Thursday, January 3, 2019

10 Years 🎂🎉

January 3, 2019

Today Bitcoin Turns 10 Years Old

Happy 10th Birthday

Ten years ago on this date, the first transaction occurred on the Bitcoin blockchain.

Bitcoin started a revolution during a time of economic turmoil. In 2008, the world was in the midst of a financial crisis and banks were being bailed out by the government.

The past decade has been a rollercoaster for the original cryptocurrency. Bitcoin has appreciated at a rapid pace while enduring major disturbances in its growth.

People have repeatedly called a spiral to zero at each significant drop in price. However, Bitcoin has remained resilient bouncing back and growing stronger.

Exemplar of the Lindy effect

What is the Lindy effect? The Lindy effect is a concept that the future life expectancy of some non-perishable things like a technology or an idea is proportional to their current age so that every additional period of survival implies a longer remaining life expectancy.

The longer Bitcoin survives the greater chance it will reach new highs. Bitcoin has been beaten down many times, but the network has never failed.

Due to its engineering, Bitcoin is built to withstand just about any attack or mishap. Barring any unforeseen bug, Bitcoin will undoubtedly survive another decade and even further.

Being tested

In its 9th year of existence, Bitcoin was tested more than it has ever been before. After nearly reaching $20,000 in 2017, Bitcoin received more media scrutiny than ever.

After its historic 2017, Bitcoin has its worst year ever in 2018. The top cryptocurrency dropped more than 70% from its all-time high. It also finished the year with five straight months in the red, something it hasn't done since 2011.

While price is not the only indicator of success for Bitcoin, it would be a lie to say it isn't one of them. Security, probably Bitcoin's most meaningful feature, is a function of how much mining power is a part of the network.

When the price of Bitcoin declines, miners with higher electricity costs are priced out of the market. Thus, declines in price can lead to a weaker network.

ANALYSIS

Crypto Lending is Booming Within the Bust

According to a new report from Bloomberg, crypto lending companies are actually booming in the middle of this bear market.

That's because they are acquiring customers from both sides of the coin:

The bulls who don't want to sell their coins low
The bears who need to borrow coins to short

Either way, it means more revenue for the handful of crypto lending startups that have popped up in the last few years.

It's starting to show

For a few startups, the success is beginning to show. Specifically, New York-based lender BlockFi has 10 times higher revenues and customers than 6 months ago, Salt Lending is hiring more heads each month as earnings climb, and Genesis Capital is looking to double its staff as it turns to the Asian market.

That combined success among the industry is no coincidence. Putting the phenomenon best, Aave CEO Stani Kulechov told Bloomberg:

"Everything flies in the bull market, but true magic happens when it does well in a bear market."

OPINION

Bitcoin Was a 'Gateway Drug' into Stock Trading

In 2017 and 2018, Bitcoin saw its fair share of volatility. The higher highs seemed to never end - until they did. However, during that time, Bitcoin grabbed attention from millennials who simply downloaded an app to cash in one the world's supposed next greatest investment.

At its height, Coinbase was seeing upwards of 50,000 new downloads per day. But when the crypto bear market hit, the fun was no longer there.

Now, one CEO is saying that once Bitcoin fell, millennials took their experience trading and investing in crypto and started applying it to the traditional stock market.

Reverse drug?

Adam Dodds, the founder of London-based startup Freetrade, believes Bitcoin is a "gateway drug" into traditional financial markets. However, instead of going from something bad to something worse, millennials did the reverse and found something better - the traditional stock market.

Tough to quantify

Dodds' theory may be true, but its tough to quantify. What we do know though is that stock trading apps have certainly begun targeting new generations that are jumping into the workforce and beginning to build wealth.

For example, millennial-focused app Robinhood, now as over 4 million users on its platform with a valuation of over $5.6 billion. That figure alone shows massive interest from a population that traditionally has low investment funds.

BITS

But wait, there's more...

💸 Michael Novogratz now owns nearly 80% of Galaxy Digital.
🚀 Nasdaq-powered exchange to launch token trading of major firms.
🙅‍♂️ HitBTC denies allegations that it froze accounts prior to the Proof of Keys event.

MEME