What governments are looking at, at the moment is how to implement features in their CBDC designs that can trick transactions, create illusions and for them make useful transferring technologies.
This is not optimal for the users of a CBDC if numbers are hidden away, the databases are closed and big amounts of user data are directly captured by states/Central banks.
Currently states/Central banks work closely with banks to send hidden transactions for funding of secret purposes the government wants. Earlier big amounts of cash were also often seen, but this is declining since it´s harder to use in many parts of the world.
If a bank/banks of a country have problems (systemic / G-SIBs) the government of the country (+sometimes other countries/banks with no interest in a collapse) will often bail them out in some way to first of all save themselves and their interests.
Three out of many reasons why Bitcoin is such an important concept is the openness/transparency directly on chain and that the monetary policy is predetermined. Especially the open ledger (Triple-Entry accounting system) and the decentralized nature of participating via mining and validating to ensure solving the issue of potential double-spending is very important in the long run for people worldwide. Nobody can freeze your money.
Of course, it will still be possible to make tricks with BTC and send them around to different wallets, buy/sell over the counter, use a mixer, use an unregulated exchange but the transactions can still be tracked back and seen – also when you use Lightning Network. Different firms are actively red-marking wallets that have stolen BTC via scams like Phishing, Ransomware, Blackmail, Sextortion, Impersonation, Fake returns, Contract exploits and other hacks.
What can be done with CBDCs?
The thing is that governments do different things to obscure their transactions and one of the biggest things is to donate to institutions in the partnerships they support, then the institutions will send the money via different routes and suddenly a country have access to a product (raw materials, weapons, medicine etc.).
Often Central banks who are lenders-of-last-resort will introduce swap lines and favor countries which holds a bigger share of their assets and/or are political aligned. So in the next years you will be able to see how many closed sourced CBDCs will get entangled and directly swapped – Will it be possible to watch these transaction real-time? I personally heavily doubt it.
Governments also buy votes by creating money “out of the thin of the air” and send it to people. This is often seen when governments wants to buy different voter groups or under Covid-19 where many people were handed government checks to keep their moral high during the pandemic/monetary inflation.
Governments also have connections to banks and will probably use some of their stable coins to obscure transaction later, but they actually don´t need this step since the CBDCs are in closed database aka closed sourced systems and only validated by the Central Bank itself.
Remember that governments will decide what terrorist financing is via labeling, so a country can send money to an institution/country today change the label so it becomes a terrorist institution/country tomorrow, and if you send money the day after you now support terrorists or your account is simple frozen.
Maybe take a look into some of these areas: Cash-intensive businesses, Structuring, Bulk-cash smuggling, Shell companies and trusts, Round-tripping, Trade-based laundering, black salaries, assigning life insurance policies or real estate.
Money laundering
Money laundering by states/countries normally follows three steps: Placement, layering and integration.
1: Create money by pressing a key in a Central Bank (central bank reserves/wholesale CBDC) introduce it to the “legitimate financial system”. Remember it´s almost free for a Central Bank to create new money since there is no process of Proof of Work (PoW) like under the Bitcoin or gold standard.
2: Move the money to create confusion – Wire or transfer the money through various accounts. Since the accounts often are using a closed sourced system, the public cannot follow the process (no real-time audit), but needs to trust what the state/government states they have been doing.
3: Integrate the money by making more transactions that seem legal, so the worthless “often newly created” money seems clean and integrated.
Trust Mathematics because Mathematics don’t lie
So, governments will probably not make money open and traceable with their new CBDC solutions even though it is very easy to do. Another bad thing about CBDC is the heavy monetary inflation that lenders of last resorts put on their users with their enormous debt creation (What is MMT?).
Following the money will get easier with public BTC and harder with private CBDC.
I currently don´t see any CBDC explorers, but I see many Bitcoin explorers (real-time audits) where I can follow blocks, transactions, fees, addresses, balances, OP-Return data and different protocol data.
A sound monetary system with Bitcoin will be a good thing for other sectors since trust and accountability are the root of Money and what financial sector/services handle for other sectors in an economy. If you cannot trust the root, you cannot trust the economy in a country/region/company.
Extra
Different countries are currently looking at the implications of Non-scattering, cloaking and broken symmetry via metamaterials – Why? Because Quantum radars can detect more than normal radars. Metamaterials will improve many things like your lens in your mobile phone or drone, but also many other areas will meet metamaterials sooner or later.
How often to governments audit their gold reserves and where do I find these audits? Bitcoin addresses and transactions are easy to audit.
Let´s take a look at some of the big institutions.
Here you can have a deeper look at the process for the BlackRock ETF.
Here is a new article about six BTC spot ETF proposals for review.
Here are some pics of the current ETF in US (May)
Here is a figure from another place:
There has been a long history of trying to make a Bitcoin spot ETF in the US, but it´s still not done.
Here is an old list of some of the old listings with the SEC.
Remember that it is possible to own your BTC by yourself and not through an ETF or fund. It might be easier for tax purposes etc. but you are not in control, your custodial is.
It´s not hard to setup a BTC wallet.
When you start buying and hodling Bitcoin it might be a good idea to get a dual wallet setup.
This means you will have a hot wallet and a cold wallet.
A hot wallet is a wallet where you store the BTC you want to use for buying a coffee or a flight trip, where your cold wallet is for bigger amounts that you want to protect more safely.
Today (July 20, 2023) the Federal Reserve (USA) launched FEDNOW an instant account-to-account payments rail. This is what some call an account-based CBDC. A token-based model is not in play yet by the FED. The Stablecoin Tether offer a token-based solution with their USDT token pegged to the US Dollar.
TCHs (The Clearing House) RTPs (Real time payment) went live in 2017 six years ago and is pretty much the same as FEDNOW, other than they have implemented a token-based CBDC solution inside it´s account-based system – read here.
Now there are two RTP rails in USA from the state.
Bitcoin has been live in USA and all around the world as a RTP rail since January 2009.
There are some differences between CBDCs and the projects currently live around the world.
Here is a figure of some of the designs.
Figure 1
The FEDNOW project is a Hybrid CBDC. The FEDNOW system and the Reserve Banks will provide access to intraday credit (Wholesale CBDC) to participants of the FedNow Service during the Federal Reserve’s normal operating hours, and a liquidity-management tool to help participating financial institutions conduct interbank transfers during hours when the Federal Reserve’s normal liquidity services are not open (e.g., on weekends). Early adopters of the system can be seen here.
Other countries have different other takes on CBDCs as Figure 1 also show + countries use different cryptography, some use Quantum resistant systems others not, some want more privacy via ZKP and some use token-based systems implemented in account-based systems(like TCH) and some token-based systems etc.
Alternatives in US
Right now, are there a few alternatives to FEDNOW and TCH with same instant transaction functionality in the US. This is Bitcoin (BTC), BTC via Lightning Network, Tether (USDT), CashApp, Paypal (Paypal and Cashapp don´t use interbank networks), Venmo and Card providers like Mastercard and VISA.
It will be interesting to see what will happen and if this account-based CBDC system will end up to tax, surveil and control the American people.
Figure 2
Remember: Any financial institutions with access to U.S. instant payment systems or stablecoin service providers operating in the United States would be generally subject to U.S. AML/CFT obligations. Stablecoins are generally not distinct from other digital assets, and financial institutions offering services in stablecoins in the United States are subject to the same AML/CFT regulatory and supervisory framework as financial institutions providing the same services with other financial instruments. Check out the U.S. Department of the Treasury Report on the Future of money and payments from September 2022.
Extra
It´s is still hard to see how much e-CNY there actually are in circulation since China´s PBC, the last seven months have stated the same thing, only giving the December number, but with all their initiatives, shouldn´t the circulating supply not suppose to increase?
BTW: How do you think this will help American citizens to faster onboard to BTC and will this increase adoption? Today (07202023) BTC has dipped around a 1% to 29.700 USD.
The world has a long history of minting coins. To exactly point out when it started is hard, but history tells that it happened in Lydia with dates ranging from 700-550 BC.
The idea of doing monetary transactions with coins was a huge move from silver rings and before that bartering.
These coins depicted the heads of gods and goddesses on the front side (observe), while the back side (reverse) showed animals, natural resources, symbols and references to historical events.
A big change happened under Julius Ceasar in 44 BC, when he started minting coins with his own portrait on the front side of the coin and his accomplishments or aspirations on the back side – figures and text is seen on the coins.
Since then, profile portraits with rulers, heroes and members of royal families been normal throughout the world.
The process of minting these coins were not easy, and engravers carved the small portraits into bronze dies, with one for the front and another for the back. The coins were then struck, one by one in a process similar to the one seen today.
The medium was often gold, silver or copper. Today some people with interest in numismatics put a big effort in collecting these often very expensive coins because of their history.
Bitcoin was born
Including metadata onto BTC (Bitcoin transactions) is not a new idea and was probably inspired by Hal Finney´s “Crypto trading cards” post back in 1993.
As you´ve probably now – Satoshi Nakamoto in 2008 proposed the Bitcoin whitepaper. He focused on the main problem to solve, namely making a decentralized peer-to-peer electronic cash system using the Proof of Work based Nakamoto consensus. In 2009 the protocol was ready, and Satoshi Nakamoto started minting the new sound currency with the help of computers and electricity.
Text messages have been embedded into blocks on the Bitcoin protocol, like the first message from Satoshi Nakamoto in 2009 – “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks” via coinbase data.
Text messages and metadata onto BTC
Like Satoshi did back in 2009 many have put text messages (“hidden messages”) onto BTC.
A nice paper from 2017, described the different methods to insert data into the Bitcoin blockchain, remember it´s 6 years old. The standards scripts described includes Pay-to-Public-Key (P2PK), Pay-to-Public-Key-Hash (P2PKH), Multi-Signature, Pay-to-ScriptHash (P2SH), and OP_RETURN.
It´s also possible to insert data via coinbase (like Satoshi Nakamoto did), P2FKH, P2FK, P2FMS.
It´s possible to do in different ways, one is to write it via Bitcoin Core and convert a text message into a hex format. A guide can be seen here. Or use Electrum (A BTC wallet). Actually, a service was provided by Eternitywall, so it was easier for people to do.
Another site called Bitcoinstrings have specialized in finding these text messages.
Another site built by Przemysław Rodwald has also looked into these messages, see the picture below.
A paper on OP_RETURN meta data was released in 2017.
In 2012, colored coins (layer 1 protocol) introduced the idea of digital assets on Bitcoin. The first working Colored Coin protocol was released in 2013. In 2014 OP_RETURN changed and changed the structure of how many used colored coins.
In 2012 the idea of Mastercoin (layer 2 protocol with native token) was born (first ICO – 2013) which allowed the creation, buying and selling of digital assets (USDT) powered by the MSC token (later Omni).
In 2014 Counterparty (layer 2 protocol with native token) allowed the creation, buying and selling of digital assets and NFTs powered by the XCP token. Here the first gaming NFTs with SoG and FDCARD (2015) were issued and later the Rare Pepe (2016).
Blockstream (Layer 2 – Sidechain) have implemented NFTs (Raretoshi and AMP assets on Liquid Network).
Stacks (layer 2 protocol with native token) have implemented NFTs.
It´s worth mentioning that Lightning Network the great Layer 2 protocol running on Bitcoin, is also coming with solutions for making digital assets on Bitcoin. Keep an eye on Taro and RGB, where you also are able to mint NFTs.
Another solution is Drivechain and their sidechains solutions. The BIP 300/301 is super interesting.
It´s worth noting that metadata is not only about NFTs, but all kinds of scripts and not only “Lenna” images. Another “fun” thing is that you actually can play Doom on Bitcoin now. You can use Bisq (decentralized exchange) build upon the tech of colored coins and much more.
Metadata on other chains than BTC
The first ever “NFT” was minted on Namecoin a fork of Bitcoin (aka first altcoin) back in 2011. This was a domain (d/bitcoin.bit) released on 2011-04-21. Later Punnycodes, ASCII Art and many other NFTs were issued on Namecoin.
Some consider the first “NFT Art” to be the piece called Quantum (2014).
Later on, other blockchains like the altcoins: Ethereum, BNB, Cardano etc. have implemented NFTs.
NB: These altcoins have nothing to do with metadata on BTC.
Ordinals and inscriptions on Satoshis
Inscriptions on the “Magic Cable/Radio wave money” have become real because of the introduction of the Segregated Witness in 2017 and Taproot implementation in November 2021, which made it possible to make Ordinals (Layer 1 protocol) in January 2023.
Casey Rodarmor did the first inscription, using Ordinals (Off chain by purpose-built external indexer), via a sat (satoshi, aka smallest unit of Bitcoin) showing a black and white skull back in 2022.
The timestamp can be seen here: 2022-12-14 20:32:00 UTC
A few days later second inscription happened with Inscription 1.
Inscriptions was released to the Bitcoin mainnet (to the public) on January 21, 2023 – 36 days after the first inscription.
Today (2023-05-16) everybody is able to inscribe their own picture/digital content on a Satoshi and already +7,200,000 inscriptions have been released. Note you can only inscribe with the need of an external indexer, read more here.
Only the future can tell which kinds of art of with accomplishments and/or aspirations will be inscribed on sats via Ordinals.
Right now, you can inscribe via Ordinals: Images, GIFs, Text, Videos, Audio, HTML, SVGs and 3D.
A new token standard called BRC-20 has launched (2023-03-08). This experimental fungible token leverage JSON data in the form of Ordinal inscriptions.
The future of NFTs and metadata on the Bitcoin protocol
Like Julius Ceasar started to place his head on coins people can now do it on satoshis, but it comes at a cost. The block size in the Bitcoin protocol is limited to 4 megabyte and the Bitcoin protocol can get clogged if everybody starts minting their pictures etc., directly on the Bitcoin protocol.
So, the Ordinals protocol might become a problem, since the pieces of data takes space and make the most important transactions namely the financial transactions, have to wait to become processed.
On the date 2023-04-22 a block (786,501) was made containing 3,978,938 bytes.
Another problem is that your inscriptions can get purged in the mempool if the fee is set to low. Normally you would get your money back if a financial transaction get purged in the mempool or you would be able to use RBF or CPFP. So ordinals wallets need to implement this feature – which they have done so it’s fixed.
It´s hard to tell what idea is the best to handle this problem, which might become bigger, but I am sure that the people in the Bitcoin space have a wise understanding heart to judge between the good and the bad!
Satoshi Nakamoto proposed a decentralized peer-to-peer electronic cash system and this is still very, very important in a world with increasing piles of debt and political interest in money creation.
A sound monetary system is here with Bitcoin!
Long live humanity and remember to level up for survival!
Mining Bitcoin on the moon is not a new idea and it will happen sooner or later.
The idea of mining Bitcoin in the moon is not feasible at the moment, the technology is not ready yet, setting up Bitcoin full nodes with lightning would be better for a start. For miners there will need to be a lot of testing with mining rigs in LEO (low earth orbit) and this will allow for environmental hardening and testing prior to the more harsh lunar environment.
The early installs will be for marketing purposes and prototyping/testing. The not too many tons budget for the next few decades is primarily determined by governments, so private companies and individuals will need to push limits and pay by themselves if the plan should happen in the near future.
The idea is to make a sound and secure monetary system on the moon. At the same time, it will be possible to use the excessive energy from solar panels, nuclear plants and thermo-electric generators (TEG) in low-demand periods for the space powerstations which are soon to be made by the US, China, UK and Japan.
Benefits of Bitcoin mining on the moon
1. It will be a liberty engine on a natural satellite, and a safe monetary network in outer space.
2. It will help with testing ASICs in outer space.
3. It will help making earth-moon entangled communication more efficient.
4. It will help stress-testing the moon-grid before wireless power transmission (WPT) aka Power beaming is fully up and running.
5. It will help to quietly heat up space stations while making money.
6. It will be able to match controllable load with uncontrollable generation when the WPT is running.
7. It will push the builders of the quantum internet to reduce latency on the Bitcoin Network.
Solutions:
The application-specific integrated circuit (ASIC) miners for mining Bitcoin will be strategically placed on the moon.
There are different solutions to withstand the shifting temperatures on the moon since the moon also rotates around its own axis (takes 27.32 days), so a lunar day (sunlight is exposed to the surface for around 13.66 days and same for the lunar night. The temperatures changes from: Daytime temperatures near the lunar equator reach a boiling 120° C (250°F, 400 K), while nighttime temperatures get to a chilly -130° C (-208°F, 140 K)1.
A. Place the ASIC miners in pits/caves. These shadowed pits/caves would have a stable temperature around 17°C which would fit the ASIC miners perfectly2. At the same time, miners would be able to heat up the caves, making it viable for humans to stay there.
Cables will supply the ASIC miners with electricity from either the nuclear plants, lunar solar cells or TEG. Regarding the energy from Solar and TEG, it will probably go to an energy transmission base, and from here a cable would go to the cave with the ASIC miners. The ASIC miners need an input to solve the hash puzzle and an output to direct their mined blocks. This would happen via a cable to a transmission base on the earth-oriented side of the moon (if the miners are placed on the other side, lunar cycle). The input and output will point directly to the earth or to a Bitcoin satellite (Blockstream) via Laser beam transmission and Radio frequency transmission (for backup)
B. Encapsulate the ASIC miners with mooncrete (lunar concrete/lunarcrete) so they can withstand the extreme shifting of temperatures during the lunar cycles and radiation. For a long time, the idea was to use mooncrete with sulfur, but it seems to have changed, because of the melting point and stability of sulfur345. The concept with the transmission of electricity and Laser beam/RF would be the same as above (A). These facilities would be placed around the moon where people will stay/live, so they could help generate heat for the moon population and secure a sound monetary network. Many propose making cities near the lunar pools, since it´s possible to harvest power from the sun via solar cells up to 95% of the time67.
ASIC miner specs on earth:
– The operation altitude is something that needs a lot more testing. When the ASIC miner is used at an altitude from 900m to 2000m, the highest operating temperature decreases by 1℃ for every increase of 300m8.
– Optimal conditions for ASIC miners are around 5-35 °C (can go a bit lower or higher, and will probably be tweaked for the operation) 9.
– Relative humidity (non-condensing) around 10-90%.
– Directing the heat exhaust from the ASIC miners to places where people live, factories, or just to heat the facility where miners are placed (not a problem in the caves/pits, but maybe ventilation is needed here).
– Robots should be able to service and clean the mining facility (the room the miners are in) and do maintenance on the machine, no robotic ASIC mining facilities is not seen on earth yet. Software updates is the easiest problem to solve, but visual inspection – like checking fans, cable and connectors is harder. Even harder is dismantling the machines, dust cleaning, with air compressors and/or antistatic brushing and ultrasonic baths.
Still a lot of testing needs to be done.
The cost and backup batteries
Also remember it´s still very expensive to bring stuff to the moon, so it´s probably better to start small, setup the facility and then scale up. Since there is an ongoing space race with better rockets and more competition, the price per kg has lowered, and with better technology, it will become more feasible to setup the system, but who will be the first? Many ASIC miners weigh in the +10 kg range.
It should also be possible to secure the moon-grid with 3D-printed sodium batteries, fuel cells10 or radioisotope thermoelectric generators (RTG) for backup. It should not be a problem, when connected to the moon grid, however, stable electricity is important for ASIC miners because they need to uphold durability and sustain efficiency.
Why this paper?
It´s important for the human race to level up according to Kardashev scale and go interplanetary – The moon is the first step on this adventure called “securing human life”.
This paper is building on the ideas of great scientists that have made a great effort in coming up with ideas to make a sound electrical monetary system, including Henry Ford, Thomas Edison, Richard Buckminster Fuller and later the cryptographic researchers/cypherpunks, including names like R.C. Merkle, David Chaum, Wei Dai Adam Back, Nick Szabo, Satoshi Nakamoto and many other great people.
Notes:
Distance:
The average distance to the moon is 382,500 kilometers, this distance varies because the moon travels around Earth in an elliptical orbit. At perigee, the point at which the moon is closest to Earth, the distance is approximately 360,000 kilometers. At apogee, the point at which the moon is farthest from Earth, the distance is approximately 405,000 kilometers11.
Speed of Signal via Lasers (encodes data in photons) + Radio Frequency
The speed of light = 299,792,458 m / s = 299,792.458 km / s
Distance
Calculation
Seconds
Light-seconds
Astronomical Unit (AU)
Average – 382,500 km
382,500 km/299,792.458km/s
1.27 s
1.27 light-seconds
0.00255685 AU
Shortest – 360,000 km
360,000 km / 299,792.458km/s
1.20 s
1.20 light-seconds
0.00240645 AU
Longest – 405,000 km
405,000 km / 299,792.458km/s
1.35 s
1.35 light-seconds
0.00270725 AU
The transmission of a signal to the moon is not really a problem, the Bitcoin software works with 600 seconds (10 min) blocks. There will of course be some latency for the ASIC miners on the moon, for receiving the signal (new block reception). The bigger problem is all the earth mining facilities also will have to wait when a block gets mined on the moon and distributed to the network for validation (Next block dissemination). Combining the earth and moon Bitcoin mining grid will create latency, which will end in waste of some hashing power on already solved cryptographic puzzle (blocks). It will take some time to optimize the interaction with earth and moon, but it should be solvable.
The problem with latency is something mining facilities on the earth already optimize a lot to increase their rewards. Different tools like Miner Entanglement (ME) have proved to increase newly discovered blocks on Bitcoin nodes, which benefit in more rewards12.
Extra: Lasers can pack much more data than RF, but you’ve got to depend on RF on days with very cloudy weather as this can interfere with the laser communication (laser can do partial cloudy weather).
Laser communication have already proved their way for communication from moon to earth1314.
ASIC mining chips for BTC
Mining Bitcoin started when Satoshi Nakamoto used his CPU (central processing unit) back in 2009 to mine the first BTC. In 2010 the first mining devices utilizing GPU (graphics processing units) was developed and used. In 2011 FPGAs (field programmable gate arrays) were re-modeled to mine Bitcoin and was the most efficient at that time. 2013 was a groundbreaking year in BTC, when the first ASICs (application-specific integrated circuit) were designed by Avalon, now Canaan Creative. Since then, ASICs have become more advanced and smaller (soon 3nm), newer manufacturers have entered the market and advanced the chips, to mention a few; Bitmain and MicroBT. Right now, ASICs are still the leading technology in Bitcoin mining, but it might change in the future with the introduction of quantum devices?15
Powerstation notes/Space Grid participants:
Power stations are needed. It is possible to make solar cells directly on the moon with robots controlled from earth like Shimizu have proposed16.
Blue Origin say they have made solar cells of simulated moon dirt17.
Lunar Resources say they have made solar cells of simulated moon dirt18.
+ Different universities like Taltech19 are designing solar cells etc.
Nasa and Doe are looking to design a nuclear reactor (fission) for 40 kilowatts of power 20.
China talks about nuclear reactor (fission) on the moon in 202821.
Rolls-Royce will send their nuclear reactor (fission) to the moon in 202922.
Global Power Technologies have earlier provided NASA with TEG for moon missions.
Nuclear fusion on the moon will eventually become possible, as the moon has an abundant supply of helium-3.
Great Rocket manufactures:
SpaceX, Blue Origin, NASA, Aerojet Rocketdyne, Boeing, Northrop Grumman, Energomash, CASIC, RFA, Agnikul Cosmos, One Space technologies etc. Building on great ideas by, among others Archytas, Hero of Alexandria, Song dynasty, Roger Bacon, Johann Schmidlap, Wan-Hu to newer rocketry scientist like Sir Isaac Newton, Willem Gravesande, William Congreve like Konstantin Tsiolkovsky, Robert H. Goddard, Hermann Oberth, Wernher von Braun, Sergei Korolev, Mikhail Klavdievich Tikhonravov, Qian Xuesen and many other later coming great scientists23.
WPT (wireless power transmission)
People in the field of WPT also have many names to consider like James Clerk Maxwell, Herman von Helmholtz, Henrich Hertz, Wilhelm Bjerknes, Nikola Tesla, Raytheon, William Brown, Peter Glaser (Father of Solar-Power satellite idea), Georg Goubau, Felix Schwering, MSFC, JPL, DOE/NASA, Hiroshi Matsumoto and JAXA, CRC and SHARP, Naoki Shinohara and JAX, Nobuyuki Kay and John Mankins, AFRL, NASA and many different universities etc.
WPT with power beaming is the efficient point-to-point transfer of electrical energy across free space by a directive electromagnetic beam24.
