(₿): Maturing from ICOs to IPOs
Newsletter #22: 20191109 - 20191115
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:
💱 Ray Dalio (Bridgewater) warns of a paradigm shift RE: world reserve currencies’ viability as storeholds of wealth, citing factors like cheap printed money, government deficits, and pension and healthcare obligations.
🔺 Nik Bhatia states that Bitcoin is the Triumvirate of Liquidity. It acts as both digital gold and digital Treasuries, and has all the makings of the world’s next risk-free asset.
Verification of what I said before: #bitcoin cash & carry (spot buying btc and simultaneously future selling for delivery in 1-6 months) will net you 7-10% annualized return .. almost risk free. @stephanlivera and I talk about this in the podcast that will be out later today.Cash & carry strategies can return up to 10% annualised ➡️ Live curve on https://t.co/0KkntYiyQp Disclaimer: Not investment advice https://t.co/yqX9LK8XJm
skew @skewdotcom
Older Newsletters: 21, 20, 19, 18, 17, 16, 15, 14
Bitcoin Markets
Stats
XBT: $8490 📉 -3.8% WoW
Market Cap: $153 B 📉 -3.8% WoW
Dominance: 69.91% 📉 -0.5% WoW
Hashrate: 95.19 EH/s 📈 +3.9% WoW
Difficulty: 12.72 T 📉 -7.1% WoW
Block Height: 603,953
Halvening: T-180 Days
Fiat Market Cap: #35 👻 No Change WoW
Global Debt: $60.104 T 📈 0.1% WoW
US Debt: $23.043 T 📈 0.1% WoW
Sources: Messari , BTC , BitcoinBlockHalf , FiatMarketCap , Economist , USDebtClock
Bitcoin / Lightning Tech
🛠 Bitcoin Optech Newsletter #72 covers:
A buffer-overflow SOCKS proxy vulnerability (CVE-2017-18350) that was first introduced in Bitcoin Core v0.7.0rc1 in 2012 and fixed in v0.15.1 in 2017
Week 1 of the Taproot Review club and its 163 participants
The Bech32 mutation weakness and its impact on BIP-Taproot design decisions
The potential privacy leakage RE: BOLT #4 - LN’s onion routing protocol, Sphinx
LN routing revenues and how up-front payments can ensure that people pay for the bandwidth they use when sending data over LN, regardless of whether a payment attempt succeeded. Rusty Russell (Blockstream) and Anthony Towns (Xapo) propose two solutions
Rusty Russell’s proposal for a new BOLT that would allow users to submit offers and receive invoices over the LN routing protocol
“Over the past 18 months, Optech has has published the equivalent of about 350 printed pages worth of Bitcoin news and documentation. In an effort to make that material more accessible, we’re pleased to announce a new topics index with an initial set of 40 topics.”
🍫 “Gibson presented a new idea: SNICKER (Simple Non-Interactive Coinjoin with Keys for Encryption Reused). Now submitted as a draft Bitcoin Improvement Proposal (BIP), SNICKER would allow for coin mixing without any synchronization or interaction: There’d be no need for users to coordinate or be online at the same time.” Read Aaron Van Wirdum’s deep dive on the cutting-edge, privacy-enhancing SNICKER proposal.
🌚 Researchers at Carnegie Mellon University present TendrilStaller, an eclipse attack targeting Bitcoin’s peer-to-peer network. They then propose respective countermeasures.
🔍 A researcher at Akvelon introduces a new coin selection algorithm that specializes in cost-savings.
🔑 Jonas Nick (Blockstream) describes BIP-Schnorr and how to reduce transaction sizes by using Schnorr’s x-only pubkeys.
⛏ First mentioned in newsletter #7, Braiins finally released their Stratum v2 protocol spec, which aims to be more secure, efficient, flexible, and decentralized than its predecessor.
“Stratum V2 is the next generation protocol for pooled mining. It focuses on making data transfers more efficient, reducing physical infrastructure requirements for mining operations, and increasing security. Additionally, Stratum V2 introduces three new sub-protocols that allow miners to select their own transaction sets through a negotiation process with pools, improving decentralization.”
🤝 Jonas Schnelli (Shift Cryptosecurity) proposes BIP 324: a new Bitcoin peer to peer transport protocol with opportunistic encryption. BIP 324 focuses on mitigating passive man-in-the-middle (MITM) attacks through a handshake protocol, while co-implementation with BIP 150 may address active MITM attacks.
🚦 Roasbeef (Lightning Labs) published a demo and deck RE: his talk on the Lightning Service Authentication Token (LSAT). It’s interesting to see the growth of LN’s privacy-preserving use cases.
💬 Stuart Kuentzel just announced his project, Kumo Chat, enabling users to spin up anonymous, self-destructing chat rooms on LN. Are LN chat apps posed to disrupt existing incumbents? How will they adapt to LN up-front payments?
⚡️ Bryan Vu (Lightning Labs) published part two to his “Node Operator's Guide to the Lightning Galaxy” series. Whereas the first dove into setting up, monitoring, and maintaining an LN node, the second explores finding peers and being found by pathfinding systems.
💻 Jamal James introduced Polar: built to help Lightning Network application developers quickly spin up one or more networks locally on their computers.
Bitcoin Companies / Projects
Wallets
🚨 Coinkite recommends Coldcard users to upgrade to v3.0.2 due to troublesome change outputs.
🧰 Vlad Costea attempts to find out what’s the best hardware wallet on the market in a three-part series: one, two, and three.
🔏 “Austin-based Bitcoin financial service provider Unchained Capital just unveiled its newest multisignature wallet tool: Caravan is a stateless, open source and flexible multisig coordinator that integrates with your hardware or software keys and your bitcoin node or a block explorer. Caravan makes it easy to build and spend from multisig addresses right in your web browser.”
⚙️ In the next release, every Wasabi wallet will have Bitcoin Core as a dependency. Why should you run a full node?
Merchants
⏹ Square highlights in its Q3 report that first time bitcoin buyers doubled, leading to $146 M in bitcoin sales. However, the costs associated with facilitating their bitcoin onramp have led to profits of only $2 M.
📹 PayPal abruptly cut off its service to Pornhub, affecting more than 100,000 performers. The website is evaluating additional crypto payout options beyond Verge, the cryptocurrency it currently supports.
Exchanges
🏎 AAX is the first crypto exchange to deploy London Stock Exchange’s core matching engine to make trading >10x faster than transactions taking place on some of the largest crypto exchanges like Binance. The company will focus on Asia to start, with the goal to be in the world’s top 10 crypto exchanges by volumes in the coming year.
💵 Bakkt plans to expand their physically-delivered futures to cash-settled offerings before 2020.
📄 Derivatives exchange CME Group has announced it will launch options on its bitcoin futures contracts January 13, 2020.
🧾 Bitfinex aims to offer options in Q1 of 2020, as well as Tether Gold. Listen to the full update on The Scoop.
📊 Interesting thread by the Skew team on futures exchanges RE: correlations between quote size vs. spread:
Other
🔒 After receiving approval from the NYDFS, Bakkt announced the expansion of its custody service, Warehouse, to all institutions. The team touts enterprise-grade infrastructure (on-premises datacenters, HSMs, etc.), operational controls (24/7 video monitoring, armed guards, geographically distributed signing, etc.), and independent oversight (regular SOC 2 audits, $125 M insurance policy, etc.).
📈 Blockchain.com’s lending desk is growing rapidly. “In August, Blockchain.com lent out $10 million in new loans. Fast forward to November, the firm is on-track to lend out $120 million this month — having lent, traded or borrow over a $1.6 billion worth of cryptocurrency.”
🎭 Unknown Fund is going to invest and donate $75 M for the development of ideas of anonymity.
🔔 Canaan Creative, which controls 23% of global bitcoin mining machine marketshare, looks to raise $100 M in an IPO on Nasdaq November 20th, pricing shares at ~$10.
⛏ Hut 8 Mining Corp. reports Q3 2019 financials (denoted in Canadian Dollars):
Bitcoin Talks / Theses
📩 The Block open-sourced their monthly report - lots of great content, covering topics like: where 42% of the industry’s employees work, deep dives on BitDEX, Silvergate, IEOs, and more.
📋 Chainalysis published their survey results, and found that “Financial Institutions See Cryptocurrency’s Growth Potential But Worry About Compliance.”
📉 Ryan Todd at The Block breaks down 2019 funding trends for the industry:
🤪 Based on Indeed.com data, the number of crypto-related jobs increased 26% from 2018 to 2019, but the number of searches dropped 53% since Bitcoin’s ATH of $20k. Who’s in it for the tech?
🕒 “Coinbase recently changed the confirmation requirement of four different assets, including reducing Bitcoin confirmation requirement from six confirmations to three.” I recommend also reading through Anthony Lusardi + Nic Carters’ literature on the subject:
🕸 Jameson Lopp (Casa) breaks down the issues of Web Browser Wallets and future improvements.
💡 Trace Mayer is an OG Bitcoiner, who entered Bitcoin in 2009 and has invested heavily into the space. Listen to the latest TFTC, where he chats about Bitcoin-friendly Wyoming legislation, Bitcoin’s 7 network effects, and more.
💻 Stephan Livera chats with Jon Atack on Bitcoin Core Contribution, covering:
Becoming a Bitcoin Core contributor
How to best contribute
Communication channels for development
Priorities in Bitcoin development
Funding for development
Bitcoin Regulations
🥩 “While the CFTC head has previously said that Ethereum, in its current state, is likely not a security and should be classified as a commodity, things are less clear for the next iteration of Ethereum… Heath Tarbert, chairman of the U.S. Commodity Futures Trading Commission, sounded out a warning yesterday over the potential for staked tokens (i.e. the coins that support proof-of-stake blockchain networks) to be classified as securities.”
🐪 In their weekly newsletter, Chainalysis highlighted: Silk Road Vendor Guilty of Laundering $19M, ‘Discount Bitcoin Bandits’ Plead to Robbery.
“A prominent Silk Road narcotics vendor who operated under the moniker “Pharmville” pleaded guilty to laundering the proceeds of the operation which ultimately totaled over $19 million in bitcoin. The indictment indicates that the defendant had falsely stated to his bitcoin exchange that the bitcoin were the proceeds of mining while the true source was “large-scale narcotics trafficking, including of the deadly opioid fentanyl.” Separately, the Los Angeles County District Attorney’s Office announced that the “Discount Bitcoin Bandits,” a pair of East Hollywood residents, have pleaded no contest to charges arising from the robbery of five people who sought to buy discount bitcoins. The Bandits robbed 5 people in 2017 and 2018 by advertising bitcoins online for in-person sales and then forcibly taking the victims’ cash at gunpoint.”
Bitcoin Calendar
(x) Canaan Creative IPO | Nov 20
(x) Boltathon | Dec 6 - 8
(x) CME 6mo Expiration | Dec 27
(x) Wilshire Phoenix Bitcoin ETF Decision | Dec 28
(x) Bakkt Cash-settled Futures | Q4 2019
(x) CME Options Launch | Jan 13
(x) Bitfinex Options Launch | Q1 2020
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