(₿): Bitcoin is the Drunk and Stock-to-Flow is the Road Home
Newsletter #18: 20191011 - 20191018
Hello beautiful - it’s min a while. Here’s what I’ve seen in Bitcoin this week.
Hit ❤ above if you like this newsletter, or leave a comment below.
Last Week’s Most Read:
Stats
XBT: $7970 📉-4.5% WoW
Market Cap: $143 B 📉-6.7% WoW
Dominance: 69.99% 📉-1.1% WoW
Hashrate: 93.43 EH/s 📉-6.0% WoW
Difficulty: 13.01 T - no change
Block Height: 599963
Halvening: T-208 Days
Fiat Market Cap: 37 - no change
Global Debt: $59.897 T 📈 0.1% WoW
US Debt: $22.838 T 📈 0.1% WoW
Sources: Messari , BTC , BitcoinBlockHalf , FiatMarketCap , Economist , USDebtClock
Bitcoin / Lightning Tech
⚡️ “Authentication online is still an unsolved problem. Most web platforms use social sign-in methods [Facebook, Google, etc.] which severely compromise your privacy, or they use simple email/password combinations which are easy to forget. Lightning Authentication solves this problem by allowing you to authenticate without giving up any private information,” Gomes told Decrypt.
🛠 Bitcoin Optech newsletter #68 covers:
LND v0.8.0 (improved backup safety, watchtower client integration, routing, mobile support, etc.)
Eclair v0.3.2 (improved backups, efficient syncing gossip data bandwidth overhead, etc.)
Proposal to increase default Lightning Network (LN) routing fees
MIT’s Digital Currency Initiative: Cryptoeconomic Systems Summit
🛹 SF-based Wyre releases a new widget to enable Apple Pay, Google Pay for on-boarding onto cryptocurrency.
Bitcoin Companies / Projects
Wallets
🔵 Blue Wallet announced new hardware support for BIP84 via PSBT and QR codes (you can use Blue Wallet with your Coldcard now), optional biometrics unlock, Lightning Refill, and more in v4.6.0.
🌝 Buenos Aires-based Muun Wallet is now on iOS.
⚛️ Electrum announced Lightning support in their next release, which uses their Python implementation of Lightning.
Merchants
🇭🇰 Hong Kong Free Press gives BitPay the boot and opts for BTCPayServer.
Other
📈 Binance recently passed $1 B in cumulative profit since its inception over two years ago. How? Through multiple revenue streams, including: spread, commissions/fees, financing turn, OTC gain, and an ICO. In Q3 of 2019 alone, the exchange made a profit of $183.5 million.
🕯 Crypto exchange Poloniex is spinning out from its parent firm Circle. U.S. residents have until Dec. 15, 2019 to withdraw their assets, with all trades being suspended on Nov. 1, 2019, the blog post said.
📈 The CME says institutional demand for its futures contracts remains strong, with higher daily volumes being traded and more institutional accounts being added. The exchange will also be launching Bitcoin options in Q1 of 2020, which the firm believes will be as popular as its futures contracts, with most demand coming from Asia and Europe.
🏢 Michael Sonnenshein of Grayscale chats with Frank Chaparro and Ryan Todd at The Block: “We have funds that are over 10 or 15 billion dollars in AUM as clients.” The firm saw a record quarterly inflow of $254.9 M in Q3, with a record YTD inflow of $412 M, and also won approval from FINRA for its new OTC product - the Digital Large Cap Fund (GDLCF).
💨 Having recently raised a $50 M series A at a $200 M valuation from VCs like Peter Thiel and Shasta Ventures, Layer1 will bring wind-powered Bitcoin mining rigs to Texas next year. The vertically integrated company currently owns electricity substations and land in Texas, and will run its own mining facilities, using mining rigs with proprietary cooling tech, to ultimately rebalance the global Bitcoin network hash power.
🏠 The Casa Team published a bunch of content this week. In one post, they address security concerns around its product, such as why users have to access their Casa nodes over HTTP instead of HTTPS. In another, they recommend against using Shamir’s Secret Sharing (which Satoshi Labs, the team behind Trezor, has recently been advocating for), due to:
Single Points of Failure
Share Revocation
Implementation Complexity
Lack of Implementation Standards
Social Recovery Issues
Auditability
Share Integrity
Side Channel Attacks
Finally, the team announces Casa Covenant: a Bitcoin Inheritance Service and Protocol. But there are concerns with Casa’s approach, as it requires users’ relinquishing access to at least 3 keys to a third party in a 3-of-6 multi-sig setup.
🤳 Podcaster Stephan Livera shares his experience using MyNodeBTC, which aims to be the easiest way to run a dedicated, easy to use, Bitcoin Node and Lightning Wallet.
Bitcoin Talks / Theses
💸 Chief Cross-Asset Strategist at Morgan Stanley, Andrew Sheets, explains how the dollar may be losing its safe haven status.
🍺 A Bitcoin statistician attempts to falsify Plan ₿’s Stock-to-Flow Model. TLDR? “Bitcoin is the drunk and Stock-to-Flow is the road home.”
🔁 The Deribit team explores the tradeoffs of cross-chain pegs like Bitcoin proxies on other blockchain networks. I personally would stay away from these pegs - not your keys, not your coins. The Liquality team explains further, how participants’ security, privacy, and self-ownership of assets can be maintained using cross-chain atomic swaps. Note: sidechains like Liquid and Ethereum that offer these pegged “solutions” (LBTC, WBTC) have less than 700 bitcoins worth of liquidity.
🤝 Matt Corallo of Square Crypto presents Consensus Group Centralization, aka, “Why Proof of Stake is strictly worse than Libra, which is, itself, not a cryptocurrency consensus model, only a applied cryptography banking model”.
Bitcoin Regulations
🔒 The DOJ shut down the largest child pornography site and arrested its site owner and many hundreds of users. Welcome to Video received over 420 bitcoins between 2015 and 2018. Read more on how law enforcement agencies were able to leverage Chainalysis software.
📃 Residents of Bermuda can now pay their taxes in USDC.
♎️ United States Rep. Warren Davidson has said that Facebook adding Bitcoin (BTC) to its Calibra wallet would be a “way better idea” than creating its new currency Libra.
💱 G20 finance committee welcomes “global stablecoins,” despite challenges - notably, the G7 said that no stablecoin project can go ahead until it is proven safe and secure.
🛑 The SEC filed an emergency action and restraining order halting Telegram from selling its gram tokens within the U.S. The network was supposed to go live on Oct. 31. Now the two waves of investors (those who bought in February 2018 and March 2018) must approve Telegram’s extension to April 30, 2020, or risk losing a percentage of their committed capital.
Bitcoin Calendar
(x) Lightning Conference | Berlin | Oct 19 - 20
(x) Mark Zuckerberg Libra Congress | Oct 23
(x) CME 3mo Expiration | Oct 25
(x) Square Earnings Call | Nov 6
(x) Consensus: Invest 2019 | Nov 12
(x) The Capital | Singapore | Nov 12 - 13
(x) CME 6mo Expiration | Dec 27
(x) Wilshire Phoenix Bitcoin ETF Decision | Dec 28
“We assume that the currency which is in all our hands is fixed, and that the price of bullion moves; whereas in truth, it is the currency of each nation that moves, and it is bullion which is the more fixed.”
- Henry Thornton, An Enquiry Into the Nature and Effects of the Paper Credit of Great Britain (1802)
Tweet at me if I’ve missed anything or if you’ve got feedback, questions, and comments.
This is not financial advice. Do your own research.
Newsletter #1 was published on 20190621. Stats:
XBT = ~$10,200
Market Cap = ~$180 B
Dominance = ~61.6%
Hashrate = ~60 EH/s
Difficulty = ~7.93 T