August 1st—I've barely opened my eyes and I'm already $BTC (+0,16 %) go shopping 💪

We now understand how Bitcoin works technically, how it scales, and how to use it.

But software gets older; bugs need to be fixed and new features added.

With Windows, Microsoft does that $MSFT (+3,6 %) (more or less...), and for iOS, Apple does it $AAPL (-2,89 %) . But who does this for Bitcoin, when there’s no company and no boss? Who programs Bitcoin?

The short answer is: Anyone who wants to—and at the same time, no one alone. Bitcoin is based on the principle of open source (open-source software). This means that the entire source code is freely available for anyone in the world to view, copy, and modify.

But how do we prevent malicious programmers from destroying the system through code updates? The process is a masterpiece of digital democracy:

1. The Core Developers (The Proposers) 🛠️

There is a global group of highly specialized programmers known as the core developers. They often work on a volunteer basis or are sponsored by foundations and crypto companies. When someone has an idea on how to improve Bitcoin (e.g., to make it more secure or private), they write an official improvement proposal: a BIP (Bitcoin Improvement Proposal).

2. The Hard Road to Consensus 🤝

This proposal is then thoroughly scrutinized, discussed, and tested by the global community for months or even years. If there are valid doubts or security concerns, the proposal is rejected. Only when there is an extremely broad, global consensus among developers will the new code be included in the official Bitcoin software update at all.

3. The True Rulers: The Nodes, Once Again! 📡

And this brings us full circle to Part 4 of our series. Even if all the developers in the world agree and release an update—they can’t force it on anyone!

The developers only write the code. Whether this code is actually activated on the network is decided solely by the tens of thousands of private nodes worldwide. Node operators must voluntarily install the update on their own computers.

If the developers were to try to incorporate a malicious feature (e.g., breaking the 21-million limit), the nodes would simply ignore the update and continue running the old software. The developers would be powerless.

💡Conclusion for Part 7:

Bitcoin has no rulers, only rules. The developers are like architects who propose new blueprints—but the community of node operators decides, in a fully grassroots democratic manner, whether this house will actually be built. This unbreakable structure ensures that Bitcoin has been running stably for over 17 years without any outages.

Now we’ve unraveled the entire technology and organization of Bitcoin. For the grand finale, let’s look ahead: What does this invention mean for our society and the global financial system?

Get ready for the grand finale in the next post. Part 8/8 is all about the future: The Bitcoin Standard and Mathematical Growth (Power Law). 📈

Would you have thought that Bitcoin’s developers actually have no final say? Share your thoughts in the comments and be sure to follow us! 👇

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The U.S.-Iran agreement now appears to be on hold: Last week brought fresh retaliatory measures and renewed pressure on the Strait of Hormuz. Markets had already priced in a return to normalcy and moved on, but the normalization process is proceeding slowly. While shipping traffic has recovered, it remains well below pre-crisis levels—and the renewed tensions are now jeopardizing this recovery in the short term. As the attached chart shows, heightened geopolitical risks have historically been closely linked to higher inflation, in a remarkably linear relationship. So far, reserves have cushioned the shock, but they are running low, and inflation fears are growing. Paradoxically, the next CPI report could come in negative thanks to the sharp drop in oil prices in June—which will be relevant for the next Fed meeting—but the relief could prove short-lived. The defining feature of this oil shock is not the price level, but its duration, which the market likely underestimates. The Fed faces a dilemma: an AI-driven economy showing signs of overheating, coupled with energy-driven inflation, argues for higher interest rates in the short term. However, oil-driven inflation acts like a tax on consumption, and in an increasingly K-shaped economy, it increases the risk of recession—which argues more for rate cuts than for hikes. Ultimately, this uncertainty typically favors safe-haven assets. Notably, however: $BTC (+0,16 %) and $GOLD are among the few assets that have underperformed since the beginning of the year.

You can invest in Bitcoin through the following platform: $BITC (-2,7 %)

About 10 months ago, I wrote here about the dispute between Bitcoin Core and Knots. Back then, it was mainly an open back-and-forth between many Bitcoiners on X (https://getqu.in/bLMDbe/)

That has changed. The conflict may have first emerged on Block 961,632 . $BTC (+0,16 %) . That’s why I thought I’d check in again and give you an update🫡

According to current estimates, depending on the block generation rate, we’ll reach this block height sometime between August 7 and 9—in just over a week.

But what exactly will happen then?

Online, the dispute between the two sides is escalating. One side wants to save Bitcoin; the other says someone is trying to hijack the network... Specifically, it’s about a “Bitcoin Improvement Proposal”—namely BIP-110—that aims to force a temporary soft fork.

What BIP-110 Aims to Do

The policy dispute over OP_RETURN (feel free to reread my old post on the subject) has turned into a proposal for a genuine consensus change. Officially, it’s called the “Reduced Data Temporary Soft Fork", or BIP-110 for short. It initially circulated as BIP-444. It was authored under the pseudonym “Dathon Ohm,” and the original draft is attributed to Luke Dashjr.

At its core are seven additional rules that will be in effect for one year and then automatically expire. I’ll spare you the specifics of the rules. Essentially, the first four rules are intended to cap the amount of data that can be included in various parts of a transaction, and the last three close loopholes that are actually reserved for future Bitcoin upgrades but are currently used primarily for data smuggling.

Normally, soft forks are implemented via a so-called miner signal with a 95% threshold.

Such forks can always become dangerous when there are several camps of nearly equal size. That’s why a 95% threshold has always been used in the past, to ensure that such rule changes are implemented only when the overwhelming majority votes in favor.

BUT BIP-110 takes a different approach. The threshold is only 55%.

And that’s not all. If the 55% threshold is not reached, a cutoff date automatically takes effect: Block 961,632

Miners can set a specific bit (bit 4) in Bitcoin blocks to signal that they support BIP-110 (Every block has a 32-bit version field in its header—essentially 32 switches. A few of these are unused and have been used as voting boxes for years.)

Starting with this block, nodes implementing BIP-110 will reject any block that does not have version bit 4 set.

And that’s exactly where the problem lies. Starting with block 961,632, BIP-110 nodes will reject any block that lacks this checkmark—even if everything else in the block is correct. A block full of perfectly normal transactions is rejected simply because a checkbox wasn’t checked.

The seven rule changes for BIP-110 nodes will then be automatically activated starting with block 965,664.

What’s the current situation?

Modest.

Signaling stands at around 1 to 3%. Virtually all signaling blocks come from Ocean, whose CTO is Luke Dashjr himself and which has been signaling by default since July 15.

Foundry USA, the largest pool with about a quarter of the hashrate, allows its customers to vote on a hashrate-weighted basis. The default position is “No”; non-responses count as “No,” and Foundry would only change its stance if approval reaches 51%. Voting runs through block 961,632. This is the only realistic chance for the situation to still turn around.

Things are getting confusing on the node side. Depending on the measurement method, Knots runs on 8 to 23% of the reachable nodes. But Knots is not the same as BIP-110: Only about 2 to 8% are actually running a version that enforces the soft fork.

What is a soft fork?

A soft fork tightens the rules: Any block that is valid under BIP-110 rules is also valid under the old rules. So old nodes accept the new blocks without issue. A hard fork, on the other hand, would expand the rules, causing old nodes to reject the new blocks.

The punchline here is that, despite the soft fork, a chain split could still occur. So in the end, we might end up with two cryptocurrencies after all: Bitcoin and Luke-Coin… or something like that😅

Core nodes do not reject blocks from the BIP-110 chain because they are completely valid under the old rules. The reverse, however, is true. So it’s not the old side that splits off, but the new one. This means two different data states would develop side by side. If Ocean, for example, continues mining with its 3% hashrate, it will occasionally find a new block after a few hours of idle time. In doing so, it will naturally drift further and further away from the Core data state.

This raises the question, however, of whether—and how many—miners would actually mine BIP-110 blocks. Miners have an incentive to stay with the network that has the most hashrate. The other chain would, in principle, create a different coin that would likely be worthless compared to Bitcoin. And why would miners switch to the network with lower security, where the return is very likely to be many times lower?

It would be funny, though, if Luke and Ocean just went ahead and mined BIP-110 blocks out of the blue, creating a new coin in the process😂

What happens if BIP-110 miraculously reaches 55%?

Miners could continue to mine blocks that are invalid from a BIP-110 perspective. However, the BIP 110 nodes would then reject these blocks, and the BIP 110 miners would continue from the last valid block and, with the majority of the hashrate, inevitably create the longer—and thus valid—chain. This would allow the 55% of BIP 110 miners to impose their will on the other 45%. The 45% would then also have to follow the BIP 110 rules in order to include valid blocks and receive the block reward. Given the current maximum of 3% miner signaling, however, this is absolutely utopian.

Why am I telling you this now, when it’s highly unlikely that anything will actually happen?

Because it’s important to understand how such soft forks unfold and function. To prevent panic from breaking out when such reports surface, it’s important to at least have a basic understanding of the underlying mechanisms.

In my view, Bitcoin already has sufficient spam protection built in:

Transaction fees.

If someone wants to clutter the blockchain with meaningless junk, they have to pay for it—in extreme cases, until they run out of money. OP_RETURN is a separate area that has nothing to do with the UTXO set of transactions. It’s essentially an appendix that isn’t required for the payments themselves. All transactions are valid even without OP_RETURN.

And Peter Todd has shown that you can’t prevent spam one way or another. He actually packed the entire BIP-110 paper into a BIP-110-valid transaction and demonstrated how to circumvent the rules🤷‍♂️

Have a great evening, everyone!

$BTC (+0,16 %)-Mining sounds technical, but at its core, it’s an infrastructure business. Miners operate data centers, secure power and cooling, manage hardware, and provide computing power for the #bitcoinnetwork. Their revenue therefore depends not only on $BTC (+0,16 %)-price, but also on electricity costs, network congestion, and what’s known as the “hash price”—the revenue per unit of computing power.

The sector is undergoing significant change. Many publicly traded miners are increasingly using their data centers for AI and high-performance computing. According to recent company statements, by the end of 2026 they could generate up to 70 percent of their revenue from AI, compared to about 30 percent today. This is interesting for investors, but not straightforward: Some pure-play $BTC (+0,16 %)miners are evolving into hybrid data center companies.

Mining stocks are therefore not a direct substitute for $BTC (+0,16 %). They can be more volatile than $BTC (+0,16 %) them: When the price rises, efficient miners often benefit disproportionately. When it falls or costs rise, the leverage effect reverses. It remains a promising but volatile investment. However, not every miner will follow the same path.

Note: Monthly figures reconstructed from the original chart; rounding discrepancies are possible.

Original page: https://coinshares.com/de/insights/research-data/bitcoin-mining-report-q1-2026/

Original image: https://a.storyblok.com/f/176807/1600x1120/8261be7cf5/miners-data-centre-revenue-breakdown.png/m/

You can invest in Bitcoin through the following vehicle: $BITC (-2,7 %)

In the last section, we learned how to use a wallet to carry out transactions on the blockchain. But if you were paying close attention, you’ll see a problem here for everyday use:

Technically speaking, the Bitcoin blockchain can only handle about 7 transactions per second, and a new block takes an average of 10 minutes to be added. If billions of people worldwide wanted to use it to pay for their daily coffee or groceries, the system would immediately become congested and fees would skyrocket.

So how can Bitcoin become the global currency for everyone? The answer is: the Lightning Network.

Think of the Lightning Network as a digital fast lane that sits on top of the actual Bitcoin blockchain (a so-called Layer 2 network).

To understand how brilliantly this works, consider the beer coaster metaphor:

1. The beer coaster at the bar 🍻

When you go to your favorite bar and drink 5 beers throughout the evening, do you pay for each beer individually right then and there with your card and wait for the receipt every time? No. The bartender opens a beer mat for you and makes a mark for each beer.

You don’t settle the bill until the end of the evening: You pay the total amount, the mat is torn up, and there was only a single payment transaction in total.

2. That’s exactly how Lightning works 🧠

Two users (or you and a business) open what’s called a “payment channel.” That’s the beer mat. You can now send millions of transactions back and forth between yourselves—in milliseconds and virtually for free.

These individual transactions aren’t recorded on the main blockchain. Only when one of the two parties wants to permanently close the channel is the final “account balance” sent to the main Bitcoin blockchain and recorded there permanently.

3. A global network of channels 🌐

The best part: You don’t have to have a separate channel open with every business in the world. If you have a channel with Person A, and Person A has a channel with Business B, then your money can be “routed” from you to Business B via Person A in a flash, without you even noticing. The network connects to form a gigantic, global spider web.

💡 Takeaway for Part 6:

The main blockchain (Layer 1) is the secure, immutable foundation—essentially the central bank level for large, irrevocable amounts. The Lightning Network (Layer 2) is the lightning-fast, everyday layer for gum, coffee, and instant global payments. Together, they make Bitcoin unbeatable.

Right now, the system is running securely in the background and scaling to serve billions of people. But who actually decides how the software evolves? Who writes the code?

That’s exactly what we’ll cover in the next post. Part 7/8 focuses on the evolution of the code: Who programs Bitcoin? 💻

Have you ever tried the Lightning Network yourself, or was this new to you? Let us know in the comments and be sure to follow us! 👇

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So far, we’ve looked at how the Bitcoin network works behind the scenes: the blockchain as a ledger, the miners as workers, and the nodes as guardians.

Now comes the most important practical question: How do I use Bitcoin as an everyday person?

The answer is: through a wallet. But the name is often misleading. A crypto wallet actually works completely differently from a regular wallet. There are no Bitcoins in your wallet. The Bitcoins never leave the blockchain.

Your wallet is basically nothing more than a set of keys and an interface for interacting with the global ledger. Every wallet consists of two magic keys:

1. The public key (your account number) 📬

Think of the public key (the public address) as a digital mailbox. Anyone can see this mailbox and deposit Bitcoins into it.

If someone wants to send you Bitcoins, you simply give them your public key. This address consists of a long string of numbers and letters (or a QR code). It’s generally completely safe to share this address publicly; the only “problem” is that anyone can use the address to view all past and future transactions—which, of course, is bad for privacy. Therefore, never give your cold wallet address directly to anyone.

2. The Private Key (Your Front Door Key) 🔐

This is the most important key in the entire system. The private key is the key that opens your mailbox. Only whoever possesses this key has the mathematical power to withdraw the bitcoins from that mailbox and send them to another address.

The golden rule: Whoever has your private key owns your coins. Never share it with anyone.

The seed phrase: Since the private key is an extremely long, ugly string of characters, it’s usually translated into 12 or 24 English words. This is your ultimate backup. If your phone or computer breaks, you can use these words to instantly restore your wallet on any other device in the world.

3. What types of wallets are there? 🛡️

Software wallets (hot wallets): Apps on your smartphone or PC. They’re great for everyday use and smaller amounts, but because the device is connected to the internet, there’s always a minimal risk of being hacked.

Hardware wallets (cold wallets): Small USB-like devices. They generate and store your private key completely offline, isolated from the internet. For long-term savings and larger sums, this is the absolute gold standard in security.

💡 Conclusion for Part 5:

A wallet doesn’t store bitcoins—it stores your private keys. Owning Bitcoin doesn’t mean having physical coins; it means possessing the exclusive mathematical right to modify a specific entry in the ledger.

When you make a transaction with your wallet, it takes about 10 minutes on the blockchain (Layer 1) for it to appear in the ledger. How are you ever supposed to pay with cash at a supermarket anywhere in the world like that?

We’ll look at the solution to this in the next post. Part 6/8 is all about the fast track: the Lightning Network. ⚡

Are you currently using a mobile app (hot wallet), or have you already secured your coins on a hardware wallet (cold storage)? Share your thoughts in the comments and be sure to follow us! 👇

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