The Stock-to-Flow model (S2F), invented and popularized in 2019 by PlanB in the piece “Modeling Bitcoin Value with Scarcity”, is one of the most popular price theories for bitcoin, suggesting that the S2F of bitcoin is what drives its price.

The popularity and credence of the model was earned mainly through three parts of supporting evidence:

  1. high R-squared between the log of S2F <> log of marketcap (~0.95)
  2. a cointegration test suggesting a more fundamental relationship between those same variables (Nick Emblow’s Aug 2019 study)
  3. the relationship being consistent also for other scarce assets, such as gold

List of counter-evidental discoveries and events

During the recent months, a series of interesting reveals have been made by various people, weakening the case for the S2F model and its supporting evidence. Each item in the list below addresses one supporting argument above. These are the recent highlights that I think have been most instrumental in tearing the S2F model apart, beyond the more fundamental criticisms that have been aired by many since the beginning. …

This is the fifth part in an article series by the Human Rights Foundation (HRF) on privacy and cryptocurrency, funded by the Zcash Foundation. To read about the purpose of this article series, see our introductory piece “Privacy and Cryptocurrency, Part I: How Private is Bitcoin?”. This series is written by Eric Wall, Privacy Technology Fellow at the HRF.

Buying bitcoin anonymously

Previously in this series, we’ve tried to uncover the privacy characteristics of cryptocurrencies and the tools available for reclaiming your financial privacy from snooping governments. Then again, if you are living under the threat of surveillance from an authoritarian country, your first question might be how to privately acquire bitcoin in the first place. …

Three months ago, I tweeted out this image with the following caption:

When someone says “Proof-of-Stake is less wasteful”

Image for post
Image for post
Image of a diesel generator powering an EV charging station.

The tweet was meant as a gag, but it spurred one of the most insightful conversations I’ve ever had on the platform. Since the discussion, my framework for thinking around this issue has changed drastically.

The purpose of this post is to highlight what a few of these insights were, and where I currently am in my thought process. …


Eric Wall

CIO Arcane Assets. Inquiries: info@arcaneassets.io. Also privacy @ Human Rights Foundation. Previously built cryptocurrency exchanges @ Cinnober (Nasdaq).

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