Jack Mallers merges Strike and Tether to build Bitcoin banking giant

Open Source (2)

• Carl and Keon discussed open-source funding, arguing corporate contributions should be seen as investments, not charity, to gain early access to upstream decisions, talent pipelines, and distributed R&D.
• Stacker News runs an open-source bounty program and has paid over 20 million sats to more than 60 contributors. Keon also contributes via GitHub sponsorships and volunteer work.

Protocol (8)

• Mara Foundation's nonprofit arm hosted a contest where Libre de Satoshi lost to 256 Foundation for a $100,000 donation. Libre de Satoshi is a Bitcoin nonprofit in South America funded by Jack Dorsey's Btrust.
• A project called Bitcoin Products XYZ catalogs over a decade of hackathon projects, using an LLM to identify gaps and suggest new ideas for builders. It was soft-launched by a developer from Montreal.
• Antoine Riard is developing Bitcoin Backbone, an alternative Bitcoin node implementation using Libbitcoin kernel and a multi-process Rust/C architecture. He aims for a test-only functional node by the end of 2026.
• Keon views Matt Levine's argument that prediction markets are zero-sum grifts as flawed, stating they have positive externalities like improving world reasoning, similar to stock markets.
• Carl referenced a Hodlnow article alleging capture and drama within Bitcoin Core, citing IRC logs and GitHub history. Keon felt the point was already made and further detailing seemed like 'dunking for style points'.
• Bisq v1 experienced an exploit draining active offers, prompting an emergency migration to disable trading. User funds in Bitcoin wallets were not affected.
• At Bitcoin Vegas, DOJ officials stated they won't prosecute developers unless they knowingly help criminals. Lola's article and Zach Shapiro criticized the vagueness, noting it doesn't change current prosecution standards.
• XXI plans to acquire Strike and a mining company, a move Carl predicted, signaling a trend of private equity-style consolidation in Bitcoin because traditional public market pathways are limited.

Big Tech (2)

• The White House is drafting an executive action to reconcile with Anthropic, described as a 'face-saving' move after a prior dispute. The Pentagon also signed new military AI deals with Nvidia, Microsoft, and Amazon.
• The OpenAI trial revealed internal emails showing a proposed 55% stake for Elon Musk, who donated $37.5 million of a pledged $1 billion. Musk testified the case is about trusting who controls AI.

Protocol (4)

• Block announced BitKey now has a built-in touchscreen display enabling address verification for both sending and receiving Bitcoin, addressing a major initial criticism of the hardware wallet.
• BitKey is a seedless, self-custody multi-sig wallet using a 2-of-3 setup with shards on the device, phone, and Block, featuring social recovery and inheritance planning. Block's potential failure does not prevent users from recovering their Bitcoin.
• Block announced a proof of reserves for its Bitcoin holdings, similar to River's model, but DK contends Block's announcement did not include a corresponding proof of customer liabilities.
• Spiral sponsored an 'Earn in the Agent Economy' challenge at a global AI hackathon, requiring Lightning Network use. The challenge attracted 73 project submissions from a largely non-Bitcoin audience.

AI & Tech (4)

• Block's Goose team presented Mesh LLM, a peer-to-peer network for distributing AI compute workloads, seen as a foundational substrate that could eventually integrate verifiable compute and Bitcoin payments.
• DK argues corporations are moving non-mission-critical AI tasks to open-source models for cost and privacy reasons, but still rely on frontier models like Anthropic's Opus for core coding tasks due to superior performance.
• Steve believes a 'sovereignty by design' AI service offering confidential compute without data sharing represents a major market opportunity, positioning it as a credible alternative to vendor lock-in with Anthropic or OpenAI.
• DK cites data showing over 90% of AI company market capitalization is concentrated in the San Francisco Bay Area, reinforcing the region's dominance despite narratives of its decline.

Society (1)

• David Bennett argues the Bitcoin industry is entering a consolidation phase, mimicking legacy finance patterns he believes contradict Bitcoin's original innovative spirit.

Diplomacy (1)

• US Treasury Secretary Scott Bessant said the US seized $500 million in Iranian cryptocurrency assets as part of Operation Economic Fury, a figure higher than the $344 million in frozen USDT Tether previously reported.

Protocol (5)

• Bessant claimed Iran's currency has fallen 60-70% against the US dollar and one of its largest banks collapsed in December.
• South Korean prosecutors seek a 20-year prison term for Delio CEO Zhang Shang Ho, alleging he embezzled $168.8 million in crypto from 2,800 victims over two years.
• River CEO Alex Leishman argued traditional finance apps are merging with gambling, creating a system where households feel forced into high-risk bets as the safe path of saving erodes.
• Leishman framed Bitcoin banking as a third path, noting 50 countries have increased regulatory friendliness to Bitcoin in the last five years.
• Paul Tudor Jones called Bitcoin the best inflation hedge, surpassing gold, due to its programmatic scarcity. He said current S&P 500 valuations imply negative ten-year returns.

Culture (1)

• Texas Tech quarterback Brendan Sorsby entered a gambling addiction program after making thousands of online bets, including on Indiana football games while a redshirt freshman in 2022.

Markets (1)

• Jones highlighted the US stock market capitalization to GDP ratio is at 252%, near the 270% level seen during the 2000 dot-com bubble.

Protocol (4)

• Strike partnered with Tether to offer segregated address collateral for large loans, enabling clients to verify their Bitcoin collateral directly on-chain without rehypothecation.
• Tether provided Strike with a $2.1 billion credit facility to finance growth in Bitcoin-backed credit products, aiming to meet any demand for loans or lines of credit.
• Mallers positions crypto exchanges like Binance, Coinbase, and Robinhood as high-operating-income but low-Bitcoin-conviction businesses, citing Coinbase's $10 billion fiat versus $1 billion Bitcoin balance sheet.
• Mallers cites Jim Chanos's analysis showing Robinhood customers lost 5% in February versus a 0.9% S&P 500 drop, framing it as evidence Robinhood promotes hyper-speculation not conviction.