- Who’s in Control of Bitcoin Software?
- Developing and Upgrading Bitcoin Software
- Is Bitcoin’s Supply Really Limited?
- Who Are the Developers?
What is Bitcoin? (technicals)
- It sounds complex, but it is actually simpler than a wire transfer.
- How is Bitcoin upgraded: Changes require consensus.
- Argument: Bitcoin is undervalued because not enough people understand the fundamentals.
- Volatility is caused by momentum traders buying with leverage.
- Features: open, neutral, permission-less, used-by-enemies, self-custody, monetary policy, social consensus, battle-tested
- allow you to buy Gamestop, even if the big Hedge funds don’t want you to
- Smart-contracts could enable a decentralized financial system
Bitcoin’s Growing Popularity with Institutions
Bitcoin is an invention on the scale of the internal combustion engine or electricity
The Bitcoin whitepaper solved a long-standing mathematical problem: The Byzantine Generals Problem
Institutions are buying because:
- It is uncorrelated to other assets
- It is large enough to have liquidity
- There is a futures market
- Prominent investors like Paul Tudor Jones have outlined their thinking of Bitcoin as an inflation hedge
- Endowments are buying 1%
How much would it cost to build the Bitcoin network today? I think it is non-replicatable.
If you buy, decide on an allocation and then put yourself on a program to invest regularly
But how does bitcoin actually work?
The Establishment View: The Economist
It takes a long time to learn about Bitcoin and you can tell that the writers for the Economist magazine haven’t done the work necessary to see through some of the FUD.
See Common Critcism
- Every system requires some level of trust. But Bitcoin has better transparency.
- Contributing to the Climate Crisis: Uses more energy than the Netherlands (but 6 times less than YouTube) and less than half the current Banking system as well as half of Gold.
- One shouldn’t be surprised that it is volatile, given that it is still small and people fear the government and other establishment powers will attack it.
- Only 10 transactions per second mean it is infeasible for widespread use
- (but millions possible with Lightning Network, Layer 2)
- Nobody thought it was worth protecting their password when Bitcoin was worth pennies per coin.
- Used for crime (compared to what other currency? Bitcoin is ill-suited to crime, compared to American dollars)