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Wednesday, 15 Sep 2021
Crypto Notes
A weekly newsletter decoding crypto, blockchain and the entire ecosystem.
By Rohas Nagpal

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All about Bitcoin (BTC)

Over the last 3 weeks, we discussed Dogecoin, Cardano and Binance Coin. and Solana (SOL). This week we take on Bitcoin (BTC).

Did you know?

A person/group holding a large amount of bitcoin is called a whale.

Ashdraking is the complete loss of a crypto investor's capital as a result of shorting bitcoin.

In January 2012, bitcoin made its television debut on “The Good Wife”.

Bitcoin’s market cap surpassed US $1 trillion for the first time ever on 19 February 2021.

Before we dive deeper, let's check out the latest news from the crypto universe.

The US Securities and Exchange Commission has threatened to sue crypto exchange Coinbase over its proposed stablecoin lending program.

The Alonzo update of the Cardano network has gone live. This enables smart contracts to be created and deployed on the network's mainnet.

Ukraine has made cryptocurrency legal within the country and has allowed crypto exchanges to officially operate in the country.

1. What is Bitcoin (BTC)?

Name: Bitcoin

Symbol: BTC

Overview:

Bitcoin is the world's first and largest cryptocurrency. The word "blockchain" is derived from its whitepaper.

Bitcoin earned a lot of notoriety primarily because of its use by members of the now shut-down Silk Road - an illegal online marketplace that facilitated the sale of drugs worth hundreds of millions of dollars, guns, stolen financial information, counterfeit documents and more. All Silk Road transactions were conducted exclusively in bitcoin.

The first Bitcoin real-world transaction took place on 22nd May 2010 and involved 10,000 bitcoins being exchanged for $25 worth of pizza.

Bitcoin was hacked in August 2010 when some hackers exploited a vulnerability and generated billions of bitcoins which were sent to two addresses on the network. The vulnerability was fixed, the transaction was erased from the transaction log and the Bitcoin network was forked to an updated version.

Bitcoin isn't 100% anonymous. All its transactions are recorded on its publicly available Blockchain.

Bitcoin’s total supply is limited by its software to 21 million. New coins are issued as rewards to "miners". On launch, the reward was 50 bitcoins per block: this number gets halved with every 210,000 new blocks mined — which takes around 4 years. As of 2021, the block reward is 6.25 bitcoins.

Bitcoin has not been pre-mined, meaning that no coins have been distributed between the founders before Bitcoin became available to the public.

On 7 September 2021, El Salvador became the world’s first country to recognize Bitcoin as legal tender

Consensus mechanism: Proof of Work

2. Metrics

As of 14 September, its core metrics are:

Price metrics

Current Price: $186
All-time high (7 September 2021) US$ 46,032
All-time high (Apr 14, 2021) US$ 64,863.10
All-time low (Jul 05, 2013) US$ $65.53

Supply metrics:

Circulating supply: 18,814,637 BTC
Total supply: 18,814,637 BTC
Maximum supply: 21,000,000 BTC

Note:

Circulating Supply is the number of coins / tokens in public hands.

Total Supply is the number of coins / tokens created minus the number burned.

Maximum Supply is the maximum amount of this crypto that can ever exist

Marketcap & Volume metrics:

Market Cap: US$ 840,527,067,824
Fully Diluted Market Cap: US$ 938,156,203,827
Volume (24h): US$ 31,682,754,270
Volume / market cap ratio: 0.037
Velocity: 1,684

Note:

Market cap = Current Price x Circulating Supply

Fully Diluted Market Cap is the market cap if the maximum supply was in circulation

Volume (24h) is the fiat value of this crypto traded over the last 24 hours

Dominance measures a crypto's total market capitalization relative to the total market cap of all cryptos

Volume / market cap ratio = 24h Volume / Marketcap

Velocity = 24h Volume / Circulating Supply

Vladimir Club Cost is the cost of owning 1% of 1% (0.01%) of an asset's "eventual" supply

RoI metrics:

Year Returns
2020 303 %
2019 87 %
2018 -72 %
2017 1,295 %
2016 123 %
2015 37 %
2014 -57 %
2013 5,394 %
2012 156 %
2011 1,474 %

Risk metrics:

  Volatility Sharpe ratio
Last 30 days 0.62 -1.32
Last 90 days 0.69 0.9
Last 1 year 0.79 2.2
Last 3 years 0.77 1

Note:

Volatility measures the annualized standard deviation of daily returns

Sharpe Ratio measures the excess return for a given level of risk

3. Wallets

There are a large number of mobile, desktop, and hardware wallets for Bitcoin.

Note: The data/graphs are from CoinMarketCap, Messari, and Future Money Wallet. Figures as of 7 September 2021.

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Rohas Nagpal is an author, an amateur boxer, a blockchain architect, a Tintinologist and a retired hacker.

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