By Hasu, James Prestwich, and Brandon Curtis

An application or protocol is secure if it realizes its goal in an adversarial environment. In the case of Bitcoin, the goal is to establish a payment system where anyone can participate, only the rightful owner can spend a coin, and all valid transactions make it into the ledger eventually.

For its first ten years of existence, Bitcoin has successfully held these security properties. At the same time, academia has largely failed to replicate Bitcoin’s empirical soundness in their models, giving birth to the meme that “Bitcoin is secure in practice, but not in theory.” …

Image: The dragon Smaug guarding his bitcoin stash (taken from, under the Fair Use license)

By Su Zhu and Hasu

We don’t talk much about price in this blog, but we will make an exception today to show how to value bitcoin using a high-level approach. We’ll highlight three significant trends in the world and suggest how either one of them could lead to increased demand for neutral, private money in the future.

How to value Bitcoin

By Su Zhu and Hasu

So far, dollar backed stablecoins like Tether’s USDT or Circle’s USDC don’t pay any interest to holders of their coin. We think that is about to change in 2019. As of today, the users of stablecoins are effectively giving their providers free loans in return for a service (digitally transferring bank dollar certificates) that is not very distinguished from one provider to the next.

Stablecoin providers make money by putting their customers’ money in the bank and collecting interest from these deposits. At the time of writing, the five largest stablecoins collectively hold $2.67B of…

When cash is gone, where will you turn to transact with a basic level of privacy? What money do you hold when negative interest rates start eating away at your bank account?

By Su Zhu and Hasu

The rise of digital payments and the move towards a cashless society are often seen as the same, but there is an important difference between them.

Digital payments like Paypal, Venmo, domestic-, and international bank transfers are convenient for people and businesses to transact with. They represent fintech innovation to consumers by the market. Faster, cheaper, and more efficient forms of digital payments are uncontroversial and largely an engineering and marketing challenge.

They don’t, however, remove every need for cash. Cash has unique properties that digital payments have not. As physical coins and notes, it…

By Su Zhu and Hasu

Monetary maximalism is the idea that in a free market for money one big winner will emerge and that the “soundest” money is in the best position to do so.

In a previous post, I wrote that “every token competes in one massive power law distribution for the title of dominant non-sovereign monetary store of value. If it does not win this rat race (or comes to a close second or third place), its market share will, effectively, be zero.”

The most popular argument for why that should be the case is that it already…

A lesson in stablecoin arbitrage

By Su Zhu and Hasu

The least understood thing about stablecoins is how they come into existence. Who creates the supply of Tether, USDC or Dai that you can buy on your favorite exchange? We will take a look at how professional arbitrageurs expand and contract the supply of a stablecoin based on the current demand of the market, how Dai’s model is different and why the lack of a professional arbitrage model makes Dai fundamentally unscalable.

There’s a common misconception that Dai can scale to any size, as demand for the stablecoin drives the price over $1, which leads…

A framework for skeptics, part 3

By Su Zhu and Hasu

Photo by Thought Catalog on Unsplash

In the second part, we showed how Bitcoin is a novel social and economic institution. But the question remains: Who is going to use it? Is there a place for Bitcoin among other institutions, and if so, where is it? Is Bitcoin just a terribly inefficient competitor to PayPal and Visa, like the media wants you to believe, or something more?

To put Bitcoin on the map with other institutions, let us first understand why humanity built social institutions in the first place.

Humans don’t scale. Sure, we can learn, but we can’t upgrade our…

A framework for skeptics

Illustration: engraving by Abraham Bosse via Wikimedia

Bitcoin is a novel social and economic institution. It is so different from our existing institutions that we should be skeptical and ask as many hard, pressing questions as we can before trusting it with any economic value. Some answers will only reveal themselves with time (or Lindy, as the cool kids say), but that doesn’t mean we can’t come up with theories or frameworks. One such framework that has helped me a lot in understanding bitcoin is social contract theory.

First, fiat money is the result of a social contract: The people give the state control over the supply…

When Casa announced their plug-and-play Bitcoin and Lightning node, I immediately pre-ordered one for myself. It was an impulse buy — I certainly didn’t need a Bitcoin node nor would I call myself an avid early adopter or tinkerer.


My prior experience with running a Bitcoin full node had been mediocre. I didn’t have 210+ GB of disk space to spare on my main PC, so I thought about using a spare notebook instead. …

By Su Zhu and Hasu

Bitcoin SV pumped 66% today while being the 6th most traded crypto asset in terms of volume. Impressive for a coin that isn’t even widely listed yet? On further inspection, the real reason might be an irresponsible business decision by the largest altcoin exchange.

Deposits disabled

Over the last days, BSV made up 19% of all volume on Binance, only second to BTC/USDT at 28% volume. So how you can join the fun? Well, you can’t. Unlike Poloniex and Bitfinex, Binance has disabled both deposits and withdrawals, citing concerns that the BSV blockchain was “not stable” enough.


Independent cryptocurrency researcher

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