital investment rather than spending it on frivolous things like coffee or ice cream, describing Bitcoin as “the most desirable property in the universe.”

What is a Donor-Advised Fund?

A donor-advised fund (DAF) is a highly flexible charitable giving tool that allows you to make a charitable contribution, receive an immediate tax deduction, and then recommend grants from the fund over time. Think of it as a “lily pad” that provides a strategic resting place for your charitable assets before they reach their final destination.

Imagine a frog poised on the bank of a stream, ready to leap to the other side. This frog represents your bitcoin, and the stream is the path to charitable giving. The lily pad in the middle of the stream is the donor-advised fund (DAF), a powerful tool for maximizing your charitable impact while enjoying significant tax benefits. Let’s explore how this leap can be both rewarding and transformative.

The Leaps: Gifting Appreciated Bitcoin

You purchased bitcoin for $5,000, and now it’s worth $70,000—a $65,000 gain. By gifting this appreciated bitcoin to a DAF, you can avoid capital gains taxes on the appreciation. Here’s how the process unfolds:

1. The Initial Hop: Getting the deduction

The frog (your bitcoin) leaps from your personal holdings onto the lily pad (the DAF). This leap allows you to claim a charitable tax deduction for the full fair market value of the Bitcoin at the time of the donation, in this case, $70,000.

2. On the Lily Pad: Waiting to distribute

While your bitcoin rests on the lily pad, you have the flexibility to redesign your charitable strategy. You can continue holding the bitcoin, convert some or all of it into cash, or diversify into other investments. This period on the lily pad is crucial for aligning your giving strategy with your financial goals.

3. The Final Leap: Gifting to charity

Eventually, the frog makes its final leap to the other side of the stream—your chosen charities. These could include hospitals, schools, religious organizations, and even bitcoin development non-profits. The beauty of the DAF is that the recipient charities can receive assets or cash, simplifying their operations. They do not need to set up any new bitcoin infrastructure to receive gifts that originated as bitcoin.

Applications

Donor-advised funds offer several applications in practice:

Simplifying Donations

Charities can receive cash donations, making it easier for them to manage funds without dealing with the complexities of holding and converting bitcoin. Meanwhile, donors enjoy the tax advantages of gifting appreciated bitcoin and can choose how long the bitcoin is held before the final conversion and grant.

Alternative Coin Cleanup

Donor-advised funds can help donors with diverse crypto portfolios. Donors can gift alternative coins, like Ethereum or others, to the DAF, sell them tax-free, and redeploy the proceeds into bitcoin or other assets, aligning with their investment and charitable goals.

Strategic Tax Planning

The DAF is a tool in the belt that can be combined with many other tools. The initial hop onto the lily pad provides an opportunity to combine with other tax strategies, such as Roth conversions or selling a business. This approach can create a multiplier effect, enhancing the overall tax efficiency of the donor’s financial plan. Effectively, a donor can time large write-offs to offset other income and front-load their charitable gifting.

Gift and Replace

You may have heard of the “spend and replace” idea: you can spend your bitcoin and buy the same amount back to maintain your net bitcoin position. The “gift and replace” concept applies this to charitable giving, suggesting that gifting appreciated bitcoin and buying it back can be more effective than just giving cash. By doing this, you increase the overall basis of your position. Rather than giving cash, gifting bitcoin with a low basis and then repurchasing it allows you to reset your cost basis to the current market value, potentially benefiting your financial situation by reducing future capital gains taxes.

Innovative Approaches: On-Chain Donor-Advised Funds

Sound Advisory, UI Charitable Advisors, and Unchained have pioneered the first of its kind: on-chain donor-advised fund (DAF). This innovative solution uses a multisignature setup to maintain bitcoin on-chain, ensuring unparalleled security and transparency. In this 2-of-3 multisig arrangement, the client, University Impact, and Unchained each hold a key. This structure allows clients to verify that their bitcoin remains securely on-chain while waiting to be distributed to their chosen causes.

To our knowledge, no other structure exists like this, where a client can hold a key and confirm their bitcoin’s on-chain status. This setup provides clients with peace of mind, knowing that their charitable contributions are both secure and transparent, setting a new standard in the management of donor-advised funds.

Conclusion

The metaphor of the bitcoin frog hopping across the DAF lilypad to get to the charitable other side illustrates the strategic benefits of channeling your bitcoin through a donor-advised fund. From the initial leap (tax deduction) to the flexible period on the lily pad (strategic planning) and finally, to the impactful leap to your chosen charities, the process is designed to maximize both your charitable impact and your financial benefits. Whether you’re simplifying donations, cleaning up alternative coin positions, or integrating with other tax strategies, donor-advised funds provide a versatile and powerful tool for philanthropy.

By incorporating bitcoin into your charitable giving strategy, you can make a significant impact while enjoying substantial tax benefits. So, take the leap, let your bitcoin hop onto the lily pad, and watch it transform into a force for good. Fix the money. Fix the world. Hop to it!

This is a guest post by Jessy Gilger from Sound Advisory. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.