Category: Crypto

The Islamic conceptualisation of finance is built around a set of core principles which give primacy to honesty, fairness and accountability in trade and transactions. As such, Islamic finance seeks uphold justice, transparency, and shared prosperity in economic systems. Arguably, fiat currency achieves the exact opposite of these principles, since it introduces uncertainty, speculation and inequities that punish the poor, who earn and spend fiat, and favours the rich who invest in assets that benefit from inflation. In this backdrop, Bitcoin emerges as a solution that aligns remarkably well with Islamic finance principles. This article explores why Bitcoin, with its decentralization, transparency, and scarcity, represents the most Islamic form of money, offering transformative potential for the Muslim world.

The foundational principles of Islamic finance include:

1. Prohibition of Riba (Usury):

Interest-based lending, where money generates money without productive activity, is strictly forbidden in Islam. Riba fosters exploitation, concentrates wealth, and undermines social equity.

2. Prohibition of Gharar (Uncertainty):

Transactions should be free from undue speculation or ambiguity. Clear terms and honest practices are paramount.

3. Asset-Backed Economy

Trade and transactions should involve tangible assets or productive activities. Wealth must be earned through legitimate means, not through gambling or speculative bubbles.

4. Risk Sharing

Islamic finance emphasizes equity-based partnerships where profit and loss are shared, ensuring mutual benefit and fairness in all financial dealings.

5. Justice and Equity:

Wealth distribution should serve societal needs, promoting fairness and reducing economic disparities.

One could very credibly argue that the current fiat-based monetary system flagrantly violates these tenets. Central banks set interest rates that underpin the entire fiat system, institutionalizing usury. Money created out of debt inherently generates unearned profits for lenders while indebting others, fostering exploitation and inequality. The fiat system disproportionately benefits those closest to the source of money creation (e.g., banks, governments) at the expense of ordinary people. This “Cantillon Effect” exacerbates wealth inequality, violating Islamic values of equity and justice.

Fiat currencies are prone to inflation and devaluation due to their unlimited supply. This creates uncertainty and speculative behaviour, further destabilizing economies and harming the most vulnerable. Unlike gold or tangible assets, fiat money is not backed by any physical commodity. It is merely a promise of value, eroding trust and violating Islam’s emphasis on tangible, asset-backed wealth. Centralized control of money by a few institutions undermines accountability, fosters corruption, and allows governments to manipulate currencies to serve political agendas, often to the detriment of their citizens. These systemic flaws have led to financial crises, inequality, and the erosion of societal trust.

Bitcoin, the world’s first decentralized digital currency, aligns closely with the ethical and economic teachings of Islam. Bitcoin operates without interest-based mechanisms. Its decentralized nature ensures that no central authority can create money out of thin air or profit unjustly through usury. Every Bitcoin transaction is recorded on an immutable public ledger, the blockchain. This ensures honesty and accountability, eliminating the uncertainty associated with opaque fiat systems.

Bitcoin’s supply is capped at 21 million coins, making it a deflationary asset. Its scarcity mirrors the attributes of gold, historically accepted as sound money in Islamic societies. Unlike fiat money, Bitcoin is not controlled by any government or institution. Its decentralized network empowers individuals and fosters equity, aligning with Islam’s emphasis on justice and fairness.

Bitcoin is not a speculative promise; it is earned through “proof-of-work,” which requires significant energy and computational effort. This tangible cost of production imbues it with intrinsic value, resonating with Islamic financial principles. Bitcoin allows anyone with an internet connection to participate in the global economy. This inclusivity aligns with Islam’s vision of reducing economic barriers and promoting universal access to financial resources. Through its adherence to these principles, Bitcoin offers a viable alternative to the exploitative fiat system, paving the way for a more just and equitable financial future.

Adopting Bitcoin on a wide scale could revolutionize the Muslim world, unlocking unprecedented economic opportunities. Many Muslim-majority countries suffer from chronic inflation, eroding the value of their fiat currencies and impoverishing their citizens. Bitcoin’s deflationary nature provides a hedge against inflation, preserving wealth over time. Millions of Muslims remain unbanked due to lack of access to traditional financial services. Bitcoin’s decentralized system allows individuals to store and transfer wealth securely without relying on banks, fostering economic empowerment. Muslim-majority countries are among the largest recipients of remittances. Bitcoin enables faster, cheaper, and more secure cross-border transactions, reducing reliance on costly intermediaries.

By decentralizing money creation and eliminating the privileges of central banks, Bitcoin ensures a fairer distribution of wealth, addressing economic disparities that plague many Islamic societies. Bitcoin’s transparent system facilitates the development of Shariah-compliant financial products and services, promoting ethical investment opportunities in line with Islamic values. Bitcoin enables nations to reduce their dependence on the US dollar and other foreign currencies, strengthening their economic sovereignty and resilience. By enabling trustless, borderless transactions, Bitcoin fosters trade within the global Muslim community, encouraging innovation and economic integration across nations.

Bitcoin is more than just a technological innovation; it is a financial system rooted in justice, transparency, and equity—values deeply embedded in Islamic teachings. As the Muslim world grapples with the challenges of fiat-based economies, Bitcoin offers a path toward economic independence, financial inclusion, and societal prosperity. By embracing Bitcoin, the Muslim world can align its financial systems with the timeless principles of Islam, paving the way for a fairer and more sustainable future.

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

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Today, Russian state-owned domestic news agency, RIA Novosti, reported that State Duma Deputy Anton Tkachev proposed creating a strategic bitcoin reserve for Russia, claiming they have obtained a copy of the document.

Tkachev, from the New People party, sent the proposal to Russia’s Finance Minister, Anton Siluanov, to create a bitcoin reserve similar to Russia’s traditional currencies reserves.

JUST IN: Russian State Duma Deputy Anton Tkachev proposed creating a strategic #Bitcoin reserve in Russia, RIA Novosti reports 🇷🇺 pic.twitter.com/PlwSp24RvF

— Bitcoin Magazine (@BitcoinMagazine) December 9, 2024

“I ask you, dear Anton Germanovich, to assess the feasibility of creating a strategic reserve of bitcoin in Russia by analogy with state reserves in traditional currencies,” the document reportedly stated. “If this initiative is approved, I ask you to submit it to the government of the Russian Federation for further implementation.”

“In conditions of limited access to traditional international payment systems for countries under sanctions, cryptocurrencies are becoming virtually the only instrument for international trade. The Central Bank of Russia is already preparing to launch an experiment in cross-border settlements in cryptocurrency,” the document reportedly goes on to explain.

Tkachev’s document explains that creating a strategic Bitcoin reserve could enhance Russia’s financial stability, noting that traditional currency reserves such as the dollar, euro, and yuan are all subject to inflation and sanctions, and that a new alternative independent of any individual country is needed.

This development continues the trend of countries looking to build a strategic bitcoin reserve, including the United States, El Salvador, Brazil, Poland, and others. An initiative led by the United States and President-elect Donald Trump, the U.S. is looking to build a strategic bitcoin reserve of over 1 million bitcoin, which appears to have caught the attention of certain Russian officials.

Just five days ago, Russian president Vladimir Putin publicly stated that no one can ban or prohibit the use of Bitcoin, and that it will continue to develop. Earlier this year, Putin also signed a new law legalizing Bitcoin and cryptocurrency mining within the country.

BREAKING: 🇷🇺 Russian President Putin says “Who can ban #Bitcoin? Nobody.” pic.twitter.com/6mJ664BZZ8

— Bitcoin Magazine (@BitcoinMagazine) December 4, 2024

GingerWallet, the fork of WasabiWallet maintained by former zkSNACKs employees after the shut down of the Wasabi coinjoin coordinator, has received a vulnerability report from developer drkgry. This vulnerability would allow the total deanonymization of users inputs and outputs in a coinjoin round, giving a malicious coordinator the ability to completely undo any privacy gains from coinjoining by performing an active attack.

Wasabi 2.0 was a complete re-design of how Wasabi coordinated coinjoins, moving from the Zerolink framework utilizing fixed denomination mix amounts, to the Wabisabi protocol allowing dynamic multi-denomination amounts. This process involved switching from homogenous blinded tokens to register outputs to claim your coins back, to a dynamic credentials system called Keyed Verification Anonymous Credentials (KVACs). This would allow users to register blinded amounts that prevented theft of other users’ coins without revealing to the server plain-text amounts that could be correlated and prevent linking ownership of separate inputs.

When users begin participating in a round, they poll the coordinator server for information regarding the round. This returns a value in the RoundCreated parameters, called maxAmountCredentialValue. This is the highest value credential the server will issue. Each credential issuance is identifiable based on the value set here.

To save bandwidth, multiple proposed methods for clients to cross-verify this information were never implemented. This allows a malicious coordinator to give each user when they begin registering their inputs a unique maxAmountCredentialValue. In subsequent messages to the coordinator, including output registration, the coordinator could identify which user it was communicating with based on this value.

By “tagging” each user with a unique identifier in this way, a malicious coordinator can see which outputs are owned by which users, negating all privacy benefits they could have gained from coinjoining.

To my knowledge drkgry discovered this independently and disclosed it in good faith, but the members of the team who were present at zkSNACKs during the design phase of Wabisabi were absolutely aware of this issue.

“The second purpose of the round hash is to protect the clients from tagging attacks by the server, the credential issuer parameters must be identical for all credentials and other round metadata should be the same for all clients (e.g. to ensure that the server isn’t trying to influence clients to create some detectable bias in registrations).”

It was brought up in 2021 by Yuval Kogman, also known as nothingmuch, in 2021. Yuval was the developer to design what would become the Wabisabi protocol, and one of the designers in actually specifying the full protocol with ‪István András Seres‬.

One final note is the tagging vulnerability is not actually addressed without this suggestion from Yuval as well as full ownership proofs bound to actual UTXOs as proposed in his original pull request discussing tagging attacks. All of the data being sent to clients isn’t bound to a specific round ID, so a malicious coordinator is still capable of pulling a similar attack by giving users unique round IDs and simply copying the necessary data and re-assigning each unique round ID per-user before sending any messages. 

This is not the only outstanding vulnerability present in the current implementation of Wasabi 2.0 created by the rest of the team cutting corners during the implementation phase. 

Abu Dhabi, December 9, 2024 – MicroBT, a world-leading Bitcoin ASIC manufacturer, has once again showcased its technological prowess and innovation-driven approach by introducing the latest WhatsMiner M6XS++ series at the Bitcoin MENA 2024 Conference in Abu Dhabi, UAE.

During the conference, Dr. Zuoxing Yang, the Founder and CEO of MicroBT, delivered a keynote address titled “Lead Great and Green Mining Forward.” In his speech, he unveiled advancements in solar power mining technology, highlighted the innovative heat utilization in hydro-cooling mining systems, and introduced the new WhatsMiner models.

The mining industry stands at a pivotal juncture, with green mining emerging as a forefront trend for the future. Dr. Yang emphasized the transformative potential of solar mining, predicting a significant reduction in electricity costs for solar power mining to approximately 3.4 cents USD per kWh by 2025. Furthermore, WhatsMiner’s groundbreaking high-temperature water outlet hydro-cooling technology is pushing the boundaries of comprehensive heat recovery. This technology enables the WhatsMiner hydro-cooling system to either minimize mining cooling needs or repurpose heat for advanced applications, such as industrial steam production, seawater desalination, and heating systems, thereby reinforcing MicroBT’s prominent position in the green mining sector.

Subsequently, Dr. Yang unveiled the latest generation of WhatsMiner products. The air-cooled M60S++ boasts a hashrate of up to 226 TH/s with a power efficiency of 15.5 J/T. The hydro-cooled M63S++ offers a hashrate of up to 478 TH/s, maintaining the same power efficiency of 15.5 J/T. The immersion-cooled M66S++, meanwhile, provides a hashrate of up to 356 TH/s, also with a power efficiency of 15.5 J/T.

Additionally, the WhatsMiner line includes the air-cooled M61S+ with a hashrate of up to 236 TH/s and a power efficiency of 17 J/T. The hydro-cooled M64S+ and M65S+ feature hashrates of up to 236 TH/s and 440 TH/s respectively, both with a power efficiency of 17 J/T. Notably, the outlet water temperature for both the M64S+ and M65S+ can reach up to 80°C.

In conclusion, Dr. Yang proudly announced MicroBT’s steadfast dedication to pioneering sustainable and eco-friendly mining practices, heralding a new era of green mining excellence and visionary leadership. With the unveiling of the latest WhatsMiner products, MicroBT stands poised and confident to decisively spearhead the green mining revolution.

In a world where digital assets are quickly becoming a cornerstone of global finance, the United States stands at a crossroads. The Trump administration has repeatedly emphasized its dedication to making everyday Americans more prosperous. From pledging to restore economic strength on the campaign trail to appointing forward-thinking advisors, the White House seems poised to usher in a new era of financial freedom. But if President Trump truly wants to supercharge wealth creation for average citizens—and establish the U.S. as the world’s leading “Bitcoin Superpower”—his administration must embrace a bold, transformative policy: eliminate capital gains taxes on Bitcoin.

This global map shows how various countries tax (or don’t tax) Bitcoin after one year. Many green jurisdictions, including those in parts of Europe, the Caribbean, and Asia, have chosen to exempt long-term Bitcoin holdings from capital gains tax.

The Winds of Change: Lessons from Abroad

The Czech Republic recently made headlines when its Parliament overwhelmingly voted to exempt capital gains from Bitcoin and other crypto-asset sales from personal income tax—provided they’re held for more than three years and meet certain income thresholds. This is not an isolated event. Countries like Switzerland, Singapore, the United Arab Emirates, El Salvador, Hong Kong, and parts of the Caribbean have long recognized that zero or minimal capital gains taxation on Bitcoin can help spur adoption, financial innovation, and consumer confidence.

As John F. Kennedy famously said, “A rising tide lifts all boats.” If we apply that logic to economic growth through Bitcoin, the tide is global—and it’s rising fast. In a sea awash with global liquidity and debt, America’s economic ship must navigate these digital currents. These nations’ policy choices—and their citizens’ increasing prosperity—send a powerful signal: The U.S. can and should leverage Bitcoin as a tool for growth, not burden it with outdated taxation models.

Trump’s Own Words: A Path to Prosperity

President Trump himself has indicated a willingness to rethink Bitcoin taxation. “They have them paying tax on crypto, and I don’t think that’s right,” he said in a recent interview, echoing the frustrations of millions of Americans who find it absurd to pay capital gains taxes after using Bitcoin to purchase something as small as a cup of coffee. “Bitcoin is money, and you have to pay capital gains tax if you use it to buy a coffee?” he asked rhetorically, highlighting how current laws discourage everyday transactions. He added, “Maybe we get rid of taxes on crypto and replace it with tariffs.”

This sentiment isn’t just rhetorical flourish. Trump, who spoke at the Bitcoin 2024 Conference in Nashville, proclaimed his vision for America to become the world’s “Bitcoin Superpower.” He’s also pledged to “Make Bitcoin in America,” turning the U.S. into a leading hub of Bitcoin innovation. Moreover, he appointed former PayPal Chief Operating Officer David Sacks as his ‘White House A.I. & Crypto Czar’ on December 5—a move widely seen as a step toward implementing forward-looking crypto policies.

The BITCOIN Act of 2024: A Strategic Reserve for the People

The U.S. has already taken monumental steps in this direction. The BITCOIN Act of 2024 mandates that all Bitcoin held by any federal agency be transferred to the Treasury to be held in a strategic Bitcoin reserve. Over five years, the Treasury must purchase one million Bitcoins, holding them in trust for the United States. This government-level accumulation shows a long-term vision for incorporating Bitcoin into national financial strategy. But why stop there? Eliminating capital gains tax on Bitcoin would create a positive feedback loop between national policy and personal prosperity. As the federal government invests and holds Bitcoin, private citizens could do the same without facing punitive tax obligations.

Serving the Everyday American

For everyday Americans, the cost of living and the sting of inflation were focal points of President Trump’s reelection campaign. Traditional strategies—interest rate manipulations, quantitative easing—often amount to rearranging deck chairs on a sinking ship when confronted with truly systemic economic challenges. Bitcoin offers a life raft—dare we say, a digital Noah’s Ark—for Americans trying to preserve and grow their wealth against the erosive forces of inflation. Removing capital gains taxes on Bitcoin would allow citizens to transact, invest, and save in a stable, finite asset without the drain of federal taxes on every incremental gain.

The ripple effect here is clear: More people adopting Bitcoin as a store of value and medium of exchange means stronger demand, which could further buttress the U.S. Treasury’s strategic holdings. It’s a virtuous cycle, a positive feedback loop. As Bitcoin’s value grows, so does the nation’s wealth base—helping pay down national debt, bolstering the dollar’s hegemony in global trade, and genuinely making Americans richer and more secure.

Why America Needs Bitcoin

Bitcoin is no longer a niche experiment reserved for a small band of enthusiasts. It has evolved into a mainstream, urgent priority for everyday Americans—especially the rising generation that will shape our nation’s future economy. This is not some ideological plea; it’s a practical, data-backed reality. According to the Stand With Crypto Alliance, a non-profit dedicated to transparent blockchain policies, more than 52 million Americans now own some form of cryptocurrency. Nearly nine in ten Americans believe the financial system needs updating, and 45% say they would not support candidates who stand in the way of crypto innovation. These numbers represent a sweeping, cross-partisan groundswell: Stand With Crypto’s research shows that 18% of Republicans, 22% of Democrats, and 22% of Independents hold crypto. This cuts through the usual tribal politics and points to a fundamental truth—Bitcoin is now a national policy talking point, not a side note on a fringe agenda.

The demand for America to lead is clear. 53% of Americans want crypto companies to be U.S.-based, ensuring that technological innovation and the wealth it generates remain on home soil. Among Fortune 500 executives, 73% prefer U.S.-based partners for their crypto and Web3 initiatives, signaling a corporate desire to keep America at the forefront of global financial progress.

Failing to act now risks a replay of past mistakes. America once led the world in advanced manufacturing, yet today 92% of the most sophisticated semiconductor production sits in Taiwan and South Korea. We cannot afford to cede the future financial landscape to other regions. Bitcoin isn’t just another investment class; it is the digital backbone of a rapidly evolving monetary system. If the U.S. wants to preserve its economic hegemony, maintain innovation leadership, and ensure everyday Americans have access to a stable, growth-oriented financial future, it must embrace Bitcoin wholeheartedly. In doing so, the nation can secure its place as the global Bitcoin superpower—uplifting our citizens, strengthening our economic base, and safeguarding our strategic interests in the 21st-century digital economy.

America, Charting the Course

By aligning with global best practices and enacting forward-thinking policies, the U.S. can position itself as a beacon of financial liberty and technical innovation. Eliminating capital gains tax on Bitcoin would signal to investors, entrepreneurs, and everyday citizens that America is serious about leading in the 21st century’s digital economy. It’s not just about being “Bitcoin-friendly”; it’s about ensuring that average Americans have the tools they need to navigate turbulent economic waters.

The complexity and inefficiency of taxing every digital transaction is an unnecessary burden on innovation and everyday life. Americans deserve better—they deserve the freedom to transact in a digital world without punitive oversight.

In essence, this is America’s chance to do what it has always done best: innovate, adapt, and lead. Removing capital gains taxes on Bitcoin wouldn’t just fulfill a campaign promise; it would set the stage for long-term prosperity, empower citizens to secure their financial futures, and cement the United States as the world’s foremost Bitcoin champion. A rising tide, indeed, lifts all boats—and what better vessel to embark upon than a Bitcoin Ark, captained by a visionary administration determined to truly Make America Great Again?

This article is a Take. Opinions expressed are entirely the author’s and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

Early in our thinking about the interaction between bitcoin and energy it became obvious to me that the value of bitcoin was fundamentally underpinned by the amount of energy that went into producing the bitcoin. As with any free market system, the value of a widget (in this case bitcoin) is determined by the cost of producing the widget plus the various levels of profit margin needed to get from manufacturing to the consumer. If someone has an innovative ability to supply something that no one else can and there is a large demand for this product then they have the ability to extract more profit based upon the scarcity of the supply relative to the demand. If the innovation is not sufficiently proprietary then others will recognise this arbitrage opportunity and seek to satisfy some or all of the demand. Over some period of time, we expect the ecosystem of producers to compete with each other for demand until a point is reached where the price of the product reflects the minimally acceptable level of profit margin for all participants in the production, supply, and sales chain. Additional innovations in production technique, material sourcing, or labour costs may give a temporary advantage to one producer over others and they can enjoy a period of greater profitability – that is until the other producers implement similar advantages and the overall price for the product gets driven lower.

This is what Adam Smith called the invisible hand or more modern economic thinkers call the economic equilibrium principle. If actors in a truly free market system (something we seldom actually achieve) act in their own interests by chasing profits, these actions will ultimately lead to a societal benefit through the satisfaction of demand at the point of optimum economic value. While we may never reach a truly optimal point of economic exchange of value, we certainly see the benefit of decreasing prices and increasing quality (especially in technical terms) in industries ranging from transportation to computing. My father bought an IBM PS/2 Model 25 with a 16 colour display and 10MB of storage space in the late 1980’s for around $7,000. Today, forty years later, a $70 Asian smartphone exceeds every capability of that IBM by many orders of magnitude for 1% of the cost. This is one aspect of the deflationary effect of technology that Jeff Booth discusses in his book The Price of Tomorrow.

While a computing device can increase in capabilities by 100,000% while decreasing in cost by 99% in the space of 40 years, why can’t we say the same thing of the automobile?

I drive a 1977 Range Rover that cost around $14,000 when it was new. Nearly 50 years later, the current model of Range Rover costs about 10 times that amount but delivers only marginally increased capabilities. Why did automobiles not experience the same technological deflationary effect as computers? In large part because the cost of the raw materials to produce a car including steel, aluminium, copper have all increased in that same time frame. In addition, the cost of running a factory to produce cars and the cost of transporting a 2 tonne vehicle from manufacturing to the point of sale have all gone up significantly in that period of time.

While you can’t get a comparable Asian SUV brand new for $14,000 today, you can get a very capable SUV for about twice that amount with significantly greater comfort and technical features versus my spartan 70’s off roader. In 1977 the most basic VW Beetle cost around $3,000. Similar low-end cars today from Asian manufactures with similarly sparse specifications tend to be around the $6,000 price point. What is hard to see with these numbers is the inflationary effect of the devaluation of currency – in this case the US dollar. A dollar in 1977 effectively had the spending power of $5.19 today or, said another way, a 2024 dollar has the same spending power of $0.19 in 1977. That is an 80% reduction in spending power. This means that a $6,000 basic car in 2024 would be priced at $1,140 in 1977 dollars. By the way, the $7,000 dollar IBM would have cost over $35,000 in 2024 dollars making the $70 smartphone an absolute steal!

What is it about a computer that allowed its technical deflationary effect to so far outpace inflation while the automobile could not achieve the same result? In short, the reason is twofold: energy and the scarcity of resources. It takes about 278kWh of energy and 120g of raw materials to produce one smartphone. A car takes around 17,000kWh of energy and 5,000,000g of raw materials to be produced (according to MDPI). Both products will end up with a similar profit margin for the manufacturer of roughly 10%. While technology can solve a lot of challenges of efficiency or miniaturisation, it cannot fundamentally reduce the quantity of physical and energy commodities that need to go into the production of something the size of a car.

In the same way, bitcoin has a fundamental cost of production that is driven by the amount of energy required to produce one bitcoin. While we are continually making progress with respect to the efficiency of the machines we use to convert energy into bitcoin (we have seen an increase in efficiency of around 83% from 2019-2024), the growth of the network hashrate has still driven up the amount of energy needed to produce 1 bitcoin to around 800,000kWh. That sets the intrinsic value of a Bitcoin produced in late 2024 at around $66,000 including a profit margin of roughly 10% for the average producer.

Does that mean that the current price of bitcoin is determined solely by the cost of producing a bitcoin?

Of course not; but it does play a critical role in setting the value of a bitcoin. The cost of production and the current market price have reached a point of equilibrium where the producer is able to make enough margin to continue to produce in their own self interests while the market is able to benefit from a fairly priced product. The amazing thing about the bitcoin network is that it is one of the only true free-markets in existence. Absent the ability for an actor to monopolise or governments to exert control over the market, the invisible hand will continue to push these two forces towards this state of equilibrium. This means that we can understand the true value of a bitcoin by understanding the cost of the energy required to produce a bitcoin. In this way, energy effectively values bitcoin.

Since I have already brought you into my worldview of thinking about most things from the perspective of a Land Rover, let me continue with that approach as we consider the other side of this Joule Paradox. As I said, I drive a 1977 Range Rover (what is now referred to as a Range Rover Classic Suffix D). I bought the truck here in Kenya about 5 years ago for right around $5,000. It was completely intact, unmolested, and 100% rust free. It was the equivalent of what is often referred to as a barn find – a perfect specimen for a functional restoration. In the Kenyan market I paid a bit above the going rate for a similar car due to its condition. If I were to attempt to purchase a similar vehicle in the UK market (assuming you can find a rust-free example still) it would have cost me significantly more. Fully restored in original condition in Kenya the truck might be worth $15,000 on the best day, a perfectly restored example in the UK would likely cost 10 times that amount. Why is there such a disparity in the value of two essentially identical things? In short, it is because of the isolation of economies.

The economic pool that I have to work within here in Kenya does not value this vehicle the same way that the economic pool in the UK does. If I could just send the truck across my Starlink connection to the UK, I could make a lot of money from this arbitrage opportunity. However, vehicle shipping doesn’t work like that. For me to move this truck from my Kenyan economic pool to the UK economic pool would require a tremendous amount of time (dealing with government paperwork on both ends), transportation expense, and a multitude of unforeseen expensive issues in making sure that the quality of my Kenyan-performed work would meet the far more rigorous requirements to operate a vehicle in the UK. Would it make financial sense? Possibly. Is it economically worth the effort for me? Definitely not. Plus, I really love the truck so I emotionally over value it.

Energy suffers from this same isolation of economies. If a natural gas producer in West Texas is trying to sell electricity into their regional pool at the same time that the wind is blowing and the sun is shining across the state, the value for their unit of energy can actually go negative. This means that they would have to pay someone to take their energy. At the very same point in time, someone charging their electric car in California may be paying a peak-demand surcharge for electricity that doubles their cost of energy. The Californian Tesla owner would very much love to have cheaper energy from Texas and the Texas producer would love to charge even a few cents for their power to anyone that would buy it. Unfortunately, these two energy pools operate in isolation. You can’t move a joule of energy from the Texas pool to the California pool without a lot of government paperwork and transportation costs. The arbitrage opportunity can’t be realised.

Rural power station with bitcoin mining in Zambia. 

The same is true for a small hydro energy producer in Northwestern Zambia, they are isolated in a very small economic pool. They can produce more energy than they can sell to the local community but there is no one else other than the community to buy their electricity. Even if they offered it for $0.01, no one would take it. Meanwhile, 100km away, another village is being charged nearly $1.00 per kWh to get electricity from a solar mini-grid. Those villagers would love to have some cheap electricity. Unfortunately, you can’t move a joule of energy across 100km of bumpy, dusty African roads. The arbitrage opportunity is lost due to economic isolation.

Although I doubt that Satoshi thought about it this way, the bitcoin mining network is effectively an adapter to connect any isolated energy pool into a global marketplace. By simply plugging in a mining machine and connecting it to the internet, you can now sell your electricity to an always willing buyer. These two simple pieces of technology allow for energy pools to be linked in a way that hasn’t really existed before. Bitcoin is a non-government-controlled, internet-enabled, real-time energy market that is open 24/7, 365 days a year.

At any point in time, the invisible hand of the market will determine what is the going hashprice. This is the amount of bitcoin paid to a miner for submitting 1TH/s of compute power for 1 day. This value represents how much a miner can earn from running their machines and – thanks to mining pools – this amount is payable in very small units of work. If you run a 100TH/s machine for 1 hour then you will earn 1/24th of the hashprice paid directly to your bitcoin wallet. This is true anytime of the day and from anywhere on earth. Using this hashprice and knowing the efficiency of your mining machine, you can know with absolute certainty how much the bitcoin network is willing to pay you for any kWh of electricity that you want to sell.

As an example, as of 7:34am East Africa Time on October 5th, 2024, the bitcoin network will pay you $0.078 per kWh if you are using a 24J/T Whatsminer M50s and $0.103 per kWh if you are using a 18J/T Antminer S21. Those numbers will fluctuate with the change in bitcoin price, but then it is up to you to decide if you can get a better offer from your local economic pool. Willing buyer, willing seller as they say.

By acting as the real-time marketplace for internet-enabled energy, the bitcoin network allows us to complete the Joule Paradox: energy sets the value of bitcoin and bitcoin sets the value of energy.

Notice that I said value and not price. An old friend of mine used to frequently say that price is what you pay and value is what you get. The same is true here. The value of a bitcoin is based upon the energy inputs and production costs but the market determines the price. Similarly, bitcoin determines what the minimum value for a unit of electricity is but the seller determines whether they will accept that price or sell to someone else for more.

In thinking about the relationship between bitcoin and energy within this paradox, we start to see why the proof-of-work model that Satoshi chose to implement and the system of automated market regulation through the difficulty adjustment is so genius. If either of these features was missing from bitcoin then we would not have the highly valuable asset that we have today. It all comes back to this simple realisation, energy is the fundamental, base commodity upon which everything of value is produced and bitcoin is the most pure embodiment of energy in a monetary form. If we took the energy out of bitcoin then bitcoin would be no better than any other fiat system of money. Remember that when someone tries to tell you that ethereum is the more environmentally friendly cryptocurrency. Energy is the true source of value and no other monetary system is built on energy.

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

Well we did it, 100k Bitcoin is here. I’m sure quite a lot of you are quite happy with where your net worth is at right now, and all of you in that situation have had to exert a large amount of self control in order to hold onto your coins in order to get to that position in the first place.

All of you are here because you initially got lucky, you found Bitcoin at the right time, you had someone you trust introduce you to it, the right confluence of events coalesced at the right time to get you to take it seriously. That’s not why you stayed, why you held through everything. That took your own effort and choice. But the reason you wound up here in the first place is luck.

I think it’s important to keep that in mind. It’s a combination of luck and your own effort that got you this far, it’s not exclusively just you and your brilliance or iron will. It’s the confluence of both.

This really is a point of no return, and a big shift in what is going to happen going forward. Problems are going to get harder, they aren’t going away just because we are all that much wealthier now. With more money come more difficulties, more challenges we are going to have to face. And more money is going to bring in even more people, all of which are going to have to be convinced that these problems exist. Convinced that the solutions to them are things we have to act on.

Fix The Money, Fix The World. That phrase does have a kernel of truth to it, but the reality is the money isn’t fixed yet. A finite supply cap is not the only problem with money. There is the ability for your wealth to be seized, surveiled, controlled. Those problems are not fixed simply because Bitcoin exists with its finite supply.

To fix those problems, Bitcoin actually has to scale. We need the network to be accessible to enough people that it prevents coins from accumulating in a handful of massive custodians that are trivially capturable by regulation. Without that, your money will be seizable. It will be surveillable. None of those problems will be fixed.

So don’t let this price landmark distract you from that. Check your ego, and keep a realistic perspective. Things are not fixed yet just because of a number on a screen, not even close. There is a lot more to do before these fundamental problems with money are a thing of the past. 

This article is a Take. Opinions expressed are entirely the author’s and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

Follow Frank on X.

(Author’s note: In this Take, I offer an interpretation of recent events in Guatemala through the lens of someone on the ground in the country.)

On November 10, the X account for El Salvador’s Bitcoin Office posted the following meme:

The meme that spread like wildfire in Guatemala.

It seemed harmless enough. I know I didn’t think too much about it when I came across it. I remember laughing when I saw it and then just going about my day.

However, a week ago, a colleague of mine, a prominent Guatemalan Bitcoiner, shared with me that the meme went viral in Guatemala. And not just a bunch of retweets-type viral — more like wildfire viral.

Many Guatemalans, particularly Guatemalan Bitcoiners, are fans of Bukele. So, when the Bitcoin Office jokingly signaled that Bukele is thinking of buying Guatemala, the reaction from many in the country was essentially “good.”

This put the powers that be in the country on their heels, catalyzing higher ups in the Guatemalan government and at Guatemala’s central bank to start researching Bitcoin.

My source tells me it’s possible that this could result in the Guatemalan government and central bank acknowledging bitcoin’s value and offering proper guidance for banks and other institutions that may want to hold the asset on their balance sheets.

I plan to speak with more people on the ground in the coming weeks to provide more substantial reporting.

This article is a Take. Opinions expressed are entirely the author’s and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

Wow, we finally hit $100,000 bitcoin. What a time to be alive! A cypherpunk experiment started as magic internet money is now the 7th largest asset globally, surpassing a $2 trillion market cap. But make no mistake — we’re just getting started. 2025 will be the year of Bitcoin. $100K feels like the mere beginning.

This is my 3rd Bitcoin bull market after entering in 2016. From experience, the party is still early. Here’s why I think $100K Bitcoin is just the tip of the iceberg:

Trump hasn’t taken office yet. The next couple years, especially his first year, will likely bring very pro-Bitcoin and crypto regulations.The US hasn’t started stockpiling BTC yet. When it does, it will put every country on notice to adopt bitcoin ASAP.Historically, the year after the halving pumps the most as supply shrinks. We’re now post-2024 halving. You do the math.More public companies are adopting bitcoin treasuries. This trend will accelerate exponentially in 2025.Some US states have presented legislation to hold bitcoin in reserves. More are expected to follow.Putin is now actively talking about Bitcoin, passing pro-crypto laws in Russia and allowing national Bitcoin and crypto mining. Global adoption is brewing.

With a pro-Bitcoin US President aiming to make America the global Bitcoin capital, you better believe we’re going past the moon. Game theory says other nations must compete and buy BTC or risk irrelevance.

So no, $100K isn’t the ceiling. I’d be shocked if we don’t surpass historical multiples this cycle, especially as nation-state adoption kicks into high gear. The show’s just getting started.

Happy $100K, but remember this is only the beginning, my friends. 2025 will be Bitcoin’s breakout year as it cements itself as the global reserve asset. I’m incredibly bullish — keep holding on tight for the wild ride ahead!

This article is a Take. Opinions expressed are entirely the author’s and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

November 2024 will be remembered as one of the most significant months in Bitcoin’s history. With its value surging from $67,000 to just shy of $100,000, Bitcoin achieved its largest dollar growth in a single month. This performance was bolstered by record-breaking ETF inflows of $6.562 billion, institutional accumulation led by MicroStrategy’s massive acquisitions, and notable regulatory advancements worldwide. To unpack the trends, milestones, and what lies ahead, we present The Bitcoin Report – a comprehensive, free-to-download analysis for serious Bitcoin investors.

📥 Read The Bitcoin Report – November 2024

The Bitcoin Report is a 19-page free publication that contains exclusive insights and charts.

Dive Deeper with The Bitcoin Report

The Bitcoin Report is your ultimate resource for understanding the events that shaped this historic month and their implications for Bitcoin’s future. Authored by top industry experts, this free monthly publication provides a comprehensive analysis of market trends, regulatory shifts, on-chain data, and technical insights.

Highlights from the November Report:

Market Cap Milestones: Bitcoin surpassed silver’s market cap, solidifying its position as a premier global monetary asset.ETF Dominance: BlackRock’s Bitcoin ETF outpaced its gold ETF in trading volume, demonstrating institutional investors’ growing confidence in Bitcoin.Regulatory Advancements: Hong Kong’s tax breaks and Brazil’s proposed Bitcoin reserve legislation highlight Bitcoin’s expanding global adoption.Technical Analysis: Insights into Bitcoin’s consolidation and the bullish indicators pointing to potential new highs in the coming months.

These are just a few of the milestones detailed in this month’s report, accompanied by expert analysis and actionable insights.

Discover the Key Insights in the Latest Bitcoin Report.

Why November Matters for Investors

Bitcoin’s meteoric rise in November didn’t happen in isolation. This report delves into the macroeconomic trends, institutional activity, and on-chain analytics that fueled its growth. Gain an understanding of:

The bullish market trends leading into 2025.How corporate Bitcoin strategies, like MicroStrategy’s record-breaking purchases, shape market dynamics.The role of Bitcoin ETFs in driving scarcity and upward price momentum.Read the full report to dive deeper into these insights and gain a comprehensive understanding of Bitcoin’s market trajectory.

Stay Informed – Download Now

Access The Bitcoin Report today and equip yourself with the data and insights you need to make informed investment decisions.

📥 Read The Bitcoin Report – November 2024

A Free Resource to Share

At Bitcoin Magazine Pro, we believe in empowering the community with actionable insights. The Bitcoin Report is available to the public for free.

Share The Bitcoin Report with your network using the hashtag #TheBitcoinReport, and help orange-pill the masses! 

Opportunities for Sponsorship and Collaboration

Interested in sponsoring future editions of The Bitcoin Report or exploring joint-publication opportunities to reach a larger audience? Partner with us to gain exposure in the fast-growing Bitcoin space.

For more information, reach out to Mark Mason at mark.mason@btcmedia.org to discuss how your brand can be part of this exciting initiative.