Introduction

Markets rely on knowledge.

The internet provided practically endless knowledge and wisdom. Humanity has never seen such leverage. Technology's progress drives us to adapt to a changing world, changing our routines and behaviors.

In a digital age, people may struggle to live in the analogue world of their upbringing. Can those who can't adapt change their lives? I won't answer. We should teach those who are willing to learn, nevertheless. Unravel the modern world's riddles and give them wisdom.

Adapt or die . Accept the future or remain behind.

This essay will help you comprehend Bitcoin better than most market participants and the general public. Let's dig into Bitcoin.

Join me.

Ascension

Bitcoin.org was registered in August 2008. Bitcoin whitepaper was published on 31 October 2008. The document intrigued and motivated people around the world, including technical engineers and sovereignty seekers. Since then, Bitcoin's whitepaper has been read and researched to comprehend its essential concept.

I recommend reading the whitepaper yourself. You'll be able to say you read the Bitcoin whitepaper instead of simply Googling "what is Bitcoin" and reading the fundamental definition without knowing the revolution's scope. The article links to Bitcoin's whitepaper. To avoid being overwhelmed by the whitepaper, read the following article first.

Bitcoin isn't the first peer-to-peer digital currency. Hashcash or Bit Gold were once popular cryptocurrencies. These two Bitcoin precursors failed to gain traction and produce the network effect needed for general adoption. After many struggles, Bitcoin emerged as the most successful cryptocurrency, leading the way for others.

Satoshi Nakamoto, an active bitcointalk.org user, created Bitcoin. Satoshi's identity remains unknown. Satoshi's last bitcointalk.org login was 12 December 2010. Since then, he's officially disappeared. Thus, conspiracies and riddles surround Bitcoin's creators. I've heard many various theories, some insane and others well-thought-out.

It's not about who created it; it's about knowing its potential. Since its start, Satoshi's legacy has changed the world and will continue to.

Block-by-block blockchain

Bitcoin is a distributed ledger. What's the meaning?

Everyone can view all blockchain transactions, but no one can undo or delete them.

Imagine you and your friends routinely eat out, but only one pays. You're careful with money and what others owe you. How can everyone access the info without it being changed?

You'll keep a notebook of your evening's transactions. Everyone will take a page home. If one of you changed the page's data, the group would notice and reject it. The majority will establish consensus and offer official facts.

Miners add a new Bitcoin block to the main blockchain every 10 minutes. The appended block contains miner-verified transactions. Now that the next block has been added, the network will receive the next set of user transactions.

Bitcoin Proof of Work—prove you earned it

Any firm needs hardworking personnel to expand and serve clients. Bitcoin isn't that different.

Bitcoin's Proof of Work consensus system needs individuals to validate and create new blocks and check for malicious actors. I'll discuss Bitcoin's blockchain consensus method.

Proof of Work helps Bitcoin reach network consensus. The network is checked and safeguarded by CPU, GPU, or ASIC Bitcoin-mining machines (Application-Specific Integrated Circuit).

Every 10 minutes, miners are rewarded in Bitcoin for securing and verifying the network. It's unlikely you'll finish the block. Miners build pools to increase their chances of winning by combining their processing power.

In the early days of Bitcoin, individual mining systems were more popular due to high maintenance costs and larger earnings prospects. Over time, people created larger and larger Bitcoin mining facilities that required a lot of space and sophisticated cooling systems to keep machines from overheating.

Proof of Work is a vital part of the Bitcoin network, as network security requires the processing power of devices purchased with fiat currency. Miners must invest in mining facilities, which creates a new business branch, mining facilities ownership. Bitcoin mining is a topic for a future article.

More mining, less reward

Bitcoin is usually scarce.

Why is it rare? It all comes down to 21,000,000 Bitcoins.

Were all Bitcoins mined? Nope. Bitcoin's supply grows until it hits 21 million coins. Initially, 50BTC each block was mined, and each block took 10 minutes. Around 2140, the last Bitcoin will be mined.

But 50BTC every 10 minutes does not give me the year 2140. Indeed careful reader. So important is Bitcoin's halving process.

What is halving?

The block reward is halved every 210,000 blocks, which takes around 4 years. The initial payout was 50BTC per block and has been decreased to 25BTC after 210,000 blocks. First halving occurred on November 28, 2012, when 10,500,000 BTC (50%) had been mined. As of April 2022, the block reward is 6.25BTC and will be lowered to 3.125BTC by 19 March 2024.

The halving method is tied to Bitcoin's hashrate. Here's what "hashrate" means.

What if we increased the number of miners and hashrate they provide to produce a block every 10 minutes? Wouldn't we manufacture blocks faster?

Every 10 minutes, blocks are generated with little asymmetry. Due to the built-in adaptive difficulty algorithm, the overall hashrate does not affect block production time. With increased hashrate, it's harder to construct a block. We can estimate when the next halving will occur because 10 minutes per block is fixed.

Building with nodes and blocks

For someone new to crypto, the unusual terms and words may be overwhelming. You'll also find everyday words that are easy to guess or have a vague idea of what they mean, how they work, and what they do. Consider blockchain technology.

Nodes and blocks: Think about that for a moment. What is your first idea?

The blockchain is a chain of validated blocks added to the main chain. What's a "block"? What's inside?

The block is another page in the blockchain book that has been filled with transaction information and accepted by the majority.

We won't go into detail about what each block includes and how it's built, as long as you understand its purpose.

What about nodes?

Nodes, along with miners, verify the blockchain's state independently. But why?

To create a full blockchain node, you must download the whole Bitcoin blockchain and check every transaction against Bitcoin's consensus criteria.

What's Bitcoin's size? 

In April 2022, the Bitcoin blockchain was 389.72GB.

Bitcoin's blockchain has miners and node runners.

Let's revisit the US gold rush. Miners mine gold with their own power (physical and monetary resources) and are rewarded with gold (Bitcoin). All become richer with more gold, and so does the country.

Nodes are like sheriffs, ensuring everything is done according to consensus rules and that there are no rogue miners or network users.

Lost and held bitcoin

Does the Bitcoin exchange price match each coin's price? How many coins remain after 21,000,000? 21 million or less?

Common reason suggests a 21 million-coin supply.

What if I lost 1BTC from a cold wallet?

What if I saved 1000BTC on paper in 2010 and it was damaged?

What if I mined Bitcoin in 2010 and lost the keys?

Satoshi Nakamoto's coins? Since then, those coins haven't moved.

How many BTC are truly in circulation?

Many people are trying to answer this question, and you may discover a variety of studies and individual research on the topic. Be cautious of the findings because they can't be evaluated and the statistics are hazy guesses.

On the other hand, we have long-term investors who won't sell their Bitcoin or will sell little amounts to cover mining or living needs.

The price of Bitcoin is determined by supply and demand on exchanges using liquid BTC. How many BTC are left after subtracting lost and non-custodial BTC? 

We have significantly less Bitcoin in circulation than you think, thus the price may not reflect demand if we knew the exact quantity of coins available.

True HODLers and diamond-hand investors won't sell you their coins, no matter the market.

What's UTXO?

Unspent (U) Transaction (TX) Output (O)

Imagine taking a $100 bill to a store. After choosing a drink and munchies, you walk to the checkout to pay. The cashier takes your $100 bill and gives you $25.50 in change. It's in your wallet.

Is it simply 100$? No way.

The $25.50 in your wallet is unrelated to the $100 bill you used. Your wallet's $25.50 is just bills and coins. Your wallet may contain these coins and bills:

2x 10$ 1x 10$

1x 5$ or 3x 5$

1x 0.50$ 2x 0.25$

Any combination of coins and bills can equal $25.50. You don't care, and I'd wager you've never ever considered it.

That is UTXO. Now, I'll detail the Bitcoin blockchain and how UTXO works, as it's crucial to know what coins you have in your (hopefully) cold wallet.

You purchased 1BTC. Is it all? No. UTXOs equal 1BTC. Then send BTC to a cold wallet. Say you pay 0.001BTC and send 0.999BTC to your cold wallet. Is it the 1BTC you got before? Well, yes and no. The UTXOs are the same or comparable as before, but the blockchain address has changed. It's like if you handed someone a wallet, they removed the coins needed for a network charge, then returned the rest of the coins and notes.

UTXO is a simple concept, but it's crucial to grasp how it works to comprehend dangers like dust attacks and how coins may be tracked.

Lightning Network: fast cash

You've probably heard of "Layer 2 blockchain" projects.

What does it mean?

Layer 2 on a blockchain is an additional layer that increases the speed and quantity of transactions per minute and reduces transaction fees.

Imagine going to an obsolete bank to transfer money to another account and having to pay a charge and wait. You can transfer funds via your bank account or a mobile app without paying a fee, or the fee is low, and the cash appear nearly quickly. Layer 1 and 2 payment systems are different.

Layer 1 is not obsolete; it merely has more essential things to focus on, including providing the blockchain with new, validated blocks, whereas Layer 2 solutions strive to offer Layer 1 with previously processed and verified transactions. The primary blockchain, Bitcoin, will only receive the wallets' final state. All channel transactions until shutting and balancing are irrelevant to the main chain.

Layer 2 and the Lightning Network's goal are now clear. Most Layer 2 solutions on multiple blockchains are created as blockchains, however Lightning Network is not. Remember the following remark, as it best describes Lightning.

Lightning Network connects public and private Bitcoin wallets.

Opening a private channel with another wallet notifies just two parties. The creation and opening of a public channel tells the network that anyone can use it.

Why create a public Lightning Network channel?

Every transaction through your channel generates fees.

Money, if you don't know.

See who benefits when in doubt.

Anonymity, huh?

Bitcoin anonymity? Bitcoin's anonymity was utilized to launder money.

Well… You've heard similar stories. When you ask why or how it permits people to remain anonymous, the conversation ends as if it were just a story someone heard.

Bitcoin isn't private. Pseudonymous.

What if someone tracks your transactions and discovers your wallet address? Where is your anonymity then?

Bitcoin is like bulletproof glass storage; you can't take or change the money. If you dig and analyze the data, you can see what's inside.

Every online action leaves a trace, and traces may be tracked. People often forget this guideline.

A tool like that can help you observe what the major players, or whales, are doing with their coins when the market is uncertain. Many people spend time analyzing on-chain data. Worth it?

Ask yourself a question. What are the big players' options?  Do you think they're letting you see their wallets for a small on-chain data fee?

Instead of short-term behaviors, focus on long-term trends.

More wallet transactions leave traces. Having nothing to conceal isn't a defect. Can it lead to regulating Bitcoin so every transaction is tracked like in banks today?

But wait. How can criminals pay out Bitcoin? They're doing it, aren't they?

Mixers can anonymize your coins, letting you to utilize them freely. This is not a guide on how to make your coins anonymous; it could do more harm than good if you don't know what you're doing.

Remember, being anonymous attracts greater attention.

Bitcoin isn't the only cryptocurrency we can use to buy things. Using cryptocurrency appropriately can provide usability and anonymity. Monero (XMR), Zcash (ZEC), and Litecoin (LTC) following the Mimblewimble upgrade are examples.

Summary

Congratulations! You've reached the conclusion of the article and learned about Bitcoin and cryptocurrency. You've entered the future.

You know what Bitcoin is, how its blockchain works, and why it's not anonymous. I bet you can explain Lightning Network and UTXO to your buddies.

Markets rely on knowledge. Prepare yourself for success before taking the first step. Let your expertise be your edge.

This article is a summary of this one.

Overview

I'm happy to provide this important update. We've worked on this for a year and a half, so I'm glad to finally write it. We named the application AESIR because we’ve love Norse Mythology. AESIR automates and runs trading strategies.

• Volatility, technical analysis, oscillators, and other signals are currently supported by AESIR.

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Views on algorithmic trading

First, let me clarify. Anyone who claims algorithmic trading platforms are money-printing plug-and-play devices is a liar. Algorithmic trading platforms are a collection of tools.

A trading algorithm won't make you a competent trader if you lack a trading strategy and yolo your funds without testing. It may hurt your trade. Test and alter your plans to account for market swings, but comprehend market signals and trends.

Status Report

Throughout closed beta testing, we've communicated closely with users to design a platform they want to use.

To celebrate, we're giving you free Aesir Viking NFTs and we cover gas fees.

Why use a trading Algorithm?

• Automating a successful manual approach

• experimenting with and developing solutions that are impossible to execute manually

One AESIR strategy lets you buy any cryptocurrency that rose by more than x% in y seconds.

AESIR can scan an exchange for coins that have gained more than 3% in 5 minutes. It's impossible to manually analyze over 1000 trading pairings every 5 minutes. Auto buy dips or DCA around a Dip

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If this sounds like a project that you might want to learn more about, you can sign up to our newsletter and be notified when AESIR launches.

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Overview

Ethereum blockchain is a network of nodes that validate transactions. Any network node can be queried for blockchain data for free. To write data as a transition requires processing and writing to each network node's storage. Fee is paid in ether and is also called as gas.

We'll examine how user-initiated transactions flow across the network and into the blockchain.

Flow of transactions

• A user wishes to move some ether from one external account to another. He utilizes a cryptocurrency wallet for this (like Metamask), which is a browser extension.

• The user enters the desired transfer amount and the external account's address. He has the option to choose the transaction cost he is ready to pay.

• Wallet makes use of this data, signs it with the user's private key, and writes it to an Ethereum node. Services such as Infura offer APIs that enable writing data to nodes. One of these services is used by Metamask. An example transaction is shown below. Notice the “to” address and value fields.

var rawTxn = {
    nonce: web3.toHex(txnCount),
    gasPrice: web3.toHex(100000000000),
    gasLimit: web3.toHex(140000),
    to: '0x633296baebc20f33ac2e1c1b105d7cd1f6a0718b',
    value: web3.toHex(0),
    data: '0xcc9ab24952616d6100000000000000000000000000000000000000000000000000000000'
};

• The transaction is written to the target Ethereum node's local TRANSACTION POOL. It informed surrounding nodes of the new transaction, and those nodes reciprocated. Eventually, this transaction is received by and written to each node's local TRANSACTION pool.

• The miner who finds the following block first adds pending transactions (with a higher gas cost) from the nearby TRANSACTION POOL to the block.

• The transactions written to the new block are verified by other network nodes.

• A block is added to the main blockchain after there is consensus and it is determined to be genuine. The local blockchain is updated with the new node by additional nodes as well.

• Block mining begins again next.

The image above shows how transactions go via the network and what's needed to submit them to the main block chain.

References

ethereum.org/transactions How Ethereum transactions function, their data structure, and how to send them via app. ethereum.org

5 VC investment criteria

I reviewed 200 startup business concepts last week. Brainache.

The enterprises sold various goods and services. The concepts were achingly similar: give us money, we'll produce a product, then get more to expand. No different from daily plans and pitches.

Most of those 200 plans sounded plausible. But 10% looked venture-worthy. 90% of startups need alternatives to venture finance.

With the success of VC-backed businesses and the growth of venture funds, a common misperception is that investors would fund any decent company idea. Finding investors that believe in the firm and founders is the key to funding.

Incorrect. Venture capital needs investing in certain enterprises. If your startup doesn't match the model, as most early-stage startups don't, you can revise your business plan or locate another source of capital.

Before spending six months pitching angels and VCs, make sure your startup fits these criteria.

Likely to generate $100 million in sales

First, I check the income predictions in a pitch deck. If it doesn't display $100M, don't bother.

The math doesn't work for venture financing in smaller businesses.

Say a fund invests $1 million in a startup valued at $5 million that is later acquired for $20 million. That's a win everyone should celebrate. Most VCs don't care.

Consider a $100M fund. The fund must reach $360M in 7 years with a 20% return. Only 20-30 investments are possible. 90% of the investments will fail, hence the 23 winners must return $100M-$200M apiece. $15M isn't worth the work.

Angel investors and tiny funds use the same ideas as venture funds, but their smaller scale affects the calculations. If a company can support its growth through exit on less than $2M in angel financing, it must have $25M in revenues before large companies will consider acquiring it.

Aiming for Hypergrowth

A startup's size isn't enough. It must expand fast.

Developing a great business takes time. Complex technology must be constructed and tested, a nationwide expansion must be built, or production procedures must go from lab to pilot to factories. These can be enormous, world-changing corporations, but venture investment is difficult.

The normal 10-year venture fund life. Investments are made during first 3–4 years.. 610 years pass between investment and fund dissolution. Funds need their investments to exit within 5 years, 7 at the most, therefore add a safety margin.

Longer exit times reduce ROI. A 2-fold return in a year is excellent. Loss at 2x in 7 years.

Lastly, VCs must prove success to raise their next capital. The 2nd fund is raised from 1st fund portfolio increases. Third fund is raised using 1st fund's cash return. Fund managers must raise new money quickly to keep their jobs.

Branding or technology that is protected

No big firm will buy a startup at a high price if they can produce a competing product for less. Their development teams, consumer base, and sales and marketing channels are large. Who needs you?

Patents, specialist knowledge, or brand name are the only answers. The acquirer buys this, not the thing.

I've heard of several promising startups. It's not a decent investment if there's no exit strategy.

A company that installs EV charging stations in apartments and shopping areas is an example. It's profitable, repeatable, and big. A terrific company. Not a startup.

This building company's operations aren't secret. No technology to protect, no special information competitors can't figure out, no go-to brand name. Despite the immense possibilities, a large construction company would be better off starting their own.

Most venture businesses build products, not services. Services can be profitable but hard to safeguard.

Probable purchase at high multiple

Once a software business proves its value, acquiring it is easy. Pharma and medtech firms have given up on their own research and instead acquire startups after regulatory permission. Many startups, especially in specialized areas, have this weakness.

That doesn't mean any lucrative $25M-plus business won't be acquired. In many businesses, the venture model requires a high exit premium.

A startup invents a new glue. 3M, BASF, Henkel, and others may buy them. Adding more adhesive to their catalogs won't boost commerce. They won't compete to buy the business. They'll only buy a startup at a profitable price. The acquisition price represents a moderate EBITDA multiple.

The company's $100M revenue presumably yields $10m in profits (assuming they’ve reached profitability at all). A $30M-$50M transaction is likely. Not terrible, but not what venture investors want after investing $25M to create a plant and develop the business.

Private equity buys profitable companies for a moderate profit multiple. It's a good exit for entrepreneurs, but not for investors seeking 10x or more what PE firms pay. If a startup offers private equity as an exit, the conversation is over.

Constructed for purchase

The startup wants a high-multiple exit. Unless the company targets $1B in revenue and does an IPO, exit means acquisition.

If they're constructing the business for acquisition or themselves, founders must decide.

If you want an indefinitely-running business, I applaud you. We need more long-term founders. Most successful organizations are founded around consumer demands, not venture capital's urge to grow fast and exit. Not venture funding.

if you don't match the venture model, what to do

VC funds moonshots. The 10% that succeed are extraordinary. Not every firm is a rocketship, and launching the wrong startup into space, even with money, will explode.

But just because your startup won't make $100M in 5 years doesn't mean it's a bad business. Most successful companies don't follow this model. It's not venture capital-friendly.

Although venture capital gets the most attention due to a few spectacular triumphs (and disasters), it's not the only or even most typical option to fund a firm.

Other ways to support your startup:

• Personal and family resources, such as credit cards, second mortgages, and lines of credit

• bootstrapping off of sales

• government funding and honors

• Private equity & project financing

• collaborating with a big business

• Including a business partner

Before pitching angels and VCs, be sure your startup qualifies. If so, include them in your pitch.

Yes, client meetings are difficult. Especially when I'm alone.

Clients must tell us their problems so we can help.

In-meeting challenges contribute nothing to our work. Consider this:

• Clients are unprepared.

• Clients are distracted.

• Clients are confused.

Introducing Jack Dorsey's Google Doc approach

I endorse his approach to meetings.

Not Google Doc-related. Jack uses it for meetings.

This is what his meetings look like.

• Prior to the meeting, the Chair creates the agenda, structure, and information using Google Doc.

• Participants in the meeting would have 5-10 minutes to read the Google Doc.

• They have 5-10 minutes to type their comments on the document.

• In-depth discussion begins

There is elegance in simplicity. Here's how Jack's approach is fantastic.

Unprepared clients are given time to read.

During the meeting, they think and work on it.

They can see real-time remarks from others.

Discussion ensues.

Three months ago, I fell for this strategy. After trying it with a client, I got good results.

I conducted social control experiments in a few client workshops.

Context matters.

I am sure Jack Dorsey’s method works well in meetings. What about client workshops?

So, I tested Enterprise of the Future with a consulting client.

I sent multiple emails to client stakeholders describing the new approach.

No PowerPoints that day. I spent the night setting up the Google Doc with conversation topics, critical thinking questions, and a Before and After section.

The client was shocked. First, a Google Doc was projected. Second surprise was a verbal feedback.

“No pre-meeting materials?”

“Don’t worry. I know you are not reading it before our meeting, anyway.”

We laughed. The experiment started.

Observations throughout a 90-minute engagement workshop from beginning to end

For 10 minutes, the workshop was silent.

People read the Google Doc. For some, the silence was unnerving.

“Are you not going to present anything to us?”

I said everything's in Google Doc. I asked them to read, remark, and add relevant paragraphs.

As they unlocked their laptops, they were annoyed.

Ten client stakeholders are typing on the Google Doc. My laptop displays comment bubbles, red lines, new paragraphs, and strikethroughs.

The first 10 minutes were productive. Everyone has seen and contributed to the document.

I was silent.

The move to a classical workshop was smooth. I didn't stimulate dialogue. They did.

Stephanie asked Joe why a blended workforce hinders company productivity. She questioned his comments and additional paragraphs.

That is when a light bulb hit my head. Yes, you want to speak to the right person to resolve issues!

Not only that was discussed. Others discussed their remark bubbles with neighbors. Debate circles sprung up one after the other.

The best part? I asked everyone to add their post-discussion thoughts on a Google Doc.

After the workshop, I have:

• An agreement-based working document

• A post-discussion minutes that are prepared for publication

• A record of the discussion points that were brought up, argued, and evaluated critically

It showed me how stakeholders viewed their Enterprise of the Future. It allowed me to align with them.

Finale Keynotes

Client meetings are a hit-or-miss. I know that.

Jack Dorsey's meeting strategy works for consulting. It promotes session alignment.

It relieves clients of preparation.

I get the necessary information to advance this consulting engagement.

It is brilliant.

The Top 8 Growth Hacking Techniques for Startups

These startups, and how they used growth-hack marketing to flourish, are some of the more ethical ones, while others are less so.

Before the 1970 World Cup began, Puma paid footballer Pele $120,000 to tie his shoes. The cameras naturally focused on Pele and his Pumas, causing people to realize that Puma was the top football brand in the world.

Early workers of Uber canceled over 5,000 taxi orders made on competing applications in an effort to financially hurt any of their rivals.

PayPal developed a bot that advertised cheap goods on eBay, purchased them, and paid for them with PayPal, fooling eBay into believing that customers preferred this payment option. Naturally, Paypal became eBay's primary method of payment.

Anyone renting a space on Craigslist had their emails collected by AirBnB, who then urged them to use their service instead. A one-click interface was also created to list immediately on AirBnB from Craigslist.

To entice potential single people looking for love, Tinder developed hundreds of bogus accounts of attractive people. Additionally, for at least a year, users were "accidentally" linked.

Reddit initially created a huge number of phony accounts and forced them all to communicate with one another. It eventually attracted actual users—the real meaning of "fake it 'til you make it"! Additionally, this gave Reddit control over the tone of voice they wanted for their site, which is still present today.

To disrupt the conferences of their main rival, Salesforce recruited fictitious protestors. The founder then took over all of the event's taxis and gave a 45-minute pitch for his startup. No place to hide!

When a wholesaler required a minimum purchase of 10, Amazon CEO Jeff Bezos wanted a way to purchase only one book from them. A wholesaler would deliver the one book he ordered along with an apology for the other eight books after he discovered a loophole and bought the one book before ordering nine books about lichens. On Amazon, he increased this across all of the users.

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