Greetings Earthling,

Welcome to issue #25 of the Bitcoin Breakdown, where you save countless hours of information mining to sift the signal from the noise.

Happy reading! 👽️

📰 HEADLINES

PayPal launches what it calls a stablecoin, but is in fact closer to being a CCDC (Centralized Company Digital Currency). ‘PayPal USD’ (PYUSD) is a cryptocurrency token issued by the Paxos Trust Company on the Ethereum network as an ERC-20 and backed by US dollar deposits. Smart contract auditors however flagged the presence of “freezefunds” and “wipefrozenfunds” functions in PYUSD’s smart contract, which are considered classic examples of centralization risks in Solidity contracts. PayPal, which has 430 million users and last year faced a backlash after announcing it will fine customers up to $2,500 for spreading ‘misinformation’, could potentially utilize these functions for its benefit.

Glassnode reports that Bitcoin's volatility has reached a multiyear low, resembling levels from December 2016. The assessment of BTC's 7-day and 30-day price ranges highlights the exceptional rarity of the current level of price compression. Glassnode also suggests historical patterns could indicate six more months of boredom and consolidation for Bitcoin investors. (Editor: Great time to stack those sats before the next halving.)

A 21e6 Capital report shows that Bitcoin has trounced crypto hedge funds even though they managed positive returns during the first half of the year. The comprehensive review from the Swiss-based investment adviser shows that crypto funds had an average return of 15% during the period, whereas Bitcoin gained 83%. The underperformance of altcoins and the sluggish response due to holding larger cash positions post-FTX's collapse contributed to the funds' lackluster performance. Consequently, around 13% of tracked crypto hedge funds closed down. (Editor: Just stick to Bitcoin, pleb friends.)

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🏆 TOP STORIES

Peer-Reviewed: Bitcoin’s Carbon Footprint Revisited: Proof of Work Mining for Renewable Energy Expansion (Aug 8 | 40 min read)

Researchers Juan Ignacio Ibañez and Alexander Freier recently had a paper peer-reviewed and published that systematically reviews the potential for Bitcoin mining to contribute to renewable energy penetration and net decarbonization of the energy grid. It also critically assesses previous studies' limitations and debates on Bitcoin's carbon footprint and presents a comprehensive literature review, examining the synergy between Bitcoin mining and the renewable energy sector. The findings suggest that renewable-based mining has the potential to drive a net-decarbonizing effect on energy grids and concludes by advocating for a re-evaluation of the environmental impact of Bitcoin mining and its potential role in facilitating renewable energy expansion and broader decarbonization efforts.

CBDCs: The Ultimate Tool of Financial Intrusion (Aug 8 | 5 min read)

Dr Jonathan Newman writes for the Mises Institute about the concept of "financial inclusion" promoted by central banks in the context of central bank digital currencies (CBDCs). Newman argues that the term is essentially a buzzword that disguises its true implications. CBDCs, instead of promoting actual financial inclusion, will lead to increased financial intrusion and control. He highlights several key points: CBDCs might not address the concerns of the "unbanked" population who avoid traditional banks due to privacy, distrust, and fees; CBDCs undermine privacy and could lead to increased surveillance by authorities; fees associated with CBDCs and the potential for negative interest rates could negate their benefits; and the supposed benefits of "digital money" might be used by governments to control transactions and limit the purchase of certain goods.

The Crypto Catch-22: Why Bitcoin Only (Aug 2 | 6 minute read)

Bitcoin maxi Jesse Myers explains why Bitcoin stands as the only cryptoasset worth holding. First off, he introduces the concept of digital scarcity, explaining that Bitcoin's unique architecture was the first to tame the replicability inherent in information and established a system of digital scarcity, granting it genuine value. He then discusses network effects, showing how Bitcoin's position as the leading cryptocurrency is strengthened by the principle that the value of a network increases with the number of users, making it a reliable store of value. Finally, attempts by other crypto projects to catch up with Bitcoin's dominance paradoxically lead them to become centralized entities and most probably securities law violators, contrasting with Bitcoin's decentralized nature. All-in-all, Myers underscores that Bitcoin's originality, network effects, and genuine decentralization make it the prime choice for long-term value storage. (Editor: I will add that while other projects may take inspiration from Bitcoin, they can't replicate the unique combination of technological innovation, first-mover advantage, community trust, and cultural impact that Bitcoin represents.)

Imagine There Are Only $21 Million In the Entire World (Aug 3 | 4 min read)

Terence Michael eloquently shows in a thread how instructive and illustrative it can be to imagine what dollars would be worth if there were only as many of them as there ever will be of Bitcoin. It is a good thought experiment that can be helpful for anyone, but especially so for people who cannot imagine anything other than the dollar being money.

Everything Divided by 7 Million: Popular Bitcoin Price Heuristics are Missing the Mark (Aug 6 | 7 min read)

In this article, Bitcoms argues that some of the most popular Bitcoin price prediction tools are underestimating the impact of migrating capital. Traditional models also tend to neglect macroeconomic influences, global events, regulatory developments, economic policies, and institutional interest. Bitcoms ultimately presents a new price prediction heuristic, suggesting that the price of Bitcoin could reach $1 million with only one-third of the redirected capital commonly believed to be needed: "everything divided by 7 million" as opposed to the common notion of "everything divided by 21 million."

How Bitcoin Transformed My Life & Forever Orange Pill'd Me (Aug 8 | 12 min read)

Bailey Jakob, Bitcoin entrepreneur and author, has published for free a chapter of his new book "Orange Pill'd," which is a collection of over 250 personal stories from individuals globally, exploring the transformative impact of Bitcoin on their lives. The book delves into accounts of financial freedom, empowerment, challenges, and personal growth experienced by those who have engaged with Bitcoin. The chapter includes a personal narrative of Bailey's journey with Bitcoin, detailing how he initially overlooked its potential, engaged in trading altcoins, faced setbacks, and eventually embraced Bitcoin's potential, leading to significant life changes, including launching Bitcoin-based businesses and pursuing writing Bitcoin-focused books.

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📖 GUIDES & EXPLAINERS

Blockstream Jade Review 2023: Small, Powerful & Bitcoin Only (Aug 9 | 15 min read)

Athena Alpha thoroughly reviews the Blockstream Jade hardware wallet, emphasizing its focus on security, transparency, and Bitcoin support. The Jade, produced by veteran Bitcoin-focused company Blockstream, offers a small, lightweight, and well-designed device. It utilizes entropy from various sources for secure seed generation, and its firmware is open-source and reproducible, boosting transparency. Blockstream Jade is recommended over alternatives like Ledger Nano S Plus due to its security features, transparency, and the backing of Blockstream's Bitcoin expertise. (Editor: Get 10% of off your Jade when using coupon code: bitcoinbreakdown).

Azteco 101: Unique, Easy & Private Way to Buy Bitcoin (Aug 5 | 6 min read)

₿itcoinQnA published a great guide on Azteco – a service enables users to buy vouchers with unique codes from physical vendors, online stores, or approved retailers, and then redeem these vouchers on the Azteco website to receive an equivalent amount of Bitcoin directly into their wallets. Voucher acquisition can be done through physical vendors, Azteco's online service, or online resellers, each with varying levels of privacy and personal information exposure. The redemption process involves scanning the voucher's QR code using your wallet.

💥 MEME BREAK

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Naiw

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