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Greetings and salutations my fellow plebs. My name is Walker and this is The Bitcoin

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Podcast. It's Wednesday, September 6, 2023. At the time of recording the Bitcoin

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block height is 806503 and the value of one Bitcoin is still one Bitcoin. Today's

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episode is the Bitcoin news roundup. I'm gonna go over the big stories, run

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through some rapid fire news, then zoom out and give you some perspective. You can

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find all the links and accounts mentioned in this episode via the article version

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of the show which is linked in the show notes or by going to BitcoinPodcast.net

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slash words. I'd like to thank everyone who has listened and subscribed to The

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Bitcoin Podcast because I just passed 10,000 audio downloads of the show with

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people listening from all over the world and that's pretty cool. Before I get

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started on the news roundup for today I want to let you know that I've started

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recording Bitcoin Talk episodes of The Bitcoin Podcast. You can watch the full

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interviews at BitcoinPodcast.net, on Twitter at Walker America, YouTube.com

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slash at Walker America or Walker America on Rumble. Did I say Walker America

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enough times? Okay good. And of course you can always listen to these episodes

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wherever you get your podcasts. Last week I released my discussion with Jeff Booth

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and soon I'll be releasing my talk with Preston Pish. Without further ado, let's

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get into the Bitcoin news roundup. FASB is for Bitcoin. Earlier today Bloomberg

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Tax reported long-awaited Bitcoin accounting rules to capture rises dips.

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Under new rules expected to be published by year-end, companies that hold or

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invest in cryptocurrency will be required to report their holdings at fair

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value, a measurement that aims to capture the most up-to-date value of an

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asset including rebounds in value after prices dip. FASB stands for Financial

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Accounting Standards Board. It's a private standard-setting body whose primary

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purpose is to establish and improve generally accepted accounting

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principles within the United States and in the public's interest. Via Bitcoin

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Archive, long-awaited Bitcoin and crypto accounting reform has been passed in a

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unanimous vote by FASB, allowing companies to use fair value measurement on

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their books. This is huge. Previously companies could only value their Bitcoin

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at the lowest price since they bought it, which meant they would have to record

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losses but not the gains when the price recovered. James Lavish has a great

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thread breaking down the previous rules that were applied to Bitcoin and I'll

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link it in the article, but here's an illustrative example from James. A public

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company uses some cash to buy $1 million of Bitcoin and lists the holding as a

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digital asset on its balance sheet worth $1 million. Then the Bitcoin price

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rises 20%. In its financials, the company cannot recognize this increase and must

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maintain Bitcoin at $1 million. Then let's say Bitcoin falls 50% and now is

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worth 60% of where the company bought it in its financials. The company must

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recognize this decrease as an impairment in value and list its Bitcoin

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holdings at $600,000 with a $400,000 loss. Even if Bitcoin trades back up, $600,000

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would remain the carrying value for the company's balance sheet going forward.

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The only way to recognize price recovery is to sell the Bitcoin and trigger a

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capital gain. This is exactly what happened to MicroStrategy. Speaking of

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MicroStrategy, Michael Saylor, Chairman of MicroStrategy, responded to the news

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saying, fair value accounting is coming to Bitcoin. This upgrade to FASB

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accounting rules eliminates a major impediment to corporate adoption of

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BTC as a treasury asset. The fair value accounting rules kick in starting in

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2025 and I suspect we're going to see a lot of forward-thinking companies

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follow MicroStrategy's lead and put Bitcoin on the balance sheet.

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Grayscale Pump On Tuesday, August 29th, Bitcoin enjoyed a nice little green candle.

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After starting the day in the high $25,000 range, it pumped up above $28,000

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before settling back into the low $27,000 range. A week later, we're back in the

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high $25,000 range, so all's fair and love in Bitcoin. But what caused this price

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action and prompted a plethora of fleeting green candle memes? Well,

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Grayscale, which operates GBTC, the Grayscale Bitcoin Trust, previously filed

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with the SEC to convert their Bitcoin trust into a spot Bitcoin ETF, but were

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rejected. Grayscale then sued the SEC via Bitcoin Archive. The court ruled against

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the SEC's rejection of a Bitcoin ETF, saying, the denial of Grayscale's proposal

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was arbitrary and capricious, because the commission failed to explain its

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different treatment for similar products. Here they're referring to Bitcoin

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futures ETFs, which are trading right now. Understandably, people were very

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excited about this news and by the fact that Bitcoin enjoyed a nice little pump

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on this news, as it seemed that we're one step closer to seeing a spot Bitcoin

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ETF approved, with the SEC running out of excuses to reject applications.

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The SEC and the SEC, first Bitcoin ETF could be coming soon as court rules in

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favor of Grayscale over SEC. The US Court of Appeals for the DC Circuit has paved

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the way for Bitcoin exchange traded funds. As I and countless others have said

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ad nauseam, it's not a matter of if, but when a spot Bitcoin ETF is approved, and

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maybe that when is going to be a bit sooner rather than later thanks to this

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ruling. Here's some added context in the situation as it relates to Grayscale

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specifically, courtesy of Dove Maclaire. Don't forget how large GBTC is. They

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hold over 600,000 BTC and was the single largest driver of the 2021 bull run from

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a flow standpoint. Today's discount move from negative 26% to negative 17% is the

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equivalent of 56,000 BTC returned to the AUM of GBTC if shares are marked to

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market. And another one from Dylan. Last point on GBTC for now. Ignore what

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Grayscale says. Their interest is in the status quo. No ETF approvals and continue

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milking a 2% fee on 600,000 BTC. ETF approvals would mean either 1. Fee

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dropping by 75% to 0.50%, 2. Massive outflows from trust. Either way, revenue

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collapses. Grayscale loses from a BTC denominated revenue perspective unless

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their AUM balloons at least 4x, assuming a 50 basis point fee. Not gonna happen.

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Already holds 3% of BTC supply. BlackRock, Fidelity, etc. all want their share.

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Management fee will be a race towards 0% to consolidate AUM. Zooming out from the

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technical side a bit. While I love to see the SEC get schooled in court and this

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decision is certainly worth celebrating, it's also worth putting in perspective,

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which is exactly what Edward Snowden did on Noster. Here's what he said.

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I know everybody's excited about the SEC losing in court and it is indeed an

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important victory, but it's worth bearing in mind that Gensler knew he was

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acting outside the law long before the verdict. The largest institutions care

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less about what is legal than what they can get away with. Given how long it

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takes to get the courts to rule, it's a reminder that in the context of the

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government's own misconduct, there are limits to the utility of the law.

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Security Budget Groundhog Day. As Bitcoin price continues to crabwalk

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sideways, it seems like everyone is coming out of the woodwork to debate

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Bitcoin's quote security budget problem. Now, it is my humble opinion that

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Bitcoin does not have a security budget problem. Bitcoin is repricing the entire

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world around us and that is extremely difficult for most people, even many

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Bitcoiners, to understand. Jeff Booth breaks this down beautifully in the

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Bitcoin talk we had together. I recommend you check it out. But instead of me

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talking more about the security budget problem right now, I'm gonna read you a

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note Lin Alden shared today on Noster, which summarizes the situation in a way

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only Lin can. Here it is. We should change Bitcoin now in a contentious way to fix

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the security budget. It's basically the same tinkering mentality that central

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bankers have. It begins with an overconfident assumption that they know

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fees won't be sufficient in the future and that a fix is going to generate more

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fees. But some fixes could even backfire and create less fees or introduce bugs

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or damage the incentive structure. The Bitcoin fee market a couple decades

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out will primarily be a function of adoption or lack thereof. In a world

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of 8 billion people, only a couple hundred million can do an on-chain

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transaction per year or a bit more with maximal batching. The number of people

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who could do a monthly transaction is one-twelfth of that number. In order to be

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concerned that Bitcoin fees will be too low to prevent censorship in the future,

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we have to start with the assumption that not many people use Bitcoin decades

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out. Fedwire has about 100x the gross volume that Bitcoin currently does with

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a similar number of transactions. But what will Bitcoin's fee market be if

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volumes go up 5x or 10x, let alone 50x or 100x? Who wants to raise their hand

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with a confident model of what Bitcoin volumes will be in 2040? What will someone

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pay to send a $10 million equivalent on-chain settlement internationally?

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$100 in fees per million dollar settlement transaction would be 0.01%.

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$300 to get it in a quicker block would be 0.03%. That type of environment can

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generate tens of billions of dollars of fees annually. The fees that people pay

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to ship millions of dollars of gold long distances or to perform real estate

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transactions worth millions of dollars are extremely high. Even if Bitcoin is a

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fraction of that, it would be high by today's standards. In a world of billion

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millions of people, if nobody wants to pay $100 to send a million dollar

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settlement bearer asset transaction, then that's a world where not many people

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use Bitcoin, period. In some months, the security budget concerned trends. In other

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months, the fees will be so high only rich people can transact on-chain

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concern trends. These are so wildly contradictory and the fact that both are

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common concerns shows how little we know about the long-term future. I don't

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think the fee market can be fixed by gimmicks. Either the network is desirable

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to use in a couple decades or it is not. If three or four decades into Bitcoin's

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life, it can't generate significant settlement volumes and gets easily

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censored due to low fees, then it's just not a very desirable network at that

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point for one reason or another. Some soft forks like Covenants can be

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thoughtfully considered for scaling and fee density and it's good for smart

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developers to always be thinking about low-risk improvements to the network

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that the node network and miners may have high consensus positive view toward

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over time. But trying to rush VC backed soft forks and using security budget

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fud to push them is pretty disingenuous IMO. Anyway, good morning.

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Cambridge revises Bitcoin energy estimates. The Cambridge Center for

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Alternative Finance CCAF recently revised their Bitcoin energy consumption

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methodology. TLDR Cambridge now estimates that Bitcoin uses about 25% less

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energy than previously stated. Why is this important? Because Cambridge data is

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frequently used as the go-to resource for academics and less than academic

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critics of Bitcoin's energy usage. Here's a couple of key points provided by

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Daniel Baden. 1. CCAF model overestimated by 16.8% in 2021 and 10.2% in 2022. This is

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in alignment with my previous research where I suggested earlier this year

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their model was overestimating by 20.6%. 2. Clear evidence that Greenpeace USA's

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claim that Bitcoin used as much energy as Sweden was incorrect and based on CCAF

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historical overstatements. 3. CCAF say explicitly that based on new estimates

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Bitcoin's energy use is comparable to tumble dryers in the US. 4. CCAF have not

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yet revised their emissions estimates beyond the direct impact of revised

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energy consumption. 5. They are still overestimating emissions by 67.6%

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due to emission intensity calculations that are both overestimated and out of

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date have not been updated since January 2022. This is an improvement upon the

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previous estimates which were out 106%. Daniel has a bunch of other points and

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analysis which you can access via the article version of this episode linked

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in the show notes but I want to round out this segment with a quote from the CCAF

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report directly. We decided to thoroughly reexamine the ASIC mining

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hardware distribution generated by our previous CBECI model and cross-check the

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results against other metrics from publicly available data. We found that

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more recently released equipment appeared to be underrepresented and

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equipment nearing the end of its life cycle was overrepresented. We will

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explore the consequences of these changes when applied retroactively. The

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first and most noticeable discrepancy happens in 2021 where our previous CBECI

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model estimated an electricity consumption of 104 terawatt hours, 15

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terawatt hours higher than the revised model estimates, 89.0 terawatt hours. The

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2022 estimate was adjusted downward by 9.8 terawatt hours from 105.3 to 95.5. To

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put this in perspective the revised figure is comparable to the electricity

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consumption of countries like Belgium 83 or to the Netherlands 113. The energy

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use of tumble dryers in the US 108. Emerging concepts we have yet to

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consider but could reasonably be expected to lower our emission estimates

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include the potential to mitigate methane emissions by mining operations

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co-locating next to oil fields and utilizing otherwise flared natural gas,

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using and subsequently sealing orphaned gas wells, and mitigating methane

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emissions from landfills but also extend to other novel concepts such as waste

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heat recovery. It's been pretty amazing to see the narrative shift happening of

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late around Bitcoin energy usage and the environment. I think in a couple of years

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it's going to be a wildly unpopular and obviously foolish opinion to hold that

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Bitcoin wastes energy.

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Drain the exchanges. On August 31st the Bitcoin balance on exchanges reached a

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five-year low of 2,238,653 Bitcoin according to data from Glassnode. This

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suggests that people are truly listening to the endless urging of toxic

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Bitcoin maximalists to get your Bitcoin off exchanges. It's important to point

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out that data like this is not perfectly accurate. It may not reflect the

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totality of Bitcoin on exchanges. Maybe some exchanges aren't counted in this

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number from Glassnode so the actual number may be slightly different. But

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what matters in my opinion is not the raw number of Bitcoin on the exchanges

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but the trend. Over the last five years even though new Bitcoin are issued every

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ten minutes of every single day the Bitcoin balance on exchanges is lower

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than it was five years ago. That means more Bitcoin is off exchanges and in

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self-custody than five years ago. That's a good thing especially as we see

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massive institutional whales like BlackRock coming onto the scene ready to

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gobble up Bitcoin and keep it safe for you.

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Ms. El Salvador, Orange Pill's Miss Universe. Ms. El Salvador aka Miss Bitcoin, Alejandra Guajardo posted a photo on Twitter and

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Noester last week saying, here I am trying to Orange Pill Miss Universe and Miss

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Aruba. What would you like these beautiful and influential ladies to know

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about Bitcoin? Some of the people who responded to her posts made the

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suggestion to set the Miss Universe up with lightning wallets and post their

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lightning addresses so people could send sats and show them the power of the

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Bitcoin Lightning Network in the real world. Over the next few days Alejandra

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posted multiple videos with the ladies showing them setting up Wallet of Satoshi

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and later posted Miss Aruba's lightning address and Miss Universe's lightning

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address. The next obvious step would be to get the Miss Universe set up on

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Noester as well where they can receive sats on anything they post. I'm sharing

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this story because I think it's amazing to see the ladies of Miss Universe

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interacting with Bitcoin on social media for all to see. As Neil Jacobs pointed

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out Bitcoin isn't just nerd money anymore. Like all great technological

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advances it would never have begun without passionate nerds. But now Bitcoin

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is for anyone who is open to learning. You don't need to be a technical expert

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to interact with Bitcoin. It's as easy as downloading an app. Not only that but

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Bitcoin might be the first real chance at bringing about world peace and I know

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that's something the Miss Universe crowd can get behind. Shout out to Miss El

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Salvador for being a wonderful ambassador for both Bitcoin and her

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beautiful country.

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Now for some rapid fire news. Via Bitcoin Archive, Oman's Minister of IT and

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Communications inaugurated the launch of project with 200 megawatts of Bitcoin

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mining. Via Glassnode, amount of hodled or lost coins just reached a five-year

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high of 7,854,417 Bitcoin. Via Forbes, Nansen pointed to on-chain data showing

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that some 90% of PayPal's PYUSD is currently held in wallets controlled by

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the PYUSD issuer PAXOS with holdings on crypto exchanges accounting for 7% of

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the total supply and only 3% held by traders. Via Glassnode, the number of

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Bitcoin addresses holding one plus coins just reached an all-time high of 1,019,117.

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Via Riot platforms, Riot produces 333 Bitcoin while realizing expanded

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benefits of power strategy. August was a landmark month for Riot in showcasing

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the benefits of our unique strategy, says Jason Les, CEO of Riot. Riot achieved

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a new monthly record for power and demand response credits totaling 31.7

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million dollars in August which surpassed the total amount of all credits

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received in 2022. Via Glassnode, number of Bitcoin addresses holding 0.01

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coins just reached an all-time high of 12,349,387. And via Bitcoin

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Archive, citing Max DeMarco's documentary featuring me, Premier Bitcoin,

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El Salvador to add Bitcoin education to all public schools next year.

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To wrap up today's show, let's zoom out and talk about the passage of time and

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time preference. In April 2024, Bitcoin will undergo another scheduled halving

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where the amount of Bitcoin issued per block is cut in half from 6.25 Bitcoin

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to 3.125 Bitcoin. In the current cycle, the amount of Bitcoin issued will be

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1,312,500. In the next cycle, starting in April 2024 and ending around four years

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later, the total amount of Bitcoin issued will be half that, 656,250. In the

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cycle after that, only 328,125 Bitcoin will be issued and so on until the

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maximum supply of 21 million Bitcoin has been issued around the year 2140. Now,

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2140 sounds like a long ways away, and it is. Most of us will likely be dead by

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then unless we figure out some wild anti-aging remedy that doesn't involve

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using children as blood bags because that's just fucked up. But while 2140

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is a long ways away, 2036 is not far away at all. On September 6, 2023, we are

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closer to the start of 2036 than we are to March 2010, which is when Bitcoin

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first started trading on exchanges. After the 2036 having, the Bitcoin block

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reward will be 0.390625 Bitcoin per block, and the Bitcoin issued in that cycle

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will be 82,031.25 VTC. In the fiat world and the crypto world, people are

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constantly trying to convince you to think short term, to have a high time

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preference. It's usually in an effort to catastrophize a situation and make you

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act impulsively, either to pursue pleasure or avoid pain. Anyone who tries to

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force you to pursue a particular course of action by pushing false urgency upon

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you likely does not have your best interests at heart and is certainly not

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thinking long term. So today, I just want to remind you to take a deep breath and

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zoom out. Remember that you will die, but you're probably not going to die today.

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So stack some sats, then go outside, get some sunlight and touch some grass. You'll

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be okay.

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And that's a wrap on this week's Bitcoin news roundup. If you're a Bitcoin only

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company interested in sponsoring the Bitcoin podcast, head to Bitcoin Podcast

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00:22:56,440 --> 00:23:02,320
net. You can find me on Noster by going to primal.net slash Walker. If you want to

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follow the Bitcoin podcast on Twitter, go to at TIT coin podcast and at Walker

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America. You can also find the video version of this podcast at youtube.com

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slash at Walker America and Walker America on rumble. Bitcoin is scarce. There

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will only ever be 21 million, but Bitcoin podcasts are abundant. So thank you for

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spending your scarce time to listen to another fucking Bitcoin podcast. Until

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next time, stay free.