What Is Bitcoin?
- Just another currency
- Similar to gold coins Bitcoin is decentralized, meaning there is no central authority that controls the supply of gold in the world.
- Also called a stateless currency, Bitcoin is not associated with any nation.
Why Bitcoin?
- Enables exchange of value with a group of strangers who do not trust each other or when a trusted mediator doesn't exist
- In 2008, Bitcoin’s inventor, known pseudonymously as Satoshi Nakamoto achieved a significant breakthrough for exchange of value without a central authority i.e. how consensus is achieved on a distributed platform aka Byzantine Generals’ Problem
Benefits of Bitcoin
- No inflation bitcoins have limited supply - 21 million Bitcoins in all
- Impossible to counterfeit
- Inherently a international currency; anyone can send bitcoins to anyone else in the world, in any amount, almost instantly.
- Negligible transaction fees, as no middleman in involved
The Blockchain
- All bitcoin transactions are recorded into the blockchain
- Is a ledger of all bitcoin transactions
- New bitcoin transactions are recorded in chunks know as blockchain
- About every 10 minutes, the transactions in that pool are bundled into a block and added to the blockchain
- Thousands of computers on the Bitcoin network collect transactions and add them to the blockchain are called miners.
- Bitcoin mining is the competitive process of collecting transactions and adding them to the blockchain in the form of blocks
Private/Public Cryptographic
1. Public Key Encryption - If a person has a public key, they can create a message that only the owner of the private key can read
2. Digital Signature - If a person has a private key, they can create a message that cannot be forged, because any person can use the public key to verify the authenticity of this message
Bitcoin Trading
Some Trading Alerts
What is SPOR (Spent Output Profit Ratio) ?
indicator provides insight into macro market sentiment, profitability and losses taken over a particular
time-frame. It reflects the degree of realised profit for all coins moved on-chain.
Sentiment Check
To illustrate the current market sentiment, we can examine bitcoin’s Spent Output Profit Ratio (SOPR). SOPR is a metric that evaluates the overall profit or loss of coins transacted on a given day relative to when they were last moved. This ratio is calculated by dividing the selling price of a coin by its purchase price. A SOPR above one suggests that, on average, coins are being sold at a profit, indicative of bullish investor sentiment. Conversely, a SOPR below one indicates sales at a loss, reflecting bearish sentiment or panic selling. While not perfect, this metric provides valuable insights into market mood, particularly during volatile periods, by tracking whether investors are securing gains or minimizing losses
What is Hash Rate ?
Hash rate, or the total computing power dedicated by miners to secure the Bitcoin network
On-Chain Metrics
1. What is the number of accounts on that blockchain ?
2. Regular accounts vs. verified accounts ?
3. The transactions being conducted on the blockchain ?
4. Number and quality of Dapps on the chain
5. Staking - is for POS chains (locking up tokens in some manner to do something with them - like validators)
6. Dollar value of transactions on the blockchain
Market Cap to Thermo Cap Ratio
The ratio indicates Bitcoin’s monetary premium relative to its maximum aggregate cost of production.
A miner is rewarded with bitcoin each time they successfully mine a block, in addition to the transaction fees for all the transactions included in the block.
Bitcoin block rewards are the single source of revenue for miners.
The all-time cumulative sum of miner revenue in USD is called “Thermocap” and is currently around $30 billion.
It distills the economic complexities of mining and the price action of bitcoin into a single metric.
