Happy Sunday (or just a general hello, depending on when you’re reading this😄)!

The dust has settled from the ETFs dropping two weeks ago and this week felt a little more normal. Er, as normal as things can get in the Bitcoin world. My favorite story this week is about normal people finding ways around a draconian government ban; always a good time. Enjoy that plus two other headlines and a quick note about inflation in this week’s TBB.

Last Week in Bitcoin

BlackRock says spot bitcoin ETF is attracting a diverse set of investors

This article from The Block focuses on comments made by BlackRock’s Head of U.S. iShares Product, Rachel Aguirre, about who has been showing interest in their spot bitcoin ETF. According to Aguirre, the ETF has drawn “interest from both retail and self-directed investors.” She also noted the financial company’s commitment to education for clients.

I’ll go ahead and suggest The Bitcoin Standard and The Bullish Case for Bitcoin as good resources to start with, but I doubt BlackRock is listening. 😅 

Nearly 66,000 users affected by phishing attack, says Trezor

In a January 20 post on their Medium blog, Satoshi Labs, maker of the popular hardware wallet Trezor, alerted users to a security breach that took place on January 17. The incident was related to the third-party platform that the Trezor team uses for support tickets. Users affected by the incident were notified by email.

In the post, Trezor pointed out that no users’ funds were compromised and reminded users of some important security tips.

If you are a Trezor user and have any concerns about the security incident, contact their support team through their website.

Laundry and crypto: Chinese crypto users trade in public places to subvert ban

Ever since China announced a ban on all cryptocurrency transactions in 2021, users of Bitcoin and other cryptocurrencies have had to find ways to get around it. This article from CoinDesk covers a Wall Street Journal report that sheds some light on those ways. Users meet in public places like cafes, snack kiosks, and laundromats to buy, sell, and trade crypto.

One of the arguments often leveled against Bitcoin is what will happen if a government outright bans it. If China is any indication, people who want to use the Bitcoin network will find a way, no matter what their government says.

Beginner Bit: What is inflation?

“Back in my day…”

It’s a favorite phrase of boomers everywhere. Usually, the phrase gets busted out when talking about how expensive a certain good or service has become. If we use the example of the cost of a movie ticket, it’s easy to see why.

The average movie ticket in 1945 cost $0.46¹ . That’s a stark contrast to the average in 2023: $10.53² . Why was there such a big jump in price? Are movies that much better? Are they that much more expensive to make?

Any answers to the first question will be pretty subjective. The answer to the second question is, thanks partly to CGI and production size, yes³ . But there’s a third answer lurking behind a third question I didn’t even ask - one that affects all prices, not just the price of a movie ticket.

Let’s look at another example; one that went viral on TikTok back in December 2023. Have you ever seen Home Alone? If yes, do you remember the scene when he went shopping for groceries? The total of his groceries was $18.83 after a $1 off coupon. Watch TikTok user @sellitlikelyons break down what those same groceries cost in 2023:

@sellitlikelyons

Groceries in 1990 vs Today Breakdown ☠️ #fyp #homealone #rockwalltx #geoffreylyons #lyonsden #northtexas #dallastx #dallasrealestate #dfw #dfwrealtor

A lot of those products aren’t any different from the ones we buy today, so why the big price increase? The answer is inflation.

Inflation is, according to Investopedia, a rise in prices, which can be translated as the decline of purchasing power over time⁴ . The rate of inflation can be measured by a select group of things called a basket of goods (think food, housing, energy, etc) to form an index. Two of the most widely used indexes to measure inflation are the Consumer Price Index (CPI) and the Wholesale Price Index (WPI).

Inflation has made a lot of headlines in the past few years. Since 2021, inflation has affected every nation on the globe and can be attributed to multiple factors⁵ : rising demand for goods coming out of the pandemic, a broken supply chain, corporate price gouging⁶ , and, the one that Bitcoiners are most concerned with, an increase in the money supply due to government spending and fiscal policy.

Every single one of the factors listed above is crucial to understanding why inflation soared to heights not seen since the 1970s, but the first three can, at least partly, be attributed to the unique circumstances of COVID-19. But the last one, an ever-increasing money supply, doesn’t go away, and we hear about it every time a budget battle comes up in the U.S. Congress to fund the government.

How does government spending affect inflation? How does it relate to the money supply and the Federal Reserve, the central bank of the United States? We’ll take a look at these questions - and finally talk a little about Bitcoin - in the next issue of The Bitcoin Beat.

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I don’t recommend buying bitcoin until you’ve done at least 100 hours of research. When you feel comfortable with the basics and are looking to finally hold your own, consider using Swan, a bitcoin-only exchange that provides excellent learning resources and emphasizes self-custody. This is an easy way to support The Bitcoin Beat and stack sats at the same time.

Use the following link to set up an account with Swan and receive $10 in free bitcoin:

swanbitcoin.com/groovinflannel

Full disclaimer: I am a Swan user and will receive 25% of the fees from any purchase you make for one year.

Lastly, I’d like to leave you with an example of the type of situation that Bitcoin was made for. The ongoing war between Israel and Hamas has left many innocent civilians without shelter, medical services, food, and water. If you are Bitcoin-savvy and would like to donate to relief efforts directly on the ground, please consider donating to Yusef Mahmoud’s Geyser fund.

-groovin’

Disclaimer: The content above is not financial advice. The Bitcoin Beat is an educational newsletter and does not offer financial advice.

Sources

1. Suneson, Grant. “Cost of a Movie Ticket the Year You Were Born.” 24/7 Wall St., 22 Aug. 2019, 247wallst.com/special-report/2019/08/22/cost-of-a-movie-ticket-the-year-you-were-born-2/.

2. “Movie Market Summary 1995 to 2024.” The Numbers, www.the-numbers.com/market/. Accessed 20 Jan. 2024.

3. Buchman, Eric. “Why Hollywood Movies Are More Expensive to Make than Ever.” Digital Trends, Digital Trends, 10 Dec. 2014, www.digitaltrends.com/movies/why-hollywood-movies-are-more-expensive-to-make-than-ever/.

4. Fernando, Jason. “Inflation: What It Is, How It Can Be Controlled, and Extreme Examples.” Investopedia, Investopedia, www.investopedia.com/terms/i/inflation.asp. Accessed 21 Jan. 2024.

5. Kalish, Ira, and Michael Wolf. “Global Surge in Inflation.” Deloitte Insights, Deloitte, 18 Feb. 2022, www2.deloitte.com/xe/en/insights/economy/is-the-global-surge-in-inflation-here-to-stay.html.

6. Andrew Perez, Matthew Cunningham-Cook, David Sirota, et al. “The Pundits Were Wrong: Corporate Greed Stoked Inflation.” Jacobin, 5 Aug. 2023, jacobin.com/2023/05/inflation-corporate-greed-mainstream-media-pundits.