...and yet I don't see that on other blockchains, nor do I see any kinds of tokens of value. Why is this not commended more in the media?

Welcome to the /Bitcoin Sticky FAQ

You've probably been hearing a lot about Bitcoin recently and are wondering what's the big deal? Most of your questions should be answered by the resources below but if you have additional questions feel free to ask them in the comments.
It all started with the release of the release of Satoshi Nakamoto's whitepaper however that will probably go over the head of most readers so we recommend the following videos for a good starting point for understanding how bitcoin works and a little about its long term potential:

• Video 1: Introduction to Bitcoin - Andreas Antonopoulos
• Video 2: The Trust Machine
• Video 3: Bitcoin 101 - Balaji Srinivasan

Some other great resources include Lopp.net, the Princeton crypto series and James D'Angelo's Bitcoin 101 Blackboard series.
Some excellent writing on Bitcoin's value proposition and future can be found at the Satoshi Nakamoto Institute.
Some Bitcoin statistics can be found here and here. Developer resources can be found here. Peer-reviewed research papers can be found here.
Potential upcoming protocol improvements and scaling resources here and here.
The number of times Bitcoin was declared dead by the media can be found here (LOL!)

Key properties of Bitcoin

• Limited Supply - There will only ever be 21,000,000 bitcoins created and they are issued in a predictable fashion, you can view the inflation schedule here. Once they are all issued Bitcoin will be truly deflationary. The halving countdown can be found here.
• Open source - Bitcoin code is fully auditable. You can read the source code yourself here.
• Accountable - The public ledger is transparent, all transactions are seen by everyone.
• Decentralized - Bitcoin is globally distributed across thousands of nodes with no single point of failure and as such can't be shut down similar to how Bittorrent works. You can even run a node on a Raspberry Pi.
• Censorship resistant - No one can prevent you from interacting with the bitcoin network and no one can censor, alter or block transactions that they disagree with, see Operation Chokepoint.
• Push system - There are no chargebacks in bitcoin because only the person who owns the address where the bitcoins reside has the authority to move them.
• Low fee scaling - On chain transaction fees depend on network demand and how much priority you wish to assign to the transaction. Most wallets calculate on chain fees automatically but you can view current fees here and mempool activity here. On chain fees may rise occasionally due to network demand, however instant micropayments that do not require confirmations are happening via the Lightning Network, a second layer scaling solution currently rolling out on the Bitcoin mainnet.
• Borderless - No country can stop it from going in/out, even in areas currently unserved by traditional banking as the ledger is globally distributed.
• Trustless - Bitcoin solved the Byzantine's Generals Problem which means nobody needs to trust anybody for it to work.
• Pseudonymous - No need to expose personal information when purchasing with cash or transacting.
• Secure - Encrypted cryptographically and can’t be brute forced or confiscated with proper key management such as hardware wallets.
• Programmable - Individual units of bitcoin can be programmed to transfer based on certain criteria being met
• Nearly instant - From a few seconds to a few minutes depending on need for confirmations. Transactions are irreversible after one or more confirmations.
• Peer-to-peer - No intermediaries with a cut, no need for trusted third parties.
• Portable - Bitcoins are digital so they are easier to move than cash or gold. They can even be transported by simply memorizing a string of words for wallet recovery (while cool this method is generally not recommended due to potential for insecure key generation by inexperienced users. Hardware wallets are the preferred method for new users due to ease of use and additional security).
• Scalable - While the protocol is still being optimized for increased transaction capacity, blockchains do not scale very well, so most transaction volume is expected to occur on Layer 2 networks built on top of Bitcoin.
• Divisible - Each bitcoin can be divided down to 8 decimals, which means you don't have to worry about buying an entire bitcoin.
• Designed Money - Bitcoin was created to fit all the fundamental properties of money better than gold or fiat

Where can I buy bitcoins?

Bitcoin.org and BuyBitcoinWorldwide.com are helpful sites for beginners. You can buy or sell any amount of bitcoin (even just a few dollars worth) and there are several easy methods to purchase bitcoin with cash, credit card or bank transfer. Some of the more popular resources are below, also check out the bitcoinity exchange resources for a larger list of options for purchases.

• Cash app
• Gemini
• Swan
• Bitstamp
• BitFinex
• Xapo
• Kraken
• Cex
• LocalBitcoins
• LibertyX
• P2P exchange list (decentralized)

Here is a listing of local ATMs. If you would like your paycheck automatically converted to bitcoin use Bitwage.
Note: Bitcoins are valued at whatever market price people are willing to pay for them in balancing act of supply vs demand. Unlike traditional markets, bitcoin markets operate 24 hours per day, 365 days per year. Preev is a useful site that that shows how much various denominations of bitcoin are worth in different currencies. Alternatively you can just Google "1 bitcoin in (your local currency)".

Securing your bitcoins

With bitcoin you can "Be your own bank" and personally secure your bitcoins OR you can use third party companies aka "Bitcoin banks" which will hold the bitcoins for you.

• If you prefer to "Be your own bank" and have direct control over your coins without having to use a trusted third party, then you will need to create your own wallet and keep it secure. If you want easy and secure storage without having to learn computer security best practices, then a hardware wallet such as the Trezor, Ledger or ColdCard is recommended. Alternatively there are many software wallet options to choose from here depending on your use case.
  
• If you prefer to let third party "Bitcoin banks" manage your coins, try Gemini but be aware you may not be in control of your private keys in which case you would have to ask permission to access your funds and be exposed to third party risk.
  

Note: For increased security, use Two Factor Authentication (2FA) everywhere it is offered, including email!
2FA requires a second confirmation code to access your account making it much harder for thieves to gain access. Google Authenticator and Authy are the two most popular 2FA services, download links are below. Make sure you create backups of your 2FA codes.

Google Auth	Authy	OTP Auth
Android	Android	N/A
iOS	iOS	iOS

Watch out for scams

As mentioned above, Bitcoin is decentralized, which by definition means there is no official website or Twitter handle or spokesperson or CEO. However, all money attracts thieves. This combination unfortunately results in scammers running official sounding names or pretending to be an authority on YouTube or social media. Many scammers throughout the years have claimed to be the inventor of Bitcoin. Websites like bitcoin(dot)com and the btc subreddit are active scams. Almost all altcoins (shitcoins) are marketed heavily with big promises but are really just designed to separate you from your bitcoin. So be careful: any resource, including all linked in this document, may in the future turn evil. Don't trust, verify. Also as they say in our community "Not your keys, not your coins".

Where can I spend bitcoins?

Check out spendabit or bitcoin directory for millions of merchant options. Also you can spend bitcoin anywhere visa is accepted with bitcoin debit cards such as the CashApp card. Some other useful site are listed below.

Store	Product
Gyft	Gift cards for hundreds of retailers including Amazon, Target, Walmart, Starbucks, Whole Foods, CVS, Lowes, Home Depot, iTunes, Best Buy, Sears, Kohls, eBay, GameStop, etc.
Spendabit, Overstock and The Bitcoin Directory	Retail shopping with millions of results
ShakePay	Generate one time use Visa cards in seconds
NewEgg and Dell	For all your electronics needs
Bitwa.la, Coinbills, Piixpay, Bitbill.eu, Bylls, Coins.ph, Bitrefill, LivingRoomofSatoshi, Coinsfer, and more	Bill payment
Menufy, Takeaway and Thuisbezorgd NL	Takeout delivered to your door
Expedia, Cheapair, Destinia, Abitsky, SkyTours, the Travel category on Gyft and 9flats	For when you need to get away
Cryptostorm, Mullvad, and PIA	VPN services
Namecheap, Porkbun	Domain name registration
Stampnik	Discounted USPS Priority, Express, First-Class mail postage

Coinmap and AirBitz are helpful to find local businesses accepting bitcoins. A good resource for UK residents is at wheretospendbitcoins.co.uk.
There are also lots of charities which accept bitcoin donations.

Merchant Resources

There are several benefits to accepting bitcoin as a payment option if you are a merchant;

• 1-3% savings over credit cards or PayPal.
• No chargebacks (final settlement in 10 minutes as opposed to 3+ months).
• Accept business from a global customer base.
• Increased privacy.
• Convert 100% of the sale to the currency of your choice for deposit to your account, or choose to keep a percentage of the sale in bitcoin if you wish to begin accumulating it.

If you are interested in accepting bitcoin as a payment method, there are several options available;

• BTCPay
• Square cash
• Stripe
• Coinify
• Wyre
• Blockonomics (direct to your wallet)

Can I mine bitcoin?

Mining bitcoins can be a fun learning experience, but be aware that you will most likely operate at a loss. Newcomers are often advised to stay away from mining unless they are only interested in it as a hobby similar to folding at home. If you want to learn more about mining you can read more here. Still have mining questions? The crew at /BitcoinMining would be happy to help you out.
If you want to contribute to the bitcoin network by hosting the blockchain and propagating transactions you can run a full node using this setup guide. If you would prefer to keep it simple there are several good options. You can view the global node distribution here.

Earning bitcoins

Just like any other form of money, you can also earn bitcoins by being paid to do a job.

Site	Description
WorkingForBitcoins, Bitwage, Cryptogrind, Coinality, Bitgigs, /Jobs4Bitcoins, BitforTip, Rein Project	Freelancing
Lolli	Earn bitcoin when you shop online!
OpenBazaar, Purse.io, Bitify, /Bitmarket, 21 Market	Marketplaces
/GirlsGoneBitcoin NSFW	Adult services
A-ads, Coinzilla.io	Advertising

You can also earn bitcoins by participating as a market maker on JoinMarket by allowing users to perform CoinJoin transactions with your bitcoins for a small fee (requires you to already have some bitcoins.

Bitcoin-Related Projects

The following is a short list of ongoing projects that might be worth taking a look at if you are interested in current development in the bitcoin space.

Project	Description
Lightning Network	Second layer scaling
Blockstream, Rootstock and Drivechain	Sidechains
Hivemind and Augur	Prediction markets
Tierion and Factom	Records & Titles on the blockchain
BitMarkets, DropZone, Beaver and Open Bazaar	Decentralized markets
JoinMarket and Wasabi Wallet	CoinJoin implementation
Coinffeine and Bisq	Decentralized bitcoin exchanges
Keybase	Identity & Reputation management
Abra	Global P2P money transmitter network
Bitcore	Open source Bitcoin javascript library

Bitcoin Units

One Bitcoin is quite large (hundreds of £/$/€) so people often deal in smaller units. The most common subunits are listed below:

Unit	Symbol	Value	Info
bitcoin	BTC	1 bitcoin	one bitcoin is equal to 100 million satoshis
millibitcoin	mBTC	1,000 per bitcoin	used as default unit in recent Electrum wallet releases
bit	bit	1,000,000 per bitcoin	colloquial "slang" term for microbitcoin (μBTC)
satoshi	sat	100,000,000 per bitcoin	smallest unit in bitcoin, named after the inventor

For example, assuming an arbitrary exchange rate of $10000 for one Bitcoin, a $10 meal would equal:

• 0.001 BTC
• 1 mBTC
• 1,000 bits
• 100k sats

For more information check out the Bitcoin units wiki.
Still have questions? Feel free to ask in the comments below or stick around for our weekly Mentor Monday thread. If you decide to post a question in /Bitcoin, please use the search bar to see if it has been answered before, and remember to follow the community rules outlined on the sidebar to receive a better response. The mods are busy helping manage our community so please do not message them unless you notice problems with the functionality of the subreddit.
Note: This is a community created FAQ. If you notice anything missing from the FAQ or that requires clarification you can edit it here and it will be included in the next revision pending approval.
Welcome to the Bitcoin community and the new decentralized economy!

Dear Harmony community,
After careful consideration we have updated the economic model of our network ahead of our upcoming open staking launch. In this new model, the total reward across the network (issuance plus transaction fees) will remain constant regardless of average block time and staking ratio. The goal of this change is to achieve a higher staking ratio, to simplify the model and to create a path to 0 issuance, all of which we believe will bring long term benefits for Harmony.
 
TLDR:

• Constant annual reward of 441M ONE regardless of changes in underlying variables such as block time and staking ratio
• Transaction fees offset issuance creating a path to 0 issuance as protocol gains adoption
• 1st year yields range: 164% (at 5% staked) to 9% (at 95% staked), 3rd year yields range: 73% (at 5% staked) - 4% (at 95% staked)
• For in depth quantitative information, take a look at our spreadsheet model.

 
Why aim for a higher staking ratio?
A higher staking ratio is beneficial for two reasons. First, the staking ratio is a barometer for the health of a PoS chain. A high staking ratio (above 60%) means that the network is highly secure since mounting a 33% attack would require at least 20% of the token supply. Just as important, a high staking percentage signals a large and loyal community that is committed to the project for the long term. If 60% or more tokens are bonded in the staking contract, you know that a majority of tokens belong to HODLers.
The second benefit of a higher staking ratio is that it creates organic demand for the ONE token. In the long run adoption of on-chain applications will drive network usage and demand for ONE, but the first major use case and demand driver for the token will be staking. We believe that higher staking yields will lead to more desire to stake ONE, thus driving more demand.
 
Why is simplicity important?
Bitcoin demonstrates the power of simplicity. The economic model is so simple you can express it in one sentence: “Issuance halving every 4 years until a maximum supply of 21 million.” The simplicity of Bitcoin’s economic model makes it easy for people to understand so that it’s easy to onboard new community members. The more understandable the model is, the easier it is to spread. Conversely the more complicated the economics are, the less likely the protocol is to reach mass adoption.
For this reason, we strived to create an economic model that could also be explained in one sentence. Here’s ours: “Issuance plus transaction fees set to 441M ONE per year.” An advantage of this simple model is that it becomes easy for validators to project their future rewards and it becomes easy for token holders to project future circulating supply. This predictability gives the protocol a stable economic base for our stakeholders to rely on.
 
Transaction fees
One of the potential problems of Bitcoin’s economic model is that it is unclear if or when transaction fees will be able to compensate for the decreasing block reward issuance. This presents a potential time bomb within the protocol. For any protocol to survive in the long term, it will need to bring in enough transaction fees to at least sustain the cost of operating and securing the network. However, it’s nearly impossible to predict when transaction fees will be adequate to sustain a network in place of issuance.
Our model solves this problem by allowing transaction fees to offset issuance. Thus as network usage increases, issuance decreases by the same amount. When the network is fully mature and can sustain itself on transaction fees alone, issuance will naturally fall to zero. Rather than trying to predict the future, we structure our model so that it adjusts automatically when the timing is right. This way we get the benefit of a stable source of funding to secure the network while also maintaining the potential to have a finite supply of ONE tokens like Bitcoin.
 
Differences from the old model
You might be wondering how this new model is different from the old one. The old model had a variable issuance. As the percentage of tokens staked increased, the annual issuance decreased from ~500M at 0% to 0 ONE at or above 80%. With the new model’s constant issuance of 441M, the reward is slightly smaller at staking ratios of less than 10% but significantly higher at higher staking ratios greater than 10%.
This means that the rewards are more generous! Stakers and validators should be excited that there will be more rewards to be claimed.
 
Why did we change the model?
We changed the model because the assumptions and judgments underlying the original model changed. As John Maynard Keynes said, “When the facts change, I change my mind. What do you do?”
Initially we wanted to have as low an issuance as possible while maintaining reasonable security so that we could minimize inflation. However, we realized that the potential harm from inflation would pale in comparison to the benefits of creating a strong community of validators and stakers in the early stages of the network. Furthermore, we realized we could put a cap on long term inflation by using transaction fees as a way to offset issuance. Therefore we decided that increasing issuance was a worthwhile trade off.
Another assumption in the old model was that staking was inherently competitive with use cases that rely on collateralization such as DeFi. We wanted a lower staking ratio so that a portion of token supply would remain unstaked for these applications. Since then, a new concept called “staking derivatives” shows promise to eliminate this competition as it would allow for derivatives representing staked tokens to be used as collateral instead.
Finally, the original model issued a constant amount of ONE per block. However, we now realize that our block time will decrease over time as we optimize the protocol but this would in turn increase issuance in the old model. So we designed the new reward system such that reward per block will adjust with a change in the time between blocks to keep annual rate of issuance constant.
 
Join the discussion
If you are curious to learn more about our economic model we encourage you to check out our spreadsheet and to join the discussion by replying to this post. If you are a validator or delegator and want to see what this new economic model will mean for your rewards, we are creating a staking calculator which you can use to explore your staking rewards under different circumstances.

1. Bitcoin has become more affordable to mine in recent times.
2. This is due to two main factors - difficulty adjustments and cheaper electricity.
3. In early 2020, researches predicted that the cost to mine Bitcoin will be around $12,000 to $15,000 after the block reward halving in May.
4. Bitcoin mining can still be profitable for some individuals.
5. Some prospective mines should perform a cost-benefit analysis to understand the price before making the fixed cost purchase of the equipment.

The variables needed to make this calculation are:

• Cost of power
• Efficiency
• Time
• Bitcoin value

Wondering where to mine bitcoins?

Surprisingly, bitcoin mining can also be done with the P2P crypto exchange platform and if you are worried about finding a P2P exchange platform, well you are at the right spot!
Blockchain Firm offers you a P2P crypto exchange platform with avant-garde features that helps you to mine bitcoins in a hassle-free manner.

Bottom line

Probably the best idea is to make mining a hobby. Bitcoin mining is perhaps profitable, perhaps not, but the experience you gain is the real work. Just stock up some bitcoins for the future when a new bull market begins, and you can benefit from the rising price.

I have hidden the seed to a wallet containing ~0.05 BTC inside of my latest album. (It's not much, I am a robot of simple means)
Solve it then sweep the keys!
​
​
'Bifurcations' by Logic Beach is a Lo-Fi, Synth-Glitch, experimental project I've put together to celebrate the halving and to have a bit of fun. You will need the Lossless versions of the songs to solve this thing. (download the .wav files).
https://preview.redd.it/fvtegar2xdy41.png?width=2486&format=png&auto=webp&s=f02aef55825dccb854c4826dd00aa5a17d70c60e
Also, check out the Video.
The album is free on BandCamp (just enter $0.00), however if you'd like to make the contest more interesting, I am putting all proceeds into the contest wallet.
If you sweep it make a post here detailing how you solved it! or remain anonymous... I'll post the solution when it's solved.
Adress: bc1qj7467e7r5pdfpypm03wyvguupdrld0ul2gcutg
​
​

After due consideration (and constant requests), I have decided to extend this contest until June 21st.

Here is a recap of what is known with some new info:

• The video has only two words for you. The first is 'Tree' from track 8 (YT's compression made it unreadable) and another from track 9. The rest of the video is IRRELEVANT as is the album cover. it was just fun for me to make and watch along with the music, sorry if it ruined your life.
• You are searching for 12 seed words in the bip39 format. No need to calculate any words.
• There is an order hidden here. It is not in the lengths of songs or hidden in the rhythms of songs. "hidden" is hardly the right word for how it's placed in this album.
• Three track names may help you in your search: songs 2,4, and 5
• Chaos and Logistic maps or any kind of advanced mathematics will not aid you. This is 'Simple'
• c = 300,000 km/s
• In track three you may have to make a '-leap' of sorts
• Morse code will only help you in tracks 1 & 2 visually and audibly
• There are two words each in tracks 5, 6, and 7.

When you hear about bitcoin “mining,” you envisage coins being dug out of the ground. But bitcoin isn’t physical, so why do we call it mining?
Similar to gold mining, bitcoins exist in the protocol’s design just as the gold exists underground, but they haven’t been brought out into the light yet, just as the gold hasn’t yet been dug up.
The bitcoin protocol stipulates that a maximum of 21 million bitcoins will exist at some point. What miners do is bring them out into the light, a few at a time. Once miners finish mining all these coins, there won’t be more coins rolling out unless the bitcoin protocol changes to allow for a larger supply. Miners get paid in transaction fees for creating blocks of validated transactions and including them in the blockchain.
To understand how bitcoin mining works, let’s backtrack a little bit and talk about nodes. A node is a powerful computer that runs the bitcoin software and fully validates transactions and blocks. Since the bitcoin network is decentralized these nodes are collectively responsible for confirming pending transactions.
Anyone can run a node—you just download the free bitcoin software. The drawback is that it consumes energy and storage space – the network at time of writing takes hundreds of gigabytes of data. Nodes spread bitcoin transactions around the network. One node will send information to a few nodes that it knows, who will relay the information to nodes that they know, etc. That way, the pending transaction ends up getting around the whole network pretty quickly.
Some nodes are mining nodes,usually referred to as miners. These chunk outstanding transactions into blocks and add them to the blockchain. How do they do this? By solving a complex mathematical puzzle that is part of the bitcoin program, and including the answer in the block.
The puzzle that needs solving is to find a number that, when combined with the data in the block and passed through a hash function (which converts input data of any size into output data of a fixed length, produces a result that is within a certain range.
For trivia lovers, this number is called a “nonce”, which is an abbreviation of “number used once.” In the blockchain, the nonce is an integer between 0 and 4,294,967,296.
How do they find this number? By guessing at random. The hash function makes it impossible to predict what the output will be. So, miners guess the mystery number and apply the hash function to the combination of that guessed number and the data in the block. The resulting hash starts with a certain number of zeroes. There’s no way of knowing which number will work, because two consecutive integers will give wildly varying results. What’s more, there may be several nonces that produce the desired result, or there may be none. In that case, the miners keep trying but with a different block configuration.
The difficulty of the calculation (the required number of zeros at the beginning of the hash string) is adjusted frequently, so that it takes on average about 10 minutes to process a block.
Why 10 minutes? That is the amount of time that the bitcoin developers think is necessary for a steady and diminishing flow of new coins until the maximum number of 21 million is reached (expected some time in 2140).
The first miner to get a resulting hash within the desired range announces its victory to the rest of the network. All the other miners immediately stop work on that block and start trying to figure out the mystery number for the next one. As a reward for its work, the victorious miner gets some new bitcoin.
At the time of writing, the reward is 6.25 bitcoins per block, which is worth around $56,000 in June 2020.
However, it’s not nearly as cushy a deal as it sounds. There are a lot of mining nodes competing for that reward, and the more computing power you have and the more guessing calculations you can perform, the luckier you are.
Also, the costs of being a mining node are considerable, not only because of the powerful hardware needed, but also because of the large amounts of electricity consumed by these processors.
And, the number of bitcoins awarded as a reward for solving the puzzle will decrease. It’s 6.25 now, but it halves every four years or so (the next one is expected in 2024). The value of bitcoin relative to cost of electricity and hardware could go up over the next few years to partially compensate for this reduction, but it’s not certain.
If you’ve made it this far, then congratulations! There is still so much more to explain about the system, but at least now you have an idea of the broad outline of the genius of the programming and the concept. For the first time we have a system that allows for convenient digital transfers in a decentralized, trust-free and tamper-proof way.

'''
Hi Everyone! If you were around for the 2017 bull cycle, you might remember me from:
[[link]⁶
With the advent of DeFi, I wanted to crystalize my thoughts on why Bitcoin will win in the end.
​

Why Bitcoin Will Win: The Bearish Case for Ethereum

Ethereum is the MySpace of decentralized finance. Hobbled together, scrappy, but provides an exciting glimpse into the future. We should be pleased with the new paradigms discovered through this experiment but should not expect it to be the de facto platform in a decade.
Ethereum has demonstrated intrinsic challenges that are insurmountable without an Ethereum 2. We have witnessed unauditability, scaling difficulties, centralization and high contract fees. Building second-layer solutions to make up for shortcomings is akin to patching cracks in the asphalt with duct tape.
In this piece, I’ll navigate why we should not confuse novelty of features for sustainable value, why Ethereum makes for a poor base layer, and what to expect in the decade ahead.
There will only be one base layer for digital scarcity of humanity and that is Bitcoin.
​

The “Bitcoin is money, Ethereum is apps” fallacy

There is a logical fallacy in arguing “Bitcoin is money, Ethereum is apps,” which draws a false equivalence between the value of money and apps. As any self-respecting financier knows, the value lies (quite literally) where wealth is stored.

“Applications are cheap. A store of wealth is expensive.”

Building applications is a solved problem.
We know how to recruit engineers, build organizations and assemble technical solutions. We have a bevy of technologies that provide affordances for user interfaces. We have best practices for effective engineering. We even have strategies for amplifying creativity during brainstorming.
The number of pages on CoinMarketCap.com is a testament to the commonality of applications.
What is not solved is building applications on top of a store of wealth.
In order to build applications on top of a store of wealth, you either appropriate an existing store of wealth and build on top of it (i.e. Plaid) or you build a new store of wealth (Bitcoin).
Building a digital store of wealth is so hard it has taken over half a century and is still not ready. The digital store of wealth is only ready when it stores a nontrivial portion portion of global wealth.
On August 11, 2020, MicroStrategy announced it had acquired 21,454 Bitcoin for $250 million. A single company bought the equivalent of all Bitcoin in Ethereum that day.
Building an application on Ethereum today is the worst of both worlds. It builds on a burgeoning new store of value with a tiny addressable market on top of a limited capacity network already showing strains.
The vast majority of global wealth is still outside of the system, waiting to designate a digital store of value.
Conceding that Bitcoin is the better store of value is conceding Bitcoin will be the disproportionate beneficiary of global wealth entering the system.
​

So where do applications fit in?

Imagine acquiring a bank. You are given a choice to either acquire the trillion dollars under management and no app or a smooth, slick app but not the financial assets.
It’s easier to make a new application where users are already present rather than move users to a new platform with an existing application. As we’ve seen in the previous section, most users will be on Bitcoin utilizing its value as a store of wealth.

“Applications will be built where wealth is stored.”

What we’ll see is the best ideas from current generation of DeFi applications (elastic supply, governance, fair distribution mechanisms, auditability) built into layer 2 solutions of Bitcoin that itself sits on top of multiple trillions of dollars of global wealth.
Why will this happen? Builders will note applications of value from the small pond of Ethereum and see a market opportunity to natively expose those features to the much larger accounts in Bitcoin, reaping proportionally higher revenue.
​

Why can’t we use Ethereum as a store of value?

“If native users of a platform are so important, why can’t we just use Ethereum as a store of value? After all, holders of Ethereum have seen much higher appreciation in value since its founding compared to Bitcoin.”
Here we refer back to the [“The Bullish Case for Bitcoin”]² which lays out the core properties of money of which three critical areas Ethereum is weak against Bitcoin.

Verifiability

As we see in the indefatigable investigation by [Pierre Rochard]³ in his epic quest to audit Ethereum’s supply limit, verifying the total number of Ethereum is not a trivial task.
A number of supply adjustments had been made in node software instead of on-chain transactions, intermediate miner rewards calculated using uncles that are not finalized for a number of blocks, selfdestruct() that leaves ambiguity for token inactivity.
These factors make it impossible to have an objective measure without specifying an asterisk of the nuances appropriated for each method of calculation.
Lack of auditability makes Ethereum a nonstarter for firms desiring a store of value. Without an objective measure of supply comes an impossibility of assessing the value of your asset.
From measurement of the Ethereum supply through scripts, it has been hypothesized that there has been at least one inflation bug that has been exploited: [*[link]⁷

Scarcity

There is no set limit of Ethereum by design. From inception it was designed to be an inflationary currency which is essential as a utility token executing applications but is fatal for a store of value.
There is an ongoing effort to curtail Ethereum’s inflation to appease to its holders which will be to its detriment as use as an application platform.
This tension between being an appreciating digital asset and utilization as fuel is intrinsic to Ethereum and cannot be removed. When Ethereum prices go up by a factor of ten, only smart contracts that can provide commensurate proportional value will be viable.

“Using Ethereum as a store of value creates a perverse relationship with increasing contract fees that undermine its value as an application network.”

As the price rises further, we will see the majority of use cases today become priced out, adding platform risk where users will now need to worry whether they will be able to get their assets back out in the event of Ethereum appreciation.

Censorship Resistance

It is an open secret that Infura is the defacto backend for Ethereum. Running a full Ethereum node is known and accepted to be an arduous task with astronomical processor requirements.
This problem is getting worse, not better as the system struggles with transaction volume today, much less the several magnitudes of transactions needed in the coming decade.
The solution provided is running Ethereum 2 and implementing applications on a second layer of Ethereum. This shifts the conversation to if building a new base layer or building on a second layer is necessary, what benefit is there to retain Ethereum as a base layer?
​

A Look Back from 2030

When we look back to 2017–2021, we will remember this period as the primordial era of where creative entrepreneurs came together to experiment with the new paradigm of permission-less smart contracts.
We will see a meaningful portion of global wealth go into Bitcoin by 2024 raising assets under management to a trillion dollars. Companies will convert overseas holdings into Bitcoin to counter inflationary risk for sovereign currencies. Smaller nation-states will start to acquire a reserve of Bitcoin to counter dollar strength to pay off their dollar-denominated debt.
During this time, firms small and large will rush to build applications to service wealth stored in Bitcoin on layer 2 and layer 3 solutions. Many of these applications will be inspired by what is currently built on top of Ethereum but addressing a much larger market.
Through two more halvings by 2030, everyone will have a Bitcoin account providing both a store of value as well as a unified platform that provides the largest installed userbase for financial products. We'll be ending the decade with 10M per Bitcoin, (one magnitude increase each for the three halving periods: 2020-2024, 2024-2028, 2028-2032) with Bitcoin serving as the generational store of wealth for those with the foresight to stack sats and hodl.

Tips for Builders

You’re not late. In fact you’re incredibly early. We’re still building the store of value that will be the foundation to the financial apps that you’ll build. Ethereum is a nice environment for experimenting with new paradigms that are made possible through smart contracts.
But understand that the bulk of your future customers will be onboarding onto a different platform when they do arrive. There will be a bonanza period where we see thousands of companies and millions of retail users adopting Bitcoin.
It’ll be up to you to recognize the arbitrage opportunity to offer product features in native Bitcoin format to beat other products that must employ bridges to access wealth stored in Bitcoin.
​

About Me

For future writing, [you can follow me on Twitter at @uncapslock]⁵ .
This article is for information purposes only and is not intended to be investment advice.
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Why Bitcoin Will Win: The Bearish Case for Ethereum
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Since Bitcoin is a protocol (or: software), it's safe to assume that it still has plenty of bugs. However, these aren't discovered yet. Right now everyone is getting excited for the halving next year, but the whole concept is a bit scary to me. Is there reasonable chance that there is a software bug, causing the block reward after the halving to be anything different than what it's supposed to be? Or are there any other risks (concerning the halving) that most people aren't aware of?
I'm not a programmer (not even close), so the whole idea of Bitcoin and the protocol/software beneath it is a bit abstract and hard for me to fully grasp.