Nokia zone
Facts:
- Recall in June I mentioned a bitcoin upgrade (aka softfork) called Taproot[1] was being signalled for activation. As is customary on BTC network everything always upgrades and is enforced at snail pace. So now after nearly 5 months of activation signalling; in 9 days (approx. Sunday 14th) at block 709631 the new rules will be enforced.
- There is continued chatter about potential for a bank run on Tether (USDT)
- Infrastructure bill's 6050I is certainly controversial in crypto circles
thoughts:
Thoughts:
Honestly, I remember someone writing this in a more eloquent manner however I forgot who it was so cannot credit them for polishing up my thoughts of past with an actual evidence. In past notes I have mentioned BTC volatility has a habit of testing your willingness to survive. Expanding upon that thread; BTC price gyrations are subdued or aggressive depending on the governance aspects of the network. In 2017, majority of the price impulse came once it was seen that block wars[2] were ending and the fundamentals would stay as they are. Similarly, if there is an upwards impulse to have; its timing is to be related to Taproot enforcement (given the risk of softfork causing instability to the network).
Moreover, the continued push in certain circles to get Tether banned or cause a "bank run" on it, is missing a critical understanding (in my humble opinion). In a bank run; customers attempt to find the fastest and most efficient exit window for their assets. That amusingly in crypto world is to run into BTC (not ETH, SOL or funny dog coins). Coincidentally, 2017 was also the year when there was a huge noise on survivability of USDT; and voila majority of players who feared repercussions exited into BTC & the offer side of book thinned out... So, in my opinion, this is a fatal flaw in thinking of pundits who wish to see BTC crash & burn via USDT bank-run.
Lastly, 6050I of infrastructure bill has laid the groundwork for interesting midterm elections - especially amongst the younger generation. This in essence means; increasing eyeballs, additional narrative building opportunities amongst the populace & political hierarchy as well as further "marketing" of the space.
Conclusion: mentally we have outgrown our own leashes but yet we are probably still on Nokia 6310 level
To jog past memory - what is Taproot? Transactions on blockchain are public, so its easy to deduce some aspects of transaction that impinge on privacy / security (e.g. would JP be happy for its competitors to be aware that its moving 100m$ from point A to B; sometimes the characteristic of transaction give away the sophisticated users). Herein, the update is to find a mathematical + programmatic way to cloak the information that does not need to be made part of the blockchain. End result; will be reduced data requirements therefore increased number of transactions per block, which in turn will increase the security, privacy and scalability of BTC. ↩︎
https://www.amazon.co.uk/Blocksize-War-controls-Bitcoins-protocol/dp/B08YQMC2WM ↩︎
