Weekend Briefing - A briefing on innovation and society.

Welcome to the weekend. Hello from Miami. Thanks to everyone who came out to our private house concert this week. It was a magical moment. If you want to see what it’s like, check out my post on Instagram.

I’m excited to announce that I’ll be co-authoring the upcoming newsletter Web3 Impact with my friend Banks Benitez. Banks has deep experience in the social sector from his time running Uncharted, and he’s the author of the groundbreaking piece: White Paper: Opportunities at the Intersection of Web3 and Social Change. I’m excited about collaborating with him on this new newsletter and related projects that explore how Web3 technologies like cryptocurrencies, blockchains and decentralized autonomous organizations (DAOs) can create a positive social and environmental impact. We had a ton of sign-ups last week. If you’re interested in this topic but haven’t subscribed to the Web3 Impact newsletter, subscribe here. 

I’m in Miami attending Bitcoin 2022 conference. So, today’s briefing is going to be focused exclusively on bitcoin. If bitcoin isn’t your thing, or you feel like you just don’t know enough, I highly recommend at least reading the first story “The Latecomers Guide to Crypto”—it’s a comprehensive introductory piece. Even if you don’t like crypto, you’ll walk away with a better understanding.

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Prime Numbers

$821,117,561,642—The market cap of bitcoin is $821,117,561,642. One bitcoin costs about $43,000.

23%—Compared to 11% of white Americans and 17% of Hispanics, there are 23% of African-Americans who own cryptocurrency.

$14 billion—Cryptocurrency-based crime hit a record $14 billion in 2021.

Although the amount of crypto collected through criminal activity went up significantly in 2021, it represents a smaller percentage of overall crypto transaction volume.

The Latecomers Guide to Crypto

Crypto! For years, it seemed like the kind of fleeting tech trend most people could safely ignore, like hoverboards or Google Glass. But its power, both economic and cultural, has become too big to overlook. Twenty percent of American adults, including 36% of millennials , own cryptocurrency. As it’s gone mainstream, crypto has inspired an unusually polarized discourse. Its biggest fans think it’s saving the world, while its biggest skeptics are convinced it’s all a scam—an environment-killing speculative bubble orchestrated by grifters and sold to greedy dupes, which will probably crash the economy when it bursts. Understanding crypto now, especially if you’re naturally skeptical, is important for a few reasons. The first is that crypto wealth and ideology is going to be a transformative force in our society in the coming years. You’ve heard about the overnight Dogecoin millionaires and Lamborghini-driving Bitcoin bros. But that’s not the half of it. The crypto boom has generated vast new fortunes at a clip we’ve never seen before—the closest comparison is probably the discovery of oil in the Middle East. New York Times (26 minutes)

Bitcoin Explained

When the mysterious creator of bitcoin Satoshi Nakamoto mined the first block on the Bitcoin blockchain, it included a headline from the London Times about a bank bailout. He wanted to send a signal that people were looking for alternatives to the current financial systems after the 2008 financial crash. The question that many people were asking was “Can we trust financial institutions with our money?” Satoshi’s answer was creating a system that did not require us to trust any centralized financial institutions. Bitcoin and other cryptocurrencies set out to upend the financial order and replace conventional money. Bitcoin has certainly disrupted the global financial system, but can it ever live up to the hype? Check out this video explainer of Bitcoin. The Economist (11 minutes)

Bitcoin and Renewable Energy

In Bitcoin’s early years, a crypto enthusiast could mine coins by running software on a laptop. But as digital assets have become more popular, the amount of power necessary to generate Bitcoin has soared. A single Bitcoin transaction now requires more than 2,000 kilowatt-hours of electricity, or enough energy to power the average American household for 73 days, researchers estimate. To achieve that, some miners are reviving broken-down coal plants, or using low-cost natural gas to power their computers. Last month, a study in the journal Joule found that Bitcoin mining worldwide may be responsible for about 65 megatons of carbon dioxide a year, comparable to the emissions of Greece. Facing criticism from politicians and environmentalists, the cryptocurrency mining industry has embarked on a rebranding effort to challenge the prevailing view that its electricity-guzzling computers are harmful to the climate. All five of the largest publicly traded crypto mining companies say they are building or already operating plants powered by renewable energy, and industry executives have started arguing that demand from crypto miners will create opportunities for wind and solar companies to open facilities of their own. Time will tell whether crypto mining will save or destroy the planet. New York Times (11 minutes)

Solar Mining

Blockstream and Jack Dorsey’s Block, formerly Square, are breaking ground on a solar- and battery-powered bitcoin mine in Texas that uses solar and storage technology from Tesla. Tesla’s 3.8 megawatt solar PV array and 12 megawatt-hour Megapack will power the facility. There is a debate about the the environmental impact of bitcoin mining. They are setting out to prove that bitcoin minnig can be done in a clean way. The project will have an open dashboard so people can play along, maybe it can inform other players to participate. The dashboard will be publicly accessible and show real-time metrics of the project’s performance, including power output and total bitcoin mined. The company said a later version of the dashboard will also include solar and storage performance data points. CNBC (6 minutes)

Bitcoin and Crime

I featured this talk previously in the Weekend Briefing, but it’s the best content I’ve seen on bitcoin and criminal activity. Kathryn Haun is a federal prosecutor with the U.S. Department of Justice and is its first-ever coordinator for emerging financial technologies. In this TEDx talk, she tells the story about how U.S. prosecutors used the bitcoin blockchain to shut down The Silk Road—a dark web bazaar selling illegal goods. But the more interesting twist is how they also used the immutable power of the blockchain to bust some dirty cops in the process. There are a lot of twists I didn’t see coming. It’s definitely worth a watch. Next time you hear a friend saying that bitcoin perpetuates crime, please share this video with them. TEDx (22 minutes)

Free Keene

Ian Freeman could have been a bitcoin billionaire. Instead he could go to prison for the rest of his life. Although he was one of the first Americans to popularize bitcoin, 10 years and several million percentage points of investment return ago, Freeman has been hawking cryptocurrency less for the money and more for the libertarian ideals he believes it represents. In rural New Hampshire, he has long been the figurehead of an activist collective called Free Keene, which agitates against state power in every form, from cops to taxes. As Freeman sees it, two ideas are inseparable: Using bitcoin is provoking the government. Supplanting the dollar and weakening the central banks that print fiat notes with abandon: This was the shared vision of bitcoin’s founding generation of investors and evangelists. And this vision, Freeman reasons, was threatening enough to the government that it freaked out and threw him in jail. “For the first time in generations, if not most of human history, the individual can finally have control over money,” he says. “No wonder they’re upset.” The ultimate target, in other words, wasn’t Freeman or the Shire but cryptocurrency itself. New York Magazine (38 minutes)

Financio-populist

A strong appeal of bitcoin is that it’s seen as a way for the outsider to build wealth. There’s a sense that the cryptocurrency offers the common man or woman the opportunity to pull ahead of the people who had always had wealth before—the children of privilege, the corporate grinds, the well-connected finance bros. There was a populist energy behind the idea of upending the distribution of wealth. It's an updated and superior version of Occupy Wall Street. I deeply understand the financio-populist impulse. Wealth inequality is at record levels. That wouldn’t be so bad if fortunes rose and fell, and everyone got to spend a little time at the top. But you hardly hear about anyone going from riches to rags these days. There’s always the nagging sensation that the system is rigged—that to get rich you have to have gone to the right East Coast prep school or met the right angel investors at the right parties. In that kind of world, anything that mixes up the set of who’s rich and who’s not can feel like justice. Yes, we all have heard of that one guy who worked at Starbucks before he got rich on Bitcoin or GameStop, and now drives a Lamborghini. Financial markets are random enough where there will always be that guy. But overall, will buying bitcoin leave the average person richer or poorer than before? Is it possible that their dreams will end up lining the pockets of the rich, knowledgeable and well-connected? Noahpinion (5 minutes)

Bookshelf

The Bitcoin Standard by Saifedean Ammous. When a pseudonymous programmer introduced “a new electronic cash system that’s fully peer-to-peer, with no trusted third party” to a small online mailing list in 2008, very few paid attention. Ten years later, and against all odds, this upstart autonomous decentralized software offers an unstoppable and globally accessible hard money alternative to modern central banks. The Bitcoin Standard analyzes the historical context to the rise of Bitcoin; the economic properties that have allowed it to grow quickly; and its likely economic, political and social implications. Buy Now

Most Read Last Week

Web3 Impact—Check out our latest newsletter about the potential of Web3 technologies to change the world.

Women and Burnout—According to McKinsey, women are the glue at many companies, and to put it bluntly, they are just barely hanging on.

Community—Research shows that you thrive more when you have a wide assortment of people that meet your various emotional needs. Becoming a member of communities helps build this social diversity.

Weekend Briefing

The Weekend Briefing is a Saturday morning briefing on innovation and society by Kyle Westaway—Managing Partner of Westaway and author of Profit & Purpose. Photo by Guzmán Barquín 

Funding Fridays

In addition to the Weekend Briefing, I write a monthly briefing on startup funding called Funding Fridays. I review the startup funding deals from the past month and deliver a concise summary to you on the first Friday of every month. If you’re interested, click here to subscribe to Funding Fridays.

Should We Work Together?

This newsletter is my passion project. When I’m not writing, I run a law firm for startups. Most entrepreneurs want a trusted legal partner, but they hate surprise legal bills. At Westaway, we take care of your startup’s legal needs for a fixed-monthly fee so you can control your costs and focus on scaling your business. If you’re interested, let’s jump on a call to see if you’re a good fit for the firm. Click here to schedule a call.

Weekend Wisdom

My hope is that bitcoin creates world peace. – Jack Dorsey

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