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In our Friday articles, we take a deep dive into the current state of Bitcoin. Every Friday we will continue to publish brief State of Bitcoin newsletters to keep subscribers up to date on news from the Bitcoin industry. For full disclosure, Brandon is a strong believer in Bitcoin and has allocated portions of his portfolios to BTC (HODL baby).
Top stories from the week:
mETH Merge: The king of all shitcoins, Ethereum has gone through its long awaited merge. For those who do not know, Ethereum has gone under a transition from the Proof of Work (PoW) which is a protocol used by Bitcoin, to Proof of Stake (PoS). mETH heads are using this as a positive saying it will consume 99.9% less energy, but many are neglecting the major tradeoffs. PoS allows people to have more ETH to obtain more ETH. This has already seemed to backfire. At the time of this writing, the top 7 addresses have over 67% of all ETH making it more centralized. Over 50% of the ETH miners are on AWS and now most of ETH is in a few hands. How is this better than the current system? This PoS is exactly what it stands for, piece of shit. It centralizes everything and to make it worse, this was the top article on the World Economic Forum’s website! If that is not a sign, I’m not sure what is.
Canada’s PM Trudeau attacks Bitcoin: Justin Trudeau has been at the forefront of limiting Canadians free reign since the start of the pandemic. The Canadian Truckers convoy started the battle of Canada vs Bitcoin and cryptocurrencies. Canada has since limited the amount Canadians can buy and now the current PM is tweeting negatively about Bitcoin and crypto as his main opponent Pierre Poilievre is a Bitcoin advocate. As this race heats up, it will be interesting to see the mudslinging and the efforts from the Trudeau camp to bring up more FUD surrounding Bitcoin.
<blockquote class="twitter-tweet"><p lang="en" dir="ltr">Telling people they can opt out of inflation by investing in cryptocurrencies is not responsible leadership. Fighting against life-saving vaccines is not responsible leadership. Opposing the pandemic supports that saved jobs and helped families is not responsible leadership.</p>— Justin Trudeau (@JustinTrudeau) <a href="
13, 2022</a></blockquote> <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
CPI at 8.3%: The general consensus in the “fintwit” community is that inflation has peaked and is starting to come down. I take the opposite side. Seeing the energy crisis, Russia lowering the amount of oil exported by a significant amount, the US attempting to put sanctions on China to try and prevent China from invading Taiwan and many more geopolitical factors, I feel we are not close to the peak. Some alarming numbers from the CPI print released Tuesday the 13th include fuel (oil) up 68.8%, energy up 19.8%, new vehicles up 10.1%, and food up 11.4%. I hope that I am wrong and we have seen the peak of inflation, but this is NOT strictly a monetary issue. This is a global supply chain and energy issue. As Bitcoiners we love to say “Bitcoin fixes this”, but in the end this is due to poor policy, something that Bitcoin cannot fix in the short term.
White House suggests Bitcoin Mining Standards to battle Climate Change: The Biden administration released a report known as the “Climate and Energy Implications of Crypto-assets in the United States.” This report claims that the US will attempt to tackle climate change due to the “environmental impact” of Proof-of-Work mining mechanisms, aka Bitcoin and now allegedly Ethereum after “the merge”. The Biden admin is fighting Bitcoin mining because of the carbon footprint of digital assets and the quantity of power utilized. There obviously has to be a cost-benefit analysis that seemingly no one in the White House attempted to do. If Bitcoin becomes the global reserve currency, medium of exchange, or even just the ability to replace banks with the ability to transact over the Lightning Network, the amount of power used is less than dryers and Christmas lights in the US. Sure Christmas lights are nice during the season, but saving people money over the long run seems like a viable solution to me.
Bitcoin Hashrate at ATH: Price remains mostly flat, but the Bitcoin mining hashrate is still increasing putting strain on Bitcoin miners trying to earn a profit. Bitcoin mining is a tough business and relies on getting cheap energy costs, but on the flip side is a necessity for the network to keep performing. Bitcoin mining was a $15 BILLION with a B, dollar industry in 2021 and when there is this much money behind an industry someone will find a way to make it profitable. Miners may have to sell more of their Bitcoin reserves and some mining companies may fail during this bear market. In the end, I believe mining companies will be better positioned for the next bear market following a bull run and the reserves will be in place to weather storms like this.
Nigeria to create economic zone for Bitcoin and Crypto: Nigeria is looking to create the first economic free zone for Bitcoin and crypto in West Africa through the Nigeria Export Processing Zones Authority (NEPZA) who is working alongside Binance. The press release is calling the zone Talent City and is modeled after the Dubai Virtual Free Zone. Now Nigeria wants to become a Bitcoin hotspot for talent and encourage companies in the space to emerge and move to Africa. Africa and LatAm seem to be leading the charge in the Bitcoin and crypto space and I hope to see this continue. Making Africa more of a Bitcoin hub will hopefully bring more prosperity to a continent that has suffered for quite some time.
A quick look on chain:
Current price: $20,253
Market Cap: $387.8B
Spent Output Profit Ratio: 0.9948
Current block height: 754129
Mean block interval: 11min. 26sec.
Meme of the Week
What would the BTC community do without memes? Every week on State of Bitcoin, we feature our favorite meme of the previous week. If you create or see a meme that you like and want us to consider featuring it, tag us on Twitter or instagram (both @Greencandleit)! This week we’re featuring a meme we came across on the @Meditation_Man page:
<blockqhttps://twitter.com/Meditation_Manuote class="twitter-tweet"><p lang="en" dir="ltr">It was a trap <a href="
13, 2022</a></blockquote> <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
Video Version!
For our complete rip, check us out on the pod:
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Happy Friday everyone - get after it this weekend!
Brandon
Disclosure: The authors of this writing hold positions in cryptocurrency mentioned in this article. That cryptocurrency is Bitcoin. The article was written by Brandon Keys and occasionally a guest writer; it expresses the author's own opinions. They are not receiving compensation for it. The information presented in this article is for informational purposes only and in no way should be construed as financial advice or recommendation to buy or sell any stock or cryptocurrency. None of the authors of this article are financial advisors. I encourage all readers to do further research and do your own due diligence before making any investments.