Sound Money + Popular Technology

Bitcoin + the Ethereum Virtual Machine (EVM)

What would happen if you took the hardest money the world as ever seen — bitcoin — and paired it with the most widely distributed smart contract virtual machine in the crypto space — the Ethereum Virtual Machine (EVM)?

Willem Schroé asked himself this question a year and a half ago and is on the verge of finding out the answer.

Schroé is the founder of Botanix Labs, which is building a Bitcoin Layer 2 called Botanix on which the EVM will run.

If you’d like to know what that might look like, please check out the interview I conducted with Schroé this week:

Also available on Spotify and Apple Podcasts.

Here’s a preview of it in which Schroé parallels the EVM to the Windows operating system and distinguishes it from bitcoin, the most sound money we’ve ever known:

I understand that just the word “Ethereum” is triggering to some Bitcoin maximalists, and I respect that.

However, I subscribe to the notion that all other blockchains are just a testnet for Bitcoin, and that if something finds product market fit on another chain, it will eventually be built on a secondary or tertiary layer of the Bitcoin network.

Whether you like NFTs, decentralized exchanges (DEXs), stablecoins and on-chain borrowing and lending platforms (all things that have been built on Ethereum and Ethereum Layer 2s) or not, the market has shown that there’s a demand for these products.

While I have mixed feelings about a lot of what’s been built on Ethereum, as I think much of it is scammy, I still think some of the apps on the platform have a lot of promise.

Also, as a New Yorker, someone who lives in one of the most restrictive jurisdictions in the world when it comes to Bitcoin and crypto services, I support the idea of being able to both swap assets as well as borrow and lend on-chain.

And one of the best parts about Botanix is that it doesn’t require any change to be made to the Bitcoin base layer for it to exist. In other words, Botanix doesn’t require a Bitcoin Improvement Proposal (BIP), meaning its existence will not put the stability of the Bitcoin base chain in jeopardy.

I hope you enjoy the interview and that you can listen to it with an open mind.

For more on Botanix, check out the white paper for the project as well as the write up on the project in Bitcoin Magazine.

Now, let’s move on to sadder things…

The US Is Banging the Drums of War

Rhetoric from Biden on down seems to be pointing to the notion that World War III may be just around the corner.

This week, Biden even coined a new term: “The arsenal of Democracy”

Very comforting.

In an interview with 60 Minutes, Biden assured the interviewer that the US is “the most powerful nation in the history of the world” and went on to share about how we have the resources to support Israel and Ukraine and “still maintain our overall international defense.”

Three things came to mind after listening to this clip.

The first was along the lines of what Dan McArdle shared in the tweet below:

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The second was something that Lyn Alden wrote in her new book, Broken Money (and I paraphrase):

Since the 1970s, the US — the empire — has expanded while economic and financial conditions for many in the US — the country — have gotten worse.

This is likely why many Americans get angry when Biden asks Congress for $100 billion to help Ukraine and Israel fight, while they struggle to make ends meet.

And the third thing was along the lines of what Larry Lepard shared in the tweet below:

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And then we have Janet Yellen making public statements about America’s ability to finance war.

Two things came to mind when I read this.

The first is that she and Biden are both simply signaling strength to the world. All major powers do this to some extent. It’s just run-of-the-mill, basic bro chest puffing.

The second is that big banks profit immensely from wars.

And given that banks paid Yellen over $7.2 million in speaking fees from 2019 to 2021 (Sources: Forbes and The Guardian), J. Yell’s got some favors to do for her homies — the big banks.

Below is a snapshot of some of Yellen’s speaking fees.

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Let us also remember that war is one of the great American pastimes (as it has been with all former empires); the country has only not been at war for 17 years since its founding in 1776.

Since the war Afghanistan ended, we haven’t been directly engaged in any conflicts (aside from the shadow wars in Africa and probably some other conflicts most Americans know nothing about).

So, in reality, Yellen is just doing her patriotic duty — benefitting certain American industries in the process.

More importantly, though, both the US Treasury, which she heads, and the Fed can use war as an excuse for the oncoming bout of increased inflation (maybe hyperinflation) we’re likely to face, when, in reality, the issues we’re facing began decades ago when the The Fed started bailing out financial institutions that made bad bets and has continued to a point where the US is now in the early stages of a debt spiral.

Now, let’s get sadder…

The Patriot Act Is Coming for Crypto

The US Financial Crimes Enforcement Network citing the Patriot Act (remember that?!) as a means to try to make self-custodying your crypto a crime.

No Bullshit Bitcoin did a great job in breaking down what FinCEN is looking to do.

This is another way for the US to try to impose capital controls as it attempts to trap its citizens in it’s inflationary monetary and fiscal regime.

This news came on the heels of another overt display of terribleness from Elizabeth Warren.

Warren Is Wrong — Yet Again

Elizabeth Warren is currently tied with Paul Krugman for Worst Person in the History of the World Award.

Only someone as depraved as her would take the Palestine-Israel conflict and use it as an opportunity to attack crypto.

She recently got a substantial number of lawmakers to sign a letter she drafted in which she proposed greater crackdown on crypto, which she claimed was used to finance Hamas.

In the letter, she claims that Hamas raised $130 million in crypto for its efforts, citing a piece from The Wall Street Journal as her source.

Oddly enough, The Wall Street Journal reported that Hamas had fundraised $93 million in crypto (which means Warren arbitrarily added another $37 million? Weird.)

However, research from Chainalysis suggests that The Wall Street Journal’s estimate was off by orders of magnitude.

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The real kicker is that Hamas reportedly stopped using bitcoin in April 2023 because of how traceable it is.

And it’s odd that Warren didn’t mention how the US has given billions of dollars to Iran, who may have helped back the Hamas attacks financially.

Okay, all this talk of how corrupt, deceitful and incompetent US leaders are is making me sad.

Let’s move on to markets, where hard assets are ripping…