BBCD Satoshi Quarterly Newsletter (Issue 1: 2021 Review)

Issue 1: 2021 Review

Hello and Welcome,

This is the first issue of the Bitcoin Investing Quarterly Newsletter & Report.

This issue is a look back at 2021 to set the stage for this current year 2022 and beyond.

Contents

• Introduction
• 2021 Macro Summary
• 2021 Bitcoin Results
• Graph Visualisation for Investing In & Out (DCA) USD and GBP
• High, Low and Median tables
• Experiment for Best Day, Week Number and Time to Buy/Sell Bitcoin
• Recommended Publically Available Graphs, Statistics & Metrics for Bitcoin
• Selected Products and Services
• Google Trends
• Halving Countdown
• Selected Important News from 2021
• Conclusion

Introduction

The focus for this newsletter is long term investing, so our view looks on a monthly and yearly basis. “Buy Bitcoin, you’ll thank yourself in the future”.

This newsletter is a compilation of notes, research and analysis that I use for my own Bitcoin investing. Rather than keeping this closed and only for me, my thought has been to open this up for subscribers. For the time taken for the research that is where the subscription fee comes in. Hopefully you’ll find this newsletter useful and or valuable and will subscribe as a paying member.

This newsletter is for simple decision making, based on your own strategy and goals that you define for holding or selling Bitcoin. This newsletter is not about exotic investing such as margin trading, shorting, futures, options or other derivatives. Just simple spot buying and selling of Bitcoin, nothing fancy. An alternative name for the newsletter could be: “The HODL report with a bit of Buying and Selling of Bitcoin”.

In this newsletter the main fiat currency used will be the US dollar (USD) and British Pound Sterling (GBP). However, in subsequent newsletter issues the Euro (EUR) and or Japanese Yen (JPY) may be used if I am able to and also if there is any interest. Incidentally, I’ve always thought measuring Bitcoin in price of Gold per kilo would be a more accurate measure of the true value of Bitcoin, rather than in fiat currency.

2021 Macro Summary

2021 was a year that remained in COVID 19 limbo. This resulted in issues such as:

• Supply chain fragility e.g. Ever Given tanker that was stuck in the Suez Canal
• Semiconductor shortages
• All time high stock markets
• Discussion of reducing quantitative easing by central banks
• Discussion of increasing interest rates
• Russia and Ukraine potential conflict (as of writing, this is now a hot war)
• Geopolitical tensions including China, Taiwan, USA

All the above factors play into the narrative of geopolitical, economic and financial uncertainty in the World.

This is an environment that Bitcoin was either created for, or has naturally come to embrace. Bitcoin embodies its role as the financial and monetary release valve or black hole of monetary gravity.

This enables Bitcoin to be harnessed by ordinary people to protect their money, capital and wealth.

2021 Bitcoin Results

How did Bitcoin fair in 2021 within the above macro environment?

USD ($) in 2021

• Bitcoin reached a high of $69,000
• Bitcoin reached a low of $27,678
• The spread for the year was $41,322

USD ($) in 2021

GBP (£) in 2021

• Bitcoin reached a high of £51,000
• Bitcoin reached a low of £19,500
• The spread for the year was £31,500

GBP (£) in 2021

Source: Data for above USD and GBP compiled from Coinbase via TradingView. Please note the figures above are accurate compared to the visual graph figures which are approximate.

Graph Visualisations for Investing In & Out:

Graph Dotted Lines Legend :

Note: The following graphs were compiled by BBCD Satoshi using data from Coinbase via TradingView. Please note the figures shown on the graphs are approximate, whereas the figures in tables are accurate.

US Dollar (USD)

Logarithmic View of USD: All time

Logarithmic View of USD: 2021

Logarithmic View of USD: Fibonacci Retracement

Logarithmic View of USD: Target for 2030

British Pound (GBP)

Logarithmic View of GBP: All time

Logarithmic View of GBP: 2021

Logarithmic View of GBP: Fibonacci Retracement

Logarithmic View of GBP: Target for 2030

USD

GBP

Experiment for Best Day, Week Number and Time to Buy/Sell Bitcoin

This is based on looking at each month in the year to see pattern(s). There can be many factors that cause these patterns.

• One hypothesis could be the salary effect, whereby people paid in Bitcoin are sent their Bitcoin and then cash out into their local currency within a day or two of receiving their salary/wages.
• Another hypothesis can be looking at Dollar Cost Averaging (DCA)  into and out of Bitcoin. Algo Trading, Bots and also humans setting a specific day of the week, week number in the month and time in UTC to either buy or sell Bitcoin. As institutions and corporations invest in Bitcoin, the other aspect to consider will be quarters in the year when portfolios are rebalanced.
• I personally think both of these hypotheses will have a bigger impact going forward. Maybe we’ll see the DCA effect clearer

GBP

• I’ve limited this experiment to only GBP.
• This is an experiment currently, but so far has indeed been useful for buying and selling.
• On a rolling basis, only looking at 1 year of data:
• In 2021 the best day, week number to Buy (at lowest point) Bitcoin was on
• last week of the month
• Thursday or Saturday at 4pm or 9pm
• In 2021 the best day, week number to Sell (at highest point) Bitcoin was on
• first week of the month on Monday, Wednesday, Friday or Sunday at 1pm

Data download:

For subscribers please click on the download area for formatted data files. These should be in CSV and Excel format.

Further project for AI and Machine Learning

Over the coming year I’m hoping to make use of machine learning and or artificial intelligence to start making predictions based on previous data. This will enable Bitcoin investors to focus on specific days of the week, week number in a month and quarter for planning ahead to optimise entry and exit for Bitcoin investments. Watch this space.

Publically Available Graphs, Statistics & Metrics for Bitcoin:

These very useful and excellent charts have been created by third parties. Please take your time to become familiar with them if you are not already. I highly recommend subscribing to the authors websites and social media posts.

• Puell Multiple
• Stock-to-Flow (S2F)
• Bitcoin Logarithmic Growth Curves/Power Law

Puell Multiple:

Source: https://www.lookintobitcoin.com/charts/puell-multiple/

See also:

https://studio.glassnode.com/metrics?a=BTC&category=&m=indicators.PuellMultiple

https://medium.com/unconfiscatable/the-puell-multiple-bed755cfe358

https://twitter.com/cryptopoiesis

Stock-to-Flow:

Source: https://studio.glassnode.com/metrics?a=BTC&category=&m=indicators.StockToFlowRatio

See also:

https://www.lookintobitcoin.com/charts/stock-to-flow-model/

https://medium.com/@100trillionUSD/modeling-bitcoins-value-with-scarcity-91fa0fc03e25

https://twitter.com/100trillionUSD

Bitcoin Logarithmic Growth Curves:

Source: https://www.lookintobitcoin.com/charts/bitcoin-logarithmic-growth-curve/

See also:

https://twitter.com/hcburger1

https://t.co/Qi94ZDV14p

https://medium.com/quantodian-publications/bitcoins-natural-long-term-power-law-corridor-of-growth-649d0e9b3c94

Selected Products and Services:

Casa (https://keys.casa)

Something to seriously consider with Bitcoin is what would happen to your Bitcoin in the event of your death.

Alternatively, how can you securely plan your inheritance with respect to your Bitcoin holdings?

I recommend looking at and considering Casa.

From their website marketing:

“Casa Inheritance keeps your bitcoin safe, even after you pass away. Included with every Casa Diamond membership.”

https://keys.casa

Kraken OTC (https://www.kraken.com/features/otc-exchange/)

If you are considering making considerable purchases of Bitcoin, I would consider using the OTC (Over The Counter) desk at Kraken.

This would be for purchases over $100,000

I recommend looking at and considering Kraken OTC:

From their website marketing:

“Over-the-counter (OTC) trading takes place off the open Kraken exchange. We offer deeper liquidity and a private, more personalized service to institutions and high net-worth individuals needing to fill large orders that might be too disruptive if placed on open markets at the exchanges. Whether you are trading blocks of $100,000, €10,000,000 or 2,000 Bitcoin, the OTC desk will provide you with execution and settlement services that are discreet, secure and ultra-competitive.”

https://www.kraken.com/features/otc-exchange/

Google Trends:

Searches for the word “Bitcoin”

2021

Last 5 Years

Halving Countdown:

The next Bitcoin halving where the supply is cut in half is likely to be in 2024.

Please see this dashboard for further details (scroll right and left for the full dashboard)

https://bitcoin.clarkmoody.com/dashboard/

Selected Important News from 2021

1. TESLA Bought $1.5 Billion in Bitcoin

Source: https://edition.cnn.com/2021/04/28/investing/tesla-bitcoin/index.html

1. Coinbase Listed on the Nasdaq with an Initial Public Offering (IPO)

Source: https://www.reuters.com/article/us-coinbase-ipo-idUSKBN2C10K7

1. China banned Bitcoin mining

Source: https://www.bbc.com/news/technology-58896545

1. Bitcoin upgrade called Taproot

Source: https://www.cnbc.com/2021/11/14/bitcoin-taproot-upgrade-what-it-means-for-investors.html

Conclusion

2021 was marked by the continued COVID 19 Pandemic and associated knock on effect from societal and economical lock downs. I believe the effects of this will be felt for many years to come ranging from inflation and interest rate increases, to disruption and changes for global supply chains.

At the time of writing this (March 2022) Oil has just peaked at $140 USD per barrel. There is discussion that this could become $300 USD per barrel. This can be attributed to the conflict in Ukraine by Russia. The USA is considering banning Russian oil imports. It was not that long ago when oil was negative, during the pandemic. There is open talk of nuclear conflict. How will this impact the price of Bitcoin? Only time will tell.

In terms of USD Bitcoin reached a high of $69,000 and a low of $27,678. The median Bitcoin price was $48,339.00

In terms of GBP Bitcoin reached a high of £51,000 and a low of £19,500. The median Bitcoin price was £35,250.00

2022 and beyond should see increases in the value of Bitcoin when measured against fiat currency. However, the rate of increase is likely to be reduced as Harold Christopher Burger (https://twitter.com/hcburger1) says due to diminishing returns.

In terms of safety and a place to keep capital, this is a 50/50 based on a risk management perspective. If you need access to a portable, secure, non confiscatable asset then Bitcoin is the choice.

The next newsletter will be looking at quarterly one for 2022 (Q1 January, February and March 2022).

A Lot can happen in the world of Bitcoin in 3 x months (1 x quarter), so let's see how Q1 of 2022 does in the next issue.

Thank you for reading.

Any comments or suggestions are welcome at Twitter/bbcdsatoshi

“Buy Bitcoin, you’ll thank yourself in the future”.

Zero to Hero, or why you should consider investing in Bitcoin

I've just published an article which is the basis/rationale for investing in Bitcoin. Actual article location: https://bbcdsatoshi.blogspot.com/p/rationale.html

• The title is: 'Zero to Hero, or why you should put 5% of your cash/fiat into Bitcoin'.
• The alternative title is the 'Purpose for BBCD Satoshi - rationale for investing in Bitcoin'.

https://bbcdsatoshi.blogspot.com/p/rationale.html

Please take a look and send your thoughts or comments to me:

https://twitter.com/bbcdsatoshi

Bitcoin specific metrics for investing

Bitcoin Specific Metrics:

There is a cottage industry that has built up for providing new statistics and charts for looking at in granular detail, valuing and predicting prices and changes with Bitcoin. These include:

• 200 Week Moving Average Heatmap

• The Puell Multiple

• Stock-to-Flow Model

• Bitcoin Logarithmic Growth Curves.

(Source for details below: https://www.lookintobitcoin.com/charts/)

200 Week Moving Average Heatmap

In each of its major market cycles, Bitcoin's price historically bottoms out around the 200 week moving average. This indicator uses a colour heatmap based on the % increases of that 200 week moving average. Depending on the month-by-month % increase of the 200 week moving average, a colour is assigned to the price chart. Long term Bitcoin investors can monitor the monthly colour changes. Historically, when we see orange and red dots assigned to the price chart, this has been a good time to sell Bitcoin as the market overheats. Periods where the price dots are purple and close to the 200 week MA have historically been good times to buy. The 200WMA heatmap can be a useful tool as it shows on a historical basis whether the current price is overextending (red dots) and may need to cool down. It can also show when Bitcoin price may be good value on a historical basis. This can be when the dots on the chart are purple or blue. Over more than ten years, $BTC has spent very little time below the 200 week moving average (200WMA) which is also worth noting when thinking about price predictions for Bitcoin or a Bitcoin price forecast.

Created by and further reading: Plan B

https://twitter.com/100trillionUSD

The Puell Multiple

This metric looks at the supply side of Bitcoin's economy - bitcoin miners and their revenue. It explores market cycles from a mining revenue perspective. Bitcoin miners are sometimes referred to as compulsory sellers due to their need to cover fixed costs of mining hardware in a market where price is extremely volatile. The revenue they generate can therefore influence price over time. The Puell Multiple is calculated by dividing the daily issuance value of bitcoins (in USD) by the 365-day moving average of daily issuance value.

There are periods of time where the value of bitcoins being mined and entering the ecosystem is too great or too little relative to historical norms. Understanding these periods of time can be beneficial to the strategic Bitcoin investor. The chart above highlights periods where the value of Bitcoin's issued on a daily basis has historically been extremely low (Puell Multiple entering green box), which produced outsized returns for Bitcoin investors who bought Bitcoin here. It also shows periods where the daily issuance value was extremely high (Puell Multiple entering the red box), providing advantageous profit-taking for Bitcoin investors who sold here.

The Puell Multiple uses the upper red band on the chart to show when miner revenues in USD terms are significantly higher than historical norms (in this case the 365-day moving average). Over the majority of Bitcoins’ existence, these periods have been when the price of $BTC has also reached its major highs. So the Puell Multiple can be a useful Bitcoin forecasting tool to identify based on this metric whether price is too high and needs to drop (when the indicator is in the red zone), or whether it is too low and may need to bounce (indicator is in the green zone).

Created by and further reading: David Puell 

https://twitter.com/dpuellARK

Stock-to-Flow Model

This model treats Bitcoin as being comparable to commodities such as gold, silver or platinum. These are known as 'store of value' commodities because they retain value over long time frames due to their relative scarcity. It is difficult to significantly increase their supply i.e. the process of searching for gold and then mining it is expensive and takes time. Bitcoin is similar because it is also scarce. In fact, it is the first-ever scarce digital object to exist. There are a limited number of coins in existence and it will take a lot of electricity and computing effort to mine the 3 million outstanding coins still to be mined, therefore the supply rate is consistently low.

Stock-to-flow ratios are used to evaluate the current stock of a commodity (total amount currently available) against the flow of new production (amount mined that specific year). For store of value (SoV) commodities like gold, platinum, or silver, a high ratio indicates that they are mostly not consumed in industrial applications. Instead, the majority is stored as a monetary hedge, thus driving up the stock-to-flow ratio. A higher ratio indicates that the commodity is increasingly scarce - and therefore more valuable as a store of value.

On the Stock-to-Flow Model chart price is overlaid on top of the stock-to-flow ratio line. Price continues to follow the stock-to-flow of Bitcoin over time. The theory, therefore, suggests that we can project where price may go by observing the projected stock-to-flow line, which can be calculated as we know the approximate mining schedule of future Bitcoin mining.

The coloured dots on the price line of this chart show the number of days until the next Bitcoin halving (sometimes called 'halvening') event. This is the event where the reward for mining new blocks is halved, meaning miners receive 50% fewer bitcoins for verifying transactions. Bitcoin halvings are scheduled to occur every 210,000 blocks – roughly every four years – until the maximum supply of 21 million bitcoins has been generated by the network. That makes stock-to-flow ratio (scarcity) higher so in theory price should go up. This has held true previously in Bitcoin's history.

Created by and further reading: Plan B

https://twitter.com/100trillionUSD

Bitcoin Logarithmic Growth Curves

Logarithmic analysis uses historical data to forecast and predict future prices. The Bitcoin Logarithmic growth curve takes all the historical price data of Bitcoin and uses log growth analysis to develop curves that project a potential path of future price growth.

Historically, price tends to bounce between the upper and lower bounds of the logarithmic growth curve. The reason for this is because Bitcoin moves through market cycles.

Further reading: Harold Christopher Burger, Cole Garner and Quantadelic

https://twitter.com/hcburger1

https://twitter.com/ColeGarnerBTC/media

https://twitter.com/quantadelic/media

Investing metrics, statistics and levels

Metrics, Statistics and Levels:

With traditional investing there are various measures and metrics that are used. These tools can also be used with investing for Bitcoin. These include: 

• MACD

• RSI

• Fibonacci Levels

(Source for details below: https://www.fidelity.com/learning-center/overview)

MACD

The Moving Average Convergence/Divergence indicator is a momentum oscillator primarily used to trade trends. Although it is an oscillator, it is not typically used to identify overbought or oversold conditions. It appears on the chart as two lines which oscillate without boundaries. The crossover of the two lines give trading signals similar to a two moving average system.

RSI

The Relative Strength Index (RSI), is a momentum oscillator that measures the speed and change of price movements. The RSI oscillates between zero and 100. Traditionally the RSI is considered overbought when above 70 and oversold when below 30. Signals can be generated by looking for divergences and failure swings. RSI can also be used to identify the general trend. 

FIBONACCI LEVELS

The Fibonacci retracement tool plots percentage retracement lines based upon the mathematical relationship within the Fibonacci sequence. 

Fibonacci numbers are a sequence of numbers in which each successive number is the sum of the two previous numbers: 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, 233, and so on. These retracement levels provide support and resistance levels that can be used to target price objectives.

Fibonacci retracements are displayed by first drawing a trend line between two extreme points. A series of six horizontal lines are drawn intersecting the trend line at the Fibonacci levels of 0.0%, 23.6%, 38.2%, 50%, 61.8%, and 100%.

Reviews

These reviews will help you to get you started and serve as a signpost for your Bitcoin journey. The reviews are books, exchanges and hardware wallets. These include:

• Cryptonomicon

• Bitcoin, The Future of Money?

• Coinbase

• Gemini

• Kraken

• Ledger

• Trezor

Useful links

Here are some useful links which include a visual block chain explorer and countdown for the bitcoin halving. 

Please look at each of these recommended external links. At some point in your Bitcoin journey they will be useful to you https://bbcdsatoshi.blogspot.com/p/media.html

Support page

I've created a donation page with the purpose to see:

• How many people reading this website are willing to donate Bitcoin?
• If they are willing to donate, how much?
• As an experiment to use and demonstrate Bitcoin as a use case and to be able to view and monitor transactions using the following resources:

1. Blockchair
https://blockchair.com/bitcoin/address/133gGwAyo3xT6oiC6HJXMXN4WSf43CVjLn

2. Blockchain
https://www.blockchain.com/btc/address/133gGwAyo3xT6oiC6HJXMXN4WSf43CVjLn

3. Blockstream
https://blockstream.info/address/133gGwAyo3xT6oiC6HJXMXN4WSf43CVjLn

Large collection of resources for learning all about Bitcoin

Here is a large collection of resources for learning all about Bitcoin. Click here

If you have any more suggestions to add to this list, please send me a message at:

https://twitter.com/bbcdsatoshi

Book Review: Bitcoin, The Future of Money? By Dominic Frisby

 Review: 

"This book is an excellent introduction to Bitcoin. The book discusses some key facts about Bitcoin and the history of cryptocurrency. There is also a discussion about Satoshi Nakamoto and who he/she/them/it was is or are."

Book Review Cryptonomicon by Neal Stephenson

 Review: 

"Reading this book was the first time I learned about cryptocurrency, way back in 2012. From then on I learned about cryptography and encryption which are key themes that run through the book. It’s a very well written book, funny, smart and though provoking. It took me a while to pronounce the book correctly, which is Kry-Pt-O-Nom-i-Kon. I have this book to thank for introducing me to Bitcoin"

Mantra and slogan

For the last few years my Twitter account has had a mantra and slogan as part of the profile. It sums up quite neatly why I am interested in Bitcoin. It also sums up a piece of advice I wish I could tell my self 12 years ago. The slogan is "Buy Bitcoin, you'll thank yourself in the future".

New home for BBCD Satoshi's Blog

Hello and welcome, this is the new home for the blog BBCD Satoshi. Thank you for looking!

Over the next few months we'll update material and add new pages.

In one form or another, the Blog has been running since 2018. Rather than deleting all the old posts, I've downloaded them all and uploaded them to this blog. You'll see quite a few posts going back over time.

Feel free to follow and message on Twitter:

https://twitter.com/bbcdsatoshi

Thanks once again.

“Buy Bitcoin, you’ll thank yourself in the future”

“Buy Bitcoin, you’ll thank yourself in the future”

“Buy Bitcoin, you’ll thank yourself in the future”

“Buy Bitcoin, you’ll thank yourself in the future”

“Buy Bitcoin, you’ll thank yourself in the future”

“Buy Bitcoin, you’ll thank yourself in the future”

“Buy Bitcoin, you’ll thank yourself in the future”

“Buy Bitcoin, you’ll thank yourself in the future”

“Buy Bitcoin, you’ll thank yourself in the future”

“Buy Bitcoin, you’ll thank yourself in the future”

“Buy Bitcoin, you’ll thank yourself in the future”

“Buy Bitcoin, you’ll thank yourself in the future”

“Buy Bitcoin, you’ll thank yourself in the future”

“Buy Bitcoin, you’ll thank yourself in the future”

“Buy Bitcoin, you’ll thank yourself in the future”

“Buy Bitcoin, you’ll thank yourself in the future”

Does this graph look similar to you? Bitcoin, or UK house prices since 1952!

 Does this graph look similar to you? Bitcoin, or UK house prices since 1952.

 

 

 

300,000 Satoshi's per person

For every 1 person on Earth (7 Billion), there will only be 300,000 Satoshi's per person.

That is (21,000,000 Bitcoin * 100,000,000 Satoshi's) divided by 7,000,000,000

How accurate is the Bitcoin Stock to Flow (S2F) model by 100trillionUSD?

How accurate is the Bitcoin Stock to Flow (S2F) model by 100trillionUSD?

Answer... Time will tell.

Quote of the decade from the BBC...

"This time, analysts think what's happening is caused by an issue with money supply."

Understanding the Technical Side of Bitcoin

Source: https://medium.com/@pierre_rochard/understanding-the-technical-side-of-bitcoin-2c212dd65c09

Computer Literacy

Read an overview of different computer hardware components, the physical objects you will be accessing: https://www.explainingcomputers.com/hardware.html

Read the book Code: The Hidden Language of Computer Hardware and Software by Charles Petzold, recommended by Lightning protocol engineer Lisa Neigut. I haven’t read it (yet!) but the Amazon reviews look very promising.

Learn to type: https://www.typing.com/

To get a high-level overview of operating systems from a user’s perspective, get the latest “For Dummies” book for the operating system you are using: Linux, macOS, or Windows. If you have the time and inclination, have all three operating systems installed on the same or on different computers to see which you prefer and to access software that is exclusive to that operating system.

Command Line

As a user you could stop here, but if you want to get technical you’ll have to get comfortable with the command line, a text-only interface where your mouse is (usually) useless! The command line interface (CLI) is the opposite of what you’re probably used to interacting with, the graphical user interface (GUI). I know just enough about the CLI to get by, but there are folks out there who are CLI wizards. Windows has a very different CLI from Linux and macOS, so I would recommend installing the Windows Subsystem for Linux (WSL). It will allow you to learn the command line in a way that is generally portable to macOS and Linux.

There are lots of guides online, and documentation inside the command line itself. Christopher Allen wrote up a tutorial that is macOS focused https://github.com/ChristopherA/intro-mac-command-line and Codecademy has an in-browser course: https://www.codecademy.com/learn/learn-the-command-line

Git

git is a distributed version control system that is widely used in software development. I think git is important to learn because it is used by all of the Bitcoin and Lightning projects I have encountered (correct me if I’m wrong!), and technical documentation often uses git and it would be great if you contribute typos, corrections, improvements, and additions “upstream” as you work through the docs. GitHub.com is a web service that is built on top of git with a GUI, but git is generally interacted with locally (on your computer/laptop) using the CLI. Here are resources and tutorials for getting started with git: https://try.github.io/

Command Line + Bitcoin + Lightning

Give Mastering Bitcoin a close read: https://www.amazon.com/Mastering-Bitcoin-Unlocking-Digital-Cryptocurrencies/dp/1449374042 or https://github.com/bitcoinbook/bitcoinbook

Work through Programming with Bitcoin Core and Lightning by Christopher Allen: https://github.com/ChristopherA/Learning-Bitcoin-from-the-Command-Line/blob/master/README.md

Bitcoin Improvement Proposals (BIPs) are a hodgepodge, so maybe focus on the ones that seem to crop up often in your readings. I wouldn’t necessarily recommend trying to sit down and reading them all from beginning to end. Here they all are: https://github.com/bitcoin/bips/blob/master/README.mediawiki

Mastering Bitcoin has a brief section on the LN. Read Joe Kendzicky’s LN Technical Primer: https://blog.usejournal.com/the-bitcoin-lightning-network-a-technical-primer-d8e073f2a82f recommended by Billy Garrison.

The LN in-progress specifications are here: https://github.com/lightningnetwork/lightning-rfc 

I highly recommend carefully reading through these BOLTs from beginning to end, a couple of times if needed! They are, or should be, understandable for non-developers (if something is not clear, research to reword the BOLT and submit a pull request!).

I would recommend watching the Chaincode Labs Lightning Residency video series here https://www.youtube.com/watch?v=aX7lOqf83h0&list=PLpLH33TRghT1SbxinAsNDS6L7RkAjC8ME, read Lighting Labs’ overview https://dev.lightning.community/overview/ and work through the Lightning Labs CLI tutorial https://dev.lightning.community/tutorial/

If you want A LOT more links about Bitcoin / blockchain / Lightning see Oded Leiba’s guide https://github.com/oleiba/blockchain-getting-started

If you stopped here you would have a very solid amount of computer experience, at least a basic understanding of the technical side of BTC/LN, and a clear path to experimenting with other people’s software. But maybe you want to write your own software!

Programming

I think that if you try to learn programming topics that are directly related to the most popular Bitcoin implementation (“Bitcoin Core”, also called “bitcoind”) then you’ll probably overwhelmed. To my knowledge there are no smooth learning curves for learning C++. I think its easier to learn a language like Python first, as it hides a lot of complexity and allows you to focus on mastering the basics of programming logic first. Coincidentally, the Bitcoin Core test suite is written in Python.

There’s a lot that has been written about learning how to code. My route was to start with Python on Codecademy https://www.codecademy.com/learn/learn-python

My friend Michael Goldstein got started with a Ruby on Rails tutorial book written by Michael Hartl, who has lots of great free and paid resources here: https://www.learnenough.com/ Find Hartl on Twitter here: https://twitter.com/mhartl

Warning: Programming is a notoriously frustrating experience. You will *repeatedly* have errors that take you hours to figure out (and the cause was “dumb”, maybe a typo). Please understand that this is everyone’s experience, you are not alone! Aggressively use Google early and often when you run into errors. If you solve the problem with a Google search, think about how you could have avoided the error in the first place and how you can detect the cause and fix it without Google. This will allow you to get faster at “debugging”. Eventually, you’ll write large amounts of code that don’t have too many “simple” obvious bugs, the code will just have really complicated and insidious bugs!

Often, an integrated development environment (IDE) can automatically point out problems to you so you have decades of programmer experience helping you out. Personally I’ve enjoyed using the IDE maker JetBrains over the years in all languages. For Python they have PyCharm (the community edition is free, the pro edition is free for college students) https://www.jetbrains.com/pycharm/.

You can also recreate a Codecademy-like environment that is web-based and highly interactive with Jupyter IPython https://ipython.org/ I really recommend this for rapidly iterating with experiments.

If after that experience you get addicted to programming and Python like I did, check out https://docs.python-guide.org/

I learned basic web development by following Miguel Grinberg’s Flask Mega-Tutorial: https://blog.miguelgrinberg.com/post/the-flask-mega-tutorial-part-i-hello-world

You can probably find the same combination of interactive tutorial + simple web framework tutorial for any modern programming language. A popular programming language is JavaScript because it can be used both inside a user’s web browser as well as on the server hosting the web content.

“Full stack” web development led to me learning about relational and document databases, key/value stores , message queues, concurrency, networking, etcetera that are either somewhat or completely applicable to BTC/LN programming. Having said that, you can learn all about these concepts by working on BTC/LN itself instead of unrelated web development like I did!

When you become proficient and comfortable with “hobbyist scripting”, start challenging yourself. Whatever modern programming language you’re using, there are “intermediate” and “advanced” books on topics like object-oriented and functional programming. There are also very interesting books that are generically about software architecture, code quality, development methodology, testing, and so on. You can always improve your programming chops by learning shiny new languages, reading code that is widely seen as high quality, and asking for a code review on StackExchange: https://codereview.stackexchange.com/

Programming + Bitcoin

Work through Learn Blockchains by Building One by Daniel van Flymen: https://hackernoon.com/learn-blockchains-by-building-one-117428612f46

Experiment with James O’Beirne’s minimalist Tinychain: https://github.com/jamesob/tinychain

If you choose to learn JavaScript, you’re in luck! Stéphane Roche recently wrote a very extensive guide on BitcoinJS: https://github.com/bitcoin-studio/Programming-Bitcoin-with-BitcoinJS

At this point, if you want to hack inside of Bitcoin Core, you’re going to have to learn C++! Alternatives are btcd which is written in go and is generally considered to be easier to read, or bcoin which is written in JavaScript.

Before you start on your C++ adventure, consider doing a detour to Rust as it may smooth the learning curve.

I learned the basics of C++ with https://www.amazon.com/Primer-5th-Stanley-B-Lippman/dp/0321714113 and https://en.cppreference.com/w/

I found it helpful to build examples using xeus-cling https://github.com/QuantStack/xeus-cling which is IPython but for C++. I found this helpful to make iteration faster than the traditional C++ environment of having to constantly recompile.

Read Contributing to Bitcoin Core, a personal account by John Newbery: https://bitcointechtalk.com/contributing-to-bitcoin-core-a-personal-account-35f3a594340b

Read about contributing here: https://github.com/bitcoin/bitcoin/blob/master/CONTRIBUTING.md

Read through recent meeting notes to see what others are working on: https://bitcoincore.org/en/meetings/

I built a website for seeing all the Bitcoin Core pull requests that can give you an idea of what’s in the pipeline and how far along it is in the review process: https://bitcoinacks.com/

Programming + Bitcoin Bootcamps

Each bootcamp has a different focus, visit their websites for topics, dates, and pricing:

• Jimmy Song → https://programmingblockchain.com/
• Justin Moon → https://buidlbootcamp.com/
• Vortex → https://programmingwithbitcoin.com/

Programming + Lightning

There are several full implementations to look at, in alphabetical order:

• c-lightning written in C: https://github.com/ElementsProject/lightning. Billy Garrison pointed out that there is a Python example of how program with c-lightning here: https://github.com/ElementsProject/lightning/blob/master/contrib/pylightning/lightning/lightning.py
• eclair written in Scala (a functional programming flavor of Java): https://github.com/ACINQ/eclair
• LND written in Go: https://github.com/lightningnetwork/lnd

Work through André Neves’ in-depth guide to help you kickstart and streamline your Lightning Application development workflow: https://medium.com/lightwork/lightning-network-development-for-modern-applications-e4dd012dac82

Facebook Libre will fail

I predict that the project by Facebook called Libre will fail. It may change it's name too, but ultimately it will fail. It will bring more interest and make Bitcoin seem attractive.

Bitcoin Whitepaper - remember... this is why we are all in this space!

Bitcoin: A Peer-to-Peer Electronic Cash System 

Satoshi Nakamoto 

satoshin@gmx.com 

www.bitcoin.org

Abstract. A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution. Digital signatures provide part of the solution, but the main benefits are lost if a trusted third party is still required to prevent double-spending.We propose a solution to the double-spending problem using a peer-to-peer network.The network timestamps transactions by hashing them into an ongoing chain of hash-based proof-of-work, forming a record that cannot be changed without re doing the proof-of-work. The longest chain not only serves as proof of the sequence of events witnessed, but proof that it came from the largest pool of CPU power. As long as a majority of CPU power is controlled by nodes that are not cooperating to attack the network, they'll generate the longest chain and outpace attackers. The network itself requires minimal structure. Messages are broadcast on a best effort basis, and nodes can leave and rejoin the network at will, accepting the longest proof-of-work chain as proof of what happened while they were gone.

https://bitcoin.org/bitcoin.pdf

https://bitcoin.org/en/bitcoin-paper

Bitcoin will be regulated to death

Bitcoin will be regulated to death. How?
Bitcoin exchanges will be unable to on-ramp fiat customers due to a ban by the banking industry.
The banking industry will be regulated and ordered to not allow fiat transactions to or from exchanges.
With exchanges barred from fiat banking, the price of Bitcoin will plummet and holders (hodlers) will sell.
Bitcoin will become worthless and will die. This is what exchanges and their executives fear the most.

Bitcoin vocabulary

How will vocabulary change, or be created, for paying and selling increments of Bitcoin?

For example if and when Bitcoin become too expensive for people to buy 1 whole Bitcoin, how will be refer to 0.00010000 Bitcoin?

1.0 BTC = "One Bitcoin"
0.00000001 = "One Satoshi"

How will vocabulary change for these missing increments...

0.00000001 BTC = "One Satoshi"
0.00000010 BTC = "One Nakamoto"?
0.00000100 BTC =
0.00001000 BTC =
0.00010000 BTC =
0.00100000 BTC =
0.01000000 BTC ="One cent of Bitcoin"

Bitcoin Log View, to good to be true?

Doing simple analysis of Bitcoin in log view on Trading View. It seems too good to be true for Bitcoin in the next few years. A big part of me thinks we are missing something, and it is too good to be true. I think the undoing will be human greed, whereby transferring to real world assets and fiat currency will eventually mean the log charts we are all hopefully of, will never materialize.

Bitcoin's 1-page elevator pitch

https://www.ericfreeburg.com/why-bitcoin/

https://www.ericfreeburg.com/assets/pdfs/why-bitcoin-summary.pdf

Why Bitcoin?

Bitcoin's 1-page elevator pitch: It's all about the digital scarcity. Bitcoin is quantifiably scarce and provably secure.

https://www.ericfreeburg.com/assets/pdfs/why-bitcoin-summary.pdf

It’s all about the digital scarcity

Bitcoin is the first and only digital object that is both quantifiably scarce and provably secure. This makes Bitcoin the next logical evolution in money… its just better money.
In the world of commodities, there is a spilt between monetary assets, those with a high stock-to-flow (SF) ratio, and standard commodities which have a utility value [1].
This matters because Bitcoin as the next money is just digital gold. Commodities with a SF above 1 are incredibly rare. Only Gold and Silver have SFs meaningfully above 1.

Stock-to-Flow (SF) = available stockpiles / annual production

In Q2 of 2019 Bitcoin had a stock of 17.5M and a flow of about 700,000 bitcoins per year. This means Bitcoin has a Stock-to-Flow of 25. This puts it right into the monetary category, just above silver, and well below gold.

Once every four years...

There is a halving where the number of Bitcoins created diminishes by half [2]. What you notice is that these halvings become very important because they double the stock to flow ratio of Bitcoin.
In May 2020, Bitcoin will undergo the third of it's quadrennial halvings, doubling Bitcoin’s SF to 50.

Money is important

Not only because of it’s financial implications, but also, because just like language, money is key for human cooperation. Better money leads to better cooperation. And money is but a technology which can be improved upon. Rather, it is a technology which has already been improved upon [3].

Bitcoin is a real piece of art, its deep, its fundamental and yet simple….

[1] The Bitcoin Standard  –  Saifedean Ammous (@saifedean)
[2] Bitcoin: A Peer-to-Peer Electronic Cash System  –  Satoshi Nakamoto
[3] Modeling Bitcoin's Value with Scarcity  –  PlanB (@100trillionUSD)
A Collaboration between: @100trillionUSD & EricFreeburg.com

How does Bitcoin work?

How does Bitcoin work?
https://youtu.be/Lx9zgZCMqXE

Good resource... http://bitcoinrabbithole.org

http://bitcoinrabbithole.org/multimedia/

http://bitcoinrabbithole.org/writings/

https://www.bloomberg.com/news/articles/2019-04-23/first-golden-cross-for-bitcoin-in-3-years-as-bulls-return-chart

First Golden Cross for Bitcoin in 3 Years as Bulls Return

Here’s yet another sign the crypto winter is thawing. Bitcoin, the largest digital currency, has formed its first bullish golden cross since October 2015, according to Bitstamp pricing that includes weekend moves. The milestone follows a 35 percent rally for Bitcoin past $5,600, on track for its best monthly gain since the height of the crypto frenzy in December 2017. The sudden resurgence has also been apparent in other parts of the market, including record contract trading volumes in the futures market at CME Group Inc. earlier this month.

Bitcoin uses a specific elliptic curve

Bitcoin uses a specific elliptic curve and set of mathematical constants, as defined in a
standard called secp256k1, established by the National Institute of Standards and Technology
(NIST). The secp256k1 curve is defined by the following function, which produces
an elliptic curve:

y 2 = (x 3 + 7)over(? p)

or

y 2 mod p = (x 3 + 7) mod p

The mod p (modulo prime number p) indicates that this curve is over a finite field of
prime order p, also written as ? p, where p = 2256 - 232 - 29 - 28 - 27 - 26 - 24 - 1, a very large
prime number.