Bitcoin - Revision history

161.12.100.241: /* Financials */

2023-12-01T10:11:05Z

Financials

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	"y": {"value": -10},		"y": {"value": -10},
	"text": {		"text": {
	"template": "Bitcoin price against the ~~USD~~ the inception of the cryptocurrency"		"template": "Bitcoin price against the US Dollar since the inception of the cryptocurrency"
	},		},
	"fill": {"value": "black"},		"fill": {"value": "black"},

161.12.100.241: /* Financials */

2023-12-01T10:06:49Z

Financials

Show changes

161.12.100.241: /* Risks */

2023-12-01T09:56:40Z

Risks

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161.12.100.241: /* Appendix */

2023-11-30T18:41:57Z

Appendix

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	== Appendix ==		== Appendix ==

			=== How does Bitcoin work? ===
			Bitcoin operates using a technology called blockchain, which is a decentralised ledger system. Here's a simplified explanation of how it works:

			# '''Transactions:''' Every Bitcoin transaction is a data unit that includes a few different items: the amount of Bitcoin being sent, the sender's address (public key), and the receiver's address.
			# '''Blockchain:''' A blockchain is a chain of blocks, where each block contains a number of transactions. Once a transaction is initiated, it is broadcast to a network of peer-to-peer computers scattered across the world.
			# '''Mining:''' To add a transaction to the blockchain, a process called mining must take place. This involves computers solving a complex mathematical problem that ultimately verifies the authenticity of the transaction. The first miner to solve the problem gets to add the block of transactions to the blockchain.
			# '''Proof of Work:''' This mathematical problem is part of a system called proof of work, which is what prevents fraudulent transactions. It ensures that altering any single record (or block) in the chain would require re-mining not just the block with the transaction, but all the subsequent blocks.
			# '''Decentralisation:''' Unlike traditional currencies, there is no central authority like a bank or government backing Bitcoin. Instead, it relies on this decentralized network of computers (miners) to process transactions.
			# '''Bitcoin Wallets:''' To use Bitcoin, you need a digital wallet. This wallet doesn't actually store your Bitcoin; instead, it holds the private keys that allow you to access your Bitcoin address (public key).
			# '''Public and Private Keys:''' A Bitcoin wallet contains a public key and a private key, which work together to allow the owner to initiate and digitally sign transactions, providing proof of authorization.
			# '''Supply Limit:''' Bitcoin also has a stipulated supply limit of 21 million coins, which is expected to be reached around the year 2140. This limited supply is one of the factors that contributes to Bitcoin's value.
			# '''Market-Driven Value:''' The value of Bitcoin is determined by what people are willing to pay for it, making it highly volatile. It's influenced by factors like supply and demand, investor sentiment, market news, and government regulation.
			# '''Anonymity and Transparency:''' While Bitcoin transactions offer some level of anonymity, all transactions are publicly recorded in the blockchain, making it transparent.

			Bitcoin's complex nature combines elements of mathematics, computer science, and economics. It represents a shift in how we think about money in the digital age.

	=== Cryptocurrencies comparisons ===		=== Cryptocurrencies comparisons ===

161.12.100.241 at 18:36, 30 November 2023

2023-11-30T18:36:29Z

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	Assuming that a suitable return level over five years is 39% per year or less, and Bitcoin achieves its expected return level (of 39%), then an investment in Bitcoin is considered to be an 'suitable' one.		Assuming that a suitable return level over five years is 39% per year or less, and Bitcoin achieves its expected return level (of 39%), then an investment in Bitcoin is considered to be an 'suitable' one.

			'''Fun fact:''' In 2010, a programmer named Laszlo Hanyecz made the first known commercial Bitcoin transaction by buying two pizzas for 10,000 Bitcoins, a sum now worth millions of dollars.

	== Operations ==		== Operations ==

161.12.100.241: /* Total Addressable Market (TAM) */

2023-11-28T20:31:39Z

Total Addressable Market (TAM)

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	=== Total Addressable Market (TAM) ===		=== Total Addressable Market (TAM) ===
	The TAM for Bitcoin is ~~indeed~~ the global currency market. This includes all forms of money circulation worldwide — from fiat currencies held in banks and cash reserves to investments and digital transactions. This encompasses every potential user or entity that could theoretically adopt Bitcoin, either as a means of transaction, a store of value, or for investment purposes. It represents the maximum possible market opportunity for Bitcoin, assuming universal adoption and acceptance.		The TAM for Bitcoin is the global currency market. This includes all forms of money circulation worldwide — from fiat currencies held in banks and cash reserves to investments and digital transactions. This encompasses every potential user or entity that could theoretically adopt Bitcoin, either as a means of transaction, a store of value, or for investment purposes. It represents the maximum possible market opportunity for Bitcoin, assuming universal adoption and acceptance.

	The global currency market, including fiat money and investments, is vast. As of 2023, the total value of all the money in the world, including broad money (M3), which covers cash, bank deposits, and money market securities, was estimated to be in the range of approximately $100 trillion USD. Bitcoin's TAM, when considering the potential to replace or complement global currency usage, would thus be a fraction of this amount.		The global currency market, including fiat money and investments, is vast. As of 2023, the total value of all the money in the world, including broad money (M3), which covers cash, bank deposits, and money market securities, was estimated to be in the range of approximately $100 trillion USD. Bitcoin's TAM, when considering the potential to replace or complement global currency usage, would thus be a fraction of this amount.

161.12.100.241: /* How did the idea of Bitcoin come about? */

2023-11-28T20:14:17Z

How did the idea of Bitcoin come about?

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	# '''Economic and Political Context:''' The development of Bitcoin was also influenced by the economic environment, particularly the financial crisis of 2007-2008. This period led to increased skepticism about traditional banking systems and interest in alternative forms of currency that weren't controlled by governments or central banks.		# '''Economic and Political Context:''' The development of Bitcoin was also influenced by the economic environment, particularly the financial crisis of 2007-2008. This period led to increased skepticism about traditional banking systems and interest in alternative forms of currency that weren't controlled by governments or central banks.
	# '''Influence of Previous Concepts:''' Bitcoin combined concepts from previously proposed systems like b-money and Bit Gold, which outlined ideas for decentralised digital currencies, but never fully developed them into working systems.		# '''Influence of Previous Concepts:''' Bitcoin combined concepts from previously proposed systems like b-money and Bit Gold, which outlined ideas for decentralised digital currencies, but never fully developed them into working systems.

	In summary, Bitcoin emerged from a confluence of ideas from the Cypherpunk movement, previous digital cash experiments, cryptographic advancements, and the socio-economic context of the time. It was the first successful implementation of a decentralised digital currency, solving key issues like the double-spending problem through its novel use of blockchain technology.

	=== What's the mission of Bitcoin? ===		=== What's the mission of Bitcoin? ===

188.211.162.197: /* Beta risk profile */

2023-11-25T21:24:43Z

Beta risk profile

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	{\| class="wikitable"		{\| class="wikitable"
	\|+		\|+
	!~~urrency~~/Asset		!Currency/Asset
	!First Cryptocurrency		!First Cryptocurrency
	!Smart Contract Capabilities		!Smart Contract Capabilities

188.211.162.197: /* What's unique about Bitcoin? */

2023-11-25T13:31:16Z

What's unique about Bitcoin?

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	The main benefit of operating on a decentralised network (rather than a centralised network) is that within the network, there is no single point of failure. In a centralised network, if the central entity that operates the network fails, then the whole network - and the currency that operates on the network - fails (i.e. there is a single point of failure in the network), whereas in a decentralised network, becasue there is no central entity, there is no single point of failure, and therefore the network - and currency - is likely to last for much longer, possibly forever.		The main benefit of operating on a decentralised network (rather than a centralised network) is that within the network, there is no single point of failure. In a centralised network, if the central entity that operates the network fails, then the whole network - and the currency that operates on the network - fails (i.e. there is a single point of failure in the network), whereas in a decentralised network, becasue there is no central entity, there is no single point of failure, and therefore the network - and currency - is likely to last for much longer, possibly forever.

	For example, the world's first ever known currency ~~is the Mesopotamian shekel, and it~~ was operated by a central entity (The Kingdom of Lydia). When the central entity failed, so did the currency.		For example, the world's first ever known currency was operated by a central entity (The Kingdom of Lydia). When the central entity failed, so did the currency.

	[[File:Value of U.S. Dollar - Log.jpg]]		[[File:Value of U.S. Dollar - Log.jpg]]

161.12.100.241 at 19:18, 24 November 2023

2023-11-24T19:18:08Z

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	Bitcoin is a currency. What makes the currency unique is that it's the most popular cryptocurrency. Research suggests that the most popular cryptocurrency will maintain its purchasing power for much longer than any other currency. In other words, the cryptocurrency will be a much better currency.		Bitcoin is a currency. What makes the currency unique is that it's the most popular cryptocurrency. Research suggests that the most popular cryptocurrency will maintain its purchasing power for much longer than any other currency. In other words, the cryptocurrency will be a much better currency.

	The degree of risk associated with an investment in Bitcoin is 'medium', with the ~~shares~~ having an adjusted beta that is 42% above the market (1.42 vs. 1).		The degree of risk associated with an investment in Bitcoin is 'medium', with the investment having an adjusted beta that is 42% above the market (1.42 vs. 1).

	Assuming Bitcoin's share of the money supply increases to 10% (from 2.2%) and other assumptions, then the Stockhub users estimate that the expected return of an investment in Bitcoin over the next five years is 5x, which equates to an annual return of 39%. In other words, an £100,000 investment in the ~~company~~ is expected to return £500,000 in five years time.		Assuming Bitcoin's share of the money supply increases to 10% (from 2.2%) and other assumptions, then the Stockhub users estimate that the expected return of an investment in Bitcoin over the next five years is 5x, which equates to an annual return of 39%. In other words, an £100,000 investment in the asset is expected to return £500,000 in five years time.

	Assuming that a suitable return level over five years is 39% per year or less, and Bitcoin achieves its expected return level (of 39%), then an investment in Bitcoin is considered to be an 'suitable' one.		Assuming that a suitable return level over five years is 39% per year or less, and Bitcoin achieves its expected return level (of 39%), then an investment in Bitcoin is considered to be an 'suitable' one.
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	=== What's the expected return of an investment in Bitcoin? ===		=== What's the expected return of an investment in Bitcoin? ===
	The Stockhub users estimate that the expected return of an investment in Bitcoin over the next five years is 5x, which equates to an annual return of 39%. In other words, an £100,000 investment in the ~~company~~ is expected to return £500,000 in five years time. The assumptions used to estimate the return figure can be found in the table below.		The Stockhub users estimate that the expected return of an investment in Bitcoin over the next five years is 5x, which equates to an annual return of 39%. In other words, an £100,000 investment in the asset is expected to return £500,000 in five years time. The assumptions used to estimate the return figure can be found in the table below.

	Assuming that a suitable return level over five years is 39% per year or less, and Bitcoin achieves its expected return level (of 39%), then an investment in Bitcoin is considered to be an 'suitable' one.		Assuming that a suitable return level over five years is 39% per year or less, and Bitcoin achieves its expected return level (of 39%), then an investment in Bitcoin is considered to be an 'suitable' one.
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	\|The Stockhub users estimate that especially given the key benefit of the asset, the peak market share of Bitcoin is around 10.00%, and, therefore, suggests using the share amount here. As of 14th November 2023, Bitcoin's current share of the market is estimated at around 1.77%.		\|The Stockhub users estimate that especially given the key benefit of the asset, the peak market share of Bitcoin is around 10.00%, and, therefore, suggests using the share amount here. As of 14th November 2023, Bitcoin's current share of the market is estimated at around 1.77%.
	\|-		\|-
	\|Which distribution function do you want to use to estimate ~~company revenue~~?		\|Which distribution function do you want to use to estimate investment value?
	\|Gaussian		\|Gaussian
	\|Research suggests that the ~~revenue~~ pattern of ~~companies~~ is similar to the pattern produced by the Gaussian distribution function (i.e. the revenue distribution is bell shaped), so the Stockhub users suggest using that function here.		\|Research suggests that the value pattern of investments is similar to the pattern produced by the Gaussian distribution function (i.e. the revenue distribution is bell shaped), so the Stockhub users suggest using that function here.
	\|-		\|-
	\|What's the estimated standard deviation of ~~company revenue~~?		\|What's the estimated standard deviation of asset value?
	\|50 years		\|50 years
	\|Another way of asking this question is this way: within how many years either side of the mean does 68% of ~~revenue~~ occur? Based on Bitcoin's current price (i.e. $37,257.50) and Bitcoin's estimated lifespan (i.e. 250 years), the Stockhub users suggest using 50 years (i.e. 68% of all sales happen within 100 years either side of the mean year), so that's what's used here.		\|Another way of asking this question is this way: within how many years either side of the mean does 68% of value occur? Based on Bitcoin's current price (i.e. $37,257.50) and Bitcoin's estimated lifespan (i.e. 250 years), the Stockhub users suggest using 50 years (i.e. 68% of all sales happen within 100 years either side of the mean year), so that's what's used here.
	\|-		\|-
	\|What's the current value of the investment?		\|What's the current value of the investment?