Month: September 2024

“Someone needs to be the keeper and reiterator of the vision. There’s a ton of work to do. When you have to walk a thousand miles and have only taken the first step, it feels like a long way. It really helps if there is someone saying, ‘We are one step closer, and the goal is not a mirage.’” -Steve Jobs

Stacy Herbert, Director of the National Bitcoin Office (ONBTC) of the Office of the President of El Salvador, shared the above quote with me, while beaming with both pride and resolve, at the onset of my interview with her.

It’s clear that Herbert is on a mission, a mission that started in 2010 when she and her partner, Max Keiser, first discovered Bitcoin and became some of the earliest spokespeople for it soon after. This mission now includes the President of El Salvador, Nayib Bukele, as well as the bureaucracy and citizens of El Salvador, which has colloquially become known as “Bitcoin country” in Bitcoin circles.

By many metrics, The Bitcoin Office has already achieved much success since its founding in December 2022. It’s stockpiled 5,836 bitcoin on behalf of the country. It’s educated 80,000 Salvadoran civil servants on what Bitcoin is and why it’s important. It’s helped implement Bitcoin education from kindergarten to university levels through programs like Mi Primer Bitcoin and CUBO+. And it’s attracted entrepreneurs, investors and other bright minds to the country.

While Herbert is proud of these accomplishments, she’s not one to rest on her laurels, especially since she believes that El Salvador’s best days still lie ahead. She has a vision that further Bitcoin adoption in El Salvador will set the stage for a new renaissance, one that will uplift Salvadorans and continue to attract the world’s best to the country. Given the obstacles she’s overcome since first arriving in the country three years ago, it’s difficult to believe she won’t continue to do her part to make this new era for El Salvador happen.

Getting Started in El Salvador

Herbert arrived with Keiser in El Salvador toward the latter part of 2021, near the height of that same year’s bitcoin bull market. Euphoria gave way to despair into 2022, though, when bitcoin’s price tanked in part as a result of broader meltdown in the crypto space.

“When we first arrived three years ago, bitcoin hit $69,000 and then it proceeded to tumble down to something like $16,000,” Herbert told Bitcoin Magazine.

This left Herbert and Keiser tasked with the challenge of explaining to Salvadorans that the collapse of major crypto companies didn’t mean that Bitcoin was dead, nor that it was a mirage.

“FTX collapsed, BlockFi collapsed, and Celsius collapsed,” explained Herbert. “When they saw all those collapses, they thought that it was the same thing as Bitcoin — all these scams, all these frauds.”

Herbert recalled the importance of steering El Salvador in a bitcoin-not-crypto path at that time.

“There were two paths: You could be crypto country or you could be Bitcoin country,” said Herbert.

“With crypto country, you’re competing with Vegas; you’re competing with Macau. The house always wins in those situations. And that’s the same thing if you have a crypto economy. You have some wealthy guys who run the house. The pre-mines, the chip owners, the chip dispensers, they always win,” she added, making the point that she didn’t want to see El Salvador exploited by the crypto industry.

“Or you could go down the route of what Switzerland was to gold, or New York became to US Treasuries. You could build capital markets. You could build an economy. You could build a Singapore 2.0, an Alexandria 2.0, a Florence 2.0. We pushed for this vision.”

Renaissance 2.0

In the vision that Herbert shares with President Bukele and Keiser, a senior advisor to Bukele, El Salvador is in the early stages of ushering in one of the greatest eras of human flourishing the world has ever seen.

Much like the Renaissance, which occurred in what is now northern Italy just over 500 years ago, El Salvador is setting the stage for its own explosion of entrepreneurship and creativity by adopting that hardest money ever known to man.

“Florence first didn’t just didn’t have DaVinci and Michelangelo and Botticelli and all of the architects, the discoverers, the explorers, the astronomers, and then find perfect money,” explained Herbert.

“They found the perfect money of the time — the Florin — and that led to a positive feedback loop of ever more wealth concentrating in Florence versus the other city states of what is now Italy and other regions across Europe,” she added, before sharing that great artists, businesspeople and thinkers flocked to Florence in the wake of its becoming a commercial center.

“We think that same sort of process could happen in El Salvador.”

Embracing Bukele’s Vision

Herbert shared repeatedly in our discussion how El Salvador’s transformation couldn’t have happened without the leadership of Bukele, whose approval rating amongst Salvadorans is still above 90%, making him one of the most popular presidents in the world.

A challenge for the ONBTC now, she claims, is getting the rest of the country to see and embrace his vision.

“You can’t just have President Bukele [believing in Bitcoin],” explained Herbert.

“You need at least a portion of his 80,000 civil servants to understand what he is actually trying to achieve. Remember, as the keeper of the vision, we have to pull everybody along to understand President Bukele’s vision for El Salvador,” she added.

In efforts to get the rest of the country on board, Herbert has hired well-known Bitcoin figures to educate and train Salvadoran Bitcoin developers as well as members of the Salvadoran government.

This work started with Bitcoin developer Jimmy Song coming to El Salvador in March 2022 (before the ONBTC was officially established) to teach developers how to work on Bitcoin Core.

“Jimmy Song taught his Bitcoin course to seven Salvadorans,” recalled Herbert. “One of them was a guy named Mario Flamenco, who ended up becoming my assistant, my number two at the Bitcoin office.”

Giacomo Zucco also came on board to not only teach developers, but also provided three days of Bitcoin education to El Salvador’s civil servants. Herbert explained that the educational efforts are not just to provide El Salvador’s bureaucrats with a deep technical knowledge of Bitcoin, but to reshape their mindset.

“They’re the people that interact with the population,” said Herbert of El Salvador’s civil servants, “so, they need to understand why they are Bitcoin country in terms of the mindset.”

Herbert often referred to the importance of mindset during our discussion. She explained that the work the ONBTC does is about more than just helping people to understand what Bitcoin is, but it’s about mentally and emotionally prepping them to be great.

“In order to be extraordinary, [you have to have] people in the government and in the population who are ready to be extraordinary,” she said.

“We’re training a population to have the mindset to be Florence 2.0, to be Singapore 2.0 — to be something extraordinary,” she added.

“You need everybody to be on the same page in terms of just how important they are. What we’re doing here is extraordinary. What President Bukele has delivered to the country is quite extraordinary.”

Passport Programs

Through ONBTC, Bukele is prepping Salvadorans for great things, while through El Salvador’s passport programs, he’s looking to attract those who have a track record of doing great things.

On April 6, 2024, Bukele announced that El Salvador would issue 5,000 passports to the likes of scientists, doctors and even philosophers.

We’re offering 5,000 free passports (equivalent to $5 billion in our passport program) to highly skilled scientists, engineers, doctors, artists, and philosophers from abroad.

This represents less than 0.1% of our population, so granting them full citizen status, including…

— Nayib Bukele (@nayibbukele) April 6, 2024

As Bukele shared in his tweet, these 5,000 passports are technically worth $5 billion. El Salvador now issues passports nearly instantly for those who make a $1 million investment in the country with either BTC or USDT.

While this program was designed to attract top talent from abroad, it also had positive effects on the psychology of the Salvadoran people, according to Herbert.

“What we did with the million dollar price tag worked,” said Herbert.

“If you go back, Salvadoran people started saying, ‘My God, some people were paying $10,000 to coyotes to take them over the border in the US, and my passport is worth $1 million.’ Even if a thousand Salvadorans think that, it changes the mindset enough that it’s a critical seed of change,” she added.

What’s Next for The Bitcoin Office?

Herbert said that ONBTC has some big announcements coming in the next three to four weeks. For now, though, the ONBTC is focused on unveiling the first Bitcoin banks, which she believes will help El Salvador build capital markets.

“Bitcoin banks will come here, and we’ll start seriously building the capital markets that are needed — like we’ve laid the foundation for greatness over the past 21 months,” said Herbert.

Beyond Bitcoin banks, Herbert seems confident that the sky’s the limit as far as what comes next for El Salvador. Thanks to the ONBTC, a foundation has been set for the revitalization of the country.

“We have the education, we have the mindset, we have the rebrand — the greatest rebrand in history — as I call it for El Salvador, and we have an increasing amount of popularity for President Bukele, because he keeps winning,” she said. “We’ve walked a thousand miles in the last 21 months, and we now have another thousand-mile journey to start.”

Editor’s note: We normally profile founders of startups for our Founders series, but, this week, we chose to profile the head of a government institution who’s led that institutions since its inception.

Jeff Garzik, a veteran Linux contributor and early open-source developer who contributed to the Bitcoin project from 2010 to 2017, has released a series of new videos detailing his time working with Bitcoin’s anonymous inventor Satoshi Nakamoto.

Joining the project in July 2010, Garzik contributed to early software releases, entering notable pull requests including the first proposal to raise the block size limit, as well as the first proposal to eliminate subsidies for free transactions. Under Satoshi’s time as maintainer, Garzik had pull requests accepted, including for work separating the mining code from the Satoshi client.

Most notably, the new videos find Garzik sharing recollections about his time with Satoshi, including new commentary on whether Satoshi was indeed a singular individual or a group.

“Satoshi as a coder, he’s more the ‘A Beautiful Mind’ type lone genius,” Garzik recalls.

 “When I was a computer science major, we thought highly of ourselves as coders, and we would notice that some of the other disciplines, the chemists, the biologists, the physicists, they had to do it, but they didn’t approach it as a profession. Satoshi was the same way.”

In this way, Garzik says he believes Satoshi knew what problem he wanted to solve, but that lacked an understanding of “modularity,” “unit testing,” and other basics that “computer science majors learn.”

“He very wisely pulled cryptographic solutions off the shelf that were well known, well studied, and he put all those together in a new and interesting way,” Garzik said, adding:

“My impression was that he studied existing people on the internet and tried to think how to combine existing crypto primitives in field use to create Bitcoin.”

Elsewhere, Garzik attested to his belief that Satoshi was a “self-taught” programmer, arguing Bitcoin’s founder was humble about his limitations. 

In other statements he spoke to Satoshi’s temperament and working methods, noting his strict focus on Bitcoin.

“Satoshi would never stray from that topic. He would never let slip any personal information whatsoever, never talk about his mood, the time of day,” he says in one clip. “It was always 100% all about Bitcoin.”

All told, the recollections cover a period of 6 months through Nakamoto’s resignation from the project in January 2011, at which point Garzik’s friend and collaborator Gavin Andresen took over as lead maintainer.

The videos come during a year in which other early Bitcoin contributors have gone public in releasing correspondence with Satoshi, with Martti ‘Sirius’ Malmi and Adam Back publishing hundreds of pages of never-before-seen emails in connection with a public trial in the U.K.

While Garzik has yet to release emails with Satoshi, the videos, produced by a new venture he founded, Hemi Network, represent the most public discussion the developer has had on the subject in some time.

Launched in July, the Hemi Network is advertised as “a modular Layer-2 protocol for superior scaling, security, and interoperability, powered by Bitcoin and Ethereum.”

The work follows a period after 2017 in which Garzik has become more interested in blockchain networks that are not tied to any specific base layer cryptocurrency, a path that includes Metronome, a project from 2017 that also sought compatibility with multiple blockchains.

Garzik left the Bitcoin project that year after serving as the lead maintainer for a hard fork of the Bitcoin protocol that despite early startup ecosystem support never formally launched. 

The full video playlist can be accessed below:

The Bitcoin mining difficulty reached a new all-time high of 92.67 trillion on September 11. This represents a 3.04% increase over the last 24 hours and continues an upward trajectory in mining competition.

JUST IN: #Bitcoin mining difficulty hit a NEW ALL-TIME HIGH 🚀 pic.twitter.com/vhq0ClEXRW

— Bitcoin Magazine (@BitcoinMagazine) September 11, 2024

The Bitcoin difficulty chart plots the historical increases and decreases in mining difficulty over time. It measures how hard it is for miners to find a valid hash for the next block. Higher difficulty requires more computing power to mine new Bitcoin.

When combined with the Bitcoin price, difficulty helps determine miners’ profitability and return on investment. The metric soared in 2024 amid massive growth in Bitcoin’s overall hash rate and adoption.

The rising difficulty shows intensifying competition on the Bitcoin network as more miners fight for limited block rewards. This is generally constructive for network security and decentralization.

Despite rough market conditions this year, the difficulty increase displays the unprecedented demand for Bitcoin block rewards. It underlines the incredible security offered by the collective computing power of miners around the world.

The difficulty adjustment algorithm built into Bitcoin’s code dictates the pace of change in mining competition. It is programmed to find blocks approximately every 10 minutes, maintaining a steady influx of new Bitcoin over time.

This predictable Bitcoin issuance schedule makes its inflation rate easy to model and appeals to investors compared to fiat currencies subject to central bank policies.

Standard Chartered has officially launched its digital asset custody service in the UAE, according to an announcement from the bank. The service has been licensed by the Dubai Financial Services Authority (DFSA) within the Dubai International Financial Centre (DIFC), following a memorandum of understanding signed in May 2023.

“The launch of our digital asset custody offering represents a pivotal moment not just for Standard Chartered, but for the financial services industry,” said Bill Winters, Group Chief Executive of Standard Chartered. “We firmly believe that digital assets are not merely a passing trend, but a fundamental shift in the fabric of finance. With this new service, we are strategically positioning ourselves at the forefront of this next evolution in the custody business. Our robust infrastructure, coupled with our expertise in the field allows us to provide a bridge between the world of financial services and the emerging digital asset ecosystem.”

The service aims to provide secure storage for digital assets, with an initial focus on supporting Bitcoin and Ethereum. The bank said it decided to launch its custody services in the UAE “due to its well-balanced approach to digital asset adoption and financial regulation.”

Brevan Howard Digital, the crypto division of Brevan Howard, an investment management platform specializing in global macro and digital assets, has been named as the first client. According to Margaret Harwood-Jones, Global Head of Financing & Securities Services, this launch addresses the growing institutional interest in digital assets. 

“After a period of intensive work and close collaboration with regulators both regionally and globally, we are thrilled to welcome Brevan Howard Digital as the first client of our digital asset custody offering,” said Harwood-Jones. “Our offering goes beyond simple wallet services – it is a comprehensive solution that addresses the unique challenges of digital asset custody from a regulatory, risk and prudential point of view. It is a game changer for institutional clients, as we can support them with our traditional expertise to navigate the complexities of the digital asset space, without compromising on the highest standards of security.”

Standard Chartered further stated that it plans to expand its custody services to include more digital assets and is exploring more opportunities to launch its custody services in other global financial hubs.

Out of the ashes emerged a snarling rodent dubbed Max Punk.

Open conflict, Whales besting Bored-Apes, the social layer manifest.

Bitcoin leaders sent to prison, then freed by massive strike waves.

HODL’ers fighting in the streets, power cuts, three-day work weeks, Maxi’s battling for Hashrates, governments brought down, Central Banks crying.

The Banksters powerless.

The Orange-Pilled class – loud, stacked and toxic.

L’ Provocateur don’t stand downwind from sh%#tcoins.

Max Punk smells of victory not of FOMO.

An Orange sky at night traverses’ seas of fiat to El Salvador dreams, not NFT nightmares.

Un Bukele ami très explosif.

Promoting Bitcoin thru absurdist and provocative actions,

a means of enacting monetary change.

Proof of ‘work[ers]’ never strike.

God won’t save the dollar, the regime.

Fiat makes you a moron, a potential Elon-bomb.

L’ Provocateur don’t stand downwind from sh%#tcoins.

Max Punk smells of victory not of FOMO.

An Orange sky at night traverses’ seas of fiat to El Salvador dreams, not NFT nightmares.

Un Bukele ami très explosif.

Orange shoes and garb only taunts the volcanos.

Consuming sats, not the FUD.

And there ain’t no future ‘cept with Bitcoin.

…In your dreaming Laser eyes!

This is a guest post by Enza Coin. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

Metaplanet, a publicly listed Japanese company, announced it had purchased 38.6 Bitcoin for 300 million yen (approx. $2.2 million), bringing its total Bitcoin holdings to 398.8 BTC.

JUST IN: 🇯🇵 Japanese Public company Metaplanet buys another ¥300 million worth of #Bitcoin pic.twitter.com/xJmnAdDrMG

— Bitcoin Magazine (@BitcoinMagazine) September 10, 2024

This latest Bitcoin acquisition comes after Metaplanet announced in August that it would raise 10.08 billion yen to purchase more Bitcoin, part of its broader corporate strategy to allocate funds to Bitcoin.

Metaplanet first adopted a pro-bitcoin investment policy earlier this year and has steadily accumulated Bitcoin. The company now holds an aggregate of 398.8 bitcoins purchased for approximately 3.75 billion yen (approximately $27.6 million).

Metaplanet’s ongoing Bitcoin treasury build mimics MicroStrategy’s playbook, which has raised debt to buy Bitcoin. Public companies seem to have discovered a model for acquiring Bitcoin.

Other firms following this strategy include Marathon Digital Holdings, which recently raise a $250 million via convertible note offering to buy more Bitcoin, and Semler Scientific, which similarly announced plans to raise more money to buy more Bitcoin.

Companies can capitalize on Bitcoin’s appreciation potential by borrowing fiat currency at low interest rates to purchase Bitcoin. This allows public companies to gain Bitcoin exposure without liquidating existing assets.

Disclaimer: Bitcoin Magazine is wholly owned by BTC Inc., which also operates UTXO Management, a regulated capital allocator focused on the digital assets industry and invested in Metaplanet. UTXO invests in a variety of Bitcoin businesses, and maintains significant holdings in digital assets.