Report: BTC Gets a Health Check in ‘The State of Bitcoin’

Report: BTC Gets a Health Check in ‘The State of Bitcoin’


Delphi Digital has taken a deep dive into bitcoin core in its first “The State of Bitcoin” report. The 59-page document from the digital asset investment company leaves no stone unturned, covering everything from BTC payments to coin distribution and rolling returns compared to stocks and gold. The report brings together a plethora of interesting statistics that attest to bitcoin’s growing evolution and adoption.

Also read: Fundraiser Aims to Raise $1M in Cryptocurrencies for Venezuelans

Better Understanding Bitcoin

Few people, save for a handful of terminal haters and discredited economists, dispute that Bitcoin is valuable. But quite where that value lies, and what the primary purpose of Satoshi’s creation should be, is a matter of some dispute. “In its current state, BTC is easier to dismiss than understand,” acknowledge the authors of The State of Bitcoin. “We believe the primary long-term value drivers for BTC revolve around its ability to serve as 1) a censorship-resistant store of value and 2) a ‘check’ on governments as an alternative, country-agnostic digital reserve currency.”

Report: BTC Gets a Health Check in ‘The State of Bitcoin’The report itself offers something for everyone, addressing BTC’s current deployment as both a medium of exchange and a store of value. Delphi Digital devotes particular attention to charting BTC’s progress in the countries that need it most – inflation-hit Argentina and Venezuela. Here, as well as in regions where many of the world’s unbanked can be found – primarily Africa – cryptocurrencies have huge potential. The report identifies three primary drivers behind BTC adoption in these countries:

  • As an alternative to local currencies suffering from high or hyperinflation
  • Allowing citizens to hold their wealth directly, rather than trust a local bank
  • To improve the speed and reduce transaction fees of sending remittances

Report: BTC Gets a Health Check in ‘The State of Bitcoin’The average cost of remittance for sending $200 is as high as $36 between South Africa and Botswana, for example, showing significant scope for cryptocurrencies to provide a low-cost alternative. But BTC’s use cases don’t end there. “In the past, when high inflation took hold in a person’s country, there was little that they could do except watch as their purchasing power evaporated,” continues the report. Now, “any person with internet access has the option to insulate themselves from local currency risk by switching to [BTC]. Essentially, bitcoin can offer a check on government power and policy while providing a vital safe haven for people from all around the world.”

Divining Trends Through UTXO Analysis

Examining unspent transaction outputs (UTXOs) offers up clues as to the market cycle that BTC is currently enduring, and hints at what may come next. Delphi Digital has used a green line to represent UTXOs that are at least a year old – i.e. coins that haven’t been spent in over a year. Monitoring the percentage of 1yr+ UTXOs, as part of BTC’s entire UTXO set, shows when bitcoin holders begin to move their coins once more, be it to sell, trade, or purchase goods and services. “In the second half of 2018, the 1-Year UTXO band began exhibiting a positive growth trajectory directly in tandem with the 1-2 Year band as older UTXO bands remain flat,” reads the report. “We believe we are in the midst of an accumulation process taking similar to the one in the 2nd half of 2014.”

Report: BTC Gets a Health Check in ‘The State of Bitcoin’
The black line represents the price of BTC on a logarithmic scale and the green line shows the percent of bitcoin UTXOs that have not been used in a transaction in at least a year

For those searching desperately for signs of a market recovery, one of the key takeaways from the report, based primarily on UTXO analysis, is that “Bitcoin may face additional selling pressure in the near-term, but we believe prices will bottom in Q1 2019 based on our analysis of holder dynamics during prior boom-bust cycles.”

From Banks to the Unbanked, Bitcoin Is for Everyone

Much of Bitcoin’s beauty lies in the fact that it can be many things to many people. While it can provide a lifeline to citizens suffering from hyperinflation or prone to having their assets seized by despotic governments, BTC can be equally valuable to governments themselves, central banks, and the so-called one percent. “There is a case to be made for central banks to hold a small portion of bitcoin in their reserves as a complement to gold if it matures into an accepted store of value,” ventures the report. It continues:

If the ~$1.4 trillion of gold reserves held by central banks grows at a similarly modest 2% rate per year, the expected value of bitcoin would be roughly $10,000 assuming a 25% chance it captures half the total value of future gold reserves … The upside potential for bitcoin is immense assuming it captures even a modest portion of the total assets held in offshore bank accounts, the investible gold market, and central bank gold reserves.

While it’s easy to speculate future use cases and users of bitcoin, what’s indisputable is that BTC is unlike any monetary system that’s gone before. Even now, 10 years on from the Bitcoin whitepaper, new applications for BTC are being discovered. It would take a brave soul to bet against bitcoin being worth more and transacted more 10 years from now.

Do you think it’s likely that BTC will start to recover from Q1 of 2019? Let us know in the comments section below.

Images courtesy of Shutterstock and Delphi Digital

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Wendy McElroy: How the Blockchain Provides PrivateJustice

Wendy McElroy: How the Blockchain Provides Private Justice


The Satoshi Revolution: A Revolution of Rising Expectations
Section 5: Saving the World Through Anarchism
Chapter 11, Part 6
How the Blockchain Provides Private Justice

The key to…an anarcho-capitalist court system is found in the concept of a “personal judiciary”. [Acting as your own judge.]…The courts’ purpose is to enable men to settle disputes so as to avoid violent resolution as well as aggression-overcompensation cycles. Regarding the courts’ decisions as legitimate is the only way for the litigants to avoid personal judiciary actions.

– Karl T. Fielding, “The Role of Personal Justice in Anarcho-Capitalism”

Justice is a stumbling block for all political systems. It is a particular problem for anarchism because its conception of justice sounds bizarre to many; anarchism uniquely argues that justice should be a commodity or service provided through the free market, rather like insurance. The view of justice also sounds contradictory to some; how can a society based entirely on voluntary exchange deal with crimes such as theft that might require seizing stolen goods and holding criminals against their will?

The latter objection was ably dismissed by Murray Rothbard during a remarkable debate on anarchist justice with Professor of Philosophy John Hospers. Rothbard wrote, “I see no reason whatever why anyone should worry about the consent of criminals to their just punishment. I believe that nothing should be done to anyone without his consent, except for the just punishment of criminals who have already violated the “consent,” the person or property, of their victims.”

The main point becomes whether or not the free market can deliver justice. And the first question to arise on this topic is usually, “What would free-market justice look like?” The unsatisfying answer is that no one knows for sure, any more than people from decades ago knew that communication would look like the Internet or transactions like the blockchain. (More on this later.)

Meanwhile, the principles upon which private justice is based can and must be defined with clarity.

John Locke’s “TINA” Argument

The classical-liberal philosopher John Locke used a “There Is No Alternative” argument in his book Second Treatise of Government. It is a type of either/or reasoning in which disproving the “either” (anarchism) means validating the “or” (the state).

In this article’s opening quote, Karl Fielding used the term “personal judiciary.” The term is based on a political argument presented by Locke, and it refers to the idea that a man has a natural right to be the judge of his own case. Every man has the right to forcefully reclaim his property from a thief, for example, because this is an extension of his right to defend person and property.

Locke acknowledged this right, but he was against practicing it. He wrote, “That in the state of nature every one has the executive power of the law of nature, I doubt not, but it will be objected, that it is unreasonable for men to be judges in their own cases, that self-love will make men partial to themselves and their friends: and on the other side, that ill-nature, passion and revenge will carry them too far in punishing others; and hence nothing but confusion and disorder will follow.”

“The state of nature” refers to human existence without “society,” in the modern sense of that word. In a state of nature, Locke believed all men were equal with the same natural right to judge their own cases. Again, if a possession had been stolen, then the owner could judge the act to be unfair and personally remedy the injury; he could retrieve his property, including whatever compensation he deemed was due. In short, private justice is a matter of right.

Locke believed a private judiciary process would tend sharply toward unfairness, however, because even an honest man sees things from his own perspective and self-interest. Even a well-meaning man could be mistaken about the facts, including the aggressor’s identity. This means a world occupied by people who judged their own cases would lead to discord, especially if the aggressor himself felt aggrieved. An aggressor might think the violence used in retrieving the possession was excessive, for example, or that the compensation added was unreasonable. At that point, the aggressor would judge his own case and find himself to be the victim; he might well seek redress or revenge. Or a falsely-accused non-aggressor might decide to rectify the wrong done to him. The process could easily become an endless loop of violence because the justice was not accepted as legitimate by both parties.

Locke believed that breaking the cycle of “confusion and disorder” required an unbiased judge whose assessment would be seen as legitimate by both sides. Put in crypto terms: decentralized justice needed to be centralized under the authority of a trusted third party. The stakes were non-trivial. Without a trusted third party to judge cases and render legitimate decisions, civil society was not possible.

The need for legitimacy in justice was a major reason—if not the major reason– Locke advocated a limited state. For centuries, this has been a mainstay argument against anarchism and freedom. And the either/or argument is correct, in this case. It is either freedom or it is the state, with justice being a pivot point between the two. (A form of this argument is playing out within the crypto community; it is either anarchism or the state, with recourse against theft and fraud being the pivot point.) Otherwise stated: If individuals cannot render justice, then the state becomes necessary, even for those who view the state as a necessary evil and try to constrain it through checks and balances.

What does this have to do with the blockchain? With the blockchain, the centralization of justice is reversed immediately; control is taken from the state and returned to the individual, without blood or votes or revolution. But if Locke is correct about justice requiring a trusted third party, then the state’s monopoly over justice is likely to establish itself again. What can transparent ledgers do to prevent this?

A definition of justice is a place to start answering. Justice is far too closely associated with police officers, lawyers, courts, and prisons. Such state employees are not justice; they are the ones who come into play when justice breaks down; they are there to protect the state, not individuals or the peace. The state so dominates this area, however, that administrative justice is the first definition that comes to people’s minds.

Ethical justice applies to the conduct of civil and private life. The Aristotelian definition appeals to common sense: everyone should receive what they deserve from each other. Few things are as just as the free market in which two people make a direct exchange for agreed-upon values, and then walk away. A woman who goes shopping, buys a tomato, and goes home is enjoying justice. It may seem as though she is merely enjoying daily life, because that statement is also true. In normal life, the free market generally provides people with what they deserve, even if it is not what they want.

The tricky bit is what to do when the justice of normal life breaks down—a situation that is otherwise known as violence. Eliminating the most pervasive form of violence—the state—would also eliminate most injustice. But a stateless society would experience private violence against person or property.

Two approaches to minimizing private violence and its damage are prevention and punishment. Prevention is the best approach, by far, for a free society. It preserves person and property; it avoids the unpleasant process of correcting an injustice; it greatly reduces the need for procedures or institutions to correct injustice; it does not create an entry point for the state.

The blockchain does not merely promote freedom, it also prevents theft by both the state and by private individuals. A peer-to-peer transfer avoids the trusted third party participation where so much theft occurs; privately-held wallets eschew the need to trust banks, exchanges, or other third parties. The blockchain’s transparency makes it possible to view where every piece of crypto goes. The irreversibly and time-stamping of the transfer were included specifically to prevent theft. The anonymity that is possible with a bit of effort provides protection as well.

The protection of crypto and the blockchain breaks down most dramatically when trusted third parties are once again introduced into the equation. Many of the problems that the blockchain cured return with trusted third party involvement. The greatest theft has occurred in exchanges, for example. With unethical exchanges or centralized ones that function like banks, the user’s trust has been misplaced, and the exchanges become thieves. The ethical but incompetent ones serve as an invitation to hackers, and the user’s trust has again been misplaced. Ones that are both ethical and competent are still risks because they are public; they are like well-locked houses that get burglarized, nevertheless.

Guidelines are available for using exchange in as a safe a manner as possible. Choose a decentralized one, for example, and never surrender private keys. But the crypto community has not adequately addressed the problems created by re-introducing trusted third parties. To my knowledge, no exchange even offers users an insurance policy or charges higher fees as a warranty against theft.

So far, only the impact of the blockchain on economic justice has been discussed, but the possibilities for all forms of justice are immense. Distributed systems can transmit peer-to-peer smart contracts that are self-enforcing. A recent U.S. Senate report stated of smart contracts, “the concept is rooted in basic contract law. Usually, the judicial system adjudicates contractual disputes and enforces terms, but it is also common to have another arbitration method, especially for international transactions. With smart contracts, a program enforces the contract built into the code.” (How smart the current contracts actually are is a debated point, but they are a proof of principle.)

The 19th century individualist-anarchist Benjamin Tucker referred to anarchism as “society by contract.” The contracts could express any exchange, from leases to prostitution, from insurance policies to drug deals. The contracts would not be legal or illegal, only consensual. Just as crypto bypasses central banking and decentralizes economic control down to the individual, smart contracts have the potential of bypassing much of the legal system and returning to the people’s law—contract law. But, like crypto, the contracts would not require a trusted third party.

[To be continued next week.]

Reprints of this article should credit and include a link back to the original links to all previous chapters

Wendy McElroy has agreed to ”live-publish” her new book The Satoshi Revolution exclusively with Every Saturday you’ll find another installment in a series of posts planned to conclude after about 18 months. Altogether they’ll make up her new book ”The Satoshi Revolution”. Read it here first.

Hash Wars: BCH Proponents Confident a Resolution Is in Sight

Hash Wars: BCH Proponents Confident a Resolution Is in Sight


On Saturday, Nov. 17, the Bitcoin Cash (BCH) community entered the third day of its hash war, with many supporters growing confident that a resolution may be in sight. Close to 300 blocks have been mined on the Bitcoin ABC side of the chain using the new consensus ruleset, which has also given the network the most accumulated proof of work. In addition to the hash battles of the last few days, the first major cryptocurrency exchange, Bittrex, has re-opened bitcoin cash deposits and given the ABC chain the BCH ticker.

Also Read: Free Keene Activists Launch Bitcoin Embassy New Hampshire

BSV and the Satoshi Shotgun that ‘Doesn’t Shoot Straight’

Hash Wars: BCH Proponents Confident a Resolution Is in SightIt’s been a long few days for Bitcoin Cash supporters, but the war seems to be nearing an end in the eyes of many. After the split, the ABC side of the chain remained vigilant throughout the entire process, mining more blocks but more importantly capturing more proof of work. The SV side is still moving along, but is behind the ABC chain and SV has also performed less work.

On Nov. 17, the BCH community got ready to watch the Stress Test team send large batches of transactions, but according to a few Telegram chat rooms, the Stress Test, or “Satoshi’s Shotgun,” has not been firing so well. Observers have stated that Satoshi’s Shotgun was no longer able to reach the ABC network. People assumed the stress test developers were not prepared to adapt to two different networks. During the start of the test, Bitcoin Unlimited’s Peter Rizun commented on the Stress Test matter.

“The difference in network effect stark: BSV has few users, no OSX or Windows clients, no block explorer, perhaps one mobile wallet, and a shotgun that doesn’t shoot so straight,” Rizun explained to his Twitter followers.

Many Believe the Release of Bitcoin ABC Version 0.18.4 Should Give Confidence to Exchanges

Many bitcoin cash users have been discussing the ABC network’s safety and reliability, with a number of them opining that exchanges should re-open markets. For instance, according to one of the most popular posts today on the Reddit forum r/btc, the release of Bitcoin ABC version 0.18.4 with a checkpoint and re-org protection cements the split.

Hash Wars: BCH Proponents Confident a Resolution Is in Sight

This means that miners will continue securing the ABC side and Nchain, Coingeek, and the rest of the SV miners will be left on that chain. “This means that exchanges can resume deposits, and we should urge them to, so everything can get back to normal,” the Reddit post explains. One Reddit user explained that he is confident the ABC chain is now Bitcoin Cash (BCH) due to the most accumulated proof of work (PoW).

“ABC has won decisively. I wish the exchanges would realize this,” explains the Redditor’s comment. “Before the fork, everyone said that the most proof of work chain would continue as BCH, and ABC is the chain with the most proof of work.” Moreover, the analytical website Coin Dance cash confirms that the ABC chain has the most PoW and leads by 53.4%.

Hash Wars: BCH Proponents Confident a Resolution Is in Sight

Bittrex Exchange Listing: ABC Chain = Bitcoin Cash (BCH)

Hash Wars: BCH Proponents Confident a Resolution Is in SightLastly, one of the first major exchanges has chosen to list the ABC side of the chain as Bitcoin Cash (BCH). The Seattle based trading platform Bittrex has decided to list the ABC side of the chain as “BCH” and the SV side as “BSV.” According to Bittrex the exchange is opening up deposits, withdrawals, and trading for BCH but with longer confirmation (20) times for deposits.

“The “BCH” ticker will remain the Bitcoin ABC chain before the hard fork block — Bittrex will observe the Bitcoin Cash network for a period of 24 to 48 hours to determine if a chain split has occurred and the outcome,” Bittrex Zendesk support explained on Nov. 17.

Many BCH supporters seem to be confident that the war is close to ending and believe exchanges will continue to list ABC as Bitcoin Cash (BCH) and SV as BSV. However, some SV supporters are still in disbelief over the outcome and think the hash war will favor their side in “weeks” or maybe even “months.” ABC proponents don’t seem to be fazed by the continued threats of re-orgs and 51% attacks, and have sought to shun instigators of war. Even today’s stress test has been regarded as a fluke, and nothing more than an SV marketing ploy, according to members of the r/btc forum.

What did you think of the past three days? Do you think the hash war is over? Let us know in the comments section below.

Images via Shutterstock, Pixabay, Coin Dance cash, Twitter, and the Bittrex logo. 

Need to calculate your bitcoin holdings? Check our tools section.

Developers Launch BDIP: A Bitcoin Cash Proposal Process forDecentralized Apps

Developers Launch BDIP: A Bitcoin Cash Proposal Process for Decentralized Apps

Technology & Security

Over the last few months, the Bitcoin Cash (BCH) developers who created the Yenom wallet have been developing a lot of BCH applications and tools. On Nov. 3, the Yenom developer Shun Usami revealed a new proposition model for decentralized application development proposals called the Bitcoin Dapps Improvement Proposal (BDIP) standard.

Also read: New Bitcoin Cash Stress Test Sees 700,000 Transactions in One Day

Decentralized Application Proposals for Bitcoin Cash

Developers Launch BDIP: A Bitcoin Cash Proposal Process for Decentralized AppsSince the introduction of re-enabled opcodes last May, Bitcoin Cash developers have been steadily working on applications like, Bitdb, and other platforms. Shun Usami from the BCH-centric wallet Yenom, revealed on Saturday a new scheme called the BDIP standard. The process is aimed at decentralized application (dapp) development using the BCH chain. BDIP is short for Bitcoin Dapps Improvement Proposal, and it’s a similar scheme to Ethereum’s EIP model, and Amir Taaki’s original BIP system created in 2011 for the Bitcoin Core (BTC) network. Essentially, the BDIP system is meant for characterizing new dapps built on the BCH network, alongside describing what the applications do and the platform’s associated processes.

“The BDIP should provide a concise technical specification of the feature and a rationale for the feature,” the BDIP Github repository explains. “The BDIP author is responsible for building consensus within the community and documenting dissenting opinions.”

The BDIP documentation also explains the rationale behind the standard. The developers believe the process is a suitable method to track decentralized applications built on the BCH chain. This way programmers and users can check the status of an implementation and maybe give feedback, check for issues, or see if the dapp software developers are active.

The repository continues by stating:

For Bitcoin dapp implementers, BDIPs are a convenient way to track the progress of their implementation. Ideally, each implementation maintainer would list the BDIPs that they have implemented. This will give end users a convenient way to know the current status of a given implementation or library.

Developers Launch BDIP: A Bitcoin Cash Proposal Process for Decentralized Apps

The First BDIP

According to the specifications, there are three types of BDIPs which include a standard track, an informational BDIP, and the described processes involved with the BCH application. The BDIP authors explain that a proposal must meet criteria and be fully descriptive of the application’s nominated intentions. The developers recommend BDIP authors “vet their own project” to make sure the proposal is original and has utility. “It helps to make sure the idea is applicable to the entire community and not just the author,” the repository adds.

After the BDIP process was announced, the Bitbox creator and BCH developer Gabriel Cardona detailed on Twitter he created the first BDIP called Dapp ID, a “unique identifier for a single dapp protocol with the specification of the dapp.” In addition to the BDIP creation, Yenom developers had recently proposed a new deep link payment protocol, on Oct. 21. The developers also won the first San Francisco BCH Devcon alongside introducing a new Bitcoin Cash Kit (BCK) for BCH developers that contains the first Bitcoin Cash library (lib) for iOS software.

What do you think about the BDIP process for Bitcoin Cash applications? Let us know what you think about this subject in the comments section below.

Images via Shutterstock, Github, and Pixabay. 

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Anypay Provides Bitcoin Cash Invoices That Can Be Paid bySending a Text Message

Anypay Provides Bitcoin Cash Invoices That Can Be Paid by Sending a Text Message

Technology & Security

On Oct. 29, a Bitcoin Cash proponent used the Cointext wallet to purchase a croissant by text message at La Maison Navarre, a bakery in Portsmouth, New Hampshire. The shop uses the free Anypay point-of-sale application, which connects to the Cointext system to allow people to make purchases by SMS.

Also read: Ukraine Plans to Fully Legalize Cryptocurrencies Within Three Years

Buying a Croissant With Bitcoin Cash
and SMS Technology

Anypay Provides Bitcoin Cash Invoices That Can Be Paid by Sending a Text offers a free cryptocurrency payment processing system.

Cryptocurrency enthusiasts can now purchase items from brick-and-mortar shops using the Cointext wallet with bitcoin cash (BCH) and SMS technology. The payment processor, a free point-of-sale application for retail merchants, has integrated Cointext payments within its invoice platform. If a user chooses to pay for a product with bitcoin cash, they will be introduced to Anypay’s invoice system, which displays a written BCH address, a QR code, and the ability to pay by text using an SMS-based code. The Cointext wallet is a light client for mobile phones that allows users to send BCH over standard text messaging services without an internet connection.

Anypay Provides Bitcoin Cash Invoices That Can Be Paid by Sending a Text
The Cointext wallet allows users to pay for items with bitcoin cash, simply by sending a text message.

At the La Maison Navarre bakery, an individual recorded a video showing how simple it is to purchase items using a text message coupled with a BCH transaction. The customer texted “BUY” and a randomized number and quickly purchased a croissant in the 45-second clip. After watching what may have been the first SMS brick-and-mortar purchase using bitcoin cash and SMS technology, decided to test the Anypay point-of-sale (PoS) system.

Testing the Anypay Point-of-Sale System With Cointext

You can register for the free service with only an email address and a password to create an Anypay PoS account. After the account is created, you need to “add an address.” You can choose from cryptocurrencies such as bitcoin cash, dash, litecoin, dogecoin, bitcoin core, zcash (non-shielded address), and a coin called horizon. I used an address from my Wallet and anchored a public address to the Anypay PoS system. Anypay’s software uses the BCH Cashaddr address format and a watch-only method to log invoices and charts for incoming and outgoing transactions.

Anypay Provides Bitcoin Cash Invoices That Can Be Paid by Sending a Text
Anypay’s free PoS payment system for merchants supports seven different cryptocurrencies.

After adding a valid BCH address, the software allows you to create an invoice. I set the test invoice to $0.25 cents worth of BCH in the app’s administrator panel. After that, an invoice was created with the address and a scannable QR code.

Anypay Provides Bitcoin Cash Invoices That Can Be Paid by Sending a Text
After creating a BCH invoice, the app provides a Cointext code with an address and QR.

Sure enough, a little green box that allows Cointext payments popped up that read: “TEXT ‘BUY 88BZZ.’” After using the text code, the invoice was paid pretty much as quickly as it would have been using the other payment options provided by the Anypay invoice.

After the video from the bakery was published online, individuals across social media and BCH-oriented forums said they were excited to hear about being able to buy items with SMS technology and BCH. The Anypay system is similar to bitcoin cash PoS solutions such as Mini-POS, Akari Pay,, and others released this year. But the Cointext SMS integration adds another element that the other bitcoin cash PoS providers do not offer.

What do you think about the PoS system and the ability to purchase goods using bitcoin cash and SMS technology? Let us know what you think about this subject in the comments section below.

Images via Shutterstock, Cointext, Anypay, and Pixabay.

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