Unfortunately. Bitcoin is probably on its way to an irrelevant role in the world. That is the conclusion in a blog post on the website of the European Central Bank (ECB). The two authors, Ulrich Bindseil and Jürgen Schaaf, share their insight on bitcoin and what’s to come.
Bindseil is head of the ‘Market infrastructure & Payments division’. Schaaf is an advisor for the same division. So we can conclude that they have a little more with the digital euro than with bitcoin.
The writers state that bitcoin is all but dead. The current price around $17,000 is the coin’s last convulsion, its last trick. Bitcoin has failed as a means of payment and you can’t save with it either. Still, you can just pay a subscription to Focus with it, by the way.
Another noteworthy point in the article: we should not see regulation and guidelines as recognition. In 2024, all bitcoin companies and projects in Europe will fall under one legal framework. The Markets in Crypto-Assets Regulation (MiCAR) aims to ensure uniform rules throughout the European crypto market.
Grab the bingo list again, because the usual points will pass again.
- The use of energy again passes by as a major drawback
- Bitcoin is a risk for banks, especially in terms of reputation
- Holders of a lot of bitcoin have the strongest incentives to keep the euphoria going
And people are also surprised about the number of lobbyists that continues to increase. I’m also not a huge fan of most “crypto lobbies.” But you may wonder whether that is really critical of bitcoin (technology), or of a completely different part of the world. Namely how we currently deal with politics and administration. But that’s a whole other discussion.
This is not about a coordinated total strategy from the ECB against bitcoin. It is ‘only’ about the opinion of two people who happen to work on the side of the digital euro.
The full blog post can be found here on the ECB’s website. The attentive reader will see a link to the digital euro right next to the article on the website. Because it will probably also arrive in 2024.
Bitcoin is an initiative to take money creation off the hands of any specific organization. Or rather: bitcoin ensures that you cannot print it or just adjust it yourself.
However you look at it, btc is a threat to the money system of today. There are no guarantees, including for bitcoin’s success. But declaring bitcoin dead again, in a blog post at the ECB, seems a bit exaggerated to me.
A fun fact: according to the website 99bitcoins, bitcoin has been declared dead at least 467 times. Bindsell and Schaaf are certainly not the first. The first reports appeared in 2010. “Why Bitcoin can’t be a currency” – The Underground Economist | $0.23.
To build
In the recent editions of Focus, it is often about Europe, rules and other shouting from the sidelines. In the meantime, of course, construction continues happily.
With Focus we try to highlight as many aspects of bitcoin as possible. And that includes the lightning network, of course. Nowhere is building and experimenting on bitcoin faster than there.
We look at new developments that are built on top of, next to or around btc.
Want to know more about what’s happening on lightning? Then read: Quest for new lightning heroes!
core update
The latest version of Bitcoin Core is out. This is version 24.0. Bitcoin Core is the main implementation of bitcoin.
And this time it was a controversial update. There is/was disagreement about ‘turning on’ the Replace By Fee option (RBF). You could already read about RBF on Bitcoin Focus. You can replace transactions later and give higher transaction costs.
The option is enabled by default with this version. Anyone can still turn it on or off themselves. For example, this has consequences for retailers who want to accept payments immediately. In theory, with RBF you can send a transaction that you then send elsewhere.
In addition to RBF, more has been added in the semi-annual update. More than 100 developers ultimately contributed to this release.
Two other notable parts of the update:
- Launch support Miniscript. This makes it easier to program with Script
- Make backups easier
- There are also updates for managing your UTXOs
Do you want to know exactly what’s included in this update? You can find all documentation on GitHub.
Walk around the fields
We have listed a number of interesting articles and news for you:
National Bitcoin Office
President Nayib Bukele and thus El Salvador as a country continue to bet on bitcoin. There will be a kind of ministry for bitcoin: the National Bitcoin Office (ONBTC). Bitcoin is still the national currency of El Salvador, alongside the US dollar.
This new government body must steer local projects in the right direction. The head of the organization is appointed by Bukele himself. According to Bukele, the designated officials must ensure that all projects run smoothly. Other ministries can also turn to ONBTC for advice. For example, the Ministry of Finance can share bitcoin plans with another country through them.
El Salvador is busy mining on volcanoes, lobbying and of course its own Chivo wallet. The latter is the app issued by the government.
Bukele is not loved by everyone. From the Netherlands we look at El Salvador through bitcoin glasses. A Reuters reporter sees things differently: trolls, propaganda and fear.
Bukele responds briefly on Twitter. And later, no doubt, in a few interviews as well. After all, the best man is also just a marketer. And in his (marketing) plan, bitcoin plays an important role. El Salvador is currently the only country that entrusts their fate (partly) to bitcoin.
=https://twitter.com/nayibbukele/status/1598500515020693505″ data-service=”twitter”>
CoinDesk
Time for a striking rumour. CoinDesk, one of the largest news platforms in the industry, may go up for sale.
Logical candidates are crypto exchanges, but other news organizations or private equity companies would also be interested.
One of the largest media takeovers in the industry was back in 2020, when Binance bought the data website CoinMarketCap for hundreds of millions of dollars.
According to Semafor, parent company Digital Curreny Group (DCG) is looking for additional capital. The company has been hit hard by recent developments in the market. The sale of CoinDesk could bring in some extra cash.
tax
In Italy, a bill is ready for capital gains tax on bitcoin. It concerns all winnings above an amount of € 2,000. It is a tax of 26%.
At the moment, bitcoin is still in the category with (other) foreign currencies. So that may change.
In the Netherlands, your bitcoin currently falls ‘normally’ in box 3. The reference date is 1 January per financial year. In the Netherlands, you pay wealth tax on your bitcoin if you exceed the tax-free allowance. All assets in box 3 above €50,650 are taxed.
Worldwide, we see constant changes in the way governments deal with bitcoin. Italians can prepare for extra tax on (exchange) profits. In the Netherlands, a capital gains tax has often been discussed, but so far this has not happened. Favorable for the bitcoin saver, should there ever be nice prices on the boards again.
Hold on, Robin
PS. If you can’t get enough of the drama surrounding Sam Bankman-Fried and FTX, check out the latest interview with the fallen golden boy. Andrew Ross Sorkin engaged in a digital conversation with Bankman-Fried at the Dealbook Summit.
