eeek. i wonder what happened.
Claim: Stonewall mimics CoinJoin by including extra input and output addresses but the extra addresses in this case, aren’t real. They’re fake but their addition conceals addresses.
Category: Security & Privacy
Background info: Stonewall is a feature of the Samourai Wallet introduced in May 2018.
According to Samourai Wallet’s blog about the Stonewall feature (emphasis in boldtype by me to highlight text supporting the claim components):
STONEWALL is a new send type available at no extra charge to all Samourai users, enabled by default - it can be disabled in the Transaction Settings. Whenever possible your wallet will create transactions that simulates a CoinJoin transaction and obtains a Boltzmann score greater than 0. Transactions will appear on the blockchain as if there are multiple unrelated counterparties involved.
Claim: Coinbase Just Moved $5 Billion in Crypto to Prepare for Token Expansion.
Evidence/Argument: According to Coinbase’s Blog, it took them months of planning and the actual migration (to their new cold storage system) lasted 4 working days to ensure much higher assurance that their customers’ funds were secure every step of the way.
This is interesting. A vast amount of Chinese population actually already transacting digital RMB using Alipay and WeChat Pay. Cash is even almost non-existent in major cities. I wonder, what is the difference between this digital current that is gonna be tested in Shenzhen, and the existing digital RMB?
Tencent and Alibaba, despite private companies, pretty much work closely with the government (altho there’s no direct proof but it’s common knowledge in China, attached a joke pic below showing all leaders of Alibaba, Tencent and Baidu). It shouldn’t be hard for government to monitor and control digital transactions in China nowadays, that’s why I am still confused with why China is pushing so much on testing “legal digital currency”.
Claim: Number of crypto ATM’s has steadily increased in 2018 eventhough the crypto prices have gone down
Category: Crypto Statistics
Evidence/Argument: The data from coinatmradar.com, which is a popular site tracking cryptocurrency ATM’s around the world shows this data is correct as mentioned in the source.
Here is the link to the graph of Crypto ATM’s growth over the years
The crypto ATM growth rate is consistent even though crypto prices went down in Nov 2018 compared to Oct 2018
You can analyse other detailed charts here.
You can also try to identify the exact ATM locations here
Context: This TruStory builds on two previous analyses. Chris Burniske had recently written about how Network Fundamentals for both Bitcoin and Ethereum were down less than price. The previous analyses support both his claim.
Nevertheless, implicit in his argument is the idea that network fundamental values can be assessed by their usage (transactions or active addresses). That is the subject of the current TruStory.
Claim : Metcalfe’s law (and similar laws) nearly perfectly correlate with BTC’s USD price (as of Feb 9/10, 2018); which suggests that cryptoassets can be valued by their usage (daily transactions or active addresses).
Category : Network Valuation / Token Economics
Evidence/ Argument : The following are two main claims the author makes
- Claim #1 : Pearson correlation coefficients of Metcalfe formulas (transactions) with BTC USD price is nearly perfect
- Claim #2 : Pearson correlation coefficients of Metcalfe formulas (active addresses) with BTC USD price is nearly perfect
See correlation with Metcalfe formulas (Transactions & Active Addresses) Source: https://medium.com/@clearblocks/valuing-bitcoin-and-ethereum-with-metcalfes-law-aaa743f469f6
My goal was to reproduce these numbers following the author’s logic. Here are the steps:
- Download 10-year’s worth of Bitcoin’s Confirmed Transactions Per Day, Bitcoin’s Unique Addresses, Bitcoin’s Market Price (USD), and Total Bitcoins in Circulation (Supply) from https://www.blockchain.com/charts [select “All Time” to get 10-year’s worth of data]
- Re-Create Metcalfe’s Law (M), variations (M1 – M3) and similar, but competing, laws (Sardoff’s and Zipf’s law) for both daily transactions and unique addresses (note: I used the exact formulas the author used). Then create the natural log of each number (see below).
Note: Orange columns represent the natural log of each number (i.e., Metcalfe’s, Sardolff’s and Zipf’s law and variants (M1-M3).
- Calculate the Pearson’s Correlation ® between Bitcoin’s Price (USD) and various measures of ‘usage’ (i.e., daily transactions, active addresses).
Orange rows represent the correlation after all numbers had been converted to their natural log scale.
- Special notes for calculations:
- The authors mention only having data for “every other day as opposed to daily which may affect precision”. This is necessary when downloading 10-year’s worth of data (2009 – end 2018); for datasets dating back a year or two, daily numbers are available. Source: https://www.blockchain.com/charts/
The authors omit days when the price of Bitcoin was at $ 0 (USD). I did the same, thus all analyses begin on August 16th, 2010 through December 22nd, 2018 (when Bitcoin’s price was higher than 0). This prevents price data from being unduly skewed towards zero.
c. The authors take the natural log of all their formulas because a Pearson’s correlation measures the linear relationship between two variables (i.e., fitting a scatter of data onto a straight line). However, telecom networks, and by implication, blockchain networks do not exhibit “linear” growth patterns. A casual glance at the ‘All Time’ graphs for Bitcoin’s Price, Daily Transactions and Unique Addresses reveal exponential growth. Therefore to find the Pearson’s correlation between price and usage, it is necessary to convert the formulas to their natural log scale.
i. Another way to think about this: When Bitcoin went from 90 cents (February 8th, 2011) to $1.95 (April 27th, 2011), that’s nearly a 100% increase in Bitcoin price. Nowadays, it takes a lot more to even get a 5% increase in price – a natural log scale accounts for the differences in scale.
Outcome of Calculations The authors report above average correlations between Bitcoin’s USD price and various Metcalfe formulas – on the linear scale – ranging from 0.56 – 0.64; I got a similar, but narrower range 0.59 – 0.60. When using the natural log, the authors report near perfect correlation between Bitcoin’s USD price and various Metcalfe formulas ranging from 0.92 – 0.96; I got similarly high correlations ranging from 0.92 – 0.95.
This analysis corroborates the author’s claim that Metcalfe’s Law (and similar laws) is a useful framework for valuating blockchain networks and lend credence to the idea that blockchain networks behave like telecommunication networks. So long as this continues, Metcalfe’s law can help analysts understand where the demand (usage) of blockchain networks and their price intersect and where one has “significantly outpaced the other” (https://medium.com/@clearblocks/valuing-bitcoin-and-ethereum-with-metcalfes-law-aaa743f469f6) as Chris Burniske had done in his follow-up analyses.
Addendum : Because Metcalfe’s law suggests that as a blockchain network expands in scale, it behaves more like a telecommunication network. I’d argue this is one way of valuing ‘network effects’. A cool analysis would be to compare the correlations between price and usage between 2010 – 2014 and 2015 – 2018 and see if there’s a significant difference between the two. I would expect to see stronger correlations for the latter years (as network size had increased).
Welcome to TruStory!
Claim: China’s New Cryptocurrency Ratings See BTC Slip While Embattled EOS Maintains Number One
China’s Center for Information and Industry Development (CCID), under the Country’s Ministry of Industry and Information Technology, has been providing Global Public Blockchain Technology Assessment Index (GPBTAI).
The latest 8th Issue of Global Public Blockchain Technology Assessment Index was releases on Dec 20, 2018.
On translation the reference page you can find the previous versions listed.
Claim: Binance CEO Confirms XRP Will Be Added As A Base Pair
Category: Token Economics
As per official binance announcent binace has added two trading pairs.
“Binance Adds TRX/XRP and XZC/XRP Trading Pairs”
Claim: Bitcoin blockchain is now broadcasted from space to all of Earth’s major land masses
Category: Use Cases
Evidence/Argument: On August 15, 2017 Blockstream announced the launch of Blockstream Satellite which aims to make Bitcoin accessible for people who are not currently connected to the Internet, due to lack of availability or affordability. They broadcast real-time Bitcoin transactions and blocks from a group of satellites in space. According to World Economic Forum there is an estimate of four billion people who don’t have internet access so this initiative might bring us closer to banking the unbanked though I haven’t found numbers yet on how many people are actually using it (maybe part of another claim).
Blockstream announced it has leased a fifth satellite on Dec. 17, which is being used to broadcast the Bitcoin blockchain to the Asia Pacific region, in addition to existing coverage over Africa, Europe, South and North America. See below coverage map
Claim: Cryptojacking (a type of Cryptomining malware) activity is up 4,000% in 2018
(1) The McAfee Labs Threats Report (Dec 2018) cites 4,000% increase in cryptojacking software in 2018. Report >>(https://www.mcafee.com/enterprise/en-us/assets/reports/rp-quarterly-threats-dec-2018.pdf?clickid=0g-2NcXSPw3EQc9V3qSG4zQCUkgW1%3Ayc1z8Ly00&lqmcat=Affiliate:IR:null:74047:10078:10078:null&sharedid=)
Source for Data Analysis: Malware data comes from the McAfee Sample Database, which includes malicious files gathered by McAfee spam traps, crawlers, and customer submissions, as well as from other industry sources.
McAfee does not share more specifics on how data source and analysis.
(2) Other reports also cite an increase in cryptomining malware. A recent Cyber Threat Alliance (CTA) report (Sep 2018) indicates a massive 459% increase in the rate of illegal cryptojacking from 2017 to 2018.
(3) Another report from Semantec (Sep 2018) also shows that sharp rise in cryptojacking detections during 2018.
While several sources discuss the rise in cryptomining malware in 2018 (key takeaway), we cannot actually confirm the validity of the statistic 4000% increase in cryptojacking since this is based on McAfee’s Sample Database and analysis.
@paulapivat can you explain how you got the 0.59 - 0.60 and 0.92 - 0.95 results? I didn’t see that in the spreadsheet.
Claim: Lightning Network hits a milestone with a “micropayment auction” of art piece sale for $0.000000037
A ‘Black Swan’ art piece by Cryptograffiti has auctioned to the lowest bidder for a milli-satoshi or just $0.000000037 thanks to the Bitcoin Lightning Network, making the winning likely the world’s cheapest auction.
cryptograffiti was one of the earliest artists in the cryptocurrency space. His work is dedicated to spreading the crypto/blockchain movement.
A micropayment is a financial transaction involving a very small sum of money and usually one that occurs online. A number of micropayment systems were proposed and developed in the mid-to-late 1990s, all of which were ultimately unsuccessful. A second generation of micropayment systems emerged in the 2010s and some of them are based on blockchain technology which has micropayments as one of its use cases.
The auction mentioned in the source is listed in his site - https://cryptograffiti.auction/
This is the reddit post which has the video of how the cryptograffiti is made
Since it is bitcoin lightning network transaction the transaction itself won’t
The reason this is mentioned as a milestone in Lightning Network is the lowest denomination which could attain with this micropayment.
The bid was opened for 1 milli satoshi which is 0.00000000001 of a bitcoin
Claim: Bitcoin can be mined by using software written in a language not based on Satoshi’s original code, which was in C++
Evidence from Twitter
Coinbase transaction is a transaction used to claim block reward and is the first transaction in a block.
Coinbase transaction info for the same block shows the following.
Another full node implementation written in Go.
Claim: The investment firm, Grayscale, owns over 1% of circulating BTC supply
Category: Crypto funds & fundraising
Evidence/Argument: Gathering data from Grayscale’s website, as of Dec 24th,
|Bitcoin per Share|0.00099063|
equals to total of 203,126.304 Bitcoins. Total circulating supply of Bitcoin, as per coinmarketcap, is 17,441,625. Thus, Grayscale holds around 1.16% of total circulating supply. However, it doesn’t own this as a company but holds it on behalf of the investors. But if we get in the argument, private keys = ownership, then they hold the private keys and thus can be called owners.
with modification - Claim to be modified as ‘holds’ instead of ‘owns’ to avoid ambiguity
@preethi this chart contains the different correlations I got. The two upper green rows represent the correlations before adjusting all numbers to their natural logs. The bottom orange rows represents the natural log adjustment.
You note the correlations on the green rows are lower ranging from 0.59 - 0.75, depending on if ‘usage’ is represented by daily transactions or active addresses (these correlations are still high compared to what you’d normally find in the social sciences). When adjusted to their natural log (orange rows), the correlations range from 0.92 - 0.95.
Each column is taken by correlating BTC’s USD price with one Metcalfe’s law (i.e., network activity squared) or a variation of it (M1-M3) or one of the competing, but similar laws (Sardoff’s and Zipf’s); I used the exact formula the author provided in the article.
@paulapivat thank you!! this is much more clear. if you’re comfortable, would love to see the link to the spreadsheet (in case others want to independently verify the calculations themselves).
Sure thing, discourse won’t allow me to post excel files, so I posted it in our slack channel
Claim – Bitmain is laying off massive number of employees immediately due to serious financial problems in the company.
Category – Mining
According to a local source jinse.com/lives/72815.htm (google translation):
- “Media confirmed large-scale layoffs in Bit China Beijing company or 700 people According to the Shenzhen-Chain financial news, it has confirmed the massive layoffs in Bitmain, and its Beijing company has cut 700 people. On the evening of December 23, Shenzhen-Finance asked the employees of Bitco, who revealed that the current mainland is actually laying off employees, and all departments will be laid off. The Beijing company will only stay around 300 people, but the list of layoffs is still not official. Ok, everyone is waiting for the official notice. According to insiders, there are more than 1,000 employees at Bitmain China’s Beijing headquarters. It is reported that the Bitland prospectus disclosed that as of June 30, 2018, there were 2,594 full-time employees in Bitmain”
There are good reasons to believe that Bitmain is experiencing financial trouble. Rumors and analyses of their IPO documents have suggested that the company is losing a huge amount of money. Simultaneously the Hong Kong Stock Exchange expressed a reluctance to allow Bitmain to IPO, citing regulatory issues.
“According to a report published by the South China Morning Post , the Hong Kong stock exchange regulator is fidgety about approving an IPO related to the cryptocurrency market given its tempestuous nature which has seen many companies close shop in recent months following an unprecedented price dip. It led to many cryptocurrencies losing over 75 percent of their value within weeks and crypto mining becoming largely unprofitable. - coincentral.com/bitcoin-mining-company-bitmain-faces-ipo-regulatory-issues/
“Fresh rumors over the financial health of Bitcoin mining giant Bitmain cast a shadow over the company again this week, suggesting it faces losses close to $1 billion.” - bitcoinist.com/bitmain-death-bitcoin-cash-crash/
Bitmain is also said to have fired its entire BCH development team. - cointelegraph
Several experts have suggested that Bitmain has lost hundreds of millions of dollars as a direct result of their purchasing and supporting Bitcoin Cash.
- “Its $328 million initiative to acquire a Bitcoin Cash stash is also deemed to have backfired and now, investor capital injection is crucial for its survival.”
If true, then Bitmain’s firing of the BCH development team may have been a direct response to the major losses associated with the BCH experiment.
Status: Partially confirmed. While it has been officially confirmed that Bitmain has fired hundreds of employees this week, there is no official confirmation that this is the result of financial trouble. However, there is very good evidence to suggest that Bitmain is in serious financial trouble given that the company may have lost as much as $750 million on the Bitcoin cash experiment. Furthermore, there is good reason to believe that Bitmain will not be allowed to IPO, which will prevent the company from gaining access to public market liquidity during a time when cashflows may be severely negative.
Given that Bitmain’s layoff announcement has come immediately following news that the IPO may not receive approval, it would make sense for Bitmain to be performing massive layoffs to preserve cash - especially amidst this (very cold) crypto winter.
P.S. As major BCH token holders, the pain for Bitmain has not stopped. As of 10pm EST on Dec. 24th, amidst a broader rout of the market, BCH is down sharply. I hope none of you are BCH holders.
Claim: After spending decades as the dominant global reserve currency, the dollar’s position is being challenged.
Argument/Evidence: According to Bloomberg Business week "Now the dollar paradox shows signs of unraveling. Political leaders who once accepted the dollar’s hegemony, grudgingly or otherwise, are pushing back. Jean-Claude Juncker, the president of the European Commission, said in September that it’s “absurd” that European companies buy European planes in the American currency instead of their own. In March, China challenged the dollar’s dominance in the global energy markets with a yuan-denominated crude oil futures contract. Russia slashed its dollar holdings this year, claiming (inaccurately) that the greenback is “becoming a risky instrument in international settlements.” And French Finance Minister Bruno Le Maire told reporters in August that he wants financing instruments that are “totally independent” of the U.S., saying, “I want Europe to be a sovereign continent, not a vassal.” https://www.bloomberg.com/news/articles/2018-10-03/the-tyranny-of-the-u-s-dollar
Great pointing out Russia’s inaccurate claim. Great Trustory.