The Fundamentals Report #71 - 1/10/2020
01/10/20 | Issue #71 | Block 612,255 | Disclaimer
~123 Days Until Halving
0.876 on the Mayer Multiple
This week we saw the launch of a new journal at the domain Nakamoto,com. The site claims to be a “new general interest journal for the crypto community.” They went out of their way to say all contributors must be “Pro-BTC,” but the list of contributors are mostly shitcoiners like Vitalik, Zooko, Brian Armstrong, Brendan Eich, Meltem, Roger Ver, Dan Larimer, Kyle Salmani, and others. It’s truly outrageous that these dangerous scammers, who may fool your grandma out of her life savings, are represented as pro-btc.
Of course, bitcoiners stepped in to self-regulate, holding these scammers’ feet to the fire. Many people tried to join their open telegram group only to get banned immediately. The Nakamoto people claim to be for open dialogue, but silence the only empirically supportable position, bitcoin dominance.
This touches on why I dislike “forgiveness” when it comes to scammers in this space. They will turn on you in a heartbeat, using your reputation as a consistently right bitcoiner against you. I think this is generally a good sign these people can no longer can use “crypto” or “blockchain” as effectively as before. Their reliance on “pro-btc” along with “maxi” is an obvious sign of desperation and failure of rhetoric.
BAIDU Launches Public Beta of Xuperchain
Let’s take a look at the new State-approved blockchain tech out of China, shall we? Internet giant Baidu has launched a public beta for its new “network.” I didn’t read the whitepaper, but this is what I can gather from their website:
- Master “super” nodes
- No PoS, No PoW
- Smart contract platform
- DAG (Distributed Acyclic Graph like IOTA)
- Sidechains (sharding) with “pluggable consensus mechanisms”
- State-approved centralized Ethereum competitor
- 3 sec block times
- 20,000 tps
- Open source
- A token
A little of everything!! It’s really hard to tell what they think all these components are for. The token is the interesting part for me as I thought it was going to be a no-no in China to launch a new token. We’ll have to wait for more info.
Bottom line, this obviously still has a LONG way to go. It does speak to the ever-growing list of huge direct competitors for Ethereum, like Libra. Ethereum better start saying why people should choose them. In fact, maybe that’s the reason behind the whole pivot to DeFi, because they think these platforms won’t offer that type of app. Whatever the case, Ethereum’s addressable market is getting smaller and more crowded.
New York Proposes Its Own Stablecoin
You can’t make this up. “Lawmakers in the city of New York are proposing a new form of hyper-localized digital cash that would run on a peer-to-peer payments platform called an ‘Inclusive Value Ledger.'”
It’s a payments network being likened to a “public Venmo.” Peer-to-peer and no fees! Guys, I can’t stop laughing about this. Did anyone tell the NYAG?
Weekly BMI | 1 : Slightly Bullish
What a week for price. The inverted head & shoulders played out almost perfectly, we hit the top of the channel and paused. I don’t think we are done being bullish, but we will likely chill out here for the next week or so.
The 50 EMA (pink) is an important level to hold over the next several days as price gets squeezed on the top of the channel. I don’t expect a quick price jump higher since volume has been lack luster in this move. Likely price will drift upward, giving bears some hope of a bull trap, but actually trapping them.
On my member newsletter, I go into much more depth on price and the charts. Recently added adding several new regular charts. Check it out.
Hash rate is exploding once again with the difficulty expected to increase by 7 to 8% in four days. The halvening rush is real and not priced in. Just by people arguing about if it’s priced in or not, is a unique driver that spurs new interest; the halvening creates it’s own unique feedback loop news cycle.
There was a great post by Aaron van Wirdum, 2020 and Beyond: Bitcoin’s Potential Protocol Upgrades, that is definitely worth a read. It talks about upcoming development trajectory of the bitcoin consensus layer with a good explanation of Schnorr/Taproot/Tapscript.
Hourly: a Lightning Project
Smash, who’s in our discord, has been working on a very cool idea for lightning called Hourly. Check it out and get involved (GitHub)! Install – pip install hourly
“Hourly is a decentralized time tracking tool that lets developers clock in and out of git repos, create time sheets, visualize workloads, and issue invoices. Hourly is non-custodial and won’t spy on you, but assumes you report honestly. The new integration with Stripe and BTCPay-server means you can issue lightning, bitcoin, or fiat invoices in a single command. This creates a market incentive to open lightning channels to freelancers and remote workers. Moreover, income received in bitcoin would be taxed at a lower rate than capital gains, so you can save or spend at your leisure. Keep an eye on our project page for upcoming GUI and marketplace features! Your time. Your money. Hourly.”
It’s been a wild first full week of the year. The Iranian situation gave us some insight into the actual structure of the market, as oil, the dollar and gold all reversing dramatically. I discuss this more in depth on the Bitcoin Pulse member newsletter.
Below is a chart comparing price movements of these assets from the assassination of Soleimani at roughly 6pm ET on the 2nd, to the response by Iran on the 8th. For all the talk about gold, bitcoin definitely performed better, and people will notice this.
I don’t think that this was true safe haven demand for bitcoin. My understanding is that there are whales trying to move the price in a prescribed direction; they make money off of volatility. When there is an event like this, it creates a temporary void in the orderbooks to the top side, and whales happily push the price that way. I think the bias is fundamentally bullish at this point for other reasons.