Sen. Cynthia Lummis might have had a hand in the so-called Trump bump from Nashville on Saturday when she mentioned legislation for the U.S. government to hold bitcoin as a strategic reserve asset.

Between the lines: Folks started fever dreaming about all the buying — but one economist tells Axios the proposal isn't as daffy as it immediately seemed, and would involve only enough capital to finance the purchase of 1 million bitcoin.

Zoom in: The Cato Institute's George Selgin worked out the mechanics of what Lummis proposed and got more details in the process.

• Lummis' plan, according to Selgin, would create gold certificates to finance the purchase of 1 million bitcoin.

What they're saying: "Now that I know the true scale of what's being contemplated mechanically, there's no issues here," he said in an interview this morning with Axios.

• Essentially, what it would cost to finance a million-bitcoin purchase is small enough to be marginally relevant.

Context: That standing is in contrast to some initial reactions Saturday. (It helped that former president and GOP pick Donald Trump also vowed to "never sell" any of the bitcoin the government came to hold. See: Charted 👇)

• Imagine if what MicroStrategy did for corporate balance sheets caught on with world governments.

The intrigue: Lummis appears to be trying to achieve a reduction of government debt. But buying bitcoin to do that, Selgin says, appears a bit of a Rube Goldbergian way to do it — one could accomplish the same thing just by taking some gold, selling it and applying it to the debt.

• "What else could bitcoin be for — I don't think it would be a strategic reserve [asset] in the way that oil or some pharmaceutical products [are]," he said.
• "Those are things that you worry about not having enough of during war or conflict, and it's not obvious that the U.S. government needs to have a stockpile of bitcoin for that."

Some people hold bitcoin as insurance against say, the devaluation of the dollar.

• Yes, but: 👆Selgin says that doesn't apply to the Fed. "It does apply to ordinary individuals who hold dollars. That's a reason to not want to have the government stockpiling."

The big picture: If anything, Selgin says, bitcoin-as-strategic-reserve proposals are political gestures.

• "I don't buy the government-as-a-giant-mutual-fund argument. I don't buy the military, sort-of-strategic-reserve argument. I don't buy the hedge-against-risk argument. I buy the symbolic argument, for having the government show that it likes bitcoin."
• Perhaps, if anything, Trump's and Lummis' proposal is a salve for the "kind of hostile policies we've seen under the current administration," Selgin says.

Former President Trump's plan is among the more modest bitcoin-as-strategic-reserve proposals out there.

Between the lines: That's because Trump didn't say he would buy more bitcoin, but merely suggested never selling what the U.S. government has now and holding onto anything it seizes in future criminal busts.

Flashback: He said Saturday in Nashville: "If I am elected, it will be the policy of my administration to keep 100% of all the bitcoin the U.S. government currently holds or acquires."

The intrigue: When a wallet previously identified as belonging to the U.S. government moved bitcoin yesterday, it elicited some investor concern.

• 🤷‍♀️

Happy birthday, Ethereum! Nine years ago, the first block of Ethereum was mined.

Why it matters: Ethereum is the $400 billion Pepsi to Bitcoin's $1 trillion Coke, and it's unlikely any other project will usurp either of them any time soon.

Catch up quick: A gawky, youthful Vitalik Buterin had the idea for Ethereum, which galvanized a bunch of blockchain notables to build the thing.

• It was funded by allowing people to buy its coin of the realm, ether (ETH) — its equivalent of bitcoin (BTC), before the chain even existed.

The big picture: Ethereum's big idea was to create a blockchain that could run full computer programs in a decentralized way, allowing them to operate without the need for a company or people to keep them going.

• People call these "smart contracts," but they are just software.

Ethereum has had some dramatic moments.

• The DAO was an attempt to create a permissionless hedge fund using tokens. We never really found out if it was a good idea, though, because it got hacked in 2016, which put $60 million of user funds and the whole future of the project at risk.
• So, controversially, they rolled back the chain — which is not supposed to happen, in principle.

Yes, but: Only a year later, $160 million was lost in a software bug on a smart contract, but the community did not fork the chain this time, because leaders believed the ecosystem was strong enough. (They were right.)

• (Neither the hack nor the bug was on Ethereum itself, but on smart contracts built atop it.)

Friction point: Initial coin offerings were a questionably legal approach to capital formation that popped off in 2017. People would sell tokens for applications that didn't exist. Billions were raised this way before the SEC came knocking.

• DeFi summer took off in 2020, when people figured out that giving away tokens was a great way to get people to make temporary deposits in decentralized finance apps, giving them liquidity for users.

Fun fact: Non-fungible tokens had been around for years, but somehow they became the new hotness in early 2021, which drove the market to new highs that year.

In 2022, Ethereum pivoted its security model from proof-of-work, like Bitcoin, to proof-of-stake, which dramatically lowered the energy overhead of the blockchain.

• Did it have any impact on the negativity of crypto haters? Nope.

The latest: The launch of ether ETFs — enabling Wall Street types who need regulated products to bet on Vitalik's baby.

👀 Stablecoin issuer Circle's privately held stock is said to be trading on the secondary markets at prices implying a valuation of around $5 billion. (CoinDesk)

🪙 The SEC intends to amend its complaint against third-party tokens in its Binance Case. (CoinDesk)

🫂 The Biden administration is embracing open-source AI models — which are favored by blockchain types. (Axios Pro)

🚓 Founder of controversial social network BitClout charged with wire fraud. (Axios)

🐦 A new app makes paying a restaurant bill easier and with USDC if the diner wants. (Axios)