2020 was unforgettable, especially for Bitcoin. To help memorialize this year for our readers, we asked our network of contributors to reflect on Bitcoin’s price action, technological development, community growth and more in 2020, and to reflect on what all of this might mean for 2021. These writers responded with a collection of thoughtful and thought-provoking articles. Click here to read all of the stories from our End Of Year 2020 Series.
This year has been a wild ride.
We have seen a blitzkrieg on civil liberties across the globe. The current new normal is nothing less than a dark and previously unimaginable dystopia. The populace has so far been eager to comply, even to the point of reporting one another for non-compliance and, in some cases, demanding even more restrictions be put in place on their own freedoms.
Information warfare is everywhere, with wildly accelerating censorship being deployed through corporate media and Big Tech platforms. As a result, an already divided populace has become more divided than ever before. Reality has forked, and people have no way to easily verify which fork holds the truth.
In the midst of all this chaos, Bitcoin remains the constant, pushing out blocks of verifiable truth every 10 minutes. Absolutely resistant to censorship. A bastion of freedom and rationality that brings much needed hope to those who have discovered it.
We started 2020 at around $7,000, with a hash rate just under 100 EH/s. At the time of this writing, the bitcoin price is $26,998, with the hash rate cruising around 140 EH/s. Bitcoin’s fundamentals have kept growing stronger and Number Go Up technology has proven itself.
Bitcoin’s biggest day of 2020 was undoubtedly May 11, block time 630,000. Bitcoin did the opposite of the fiat printing presses and went through its third halving, once again cutting the inflation rate in half. This happening in symphony with central banks all over the world going full brrr to an unprecedented extent sent a powerful signal to those not completely asleep. The metaphor of Bitcoin as a lifebuoy suddenly resonated stronger and with more urgency than ever before. The core mechanism of Bitcoin’s Number Go Up technology was laid bare for all to see, decreasing new supply in a world of increasing new demand.
Since May 11, only 6.25 BTC are issued per block, or a total of 900 BTC per day. One company alone, MicroStrategy, has since taken more than 40,000 BTC off the market. This represents around 45 days’ worth of fresh bitcoin supply. MicroStrategy stock has skyrocketed almost three-times since then and Gigachad Michael Saylor have shown board rooms across the world a way to store their excess cash holdings that will be very hard to ignore.
2017 was, in my eyes, the year Bitcoin won. The SegWit upgrade was finally successfully activated, ending a brutal civil war in the Bitcoin community. A “war” that, in my opinion, was more manufactured by corporate interests and bad actors than actually reflected the situation on the ground. Keeping block size small and scaling off-chain was always a no-brainer for those who understood that decentralization is everything in Bitcoin.
But why am I bringing up 2017?
Because 2021 looks set to be the year when the first big post-SegWit upgrade is activated. Schnorr/Taprott looks set to bring much needed privacy and scaling improvements to the table. These consensus rules have already been merged into the Bitcoin Core code, but the activation method remains undecided.
Bitcoin is currently seeing a brewing divide between those who hold the cypherpunk ideals of censorship resistance and privacy as inviolable and sacred, and those who seem to think these ideals hinder the adoption of Bitcoin and that Bitcoin needs to evolve in harmony with the political system and conform to the requirements of governments.
Any change to the protocol, or even proposals to change it are potential attack vectors that can be leveraged to harm Bitcoin. Hopefully Schnorr/Taproot is the last big upgrade of the Bitcoin base layer. The faster the protocol ossifies and is viewed as an unchangeable constant, the better it is for Bitcoin, in my opinion. We must avoid creating any kind of opening for those who will wish to change the inflation rate, supply cap or other key features in the future. The hardest money on earth needs to have rules set in stone, impossible to change.
It remains to be seen if we will have a peaceful and non-controversial activation of Schnorr/Taproot. I think there is a risk that we will once again see government and corporate interests in tandem with bad actors and powerful individuals who are mostly oriented toward the short-term value of their bitcoin holdings fight it out against those who see Bitcoin as a supremely powerful weapon of individual sovereignty that will profoundly change the world. No matter how it plays out, I am confident Bitcoin will come out the other end stronger and more hardened.
Going forward, I am extremely optimistic about Bitcoin. The current nasty endgame of the fiat system is what Bitcoin was created for; a readily available tool to take back our sovereignty. The stage for accelerating Bitcoinization is set to perfection, and 2021 looks likely to be the year when it all explodes into a whole new level of awareness and adoption. I predict serious FOMO coming in from both retail and institutions in 2021.
None of this would have been possible if it weren’t for those who make me the most optimistic and bullish about Bitcoin’s future. Everywhere I turn, I see people building, creating, writing. A buzzing nest of Cyber Hornets that never sleeps. Existing projects strengthening and new ones popping up at an increasing pace. New use cases being identified and built out. An explosion of art and cultural content. Grassroots and organic. A very real sense of growth and acceleration.
Bitcoiners really are a special breed of people. Independent minds that have finally found something that resonates strongly and deeply. The Bitcoin rabbit hole is a profound journey that brings motivation and dedication to those who discover it. And there is no exit.
The network effect is extremely strong. We now have more Bitcoiners in positions of power and influence than ever before. More HODLers Of Last Resort. More supremely-motivated Cyber Hornets willing to fight and die for the protocol. Bitcoin has been spreading for 12 years, growing its mycelium organically throughout minds and infrastructure all over the world. And it has never before been more needed.
This is a guest post by Hodlonaut. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.
Binance Staff Unlock ‘Forgotten’ $750 Million in BNB
Binance has unlocked 16 million BNB for its staff that were supposed to be released in July 2020. The exchange simply forgot.
Crypto exchange Binance has unlocked a massive amount of(BNB) for its staff, six months later than it’s supposed to happen, according to Binance CEO Changpeng Zhao today.
When Binance ran its ICO in 2017, it allocated a certain amount of the tokens for its own staff. These tokens were to be released periodically and handed out. And yet the exchange missed a rather large milestone.
“Also unlocked 16 million #BNB. These were suppose (sic) to be unlocked in July 2020. We just forgot. They are moved to a team token holding address, same one as before,” Zhao tweeted.
This 16 million BNB is worth around $752 million, according to the coin’s current price of $47.
Binance’s whole ecosystem is built around BNB. The exchange offers a discount on trading fees to those who use the token to pay their fees. It can be used to participate in token sales on Binance Launchpad. And it’s used to power Binance’s decentralized exchange.
The token is also used to reward its employees. Not only were certain amounts allocated by the exchange in its ICO, but many employees choose to receive their salary in BNB. This creates a feedback loop where staff have a potential incentive to grow the exchange, in order to increase the uptake of BNB and, potentially, its price.
Binance also helps put upward pressure on the price of BNB by regularly burning its supply—today burning the largest amount ever.
Dubai to introduce crypto regulations framework soon
TL;DR Breakdown A financial authority in Dubai is looking to implement new crypto regulations. The regulation would cover digital assets like Bitcoin and tokenized securities. Financial regulators in Dubai are looking to enact local crypto regulations in the country. The body, Dubai Financial Services Authority (DFSA), which oversees the oil-rich region’s special economic zone, made […]
- A financial authority in Dubai is looking to implement new crypto regulations.
- The regulation would cover digital assets like Bitcoin and tokenized securities.
Financial regulators in Dubai are looking to enact local crypto regulations in the country. The body, Dubai Financial Services Authority (DFSA), which oversees the oil-rich region’s special economic zone, made this known recently.
According to the statement, the new crypto regulations would serve as a guideline for different digital assets. This is part of the agency’s 2021–2022 business plan, which aims to meet the Dubai International Financial Centre (DIFC).
DFSA says the new framework would now take issuers of these digital assets into consideration plus other trading platforms. The body also said digital assets are recognized to be tokenized securities and crypto-assets like BTC. The body noted that it would also continue to implement various regulations that would support various business models.
To allow input from the market participants, DFSA would publish two consultation papers in which it would be requesting feedback from members of the public. A top executive of the agency added that these consultation papers would be published in the first two quarters of 2021.
Different crypto regulations for different countries
Countries across the globe are implementing varying crypto regulations in their jurisdictions. For example, in the United States, financial authorities are implementing stringent crypto regulations that would mandate crypto exchanges and wallets to enforce Know-your-customer (KYC) rules.
The authorities in this country are citing the need to curb anti-money laundering activities and prevent the funding of illegal activities as to why this crypto rule is necessary.
In the UK, the authorities there have warned their citizens against investing in cryptocurrencies. According to the Financial Conduct Authority (FCA), investors in this field should be prepared to lose all their money.
FCA cites the level of volatility attached to the crypto market as one reason it gives this advice.
Grayscale Now Owns More Than 3% of Total 21 Million Bitcoins That Will Ever Exist
The leading digital asset manager Grayscale continues to tighten its grip on the bitcoin supply. According to recent estimations, the company now owns over 3% of all the 21 million BTC that will ever exist.
Grayscale’s BTC Domination
Launched in 2013, Grayscale is the largest cryptocurrency asset manager with over $27 billion in assets under management.
Somewhat expectedly, the company’s Bitcoin Trust (GBTC) is the most popular product that enables institutions to receive BTC exposure through a publicly-traded trust that reports to the US Securities and Exchange Commission (SEC).
Investors typically pay a premium to avoid worrying about storing and managing the assets.
GBTC’s popularity exploded in the past year as institutions have been more eager to join the space. Grayscale reported that its AUM skyrocketed by 10x in 2020. Moreover, the firm garnered more inflows in Q4 2020 alone than in 2013-2019 combined, and BTC has been on the forefront.
Investors allocating funds in GBTC buy shares in a trust, which Grayscale backs by owning bitcoins. And, the company has been purchasing massive amounts of BTC in the past year to keep up with the skyrocketing demand.
The asset manager wrote in its Q4 2020 report that “while the supply of newly-created Bitcoin has slowed as a result of the halving in May 2020, the inflows into Grayscale have accelerated meaningfully.” In fact, the firm said it bought nearly two times as many bitcoins as mined since the halving.
How Much Bitcoin Is In Grayscale’s Hands
Recent reports exemplified Grayscale’s BTC shopping spree. The monitoring resource Bloqport said that the asset manager had bought 16,244 BTC in the span of 24 hours. To put this considerable amount in USD perspective – it’s nearly $600 million.
Ultimately, Bloqport noted that Grayscale’s bitcoins under management is 3% of all BTC ever to exist. Company data confirmed this.
According to Grayscale’s website, GBTC has 666,675,200 outstanding shares with 0.00094919 BTC per share. Simple math shows that this amount equals 643,801 bitcoins – this is 3.013% of the total supply of 21 million. Moreover, it’s actually 3.40% of all 18,604,000 bitcoins in circulation as of writing these lines.
How Crucial Is GBTC For Bitcoin’s Price
Analysts from the giant US multinational investment bank, JPMorgan Chase & Co, have repeatedly emphasized the significance of the Grayscale Bitcoin Trust on the asset’s performance and adoption.
In its latest report, the strategists said that the cryptocurrency needs to overcome $40,000 to avoid a correction, which could drive institutions away from investing in GBTC.
Furthermore, they noted that the Trust has to sustain at least $100 million per day pace over the next few weeks to prevent such retracement.
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