𝐀 𝐩𝐫𝐒𝐦𝐞𝐫 𝐨𝐧 𝐁π₯𝐨𝐜𝐀𝐜𝐑𝐚𝐒𝐧 & 𝐂𝐫𝐲𝐩𝐭𝐨𝐬 🧡

I still everyday meet investors who think Bitcoin & Blockchain are the same & this thread is specifically for them

Do re-tweet & help us educate more invetsors ☺

#Investing #Cryptos #Bitcoin (1/n)

(Q1) Lets start with what was historically used as a method of payment?

- Barter system, you give me a cow and I give you 100 kgs of rice (2/n)
(Q2) So why dint we continue with the barter system?

- It was difficult to transact in fractions
- What if I want only 50 kgs of rice? I cant give you half a cow right?
- This is the prime reason for the introduction of smaller units of payment method we now call as coins (3/n)
(Q3) How did Gold coins get shortlisted for the job?
- It was malleable & portable
- It was non corrosive, could be stored for a long time
- It was a perfect combination of abundance & rare
- Plus it was eye catching & visually appealing (4/n)
(Q4) What about paper currencies?
a) When paper currencies were introduced, it was decided that a country could only print as much currency as the gold reserves they have but this was withdrawn in 1971 bcoz of which the central banks could then print as much money as they wanted
(b) Infusing so much liquidity leads to β€˜higher inflation’ & it is completely β€˜controlled by the central banks’ (This is the problem, remember this through out the thread)
(c) To solve the above problem, Bitcoin was invented. (6/n)
(Q5) What is a Bitcoin?

(a) It claims to be a Store of value (like Gold is) & a payment method (Like $ is) (7/n)
(b) Because only a limited supply of Bitcoin is available, it is expected to be deflationary (problem 1 addressed) as per modern economics & because it uses blockchain, it is more transparent & no 1 single entity controls it (Problem 2 addressed). (8/n)
(Q6) Before we understand Bitcoin, lets understand Blockchain

(a) Assume split wise. Friends go out, sometimes someone pays and sometime someone else. At the end of the year, there is a ledger mentioning how much does who owes whom. (9/n)
(b) The challenge with this ledger is what if I add any entry in it during the year, who verifies if it’s correct?
(c) Currently, banks do this verification when you transact through the bank. Banks maintain transaction record of credits & debits (10/n)
(d) NSE/BSE /NSDL/CDSL does the same thing in the stock markets
(e) But what can you do to decentralize? No banks, no NSE/BSE/CDSL/NSDL? To verify the transactions, you use computational work (replacing intermediaries (Banks) with computational work), let me explain (11/n)
(Q7) How does the blockchain work?

(a) There are multiple computers also called as miners or NODEs are connected to each other on open source software (12/n)
(b) For bitcoin, you can download the software Bitcoin client, have the hardware in place and you become the part of the mining community who would verify & maintain all transaction records (13/n)
(c) Lets say someone buys & sells the bitcoin and that transaction needs to be verified. What happens is, multiple transactions (maximum of 2400) are bundled into a block (14/n)
(d) 2 authorize if the transactions r correct, u have 2 sign it with a unique valid transaction key (HASH or Proof of work), which is generated after solving some very complicated algorithmic problems 2 arrive at the HASH which other computers in the network also validate (15/n)
(e) Whichever computer in the open network is able 2 solve it 1st, announces it in the network 2 every1 where every1 saves the transaction in their ledger automatically as a part of the network (decentralized) 4 which the miner who solved the problem receives bitcoin as a reward
(f) Like in the ledger, these blocks keep forming a chain one after the other and hence it’s called the Blockchain (17/n)
(Q8) How many Bitcoin’s do I get for the mining activity?
(a) It is called Bitcoin Halving
(b) It reduces the bitcoin reward for the miners by half every time 2,10,000 blocks are verified (18/n)
(c) A new block is created every 10 min, it roughly takes 4 years 4 the bitcoin halving (its an automated process of reducing the reward at every 2,10,000 blocks verified)
(d) This is the bitcoin reward 4 solving the block & no new bitcoins after 2,10,00,000 bitcoin are released
(Q9) What are Altcoins, Stable coins & Meme Coins?

(a) Altcoins - Anything other than a Bitcoin is called the Altcoin. Example – Ethereum, Cardano, Polkadot (20/n)
(b) Token or Stable coin - It is pegged against $ majorly & tries to mirror its movement. Price of the coin moves up & down with the movement in $. Example – Tether, USDC

(c) Meme-Coins - Made for fun, have no logic. Example – Doge, Shiba (21/n)
(Q10) What are my views on the same?
(a) Blockchain is a brilliant technology & has multiple use cases in various industries
(b) But on Bitcoin, I am not sure if it will be able to replace paper currencies as a medium of transaction or gold as a store of value. (22/n)
(c) It 'may' evolve into use cases in the future that I cant visualise right now.
(d) Altcoins with use cases like De-fi will evolve over time & we will talk about it in the next thread. Will also talk about the fancy around NFT's & Metaverse going forward (23/24)
This is my 49th thread, 'do re-tweet’ & follow me
@KirtanShahCFP

Have earlier written on,
-Sector Analysis
-Macro
-Debt Markets
-Equity
-Gold
-Personal Finance etc. You can find them all in the link below https://t.co/UrRt87xIJF…………… (END)

More from Kirtan A Shah

More from Bitcoin

Another #FreeLoveFriday. So far, I’ve covered Bitcoin, Mastercoin/Omni, and last week ChainLink and the importance of decentralized oracles. Today, let’s talk about one of the most fascinating projects in crypto - @MakerDAO


In my thread about Mastercoin, I briefly touched on the vital role fiat-backed stablecoins play in crypto markets, but there’s a catch with them:

The counterparty risk of a third-party holding fiat in reserves.

Enter MakerDAO, which set out to create a decentralized, collateral-backed cryptocurrency, DAI, that would be β€œsoft-pegged” to the U.S. Dollar using the power of algorithms. In crypto tradition, its supporters said trust game theory, not operators.

In 2017, MakerDAO published a whitepaper describing a system where anyone could create DAI by leveraging ETH as collateral to create Collateralized Debt Positions. Essentially, you take out a digital USD loan against your crypto.

The game theory of the system is structured such that DAI issuance is controlled to keep the price pegged to $1.00. In essence, it buffers the fluctuations of the underlying collateral to create a synthetic dollar bill.
$BTC: Two Bitcoin FUDs to address this Thanksgiving weekend:

1. China PlusToken FUD: Old news. Please see linked thread.

2. U.S. Treasury FUD: Read thread below...


1/ These news are much more relevant, as they imply severe trade-offs for people who want to keep their bitcoins undoxxed, with the cost and risks of doing so. I would not disqualify the tweet as mere FUD in the sense that what he posted is false. It should be taken seriously.

2/ For all we know, his decision of making it public before TG weekend may come out of the urgency of informing CT of a poignant anti-Bitcoin move by a Trump administration trying to cut lose ends before leaving officeβ€”not just "price manipulation" as I've seen suggested around.

3/ It implies the acceleration of a process already planned for for months in advance, not something he just came up with to "crash the market."

4/ In practicality, assuming this passes, it will have two major consencuences:

a. Armstrong's analysis is correct. And I would go further in saying, this regulation would leave the U.S. severely handicapped to continue to be the leader in the cryptocurrency industry worldwide.
I have a different take on bitcoin, tether, and dollars

Can also speak with authority on nation state violence

"Nothing makes you feel more free than taking another person's freedom"


and @profplum99 concerns with tether, bitcoin, and decentralization make sense yet I remain long BTC

They are correct on force, I worked in decentralized societies, they are dangerous because the state does not have a monopoly on violence

For those in the first world who have never seen a milita ride out of the desert, kill and enslave farmers, and the government cannot stop it because the 21st century slave trade pays better than the UN, the reality of decentralization is might equals right

I know, that isn't the decentralized future Buterin talks about while wearing a t-shirt with a cat fighting space invaders on it (love those shirts)

But we need to be real, disrupting the global centralized economy won't be like Uber putting taxis out of work

It will be war and faminine level disruption as old empires come alive again

For decentralization to rise the centralized global power of the last 70 years (US Hegemony) has to weaken

Yes we will be rich, but as the Big Short says,

"you can be happy, just don't fucking dance"
1/THREAD: WHEN WAS IT CLEAR?

Oct. 8, 2020: The purpose of this thread is to document and timestamp when it first became clear that #Bitcoin was likely to become a major reserve asset for public corporations, and eventually states, with Square's purchase of $50M in BTC.

The purpose is to give something to cite when ppl later claim "But there was NO WAY OF KNOWING..."

h/t @ErikSTownsend who used the same format to call out the impact of Covid on Feb 8 and made me personally aware of the looming shutdown of the country
https://t.co/opuiNgSeqC !


Bitcoiners smarter than me have been predicting the takeover of the dollar by Bitcoin for many years.

In 2014 with Bitcoin barely at $1B, @pierre_rochard wrote https://t.co/EGHa58KqHq, covering all the incorrect narratives of Bitcoin and stating it will overtake the dollar.

"[skeptics] misunderstand how strong currencies like bitcoin overtake weak currencies like the dollar: it is through speculative attacks and currency crises caused by investors, not through the careful evaluation of tech journalists and 'mainstream consumers'" - @pierre_rochard

I first became bullish on Bitcoin in the summer of 2016, around a $3B market cap, but it was still a toy project at that time in the eyes of most in the financial world, while many technologists thought of it as a v1 technology to be improved on.

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Margatha Natarajar murthi - Uthirakosamangai temple near Ramanathapuram,TN
#ArudraDarisanam
Unique Natarajar made of emerlad is abt 6 feet tall.
It is always covered with sandal paste.Only on Thriuvadhirai Star in month Margazhi-Nataraja can be worshipped without sandal paste.


After removing the sandal paste,day long rituals & various abhishekam will be
https://t.co/e1Ye8DrNWb day Maragatha Nataraja sannandhi will be closed after anointing the murthi with fresh sandal paste.Maragatha Natarajar is covered with sandal paste throughout the year


as Emerald has scientific property of its molecules getting disturbed when exposed to light/water/sound.This is an ancient Shiva temple considered to be 3000 years old -believed to be where Bhagwan Shiva gave Veda gyaana to Parvati Devi.This temple has some stunning sculptures.
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.