Bitcoin as a Hedge against Global Instability; Time Locked Vaults; Fidelity and Reid Hoffman Mine Bitcoin; AT&T Bribes and SIM Hijacking; FATF Updates
Newsletter #8: 20190802 - 20190809
Highlight
Bitcoin Tech
(1) First proposed in 2016, Vaults are essentially on-chain escrows that enable users to better secure their cold-storage bitcoin. By encumbering a publicly observable delay period (a time lock) on any attempt to spend their escrowed funds, a user could be alerted whenever a thief attempts to steal their coins. During the time lock period, a user could clawback their vaulted funds into a pre-determined Bitcoin address.
The concept was never implemented because it required a fork of the Bitcoin codebase. But Bryan Bishop, core contributor + transcript scribe, found a way to implement vaults using Bitcoin’s existing time lock functions, without the need for a soft or hard fork.
(2) Bitcoin Core contributors began documenting design decisions for the Bitcoin Core node and wallet.
(3) Bitcoin Optech #58 briefs:
Upgrading to Bitcoin Core 0.18.1
Changes to BIP174 (partially signed bitcoin transactions - PSBT)
Trampoline Layered Onion Routing on LN for devices with limited resources
(4) 6102 Bitcoin compiles a repository of coinjoin research.
(5) In 3 weeks, the Wasabi community contributed hundreds of commits and 10s of thousands of lines of code to Wasabi wallet documentation.
(6) Aaron Van Wirdum details Stratum v2, the updated mining protocol by Braiins mentioned in last week’s newsletter.
(7) Omar Faridi and Aaron Van Wirdum cover the Erlay transaction dissemination protocol, mentioned in newsletter #5.
Bitcoin Products
(1) Blockstream announces their mining + pool services. Since starting the service in 2017, they’ve scaled up their operations, secured additional sources of power, and expanded their service to provide hosting to clients that include Fidelity and LinkedIn co-founder Reid Hoffman. In addition to their mining colocation service, they’ll be offering the first pool that utilizes the BetterHash mining protocol, mentioned in newsletter #5.
Bitcoin Markets / Stats
(1) Gold Market Cap
Gold: ~$8.037 T at ~$1500/oz
Bitcoin: ~$212 B at ~$11860/btc (~2.6% of gold’s market cap)
(2) Fiat Market Cap
Bitcoin ranks #33 compared to all fiat currencies, placed between the Danish Krone (DKK) and the New Zealand Dollar (NZD)
(3) Government Debt Clock
(4) Crypto Market Cap Dominance
Bitcoin represents 68.60% of the total cryptocurrency market cap
(5) Bitcoin Security: Hash Rate + Difficulty
The two metrics hit new all-time-highs again, reaching ~75.20 EH/s and ~9.99 T respectively, according to BTC.com
(6) Supply + Halvening News:
~282 days until the next halvening, where the issuance rate of new bitcoins will decrease from 12.5 to 6.25 bitcoins per new block mined. Bitcoin inflation will decrease to 1.8%, rivaling the US inflation rate.
We’ve mined >85% of the 21,000,000 bitcoins that will ever exist, in the past ~10 years. To mine the remaining 15% will take ~120 years.
(7) Bitcoin mining pool distribution over time
(8) FTX, a crypto derivatives exchange that offers - you guessed it: 101x leverage - claims they’ve KYCed 10,000 clients and achieved $200mm in daily trading volumes within 3 months of launching.
Bitcoin Talks / Theses
(1) Peter McCormack chats with John Newbery about:
Risks of a reducing block subsidy for miners
How Chaincode Labs operates + their residency program
Privacy on-chain vs. on the Lightning network
(2) Peter McCormack chats with Matt Odell and Marty Bent about:
Inflation & block rewards
Contentious hard forks
Bitcoin Twitter
Facebook Libra
(3) Stephan Livera chats with Michael Flaxman about:
Why every hardware wallet sucks
Multisig adoption
Airgapped QR codes
PSBT
(4) Anthony Pompliano claims it is irresponsible to have no exposure to Bitcoin, given its status as one of the best performing assets of the past decade: “Bitcoin is a non-correlated, asymmetric return-profile asset. It has proven to even be inversely correlated in times of increased global instability.”
Bitcoin Regulations
(1) According to the Nikkei Asian Review, 15 nations (G7 nations and others) plan to setup a new system to collect and share personal data on individuals who conduct cryptocurrency transactions, alongside the Financial Action Task Force (FATF). The plans should be complete by 2020 and implemented in the following years.
(2) Coinbase is getting sued for negligence RE: their bitcoin cash listing.
(3) The US House of Reps just introduced the “Virtual Value Tax Fix Act of 2019” bill that aims to preclude cryptocurrencies from double taxation under the Internal Revenue Code.
(4) AT&T employees took bribes to plant malware and keyloggers on the company’s network. Similar tactics have been used in SIM hijacking, whereby customers have lost their identities and respective crypto holdings.
(5) In 2018, the world’s largest crypto exchange, Binance, contracted a third-party vendor to handle its KYC processes. This week, an individual started to leak some users’ KYC information, demanding 300 BTC in exchange for withholding 10s of thousands of Binance users’ KYC information.
(6) Github and Slack bans are hurting Iranian Bitcoin businesses and in doing so, awakening the honey badger.
Bitcoin Events
(1) BitDevs #95 will be hosted in New York, August 15
(2) Russell Okung’s educational event in LA, September 1
(3) Scaling Bitcoin 2019 will be hosted in Tel Aviv, September 10 - 11
(4) Baltic Honey Badger will be hosted in Riga, September 13 - 14
(5) Lightning Conference in Berlin, October 19 - 20
DM me on Twitter if you’ve got feedback, questions, and comments.
This is not financial advice. Do your own research.