Day: December 30, 2020
To show how heuristics can vary widely: @coinmetrics estimates (by removing likely change outputs) that $999B was transferred via bitcoin in 2020, averaging $31,660 per second.
@murchandamus Do you like this number better? 😋
@MrHodl Kids are meant to sleep in the same room as parents They feel unsafe at nights and want to know they are protected If they drink milk (glycine) they’ll have vivid dreams that may contribute to being scared Having your kids sleep in some other room far away is fiat culture
They feel unsafe at nights and want to know they are protected
If they drink milk (glycine) they’ll have vivid dreams that may contribute to being scared
Having your kids sleep in some other room far away is fiat culture
Saving With Bitcoin Was Never So Cool As In 2020
2020 was unforgettable, especially for Bitcoin. To help memorialize this year for our readers, we asked our network of contributors to reflect on Bitcoin’s price action, technological development, community growth and more in 2020, and to reflect on what all of this might mean for 2021. These writers responded with a collection of thoughtful and thought-provoking articles. Click here to read all of the stories from our End Of Year 2020 Series.
In 2020, Bitcoin benefited strongly from the incredible media-driven fear and government overreaction around COVID-19. Over decades, fiat money and debt culture has degenerated our ability to think and plan long term. But while society’s fiat savings were being inflated away, many were able to insulate themselves from the impact.
So what changed this year? It was a tipping point of understanding. The macroeconomic winds had finally changed enough that people were realizing that something was wrong.
There used to be some semblance of an interest rate and return for savers. But as those have been driven to almost zero in nominal terms, and negative in real terms, well-known investors have now openly acknowledged the value of bitcoin as a store of value. We saw billionaire investors, money managers and public company CEOs speak out with bullish points of view on Bitcoin: Paul Tudor Jones, Stanley Druckenmiller, Bill Miller, Larry Fink and Rick Rieder of BlackRock, Michael Saylor of MicroStrategy and Jack Dorsey of Square.
Many in the traditional investing world remain confused. Consider this exchange between Melissa Lee and Saylor. Saylor understands the game here is to earn (whether in fiat or bitcoin), and then store that value in bitcoin, while Lee seems stuck on the idea that this is some “bet” on bitcoin. As though remaining in fiat was not itself a risk given these underlying conditions.
In other interviews, Saylor has aptly characterized sitting in fiat as sitting on a melting ice cube. It’s hard enough to turn a buck and make an honest living these days. There’s rightly a sense that a person should not also have to be an equity analyst, property mogul or a bond king to hold on to their savings.
More broadly, we’ve seen a rise in the savings rate. In the U.S., the savings rate has gone from the 5 percent range to the 15 percent range in 2020. Australian household saving has jumped from 5 percent to around 20 percent in 2020. What happens as more people around the world realize that bitcoin is the “fastest horse,” as Jones put it?
The Impact Of The Bitcoin Halving
As anticipated, bitcoin’s third subsidy halving occurred in May 2020. The four-yearly event that is like New Year’s Eve for bitcoiners went over in a festive way, with many live streams and events taking place.
Also relevant in terms of Bitcoin memes, the NgU (Number Go Up) technology meme became much more prominent in 2020. While “Number Go Up” was initially intended as an insult to bitcoiners for their apparent simplicity, bitcoin’s strict supply schedule and monetary qualities do make it a loosely-considered Number Go Up technology.
As to whether S2F (stock-to-flow) modelling works, debate continues to rage on. The pro-S2F model side asserts that the model has not yet been broken, while the anti-S2F model side argues that it is not statistically valid, that the goal posts keep shifting, etc. We will see what happens next year.
Bitcoin’s Technical Development
There’s been more focus on making Bitcoin development more distributed, and sustainable over the long term. We’ve seen more focus on the importance of reviewing and testing important code in Bitcoin Core and in related software. Contributions continue to be made by existing development organizations like Blockstream, Chaincode Labs, MIT DCI, Crypto Garage and Square Crypto.
Research and development organizations are being created and built to support in this area, such as Brink, Judica and the Human Rights Foundation’s (HRF) development funding effort.
Another welcomed trend has been Bitcoin exchanges and companies increasingly making contributions either directly to individual contributors, or to Bitcoin development organizations.
Development Of Bitcoin Privacy
While it’s not the focus of every bitcoiner, privacy remains an important consideration and there were some welcome advancements in the space this year.
Soroban by the Samourai Wallet team enables much faster and easier collaborative private transactions that break the heuristics that surveillance firms rely on. Samourai Wallet’s growing user numbers and rising Whirlpool unspent capacity (both in BTC terms and in fiat terms) represent a growing recognition of its leading toolset in the Bitcoin privacy game.
Ronin Dojo as a node project is also maturing and becoming an easy go-to choice for the user who wants to use Samourai Wallet in a more sovereign fashion.
CoinSwaps being developed by Chris Belcher (with grants from Square Crypto and HRF) are an interesting non-custodial tool for additional privacy also.
Multisig And Hardware Wallets
Interesting highlights here were the advancing conversation around using multisignature and making it easy to use, as well as community discussion calling out common pitfalls. Some of the relevant pieces and considerations (such as Michael Flaxman’s wishlist from 2019) came together or were more widely supported, such as PSBT (partially-signed bitcoin transactions), HWI (hardware wallet integration), animated QR scanning libraries and backup files for multisig.
Guided multisignature providers like Unchained Capital and Casa both made great progress in terms of offering new features such as OTC and/or directly stacking bitcoin into multisig cold storage. Unchained Capital’s Caravan project provides easy user-independent recovery for users on the commercial Vaults product, and another DIY multisig option for those not comfortable with the commercial product. Casa’s Casa Wallet application enables a new level of ease in terms of the “seedless” onboarding for newcoiners with cloud backup.
Specter Desktop is a clear stand out in the DIY multisignature space (and also for single signature users) recently, given the application is a simple Windows or Mac install that easily calls out to the local Bitcoin Core instance. This represents a new level of ease of use that was not previously available to the user who wanted to use their own hardware wallet with their own full node.
Bitcoin’s Lightning Network advanced in 2020 with more widespread adoption of MPP (multi-part payments) across the network, the activation of wumbo (large channels) and the growing maturity of beginner/consumer-level easy Lightning wallets such as Breez, Phoenix and Strike.
The Lightning ecosystem grew in different areas, such as its use for mining pool payouts, sats-back rewards, Lightning-powered gaming and interestingly, use as part of a brave new push into “Podcasting 2.0” led by Adam Curry (Podcast Index) and the Sphinx app team.
Some of the other tooling around Lightning Network also advanced with Lightning Pool, a marketplace built to help Lightning Network users deal with managing their channel liquidity, along with other tools like Autoloop. Dashboards like RTL (Ride The Lightning) and ThunderHub emerged as popular Lightning node management tools also.
With that said, there were also attacks on the Lightning Network disclosed by researchers, and some mitigations and protections also proposed against these attacks. As the Lightning Network grows up, it will surely have to face more malicious adversarial actors, but nevertheless it is a very exciting space that I remain very bullish on.
Savings Technology Goes Large
As my friend Pierre Rochard says, Bitcoin is savings technology. This way of thinking about bitcoin will become popular in a world where people have no good alternatives.
Popular messaging in the past was more associated with lump-sum buying or selling and attempting to time the market. Going forward, I believe the common method will be to start with a lump-sum buy, and then regularly accumulate, aka DCA (dollar-cost averaging). 2020 saw the rise of bitcoin-only DCA businesses and 2021 should be even bigger.
We’ve seen impressive growth and development in tooling that enables Bitcoin use in more self-sovereign ways, from node packages, to wallet software, hardware wallets, Lightning Network and continuing advancement at Bitcoin’s protocol level.
Many who only took a cursory look in past years will take a deeper dive, and others who invested a small amount will increase the size of their investment after being validated in their thesis.
Globally speaking, Bitcoin has been fringe up until recently, but it is about to go through the next big leg up in adoption and use.
This is a guest post by Stephan Livera. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.
Whales Send 54,950 BTC Worth $1.49 Billion in Series of Giant Transactions – Here’s Where the Crypto Is Heading
A number of high-net-worth crypto holders known as whales are busy moving billions of dollars worth of Bitcoin as the leading cryptocurrency continues to show signs of strength.
In the last 24 hours, crypto whale watching bot Whale Alert tracked nine large transactions to the tune of 54,950 BTC worth about $1.49 billion at time of writing.
The largest transaction of the day witnessed a whale relocate 9,500 BTC worth $257.2 million from a wallet of unknown origin to another wallet of unknown origin.
🚨 🚨 🚨 🚨 🚨 🚨 🚨 🚨 🚨 🚨 9,500 #BTC (257,255,356 USD) transferred from unknown wallet to unknown wallet
— Whale Alert (@whale_alert) December 28, 2020
Another large crypto holder shifted 9,099 BTC worth $247.5 million from an unknown wallet to an unknown wallet.
On top of these transactions, five large crypto holders moved thousands of BTC between wallets of unknown origins. None of the transactions appear to be sending crypto to exchanges, where it could then be sold on the open market.
One transaction transferred BTC from crypto exchange Binance to a crypto custodial firm and another transaction move BTC from crypto exchange Coinbase to a wallet of unknown origins. Here’s the summary of the recent transactions:
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Spain: City Council of Lebrija Launches Euro-Pegged “Elio” Cryptocurrency
Lebrija city, municipality of Spain located in Andalusia’s autonomous community, has introduced a cryptocurrency named Elio pegged with Euro. The move will support local transactions among residents and merchants.
A Fruitful Adoption of Elio
In Madrid, Europa Press, a news agency, said Elio cryptocurrency would empower the City Council of Lebrija to dispatch economic aid to 593 selected beneficiaries. The move will take into consideration the monthly income and number of kids, with recipients getting support between 50 to 200 euros for local consumption. The City Council has also announced an economic aid of 393 to 400 Euros worth of Elio to locals under the Municipal Reactive Plan.
The mayor of Lebrija, Pepe Barroso, commented that the new crypto would ensure that economic aids are directly reversed in local companies. Pepe further encouraged people to download a mobile application in Google Play Store and App Store to help handle Elio transactions.
People will be able to purchase products or services in shops, exchange half of the purchase amount with a charge to this balance through a virtual currency, and conventionally pay the other half. A multiplier effect will be achieved on the incentive provided by the City Council. It is reported that 165 shops in the city have already joined the platform. Barroso encouraged more companies to join the Elio platform.
Cryptocurrencies Gaining Stardom
Recently, the European Central Bank published a report regarding a central bank digital currency (CBDC).
ECB President Christine Lagarde said that the ECB might establish a digital euro in a few years. In addition to the government level’s efforts, some private financial companies in Europe have begun issuing stablecoins.
BTCManager reported a few weeks ago that Bankhaus von der Heydt (BVDH), a 266-year-old German bank collaborated with the German blockchain technology provider, Bitbond, to establish the first-ever Euro stablecoin on the Stellar Network. The stablecoin is now available for trading.
Cryptocurrency in Spain
The local crypto industry in Spain has been braced with a lot of action this year.
Spain is working on increasing regulation over the crypto industry. Just recently, the Spanish government approved the bill, entitled “Law on preventive measures to combat tax avoidance”.
The bill aims to control cryptocurrencies, obliging citizens to provide detailed information on balances and all transactions. The crypto activities that must be submitted to the authorities include; acquisition, transmission, exchange, transfer, collections, and payments.