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Bitcoin whitepaper celebrations amid high inflation and rates ratcheting up

The bitcoin community is celebrating the 14th anniversary of the release of the bitcoin whitepaper. This formal announcement and description of the bitcoin network was posted to The Cryptography Mailing List on 31 October, 2018. Celebrations of the whitepaper’s announcement occur this year with a backdrop of high inflation and with central banks lifting interest rate targets.

Graphical excerpt from the whitepaper illustrating a privacy advantage that bitcoin offers.

Satoshi Nakamoto, the pseudonymous creator of bitcoin, described his creation for the first time on Halloween (31 October), 2008. He wrote, “I’ve been working on a new electronic cash system that’s fully peer-to-peer, with no trusted third party,” and linked to the whitepaper.

Adam Back, proof-of-work pioneer and creator of Hash Cash, was cited in the Bitcoin whitepaper by Satoshi Nakamoto.

Bitcoin is the declared legal tender of two nations: El Salvador and the Central African Republic. The notional market capitalization is $610B (AUD). Over 300 EH/s of computing power secures the network. 6.25 BTC is awarded with each new block. On this basis, supply inflation is 1.7%. Issuance of new bitcoin will be reduced by 50% in 18 months to 3.13 BTC/block. Lightning network liquidity exceeds 5,000 BTC. More statistics are available at BiTBO.

The supply schedule for bitcoin is inflexible and ultimately capped at 21 million units. This contrasts with the Aussie dollar for which supply fluctuates according to edict, cannot be easily audited and has no absolute cap on supply. The Reserve Bank of Australia will announce its interest rate target later today. Analysts have tipped a relatively modest 25 basis point rise, to 2.85%, on the path to a peak of 3.9% next year.

Despite interest rate increases, price inflation is still a challenge in Australia. Third quarter inflation here was calculated at 7.3% (year-on-year) by the Bureau of Statistics. This is the highest rate in 30 years.

Fuel for transport is rose steeply in recent weeks. The average price for unleaded fuel in Sydney exceeds $2/L. Chart and data from PetrolSpy Australia.

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