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In Soviet Russia, bitcoin HODLs YOU!

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by Coinbits
Thursday, Jun 20, 2024 - 23:49

Those of us who grew up during the Cold War have a clear memory of how Soviet culture was perceived. The contradictions and absurdities, perfectly captured by the “In Soviet Russia” joke template, were so clear that, as Americans, it was hard to imagine being steeped in lies to the point that reality itself was denied by authorities.

This week, Niall Ferguson has published an important and thought-provoking article drawing similarities between Soviet culture and that of the post-modern United States.

While he allows that the average person’s quality of life in the U.S. in 2024 is much higher than that of the USSR at any time in its history, Ferguson points out troubling parallels: Unprecedented intervention into the economy, a sprawling bureaucracy tasked with surveillance of regular citizens, a national debt that has spiraled out of control, and a currency that is debasing fast. From rule by gerontocracy to a bloated, ineffectual military, the similarities are more than a little bit alarming – and certainly not to be dismissed out of hand.

What is to be done?

If there is hope, it lies with the proles – or as we call them in bitcoin culture, plebs. The citizens of the Soviet Union were trapped by an unjust system they could not change, and could not leave. Today, bitcoin is an escape hatch that every individual person can use, no matter who, or where, they are.

Bitcoin is a breakthrough technology that allows anyone to protect the fruit of their labor in the form of hard, digital money that can be taken anywhere without detection and exists completely outside the control of any political entity.

American technology has been credited for bringing about an end to the USSR. Ironically, another technology that originated in the U.S., bitcoin, may undermine an American regime increasingly viewed as illegitimate. 

However, bitcoin is unique. It can simultaneously strip away the pretenses of an illegitimate regime while also providing a stable foundation upon which regular citizens may stand in a time of instability and crisis. Simply by telling the truth in an economy steeped in lies, bitcoin is both a problem and a solution to that problem.

The parallels between the U.S. in the 2020’s and the Soviet Union are troubling. However, bitcoin preserves the ties that bind the civil society together, and provides a strong basis upon which to build – and rebuild – a bright future.

NEWS

Congress: We must change government’s stance toward bitcoin

Congressman Patrick McHenry (R-N.C.) has advocated for the U.S. Congress to take a more active role in clarifying the laws and regulations surrounding cryptocurrency. This week, he gave a speech explaining the importance of the FIT21 bill, and what we should expect to happen next.

Momentum builds for congressional action

With two-thirds of the House of Representatives voting in favor of FIT21, there is clear bipartisan support for change to federal bitcoin policy.

Bitcoin drives donations to friendly politicians

Cameron and Tyler Winklevoss, co-creators of Facebook and major bitcoin supporters for over a decade, each donated 15.47 BTC ($1 million) to Donald Trump’s presidential campaign. They announced that their chosen candidate is pro-bitcoin and pro-business, and will end the Biden administration’s war on crypto.

It didn’t have to be this way

Bitcoin has much to offer progressives. If history had gone a different direction, bitcoin might have been supported by Democrats and opposed by Republicans. However, the way it turned out is that the Biden administration’s unpopular war on crypto gave Donald Trump an opening, and he capitalized on it. By unexpectedly assembling a bloc of donors and voters with a pro-bitcoin stance, Trump has demonstrated political skill – and changed the narrative.

Don’t like the price? Blame “ancient whales”

Since the launch of bitcoin ETFs, the exchange rate between bitcoin and USD has climbed, but not as quickly as many analysts predicted it would. On-chain data seem to indicate the reason: “Ancient whales,” people who have been hodling large amounts of bitcoin for many years, are continuously selling their bitcoin, to the tune of billions.

Bitcoin buys you time

Why would the same people who benefitted directly from the meteoric rise of bitcoin suddenly sell? It may have less to do with changing conviction and more with the human lifespan. Young adults who accumulated large bitcoin hoards in the early years are now middle-aged. With more than enough wealth to lead the life they’ve always wanted, it would be reasonable that they would sell some of their stash.

BITCOIN ADOPTION CONTINUES

MicroStrategy increased its stock sale to $700 million to buy more bitcoin due to strong investor demand.

Fidelity’s Jurrien Timmer described bitcoin as "exponential gold," highlighting its potential as a long-term store of value akin to gold due to its scarcity and growing adoption.

Marathon Digital Holdings, a major bitcoin mining company, has launched a pilot project to recycle heat from its data center to heat 11,000 homes.

The largest bank in Latin America, Itaú Unibanco, is set to begin offering bitcoin trading services to its 60 million members.

Major Wall Street firm Bernstein has published a prediction that the price of a single bitcoin could reach $1,000,000 by 2033. (Don’t forget, you can buy a fraction of a bitcoin. In fact, bitcoin can be used by rich and poor people alike, regardless of how much a single bitcoin costs!)

HOW BITCOIN WORKS

Learn one key idea about bitcoin each week. This week:

What is bitcoin cold storage?

Bitcoin cold storage refers to keeping bitcoins offline to protect them from unauthorized access, hacking, and other vulnerabilities associated with online storage methods. By storing bitcoins in a way that is not connected to the internet, you significantly reduce the risk of theft and cyber attacks.

There are several methods of cold storage, including hardware wallets, paper wallets, and offline computers. Hardware wallets are physical devices specifically designed to store bitcoin securely. They generate and store private keys offline, allowing users to sign transactions without exposing their keys to the internet. Paper wallets involve printing out or writing down private keys on paper and keeping them in a safe place. Offline computers that have never been connected to the internet can also be used to safely generate and store private keys.

Cold storage becomes more important the more bitcoin you have. By keeping your bitcoin offline, you dramatically reduce your risk of loss.

Anyone can set up cold storage, but there is a slight learning curve. It is critical to know how to create backups for your private keys and manage them responsibly. Cold storage protects you from hackers, bankruptcies, and other counterparty risks, but it replaces those risks with the personal responsibility to not lose your keys. If you do, nobody will be able to help you get your bitcoin back.

If you would like help moving your bitcoin to cold storage, get in touch with our friends over at The Bitcoin Adviser. Get one month free when you sign up with this link!

COIN CHECK

What is the primary value of the Lightning Network?

  1. Increase the maximum block size to allow more transactions per block.

  2. Create and manage smart contracts on the bitcoin blockchain.

  3. Increase bitcoin transaction throughput with off-chain payment channels.

  4. Improve bitcoin's mining algorithm to reduce energy consumption.

Check your answer at the end of the page.

FROM THE MEME POOL

ANSWER

  1. Schnorr Signatures are a type of digital signature scheme that offers several advantages over the ECDSA scheme originally implemented by Satoshi Nakamoto. At the time, Satoshi knew Schnorr signatures were a better choice, but they were protected by a patent at the time.

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