“A viral loop is a mechanism that drives continuous referrals for continuous growth.
It’s how you drive your existing customers to refer others to your brand, and in turn, get those new customers to tell even more people about you." - @ReferralRock
1/ The Price of Bitcoin
- Why price is entirely what matters
- How the price helps build Bitcoin
A thread👇
“A viral loop is a mechanism that drives continuous referrals for continuous growth.
It’s how you drive your existing customers to refer others to your brand, and in turn, get those new customers to tell even more people about you." - @ReferralRock
“As the number of users grows, the value per coin increases. It has the potential for a positive feedback loop; as users increase, the value goes up, which could attract more users to take advantage of the increasing value.” - Satoshi
This means that no more Bitcoin are produced as demand for it increases. With gold or oil, they can be sourced from increasingly more expensive/difficult places when demand ⬆️
In bull runs, user adoption increases. For Bitcoin, as SoV, adoption = buying and HODLing. As we can see with the below chart of Coinbase users, 2017 and late 2020 had enormous increases in users as Bitcoin price started to climb.
https://t.co/6P3WIDxGBU
Coinbase has revealed they have over 43million users
— Alistair Milne (@alistairmilne) January 23, 2021
Growth accelerated in late 2020#Bitcoin pic.twitter.com/5D5Fws4LP3
With the price increase, more funding is thrown at the space to support a variety of existing and new businesses: exchanges, wallets, data providers, etc. This ensures that there are easy ways for people to buy Bitcoin, store it, and run full nodes.
As the price rises, so does trading volume. When Bitcoin becomes more liquid, that enables larger and larger participants (ex: Institutional traders/Telsa) to buy substantial amounts of Bitcoin without too much slippage.
The below chart represents code commits for Bitcoin over time. As Bitcoin’s price has increased, so has developer activity and review of Bitcoin core code.
As the price of BTC increases, the value of the block reward increases as well, which incentivizes miners to bring more hashrate online to mine. The higher the hash rate of a cryptocurrency network, the more expensive to 51% attack.
We’re seeing the miner % of revenue from fees start to climb up in the 2017 and 2020/2021 bull runs. Bitcoin is fine.
Bitcoin’s price is the singular function that enables Bitcoin to grow in user adoption, liquidity, funding, security, and core development.
It is the most important aspect of Bitcoin. Don’t let anyone tell you otherwise.
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https://t.co/TYJDErcY6C
More from Dan Held
1/ [December Bitcoin yield update]
Over the last year and a half, I’ve earned ~1.2BTC with various yield generating services to earn an average of 5% on 30 BTC.
Here’s my journey and how to guide👇
2/ Here are the ways you can earn yield:
Lending (Easiest/most popular)
Yield: 3-6%
- Ledn: https://t.co/4x0YATuQ0v
- BlockFi: https://t.co/90Xtg2cNka
Covered calls (Harder)
Yield: 1-80%
- Deribit: https://t.co/2iQVkXlylP
- LedgerX:
3/ Earning a yield enables you to stack more sats (what I’m doing), or reduce the temptation to sell your coin through earning an income.
The yield you earn comes with RISK!
Below is my current allocation for Dec (will update MoM)
(yellow = changes)
https://t.co/PZwVYs8lFT
4a/ [Nov > Dec Changelog]
- Covered calls: approx. 4 BTC was in $40k 12/28/20 contracts. Those closed without them being exercised (a good outcome for me). However, I was nervous about my January 1/28 $50k contract so I decided to close out my position at a small loss.
4b/ [Nov > Dec Changelog]
- In process of reallocating the 5 BTC (probably will be a lending platform).
- I incorrectly had my Ledn rate at 6.5%, it's 6.25%
Over the last year and a half, I’ve earned ~1.2BTC with various yield generating services to earn an average of 5% on 30 BTC.
Here’s my journey and how to guide👇
2/ Here are the ways you can earn yield:
Lending (Easiest/most popular)
Yield: 3-6%
- Ledn: https://t.co/4x0YATuQ0v
- BlockFi: https://t.co/90Xtg2cNka
Covered calls (Harder)
Yield: 1-80%
- Deribit: https://t.co/2iQVkXlylP
- LedgerX:
3/ Earning a yield enables you to stack more sats (what I’m doing), or reduce the temptation to sell your coin through earning an income.
The yield you earn comes with RISK!
Below is my current allocation for Dec (will update MoM)
(yellow = changes)
https://t.co/PZwVYs8lFT
4a/ [Nov > Dec Changelog]
- Covered calls: approx. 4 BTC was in $40k 12/28/20 contracts. Those closed without them being exercised (a good outcome for me). However, I was nervous about my January 1/28 $50k contract so I decided to close out my position at a small loss.
4b/ [Nov > Dec Changelog]
- In process of reallocating the 5 BTC (probably will be a lending platform).
- I incorrectly had my Ledn rate at 6.5%, it's 6.25%
1/ Bitcoin: a bold new world.
Satoshi published the white paper on 10/31/2008. Right at the moment of peak despair during the 2008 financial crisis. Trust had been lost in a world that ran on trust.
2/ But why October 31st? It certainly wasn’t because Satoshi was a fan of halloween, it must have had a deeper meaning. With all of his actions, he demonstrated a careful precision.
He had been working on Bitcoin for at least a year and a half before publishing the white paper.
3/ “I believe I've worked through all those little details over the last year and a half while coding it, and there were a lot of them. The functional details are not covered in the paper, but the sourcecode is coming soon” - Satoshi Nakamoto
4/ On August 18, 2008 Satoshi registers registers https://t.co/rMWwiEwtxT through https://t.co/Uj8lMr10kB.
Satoshi was ready and waiting to hit the send button throughout 2008. What was so special about October 31st?
5/ I believe that Satoshi published the Bitcoin white paper on 10/31 as a hat tip to the ancient Gaelic festival of “Samhain” which was also the date in which Martin Luther nailed his 95 Theses to a church door. Both represent an end of the old and the beginning of the new.
Satoshi published the white paper on 10/31/2008. Right at the moment of peak despair during the 2008 financial crisis. Trust had been lost in a world that ran on trust.
2/ But why October 31st? It certainly wasn’t because Satoshi was a fan of halloween, it must have had a deeper meaning. With all of his actions, he demonstrated a careful precision.
He had been working on Bitcoin for at least a year and a half before publishing the white paper.
3/ “I believe I've worked through all those little details over the last year and a half while coding it, and there were a lot of them. The functional details are not covered in the paper, but the sourcecode is coming soon” - Satoshi Nakamoto
4/ On August 18, 2008 Satoshi registers registers https://t.co/rMWwiEwtxT through https://t.co/Uj8lMr10kB.
Satoshi was ready and waiting to hit the send button throughout 2008. What was so special about October 31st?
5/ I believe that Satoshi published the Bitcoin white paper on 10/31 as a hat tip to the ancient Gaelic festival of “Samhain” which was also the date in which Martin Luther nailed his 95 Theses to a church door. Both represent an end of the old and the beginning of the new.
More from Bitcoin
Ok, so what is the significance of the @lagarde statement on bitcoin?
We were offered a very open insight (but slightly flawed analysis) into top level policy perspective behind the crack down on selfhosted wallets.
https://t.co/1LTzrxHbgs 1/32
'It is a speculative asset, by any account. If you look at the price movements... '
It starts with an economic price perspective and we can learn that ECB is closely monitoring this price movement as one of the many indicators.
So we are in the classic central bank frame 2/32
'Those who thought it would turn into a currency. Sorry, it is an asset not a currency.'
Here she summarises a classic debate on what is currency and what is needed for that. Based on the holy three: unit of account, means of payment, store of value. 3/32
The summary is classic, but too narrow and does not incorporate the wider financial history viewpoints on money, currencies and the way we pay. 4/32
ECB overlooks the de facto unit of account role of bitcoin, having been used to 200 years of having cash around whic is both the unit of account and a means of payment. 5/32
We were offered a very open insight (but slightly flawed analysis) into top level policy perspective behind the crack down on selfhosted wallets.
https://t.co/1LTzrxHbgs 1/32
ECB President Christine Lagarde called for global regulation of #Bitcoin, saying the digital currency had been used for money laundering activities in some instances and that any loopholes needed to be closed. Follow #ReutersNext updates here: https://t.co/4MgFy4jnw5 pic.twitter.com/qlBtoDuZLW
— Reuters (@Reuters) January 13, 2021
'It is a speculative asset, by any account. If you look at the price movements... '
It starts with an economic price perspective and we can learn that ECB is closely monitoring this price movement as one of the many indicators.
So we are in the classic central bank frame 2/32
'Those who thought it would turn into a currency. Sorry, it is an asset not a currency.'
Here she summarises a classic debate on what is currency and what is needed for that. Based on the holy three: unit of account, means of payment, store of value. 3/32
The summary is classic, but too narrow and does not incorporate the wider financial history viewpoints on money, currencies and the way we pay. 4/32
ECB overlooks the de facto unit of account role of bitcoin, having been used to 200 years of having cash around whic is both the unit of account and a means of payment. 5/32
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So the cryptocurrency industry has basically two products, one which is relatively benign and doesn't have product market fit, and one which is malignant and does. The industry has a weird superposition of understanding this fact and (strategically?) not understanding it.
The benign product is sovereign programmable money, which is historically a niche interest of folks with a relatively clustered set of beliefs about the state, the literary merit of Snow Crash, and the utility of gold to the modern economy.
This product has narrow appeal and, accordingly, is worth about as much as everything else on a 486 sitting in someone's basement is worth.
The other product is investment scams, which have approximately the best product market fit of anything produced by humans. In no age, in no country, in no city, at no level of sophistication do people consistently say "Actually I would prefer not to get money for nothing."
This product needs the exchanges like they need oxygen, because the value of it is directly tied to having payment rails to move real currency into the ecosystem and some jurisdictional and regulatory legerdemain to stay one step ahead of the banhammer.
If everyone was holding bitcoin on the old x86 in their parents basement, we would be finding a price bottom. The problem is the risk is all pooled at a few brokerages and a network of rotten exchanges with counter party risk that makes AIG circa 2008 look like a good credit.
— Greg Wester (@gwestr) November 25, 2018
The benign product is sovereign programmable money, which is historically a niche interest of folks with a relatively clustered set of beliefs about the state, the literary merit of Snow Crash, and the utility of gold to the modern economy.
This product has narrow appeal and, accordingly, is worth about as much as everything else on a 486 sitting in someone's basement is worth.
The other product is investment scams, which have approximately the best product market fit of anything produced by humans. In no age, in no country, in no city, at no level of sophistication do people consistently say "Actually I would prefer not to get money for nothing."
This product needs the exchanges like they need oxygen, because the value of it is directly tied to having payment rails to move real currency into the ecosystem and some jurisdictional and regulatory legerdemain to stay one step ahead of the banhammer.
First update to https://t.co/lDdqjtKTZL since the challenge ended – Medium links!! Go add your Medium profile now 👀📝 (thanks @diannamallen for the suggestion 😁)
Just added Telegram links to https://t.co/lDdqjtKTZL too! Now you can provide a nice easy way for people to message you :)
Less than 1 hour since I started adding stuff to https://t.co/lDdqjtKTZL again, and profile pages are now responsive!!! 🥳 Check it out -> https://t.co/fVkEL4fu0L
Accounts page is now also responsive!! 📱✨
💪 I managed to make the whole site responsive in about an hour. On my roadmap I had it down as 4-5 hours!!! 🤘🤠🤘
Just added Telegram links to https://t.co/lDdqjtKTZL too! Now you can provide a nice easy way for people to message you :)
Less than 1 hour since I started adding stuff to https://t.co/lDdqjtKTZL again, and profile pages are now responsive!!! 🥳 Check it out -> https://t.co/fVkEL4fu0L
Accounts page is now also responsive!! 📱✨
💪 I managed to make the whole site responsive in about an hour. On my roadmap I had it down as 4-5 hours!!! 🤘🤠🤘
