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Why 2021 Will Be A Big Year For Bitcoin

04/01/2021 by Idelto Editor

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.

Leaving 2020

This year has been a wild ride.

We have seen a blitzkrieg on civil liberties across the globe. The current new normal is nothing less than a dark and previously unimaginable dystopia. The populace has so far been eager to comply, even to the point of reporting one another for non-compliance and, in some cases, demanding even more restrictions be put in place on their own freedoms.

Information warfare is everywhere, with wildly accelerating censorship being deployed through corporate media and Big Tech platforms. As a result, an already divided populace has become more divided than ever before. Reality has forked, and people have no way to easily verify which fork holds the truth.

In the midst of all this chaos, Bitcoin remains the constant, pushing out blocks of verifiable truth every 10 minutes. Absolutely resistant to censorship. A bastion of freedom and rationality that brings much needed hope to those who have discovered it.

We started 2020 at around $7,000, with a hash rate just under 100 EH/s. At the time of this writing, the bitcoin price is $26,998, with the hash rate cruising around 140 EH/s. Bitcoin’s fundamentals have kept growing stronger and Number Go Up technology has proven itself.

Bitcoin’s biggest day of 2020 was undoubtedly May 11, block time 630,000. Bitcoin did the opposite of the fiat printing presses and went through its third halving, once again cutting the inflation rate in half. This happening in symphony with central banks all over the world going full brrr to an unprecedented extent sent a powerful signal to those not completely asleep. The metaphor of Bitcoin as a lifebuoy suddenly resonated stronger and with more urgency than ever before. The core mechanism of Bitcoin’s Number Go Up technology was laid bare for all to see, decreasing new supply in a world of increasing new demand.

Since May 11, only 6.25 BTC are issued per block, or a total of 900 BTC per day. One company alone, MicroStrategy, has since taken more than 40,000 BTC off the market. This represents around 45 days’ worth of fresh bitcoin supply. MicroStrategy stock has skyrocketed almost three-times since then and Gigachad Michael Saylor have shown board rooms across the world a way to store their excess cash holdings that will be very hard to ignore.

Entering 2021

2017 was, in my eyes, the year Bitcoin won. The SegWit upgrade was finally successfully activated, ending a brutal civil war in the Bitcoin community. A “war” that, in my opinion, was more manufactured by corporate interests and bad actors than actually reflected the situation on the ground. Keeping block size small and scaling off-chain was always a no-brainer for those who understood that decentralization is everything in Bitcoin.

But why am I bringing up 2017?

Because 2021 looks set to be the year when the first big post-SegWit upgrade is activated. Schnorr/Taprott looks set to bring much needed privacy and scaling improvements to the table. These consensus rules have already been merged into the Bitcoin Core code, but the activation method remains undecided.

Bitcoin is currently seeing a brewing divide between those who hold the cypherpunk ideals of censorship resistance and privacy as inviolable and sacred, and those who seem to think these ideals hinder the adoption of Bitcoin and that Bitcoin needs to evolve in harmony with the political system and conform to the requirements of governments.

Any change to the protocol, or even proposals to change it are potential attack vectors that can be leveraged to harm Bitcoin. Hopefully Schnorr/Taproot is the last big upgrade of the Bitcoin base layer. The faster the protocol ossifies and is viewed as an unchangeable constant, the better it is for Bitcoin, in my opinion. We must avoid creating any kind of opening for those who will wish to change the inflation rate, supply cap or other key features in the future. The hardest money on earth needs to have rules set in stone, impossible to change.

It remains to be seen if we will have a peaceful and non-controversial activation of Schnorr/Taproot. I think there is a risk that we will once again see government and corporate interests in tandem with bad actors and powerful individuals who are mostly oriented toward the short-term value of their bitcoin holdings fight it out against those who see Bitcoin as a supremely powerful weapon of individual sovereignty that will profoundly change the world. No matter how it plays out, I am confident Bitcoin will come out the other end stronger and more hardened.

Going forward, I am extremely optimistic about Bitcoin. The current nasty endgame of the fiat system is what Bitcoin was created for; a readily available tool to take back our sovereignty. The stage for accelerating Bitcoinization is set to perfection, and 2021 looks likely to be the year when it all explodes into a whole new level of awareness and adoption. I predict serious FOMO coming in from both retail and institutions in 2021.

None of this would have been possible if it weren’t for those who make me the most optimistic and bullish about Bitcoin’s future. Everywhere I turn, I see people building, creating, writing. A buzzing nest of Cyber Hornets that never sleeps. Existing projects strengthening and new ones popping up at an increasing pace. New use cases being identified and built out. An explosion of art and cultural content. Grassroots and organic. A very real sense of growth and acceleration.

Bitcoiners really are a special breed of people. Independent minds that have finally found something that resonates strongly and deeply. The Bitcoin rabbit hole is a profound journey that brings motivation and dedication to those who discover it. And there is no exit.

The network effect is extremely strong. We now have more Bitcoiners in positions of power and influence than ever before. More HODLers Of Last Resort. More supremely-motivated Cyber Hornets willing to fight and die for the protocol. Bitcoin has been spreading for 12 years, growing its mycelium organically throughout minds and infrastructure all over the world. And it has never before been more needed.

This is a guest post by Hodlonaut. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

The post Why 2021 Will Be A Big Year For Bitcoin appeared first on Bitcoin Magazine.

Saving With Bitcoin Was Never So Cool As In 2020

30/12/2020 by Idelto Editor

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.

Lightning Network

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.

Wrapping Up

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.

The post Saving With Bitcoin Was Never So Cool As In 2020 appeared first on Bitcoin Magazine.

Demystifying Mining Data With HashrateIndex

29/12/2020 by Idelto Editor

HashrateIndex is a site focused completely on exposing data from the mining industry. Miners are notoriously guarded about their data since every edge they can maintain has significant implications. It’s a unique product in our 21 Days of Data because it has such a specific focus.

Ethan Vera and Flip talked through each section of their site, why they picked the pieces of information they did, mining in North America and a little bit of gossip, too. It was a really fun interview to put together and its full of information you most likely haven’t dug into yet.

The post Demystifying Mining Data With HashrateIndex appeared first on Bitcoin Magazine.

Bitcoin’s 2020: The Rise Of Certainty

25/12/2020 by Idelto Editor

In a year overflowing with chaos throughout the world, Bitcoin continued to function flawlessly and give precisely zero fucks about what the rest of the world was doing. And, in doing so, Bitcoin’s predictability has contrasted sharply with the world as a signal of truth in a rising sea of both actual and manufactured chaos.

It was a constant, simple beacon of certainty.

Throughout 2020, Bitcoin has grown, evolved, strengthened and, most importantly, all of these developments in aggregate have increased the certainty of bitcoin’s eventual form as a global reserve asset.

Core to my own view of Bitcoin is that the certainty of Bitcoin’s eventual end-state is far more important than timelines; the scope and scale and importance of what is being built and emerging in front of our eyes must not fail, so consequently should not be compromised by the impatient.

From this framing, let’s explore a few of the strands of Bitcoin’s rising certainty.

Developer Funding

While 2019 saw some excellent articles highlighting the perennial issue of insufficient funding for Bitcoin developers, 2020 saw the emergence of five more initiatives that acquired and supplied additional funding for Bitcoin developers.

BitMEX Research summarized its current state earlier in the year in this excellent article and subsequently, we saw these other efforts emerge:

Human Rights Foundation
Square Crypto with a focus on design and UX
Bitcoin Brink with a focus on providing mentoring in conjunction with funding
Long-absent Bitcoin-focused businesses stepping up in Gemini and Coinbase
And my personal favorite, Bitcoin Devs List created for accepting direct contributions

These new initiatives built on top of those Bitcoiners who quietly and privately support developers who they know, and on top of the many good actors in the space who recognize that supporting the foundational strength of bitcoin is actually critical to their businesses.

The longer that HODLers retain their bitcoin, the more discretionary purchasing power they will control. I am very hopeful that many bitcoiners will, through some of the mechanisms that now exist, support bitcoin developers. I was delighted to support several devs on the Bitcoin Devs List in a small way as I have been able to recently. Take a look if you’d like to make a small but material difference too.

Helping the developers who build and maintain Bitcoin is a foundational piece in Bitcoin’s certainty.

The Third Bitcoin Halving In May

For those new to Bitcoin, “the Halving” is the reduction in the bitcoin emission rate — the block subsidy that occurs every 210,000 blocks, which is roughly every four years. In May of this year, that 10-minute block reward reduced from 12.5 bitcoin to 6.25 — a new rate of 900 BTC per day.

So with a static demand for bitcoins, and a halving of supply, basic economics dictates that price should escalate. If, however, demand was to increase at the same time as supply was reduced, that price action could be accelerated, as we historically observed in prior halvings.

For me, the third Halving in May was the first Halving that I’ve deeply understood as it happened — it was both a milestone to be celebrated with much joy and fun and laughs and joking and memes and art and music and articles and podcasts and live streams… and also supremely boring.

Boring in the sense that block 630,000 was mined just like every other before it, and every one that has followed it since — hashed to the preceding block, and propagated and validated near-instantly throughout the global network of nodes. As @citizenbitcoin first noted: #ticktocknextblock.

In a beautiful nod to both the genesis block and the degrading macro-economic climate, @f2pool_official (which mined block 630,000), added this message in the coinbase transaction itself:

“NYTimes 09/Apr/2020 With $2.3T Injection, Fed’s Plan Far Exceeds 2008 Rescue,” permanently etching it into Bitcoin’s timechain like Satoshi’s original message to us.

The predictability and unstoppable costly forging of the world’s bitcoin transactions into an immutable timechain is the manifest display of Bitcoin’s inevitable certainty. #ticktocknextblock

Number Go Up

NgU is one of Bitcoin Twitter’s favorite and perennial memes and typically references the price of bitcoin as measured in your local currency, like AUD, EUR, GBP or USD. That NgU represents increased validation in Bitcoin’s core value propositions by a wider group, and for Bitcoiners, reflects an increased purchasing power and a validation of their understanding and conviction.

Yet there are so many more important NgU metrics within Bitcoin, which is why I’ve been a huge fan of Clark Moody’s Bitcoin dashboard and Bitbo’s more recent take, which consolidate many of these data points in an accessible point-in-time snapshot. Some of my 2020 favorite NgU’s are:

Hash rate: Up about 50 percent, demonstrating a more secure network
Block fees as a percentage of reward subsidy: From consistently under 2 percent to finding a new median between 6 percent and 10 percent
Whirlpool cumulative CoinJoin volume: Growing from 1,800 BTC to 18,000 BTC, demonstrating better privacy

The hash rate underpins the security of the Bitcoin network, and also reflects the inflow of capital investment by mining groups (facilities and ASICS), as well as the organizational commitment to significant energy contracts. It is up 50 percent in 2020, and a whopping 1,000 percent since the last bull run (start of 2018).

Block fees will eventually replace reward subsidies as the income for miners who provide all of that crucial hash rate. Dan Held dug into this in detail in his 2019 article “Bitcoin’s Security Is Fine.” Since the Halving in May, the value of block fees has risen from under 2 percent to consistently between 6 percent and 10 percent, validating the fee model as expected.

While the increase of digital surveillance has been pervasive, so too have the rise of privacy tools and the willingness of people to both value and protect their privacy. In Bitcoin, CoinJoins are a great privacy tool, and Samourai’s Whirlpool use statistics are evidence of this.

So many NgU’s — and all of them reinforcing Bitcoin’s certainty.

The Formalization As BIPS: Their Review And Merging Of Code For Taproot, Schnorr And MAST

The most significant Bitcoin base layer protocol change — comprising three Bitcoin Improvement Proposals (BIPs) — in several years was formalized, published and extensively reviewed this year. Following the BIP reviews, the implementation was progressed and eventually merged into the pending Bitcoin Core v0.21, where it awaits release. The discussion on the appropriate soft fork activation mechanism is an active conversation and when a broad consensus is reached, that too will hopefully move forward.

With these BIPs, Bitcoin gains some minor block space efficiencies, important transaction privacy improvements and increased power and flexibility. Yet, like all changes to critical systems, there’s caution and care about deploying those changes — and that’s exactly how the activation discussions and considerations are progressing.

Looking at the process as a non-developer, I see better information dissemination; a wider, welcoming and public review process both for the BIPs and the implementation; and open, considered discussion on activation.

This makes me bullish AF, and is yet another reinforcing aspect of Bitcoin’s inevitable rise.

The Rise Of The DCA Army

As a fellow Australian, I’m blessed to count @FriarHass as a friend, and he has been crucially influential in encouraging, cajoling and informing on the importance of dollar-cost averaging (DCA) to provide bitcoin price stability. Throughout 2020, prominent Bitcoin businesses have added DCA mechanisms to their platforms, or extended DCA flexibility and capability.

Definitely high up among “things we love to see”:

The AmberApp in Australia adding AmberBlack to its mobile platform
Bitaroo in Australia enabling hourly, daily and weekly stacking
Bitnob in Nigeria offering mobile DCA stacking
BullBitcoin in Canada adding DCA capability to its platform
Cash App in the U.S. adding DCA capability to its existing bitcoin buys
CoinFloor in the U.K. providing DCA capability for the U.K. market
Relai launching auto DCA in Switzerland for the European market
River Financial in the U.S. adding DCA and monster buy limits for greedy stackers
Swan Bitcoin in the U.S. offering sat stacking in all 50 states

Throughout the year has been the quiet and humble voice of the Friar echoing from his discussion with John Vallis: “If you want Bitcoin to be stable, put your nuts on the table.”

And wow, have we seen that take hold this year. Cash App’s published quarterly growth figures show incredible growth and demand for bitcoin, and the DCA Army is growing stronger, broader and hungrier for increasing their own stacks of sats, and with it, the value and stability of Bitcoin. The DCA Army is now buying a significant portion of the daily reward. This sets the floor from which future price gains build.

While the price gains are great, for me the simplicity of “set and forget” in a busy life means I never forget to buy, and each day I’ve got a bit more bitcoin than I had the previous day. More sats is my favorite Number Go Up. The rise of the DCA Army, though, is about ordinary people, not vetted as “sophisticated investors,” but ordinary people using the best savings technology ever invented. And damn, front-running the established financial markets is a mighty fine feeling, too.

The growing recognition of Bitcoin as the ultimate savings technology reflects growing certainty.

Growing Adoption

Seeing more friends and family buy bitcoin and seeing it begin to provide them with financial certainty in a frenzy of unrestrained debt-printing makes me appreciate that many others see Bitcoin’s value too.

Like many before me, I initially came for dollary-doo Number Go Up, but then as I learned more, I realized that, more importantly, Bitcoin is not about getting “rich,” but about not getting poor. It is just as simple as protecting my savings.

That has been reinforced for many bitcoiners this year as the U.S. Government increased the amount of USD by 20 percent. Not that the U.S. Government was alone in any way in the latest episodes of the “Money Printer Go Brrr” saga; all over the world there’s been vast quantities of debt printed and distributed. Central Banks aren’t printing money, they’re issuing debt and, in doing so, debasing the monetary supply and corrupting savings accumulated through work.

Unsurprisingly, us working plebs haven’t been the only ones noticing this.

MicroStrategy neatly summarized its predicament of a $500 million cash balance as sitting atop a melting ice cube. So, after casting around for options, it settled on making bitcoin its treasury reserve asset, and acquired $425 million worth, which now sits on its corporate balance sheet, a first for a listed U.S. company. And in line with its policy, it has subsequently added to that position.

I count their CEO, Michael Saylor (aka, Uncle Chad) as another bitcoiner — just with a few extra zeroes of fiat selling power. Thorough in his research, and generous with his time subsequently, it has been interesting to watch other parts of the corporate sector start to consider Bitcoin following MicroStrategy’s move and Saylor’s eloquent articulation.

Yet the news that heartened me most in the adoption category was a call from my long-retired parents concerned about their fixed income annuity streams: “We think it might be time for us to buy some more bitcoin.” A small initial purchase early this year was probably as much to placate their lunatic-fringe son as to satisfy their curiosity. Seeing “the light come on” for those you love is the heart-warming.

The best savings technology ever invented is meaningfully real for all age groups. Certainty is seeing all of these groups arrive in increasing numbers.

Maturing Financialization

Ignoring the obvious increase in Bitcoin’s realized and total market capitalization, there are three aspects of Bitcoin’s financialization that I’ve found so exciting to watch this year:

Firstly, the global liquidity crunch in March, and the effect it had on Bitcoin, was the most bullish thing I’ve seen since UASF — which is the most bullish thing in Bitcoin.

In the lead up to that hard crunch in mid-March, the regulated equity markets were frequently hitting their “stop-loss” indicators, freezing all market orders for minutes or hours at a time: To protect the market. To provide a circuit breaker. Bitcoin ain’t got none of that part-time market nurse-maiding; it’s 24/7 in every corner of the globe and as the world’s most accessible liquid market.

It dipped hard, and recovered quickly.

It didn’t have “circuit breakers.” No one “closed the market.” The Bitcoin CEO didn’t offer press briefings to all of the world’s financial media, providing carefully prepared remarks to “calm the market.” Nope, Bitcoin had none of that. It got sold hard, dipped hard and bounced back quick.

For bitcoiners with dry powder, it was, most likely, a never-to be repeated, BTFD gift.

And what it demonstrated to bitcoiners, and to anyone with eyes to see, was that Bitcoin had matured into a viable free market that corrected according to market behaviors rather than regulators. I’m pretty sure that makes it unique. And uniquely valuable.

The latter two things have emerged in the latter part of the year, and both are new products that offer bitcoin-native financial services. Both are early, evolving and exciting. And neither has a side serving of vegetables.

Bitcoin DeFi has arrived with Hodl Hodl’s Lend platform which offers peer-to-peer lending, utilizing bitcoin as collateral that’s secured against loans of stablecoins using an on-chain bitcoin multisig contract. As the platform does not touch fiat, and as stablecoins are easily redeemable for fiat, Hodl Hodl has created a basic DeFi product that’s true to the ethos of Bitcoin — trust minimized, peer-to-peer and devoid of intrusive surveillance requirements.

The third aspect has been the launch of Lightning Labs “Lighting Pool” product to provide an automated, trust-minimized marketplace to offer inbound Lightning liquidity to Lightning nodes seeking that service. Like Hodl Hodl’s lending platform, the marketplace participants determine what acceptable rates are to them — and from that a marketplace emerges.

In essence, Lightning Pool is a platform to “rent” your Lightning node liquidity upon which you can gain a bitcoin-denominated return. This, in turn, from a financial perspective offers the prospect of starting to determine a yield curve for understanding the value of bitcoin using more traditional financial models.

Many may consider these aspects of little interest to them, but as we expect bitcoin to become recognized as the best money the world has ever known, it is important to track these emerging financialization aspects. They’re not as important now as they’re going to become, but their emergence definitely shouts loudly “certainty, certainty, certainty.”

Bullish On Bitcoiners

Bitcoiners are a diverse bunch from all walks of life, from all the villages in all the tribes, and curious, critical, humorous, witty, clever, creative and educational. Of all the resources in Bitcoin, it’s bitcoiners that are most under-rated, and the one which I’m most bullish about. The diversity of viewpoints, knowledge, experience and perspective helps everyone sharpen their own understanding. To sift hopium from reality.

Bitcoiners are certain about Bitcoin.

For me, Bitcoin remains the single longest lever upon which we can push to affect change to the most fundamental good in humanity: money. If we can fix the money, we can eventually fix the world.

The progress for Bitcoin throughout 2020 has been incredible and positive and increases the certainty of the outcome that I and many others seek for it: bitcoin as a global reserve asset.

This is a guest post by WizardofAus. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

The post Bitcoin’s 2020: The Rise Of Certainty appeared first on Bitcoin Magazine.

How Bitcoin Grew Even Stronger In 2020

24/12/2020 by Idelto Editor

For most people, 2020 was one of the most challenging years in recent memory. The entire world was shaken by the COVID-19 epidemic (or scamdemic, if you’re so inclined).

The corporate press blanketed the public with stories of death and full intensive-care units. In response to COVID-19, governments around the world shut down businesses and schools, plunging the economy into a recession and mass unemployment. Even 11 months into this crisis, many jurisdictions are still on lockdown. And if that wasn’t enough, political tensions are at an all-time high, culminating in a presidential election that has drawn sharp allegations of voter fraud. No matter who you are, there’s a reason to dislike this entire year.

Except if you’re a bitcoiner.

For bitcoiners, 2020 was yet another win in a long series of victories, as we walk the path from novelty project to the future global reserve currency. Every aspect of the Bitcoin ecosystem grew stronger this year; the code, the community and the price. For someone that was already bullish at the beginning of 2020, it’s hard not to be even more optimistic at the prospects for 2021.

Bitcoin’s Technical Progress In 2020

From a technical standpoint, 2020 produced the greatest progress since the adoption of Segregated Witness in 2017, thanks to the merger of Taproot into the Bitcoin Core codebase this October.

Although it hasn’t been deployed to the network yet, and we still haven’t seen any real-world applications, the promise Taproot holds is tremendous. By allowing for more expressive scripting and key/signature aggregation, Taproot improves on-chain anonymity and functionality, while making transactions more lightweight (see #TaprootWeek on Twitter to learn more from @benthecarman). Like SegWit, it might take a few years for nodes to upgrade and for wallets to take full advantage of these benefits, but the foundation has been laid.

Even outside of the Core codebase, we’re seeing exciting technical developments. Although multisignature has been a feature of Bitcoin for years now, the past one to two years has seen it get easier and easier to use. Unchained Capital released its open-source Caravan multisig coordinator, so easy even a drunk American HODL could use it to bet 1 BTC on the U.S. presidential election with podcaster Peter McCormack.

More recently, the Specter and Nunchuk applications are making multisig simple and seamless.

Similarly, the Lightning Network continues to make progress. Anyone who has used it in the past remembers the feeling of payments failing to find a route, but that is becoming less and less common as liquidity on the network grows.

Lightning Labs recently launched Lightning Pool, a non-custodial, peer-to-peer marketplace to buy and sell channels, allowing for the more efficient deployment of capital. Furthermore, one of the most exciting Bitcoin products in years arrived in 2020, courtesy of Forbes “30 Under 30” list member Jack Mallers. Using his new application, Strike wallet, you can seamlessly spend fiat to purchase anything over the Lightning Network, thereby bringing liquidity into the system and not exposing yourself to exchange risk or tax penalties.

The Bitcoin Class Of 2020

If Bitcoin twitter is any indication, the class of 2020 is one of our strongest in recent years.

This can be partially attributed to price appreciation, but instead of being diverted into a slew of shitcoins as many in the class of 2017 were (no offense to those folks), many of these newcomers dove straight down the Bitcoin rabbit hole. As someone who is addicted to Twitter and on the app practically 24/7, it feels like there are dozens of new bitcoin maximalist accounts to follow each and every day. Some people may call Bitcoin Twitter an echo chamber, and perhaps it is, but the reality is that our echo chamber is growing, while the mainstream echo chamber is shrinking.

One reason newcomers of 2020 are “getting it” so much faster than previous generations is because the ecosystem of Bitcoin content creators is stronger than ever.

Back in 2015 and 2016, I would have weeks-long Bitcoin-free dry spells waiting on a new episode of “Bitcoin Uncensored.” Today, the content is so voluminous, it’s impossible to keep up. My podcast app is subscribed to the feeds of 37 different Bitcoin programs. That’s not an exaggeration. And every few days, someone like Robert Breedlove or Parker Lewis will drop an article with profound new insights.

We’re even seeing the extension of Bitcoin content to the largest video platform on the internet — YouTube — which has traditionally been dominated by shitcoin pumpers and trading channels. One of the best things to come out of 2020 has been the Swan Signal channel, as well as its 24/7 Bitcoin-only network, Bitcoin TV. But it’s not the only one. Bitcoin Magazine has stepped up its game as well, hosting “Bitcoin Happy Hour” every week, alongside other independent video content creators like John Vallis and the guys at Simply Bitcoin.

Bitcoin’s 2020 Price

Of course, the strongest indicator of bitcoin’s health is the price. After all, it’s built on NgU technology, and price is one thing that can’t easily be faked. The BTC price started the year around $7,200 (doesn’t that feel like an eternity ago?). As I’m writing this now, the price is at $19,131.

Bitcoin has now spent more than 120 days above $10,000, smashing the previous record of 62 days from late 2017 to early 2018. More and more, this year feels like a reflection of 2016, when the price started at $430, a little more than doubling over the course of the year to $960, and ultimately setting the stage for 2017’s massive bull market. Will 2021 bear out the stock-to-flow model that tells us bull markets arrive about one year after the Halving? We’ll find out in the next 12 months.

No matter which way you slice it, 2020 was a great year for bitcoiners. The quantity and quality of content was overwhelming, our community grew by leaps and bounds, the technical advancements will bring us incredible new features and products and, to top it all off, we’re poised for another bull run.

Even if COVID-19 lockdowns continue through the next year, and we see more government policies that are hostile to individual liberty, I’m certain that, for Bitcoin, 2021 will shine even brighter.

This is a guest post by Vake Raj. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

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