Crypto News

Bitcoin’s Fifteen Years Of Evolution: A Look Beyond the Original Whitepaper

Published

1 year ago

October 31, 2023

Today is fifteen years from the date of the publication of the Bitcoin whitepaper. A lot has happened in that fifteen years. Bitcoin went through the blocksize war. A nation state has adopted Bitcoin. We are possibly on the verge of a Bitcoin ETF approval. Bitcoin in almost every way is nothing like it was described in the original whitepaper all the years ago.

The network has grown, it has changed, it has evolved. On a social level, an economic level, and a technical level it’s a completely different animal than it was all those many years ago. I feel like on this day, every year, people tend to focus on Bitcoin as it was all the way back in 2008. People get nostalgic about the basic design with no mention of mining pools, or ASICs, or second layer protocols. This year I wanted to do something different than wax poetic about section 10 on privacy, or section 4 on Proof-of-Work.

In fifteen years more development has occurred on Bitcoin than one person can easily keep track of. There have been a good number of whitepapers over that time period since the original Bitcoin whitepaper itself. So why do we keep focusing just on the one original whitepaper every year on this day? In just the last year alone, out of the past fifteen, five major whitepapers have been released that could completely change how people interact with Bitcoin.

Bitcoin itself just continuing to exist as it is right now is a massive and world changing achievement, but that is not enough to create the world that many of us want to see. Bitcoin cannot yet meet the scale and functionality to serve the entire world in the way it serves people using it currently. There is a lot of work left to do, a lot of problems to solve, and a lot of whitepapers to write. Let’s look at some of the big papers written in just the last year looking to solve some of Bitcoin’s outstanding shortcomings.

BitVM

Released on October 9, 2023, just this month, BitVM completely shattered the notion of what Bitcoin is or is not capable of. Robin Linus of Zerosync published a paper describing an off-chain scheme for using arbitrary computation to secure the conditional transfer of Bitcoin against said computation. The core value of Robin’s proposal is that it requires zero changes to the Bitcoin protocol to accomplish.

There are two novel insights that contribute to this idea being viable. First is that it is possible to create a NAND logic gate using existing Bitcoin script in a way that validates on the stack that the NAND operation is done correctly. For example, if a user provides 0 and 1 as inputs to the script, and if the output that they provide is anything but a 1, the script will actually fail execution because the NAND operation is invalid.

The second insight is that hashlocks can be used to commit to which inputs a user wants to provide to a computation in an irrevocable way. A user commits to input bits by revealing one or two preimages corresponding to a 1 or a 0, after which a user cannot change the committed inputs as revealing both preimages to any one logic key will allow the other user to submit a penalty transaction and claim all of their funds.

From this point it is simply a matter of running the computation off-chain, and if one party tries to lie or withhold output, the other can simply challenge them on-chain. From here the challenging party either claims money after a timelock, or after the other user reveals both preimages trying to cheat. This design allows for an incentivized off-chain computation to secure Bitcoin, with the guarantee that eventually things will settle correctly on-chain, even if it takes a long series of transactions to back the dishonest user into the corner of either revealing both preimages to be penalized, or giving up and letting the other user claim after a timelock.

BitVM has completely changed the degree to which Bitcoin is programmable, without needing any change to the Bitcoin protocol itself.

Timeout Trees

On September 8, 2023 John Law posted his paper “Scaling Lightning With Simple Covenants” to the Lightning-dev mailing list. In the paper he described a concept he called a Timeout Tree as a solution to scaling the channel creation and closure for casual Lightning users. One of the most well known scaling limitations of the Lightning Network is the number of users that can open or close channels within any given block. This presents a large challenge to on-boarding users onto the network in the long term. Once someone has a Lightning channel it can be used to their heart’s content off-chain, but there is only so much blockspace available every ten minutes for new users to open channels.

Even the original Lightning whitepaper calculated that if each of the 7 billion people on Earth only opened two channels per year, Bitcoin would require 133 MB blocks in order to on-board the entire world to Lightning. This is not an unknown, or recently discovered limitation, it was always known. Timeout trees present an alternative solution to a blocksize increase.

The basic concept is that an LSP can utilize CHECKTEMPLATEVERIFY(CTV) to batch open channels to a very large group of users in a single UTXO, but with a catch. All of the channels expire, and if they haven’t been unilaterally closed (or at least the funding transaction actually confirmed on chain instead of being left committed to by CTV) by the end of that expiry, the LSP can sweep all of the funds in the group of channels. This allows a very efficient channel opening footprint, potentially thousands of channels all opened with a single UTXO, and in the cooperative case a very efficient closing footprint, with all users simply routing funds over the Lightning Network from the expiring Timeout Tree to a new one off-chain and letting the LSP sweep the old tree after the expiry.

Timeout Trees are an incredibly simple idea that offers a huge degree of flexibility in overcoming one of Lightning’s biggest known limitations.

Ark

Ark is another second layer proposal that was released by Burak Keceli on May 22, 2023. Ark offers an entirely new layer two design proposal attempting to overcome some of the limitations of the Lightning Network. It is very similar conceptually to a channel factory, but the key difference is in how it is used. A channel factory hosts a conventional Lightning channel that can be used repeatedly to send and receive, an Ark factory allows users to control an off-chain UTXO that can only be sent in its entirety a single time, like a cash note. Users spend their off-chain UTXO by atomically linking it to the creation of a new off-chain UTXO in a new Ark to transfer that UTXO. New Ark’s are created regularly to allow users to transfer coins in a rotation scheme from old Ark to new Ark.

This is accomplished using something called an ATLC. In the transfer scheme, the Ark Service Provider (ASP, analogous to an LSP) is fronting the liquidity to facilitate transfers. When an existing Ark off-chain UTXO is spent, the transaction spending it to the ASP in compensation for fronting liquidity to the receiver is signed using an input from the new Ark in which the receiver is gaining control of the funds. This guarantees that if the new Ark, where the receiver is getting money, never confirms, the ASP cannot claim the sender’s money.

Ark is a cash-like system, with no liquidity constraints requiring a specific user to have receiving capacity ahead of time to be able to spend money, but because of this it has a much higher liquidity cost than a traditional LSP. This might however be worth the higher overhead for the service provider in exchange for providing a more cash-like user experience.

ZeroSync

On May 12, 2023 Robin Linus published the Zerosync proposal to the bitcoin-dev mailing list. The scheme is an entirely application side zero knowledge proof system for bootstrapping a Bitcoin node. Composed of three separate proofs, Zerosync has the potential to enable trustless bootstrapping of a new Bitcoin node without having to actually download and process the entire historical blockchain.

The first of the three proofs covers the validity of block headers in the blockchain, providing a succinct proof on the order of kilobytes that the difficulty requirement for each block header is successfully met. The second proof validates the UTXO set at each block height by using Utreexo, a prior proposal to allow nodes to validate blocks without having the entire UTXO set. Lastly, the final proof will actually provide a guarantee that all historical signatures and other witness data in the blockchain are valid.

Together, these three proofs would allow a node to simply download the current UTXO set in addition to a small proof at most a few kilobytes in size and instantly having a fully trustless and validating node running. This will completely change the cost of users fully validating the system when interacting with Bitcoin.

Civ Kit

On May 1, 2023 Antoine Riard posted the Civ.Kit: A Peer-to-Peer Electronic Market System whitepaper written in collaboration with Nicholas Gregory and Ray Youssef to the Bitcoin-dev mailing list. Civ Kit proposed a decentralized marketplace for trading everything from fiat currency for Bitcoin to goods and services built on top of the Nostr protocol. Because of the dependence on Nostr, and how that protocol works, every user of Civ.Kit would inherently possess an identity key to authorize messages posted on the market place, as well as form part of a reputational system. In combination with locked funds on the blockchain constituting a bond, market board operators can establish bond requirement policies to allow users to post offers for orders.

With the basis for a reputational system, a resilient broadcast and communication mechanism, and Bitcoin itself as the basis for escrow contracts for trades, Civ.Kit has the potential to be a powerhouse protocol facilitating peer-to-peer economic activity using Bitcoin as a means of exchange. One of the most important axioms long-term for Bitcoin’s success is its use as a means of exchange in a circular economy. Without this peer-to-peer monetization, it risks falling victim to the trappings of regulatory capture. Civ.Kit could be a framework and foundation to prevent that outcome.

To The Next Fifteen Years

These are not even all of the proposals that have been released this year; some floating around aren’t even formal whitepapers. But this is a small taste of the massive progress that has happened in the Bitcoin ecosystem in just the last year. There is still everything that happened the year before that. And the year before that. Not to mention going back another fourteen years.

People love to talk about how Bitcoin isn’t going anywhere or doing anything interesting, or that no technical development occurs and it is a stagnating and dying coin. After going through just some of the big proposals in only the last year, does Bitcoin seem like a stagnant and dying project to you? Should we just give up, pack it all in, and go home? After fifteen years of time, hard work on the part of many, and the numerous possible avenues to explore to continue improving and extending this project, does it feel dead to you?

It doesn’t to me.

It has been fifteen years since the original Bitcoin white paper was published on the cryptography mailing list. Those fifteen years have been a wild ride of progress and new ideas.

Crypto News

David Bailey Forecasts $1M Bitcoin Price During Trump Presidency

Published

4 hours ago

January 21, 2025

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In an in-depth discussion on the Hell Money Podcast, David Bailey, CEO of BTC Inc., shared insights into Bitcoin’s transformative potential, its geopolitical implications, and its role as a cornerstone of a new global economic framework.

“I see this happening so much faster than anyone can appreciate. Within 10 years, Bitcoin will become the reserve asset of the world.”

00:00 Intro
07:15 Bitcoin soft forks
11:00 Bitcoin vs. Crypto in US policy
19:20 How much political power does Bitcoin have?
23:50 Bitcoiners are politically homeless
26:20 Strategic Bitcoin Reserve
29:00 Bitcoin development and ossification
32:00 Separation of money and state
33:40 Raise your time preference
35:20 SBR as a way out of USD global reserve status
41:00 Will they eventually fight us?
43:00 Incentives as a political movement
46:30 What happens next?
49:15 Bitcoin Vegas & Inscribing Vegas 2025

The Political and Economic Power of Bitcoin

Bitcoin has evolved into a significant political and financial instrument. Its decentralized nature, immutable ledger, and finite supply make it an attractive alternative to traditional fiat currencies, particularly during periods of economic uncertainty. Bailey emphasizes that Bitcoin is no longer merely a speculative asset but has become a political force capable of influencing policy and elections.

“Within the next four years, Bitcoin will be the most widely held asset in the world. This isn’t a special one-off moment—it’s the changing of the guard of the world order.”

As Bitcoin gains adoption among individual investors, corporations, and governments, its ability to sway decisions in both the public and private sectors continues to grow. This makes Bitcoin a strategic tool for economic stability and a hedge against systemic risks such as inflation, currency devaluation, and geopolitical instability. Understanding this evolution is crucial for investors looking to align their strategies with Bitcoin’s increasing influence in global finance.

Strategic Bitcoin Reserve: A Game-Changer for Economies

Bailey highlights the concept of a Strategic Bitcoin Reserve (SBR) as a key driver in Bitcoin’s path to becoming a global reserve asset. If a major economy, such as the United States, were to adopt an SBR, it could trigger a domino effect, with other nations racing to establish their own reserves. This global competition could significantly accelerate Bitcoin’s transition from a speculative asset to a fundamental part of national and international financial strategies.

“If America gets an SBR, China gets an SBR. If America and China have an SBR, within 12 months every country on the planet will have an SBR. The game theory effects of us kicking this off, in my opinion, are like the biggest catalyst possible for hyperbitcoinization.”

An SBR offers governments the ability to hedge against inflation, protect their economies from devaluation, and diversify their reserves. Unlike gold, Bitcoin is easily transferable, highly divisible, and operates transparently on a decentralized network. For investors, national adoption of Bitcoin reserves signals long-term stability and growth potential, reinforcing the case for allocating a portion of portfolios to Bitcoin and related assets.

Orange-Pilling Trump: A Strategic Advocacy Moment

One of the most intriguing aspects of David Bailey’s efforts in advancing Bitcoin’s adoption was his strategic engagement with former President Donald Trump. Bailey discussed how Bitcoin advocates pitched Bitcoin to Trump as more than just a digital currency, emphasizing its economic and political advantages. By framing Bitcoin as a tool for strengthening American competitiveness and financial independence, Bailey and his team successfully captured Trump’s interest.

“We are within a couple of years of being the most powerful political faction in the United States. And not just the United States—there are bitcoiners embedded in power structures across the planet.”

Bailey’s team leveraged Bitcoin mining as a key entry point in their discussions, highlighting the economic benefits of Bitcoin mining operations in the United States, such as job creation and energy innovation. This approach aligned Bitcoin with Trump’s “America First” policies, presenting it as a way to bolster the nation’s energy independence and economic strength. These discussions laid the groundwork for a broader understanding of Bitcoin’s strategic value at the highest levels of government.

Governance and Innovation in Bitcoin

While Bitcoin’s decentralized nature is its greatest strength, it also presents challenges in governance and technological adaptability. Bailey underscores the importance of continuous innovation, particularly through mechanisms like soft forks, to ensure that Bitcoin remains scalable, secure, and competitive. Without these updates, the risk of ossification—where the network becomes resistant to necessary changes—could hinder Bitcoin’s evolution.

“Bitcoin gives governments a really elegant way out of the money-printing trap. They can print money, buy Bitcoin, and as the price of Bitcoin goes up, they’re still solvent. Later, they can peg their currency to Bitcoin.”

The Bitcoin community must navigate these governance complexities with a focus on collaboration and forward-looking solutions.

Hyperbitcoinization and the $1 Million Price Target

Bailey predicts that Bitcoin could reach a value of $1 million per coin within the next four years, driven by its growing adoption and the systemic challenges faced by traditional financial systems. This projection signifies more than just a price milestone—it represents a fundamental shift in the global economic order. Hyperbitcoinization, as Bailey describes it, involves Bitcoin becoming the default reserve currency, complementing or even replacing traditional fiat currencies.

“When we get to a million bucks, which I think can happen over the next four years—in my personal opinion, I think it’s possible—the Federal Reserve is, like, going to be completely impotent.”

This transition would have profound implications. Bitcoin’s decentralized nature would democratize access to financial systems, reduce reliance on central authorities, and promote greater economic inclusion. For investors, the journey toward hyperbitcoinization offers unparalleled opportunities as Bitcoin’s dual role as a store of value and medium of exchange becomes increasingly evident.

Interview Key Takeaways

Political Leverage: Bitcoin’s influence on policymaking and elections underscores its role as a hedge against political and economic risks.
National Adoption Trends: The adoption of SBRs by major economies could catalyze global Bitcoin adoption, creating a favorable environment for long-term investment.
Technological Resilience: Continuous innovation, including scalability solutions like the Lightning Network, is essential for sustaining Bitcoin’s growth and usability.
Portfolio Diversification: Bitcoin’s uncorrelated performance relative to traditional assets makes it an attractive addition to diversified investment strategies.
Economic Stability: In an era of rising inflation and monetary instability, Bitcoin provides a transparent, secure, and decentralized alternative to fiat currencies.

The Future of Bitcoin in the Global Economy

David Bailey’s insights provide a compelling vision of Bitcoin’s transformative potential, offering investors a clear opportunity to align their strategies with a rapidly evolving financial landscape. By understanding and leveraging Bitcoin’s role in fostering economic resilience and innovation, investors can position themselves to benefit from its adoption as a global reserve asset and a tool for long-term portfolio growth. As the world confronts challenges such as inflation, currency instability, and geopolitical uncertainty, Bitcoin emerges as a beacon of financial stability and innovation. For investors, the implications of Bitcoin’s growth extend far beyond speculative returns—it represents a strategic opportunity to participate in the evolution of the global financial system.

“It’s like, well, once that happens, then it’s not $1 million or $10 million. It’s like, it is the reserve asset of the world.”

In the coming decade, Bitcoin’s role as a stabilizing force and driver of innovation will become increasingly evident. Its seamless integration into national and corporate strategies, combined with its adaptability, positions Bitcoin as a cornerstone of future financial systems. Bailey’s vision challenges investors to consider the profound implications of a decentralized monetary system that prioritizes transparency, inclusion, and resilience.

Disclaimer: This article is for informational purposes only and should not be considered financial advice. Always do your own research before making any investment decisions.

David Bailey Forecasts $1M Bitcoin Price During Trump Presidency David Bailey, CEO of BTC Inc., shares bold predictions for Bitcoin’s future, including its potential to reach $1 million during the Trump presidency. This article delves into the political, economic, and technological forces shaping Bitcoin’s role as a global reserve asset and highlights key strategies for investors to align with its transformative potential.

Crypto News

Trump Did Not Free Ross On Day One Because Of Course He Didn’t

Published

6 hours ago

January 21, 2025

admin

I’m not here to say “I told you so.”

In my Take from October 4, I did write that Donald Trump does not give a damn about Bitcoin, and in my Take from November 5 I wrote he just wants in on the crypto scam. But I didn’t mention Ross Ulbricht in either of these, largely because even I expected Trump to at least follow through on his promise to free Ross. It’s an easy promise to keep, without any real downside for Trump; after more than ten years in prison Ulbricht deserves to be free.

I didn’t really expect Trump to free Ross on day one of his presidency, however. Inauguration day is quite a busy day for a new president, I’m sure.

Having said that, it is what Trump himself said he would do. Of course Trump also said that he would have resolved the war in Ukraine by now — apparently they’re still fighting.

Trump is a bullshitter. He will just say whatever he wants or whatever people want to hear, with no regard for the truth. He may in fact well have the most recorded lies out of any human being in history: Fact checkers from The Washington Post have for example counted over 30,000 false or misleading claims during his first term as president alone.

Still, it is also true that Trump had a busy day yesterday. He signed 26 executive orders (a record amount for a first day president), and pardoned over 1500 of his supporters; those who stormed the US Capitol Building on January 6th four years ago. Yes, that means the QAnon Shaman walks free before Ross Ulbricht (H/T Trey Walsh)… but let’s just hope that Elon Musk is proven right in the next few days, and Ross will be freed too.

This article is a Take. Opinions expressed are entirely the author’s and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

Trump Did Not Free Ross On Day One Because Of Course He Didn’t Donald Trump broke his campaign promise to free Ross Ulbricht on day one of his presidency… let’s hope he follows through in the next couple of days after all.

Crypto News

Advanced Mathematical Projections for the Bitcoin Bull Cycle Peak

Published

7 hours ago

January 21, 2025

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The current Bitcoin bull market presents a compelling opportunity for investors seeking precise, data-driven forecasts regarding the timing and magnitude of the next price peak. In a rigorous analysis presented by Bitcoin Magazine Pro, lead analyst Matt Crosby applies a sophisticated blend of historical data, moving average analysis, and statistical modeling to predict the forthcoming Bitcoin bull cycle peak.

Crosby’s findings project October 19, 2025, as a pivotal date, with Bitcoin reaching a median price of $200,000 and the potential for peaks extending to $230,000 when accounting for statistical outliers.

Access the Comprehensive Analysis

For an in-depth understanding of the mathematical methodologies and the complete analysis, refer to the full video presentation available on Bitcoin Magazine Pro’s platform.

The Pi Cycle Top Indicator: An Analytical Benchmark

Central to Crosby’s predictive framework is the Pi Cycle Top Indicator, renowned for its precision in identifying Bitcoin’s cyclical price peaks within narrow temporal margins during past bull markets. The indicator functions by employing two critical moving averages:

111-Day Moving Average (111DMA): Reflecting shorter-term price dynamics.
350-Day Moving Average (350DMA) multiplied by two: Offering a broader historical perspective.

The nomenclature “Pi” arises from the ratio of these averages, approximating 3.142. Historically, the intersection of these moving averages has corresponded with Bitcoin’s market cycle peaks:

2017: The indicator predicted the peak with a one-day margin of error.
2021: Accurately identified the exact peak date.

Methodological Precision: From Data to Predictions

Crosby extends his analysis through Monte Carlo simulations, a robust statistical technique that models numerous potential trajectories for Bitcoin’s price evolution. Key facets of this approach include:

Quantifying median daily returns and associated volatility over the preceding 791 days.
Running more than 1,000 simulations to map a spectrum of plausible price paths.
Deriving a median price peak of $200,000, with an average of $230,000 when incorporating extreme data points.

These simulations align with historical patterns, suggesting that the next Bitcoin bull cycle peak will likely occur on October 19, 2025.

Examining Diminishing Returns

To estimate the price range at the projected peak, Crosby evaluates the historical phenomenon of diminishing returns, where each successive cycle exhibits proportionally smaller price increases relative to its moving averages:

2013: Bitcoin’s price exceeded its moving averages by 440%.
2017: This figure decreased to 299%.
2021: The peak was 32% above the moving averages.

Extrapolating this trend and incorporating Monte Carlo simulations yields the following projections:

Median Price Peak: $200,000.
Average Price Peak: $230,000, accounting for statistical variability.

Implications for Investors

Crosby underscores the inherent uncertainties in any predictive model, emphasizing the importance of adapting to evolving market dynamics. Factors such as institutional adoption, macroeconomic trends, and unforeseen events could significantly influence Bitcoin’s trajectory. Nonetheless, this analysis provides a rigorous, data-driven framework to inform investment strategies during the current bull cycle.

Key Insights

Projected Peak Date: October 19, 2025.
Forecasted Price Range: A median of $200,000, with potential peaks averaging $230,000.
Analytical Tools: Pi Cycle Top Indicator and Monte Carlo Simulations, powered by Bitcoin Magazine Pro data.

For ongoing access to live data, advanced analytics, and exclusive content, visit BitcoinMagazinePro.com.

Disclaimer

This article is intended for informational purposes only and does not constitute financial advice. Readers are encouraged to conduct thorough independent research before making investment decisions.

Advanced Mathematical Projections for the Bitcoin Bull Cycle Peak Discover how advanced statistical methods and historical data, including the renowned Pi Cycle Top Indicator and Monte Carlo simulations, are used to project Bitcoin’s next bull cycle peak, with insights into potential price ranges and timing for savvy investors.