Month: October 2024

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Earlier today, Vivek discussed why he thinks crypto native Polymarket, the world’s largest prediction market, is biased towards Trump in this upcoming U.S. presidential election. While it is plausible given the arguments he laid out, I still believe that it may not be as biased as he may think.

First and foremost, prediction market traders are betting on these odds to make money, not swear loyalty to their preferred politician. Traders are looking to make a profit and are trying to lock in their bets at attractive odds on who they think will win. Based on many factors, like positive incoming GOP voter registration data in swing states like Pennsylvania, there are signs that show Trump has a very solid chance of winning this election. Even billionaire Stanley Druckenmiller said that the recent positive upswing in markets is due to the markets pricing in a Trump victory.

Like Vivek, many claim that since Polymarket is crypto native, then of course its users support Trump because he is also pro-Bitcoin and crypto. So let’s take a look at another, non-crypto native, market predictions platform, Kalshi.

On Kalshi, a U.S. betting odds platform that settles contracts in dollars, not Bitcoin or crypto, Trump is also in a massive lead. Trump is currently up by 20% over Harris. The crowd of users on this platform appear to be choosing their bets on who they think will win the election, even putting aside their own personal political preferences. Reading the comments, I’m seeing many people say they want Trump to win, but are taking the other side of this bet as they believe there may be election fraud from the Democrats which would see Harris ‘win’.

“Y’all betting on Trump haven’t priced in the probability of delivery vans pulling into the polling stations at 3am with 10’s of thousands of ballots, 99% of which going to Kamala they suddenly ‘found,’” commented one user. “Kamala will win legitimately or not, you have been warned.”

It will be fascinating to watch how these prediction markets play out as we inch closer to the election, which is now only two weeks away. I agree with Vivek that as we get closer to the election, these margins will likely get narrower. It appears to me that Trump has got this one in the bag, but it ain’t over until it’s over. Last election most people went to sleep thinking Trump had won the election, just for the Democrats to find all these ballots voting for Biden at 3am to win him the election. If there is any election fraud and interference in this upcoming election, these prediction markets may be in for a very volatile time.

A Trump win would be massive for Bitcoin on a regulatory level and price wise, due to his proposed policies. Under Harris, on the other hand, the future of Bitcoin in this country would be uncertain, as she has not laid out any real details on policy she would implement while as president and has a four year track record of attacking the industry while in office as vice president.

Bitcoin Magazine is teaming up with Stand With Crypto to provide real time election coverage on November 5th. So if you’re a Bitcoiner tired of watching mainstream news and want to witness this election from the perspective of a Bitcoiner, make sure to tune into the stream. More details on the livestream and where to watch here.

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

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In the heart of London, amidst the smog and the burgeoning industrial age, a story unfolds that is as relevant today as it was over half a century ago. Mary Poppins, a tale woven with magic, whimsy, and a touch of surrealism, unexpectedly serves as the perfect allegory for the financial liberation movement epitomized by Bitcoin.

At its core, Mary Poppins is a narrative of transformation and enlightenment, primarily seen through the eyes of Mr. Banks, a staunch advocate of traditional financial systems. His journey, however, is not merely one of personal redemption but symbolizes a broader awakening to the pitfalls of centralized financial institutions and the virtues of financial self-sovereignty and liberty.

In the character of Mr. Banks, we see the embodiment of the traditional financial system: rigid, hierarchical, and intrinsically tied to the practices of fractional reserve banking. This system, as critiqued through the film’s narrative, perpetuates a cycle of debt that disproportionately affects the younger generations, symbolized by Michael. It’s a system where the power lies with the few, and the many are left to navigate its consequences.

Enter Bitcoin. In stark contrast to the centralized control of traditional banking, Bitcoin offers a decentralized, peer-to-peer system that champions the principles of self-sovereignty and financial equality. It’s a system where individuals, much like Michael, can take control of their financial destiny, free from the whims of institutional gatekeepers.

The crux of Mary Poppins lies in Mr. Banks’ epiphany. He realizes that true wealth is not measured in gold or banknotes but in freedom, liberty, and the well-being of his family. This transformation mirrors the ideological shift required to embrace Bitcoin. It’s about breaking free from the conditioning that has long tied society to trust-dependent and inflation-prone financial systems.

By opting for Bitcoin, individuals like Mr. Banks can reclaim their financial autonomy. They are no longer at the mercy of institutions that, by nature, operate on a foundation of trust and permission, often at the expense of those they serve.

Michael’s rebellion against the traditional banking system, opting instead for a model that values equality and self-sovereignty, reflects the growing disillusionment with traditional financial systems. Bitcoin, and the technology underpinning it, represents a beacon of hope for a fairer, more inclusive financial future.

The film’s narrative suggests that the future belongs to those who dare to challenge the status quo, much like the early adopters of Bitcoin. It’s a call to action, urging us to reconsider our relationship with money and the institutions that control it.

Mary Poppins is more than just a children’s movie; it’s a parable for our times. In the transformation of Mr. Banks, we find a powerful metaphor for the shift towards Bitcoin and the principles it stands for. This story encourages us to question, to dream, and to seek a world where financial systems serve the many, not the few.

As we watch Mr. Banks fly a kite with his children, we are reminded of the potential for joy and liberation in breaking free from traditional constraints—much like the freedom found in the adoption of Bitcoin. It’s time to take control of our financial futures, to opt for a system that empowers us all, much like Michael did.

Let us take inspiration from Mary Poppins and embrace the change that Bitcoin represents. After all, sometimes, all it takes is a leap of faith and a spoonful of innovation to find our way to a brighter, more liberated financial horizon.

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

The Lightning Network is a revolutionary scaling solution for Bitcoin, enabling fast and inexpensive payments that make everyday transactions with Bitcoin possible. As the network grows, it’s essential to measure its health and efficiency accurately, so we can unlock its full potential.

Traditional metrics like node count, channel count, and capacity have been used to assess the Lightning Network, but they only tell part of the story. To truly understand the performance of this second-layer solution, we need to focus on flow—specifically, Max Flow, a metric with a long history of optimizing complex systems.

Max Flow: The Key to Understanding Lightning’s Health

Max Flow is a powerful metric that calculates how much value can theoretically flow through a network, considering constraints like channel capacity and liquidity. It’s an essential tool for evaluating network effectiveness and reliability, particularly in systems where smooth, uninterrupted flow is the key to success.

Max Flow has been used for decades in industries ranging from telecommunications to logistics. It’s already been applied to solve problems in:

Telecom Networks: Max Flow helps allocate bandwidth efficiently, ensuring that data flows seamlessly across the internet.Supply Chains: Companies use Max Flow algorithms to optimize the movement of goods across their global distribution networks, reducing delays and maximizing efficiency.Transportation Systems: Cities apply Max Flow to traffic management, ensuring that vehicles move smoothly across road networks by optimizing flow through intersections.

These examples showcase how Max Flow improves efficiency in complex systems where resources need to move quickly and efficiently. Now, it’s being applied to the Lightning Network as seen in new data science research from René Pickhardt about feasible lightning payments. Applying Max Flow to the Lightning Network will help ensure that Bitcoin can flow smoothly between users, even as the network scales.

Max Flow isn’t about measuring the actual movement of value, but rather about understanding the probability of feasible payments across the network. By focusing on Max Flow, we gain a more accurate understanding of the Lightning Network’s true health. Instead of just counting channels or capacity, Max Flow shows us the likelihood of payment success, allowing node operators to optimize their liquidity and improve the overall performance of the network.

Max Flow provides a curve of Payment Reliability by Payment Amount, showing how success probability changes with different payment sizes for the network and specific nodes of interest.

Traditional Metrics Fall Short

Metrics like node count, channel count, and capacity provide a snapshot of the Lightning Network’s infrastructure. But much like counting the number of roads or intersections in a city, these numbers don’t tell us how well traffic is flowing. In the case of the Lightning Network, what really matters is how efficiently Bitcoin can be routed through the system.

Critics who focus solely on these traditional metrics often draw limited conclusions about the network’s performance. While it’s important to know the size of the infrastructure, it’s far more valuable to understand the probability of successful payments.

Max Flow offers that deeper insight. By measuring the success probability of payments, it helps us see where liquidity is well-distributed and where bottlenecks might be forming. This enables operators to make data-driven decisions that improve the network’s performance and ensure that payments are routed reliably.

Max Flow Shows Lightning’s Performance Rises with Bitcoin Price

The Lightning Network is designed to scale with Bitcoin, offering fast and cheap transactions without overloading the Bitcoin blockchain. As Bitcoin’s price appreciates, the network’s capacity to handle larger payments grows naturally.

For example, if a channel holds 0.1 BTC and Bitcoin is priced at $50,000, that channel can route a $5,000 payment. If Bitcoin’s price doubles to $100,000, that same channel can handle $10,000—without any changes to the underlying infrastructure. As the bitcoin digital economy grows, so too will the capabilities of the Lightning Network. Bitcoin price increases coupled with data-driven changes to the Lightning Network will help expand the capabilities of Lightning.

Max Flow plays a critical role here, helping to measure the success probability of payments as the network scales. It provides an essential tool for monitoring payment reliability and ensuring that the network remains efficient as demand for Bitcoin transactions grows.

The network payment reliability increases as bitcoin’s price appreciates from $50,000 to $100,000 assuming no changes to the Lightning Network.

Max Flow is the Future of Lightning Monitoring

Max Flow is the next-generation metric that will help drive the Lightning Network forward. By moving beyond superficial statistics like capacity or node count, it offers node operators and investors a more accurate picture of the network’s performance. This, in turn, helps them make smarter decisions about liquidity allocation and payment routing.

For investors, Max Flow offers a more reliable measure of network health, revealing the underlying potential of the Lightning Network. Those who focus on Max Flow will gain deeper insights into the scalability and efficiency of Lightning, positioning themselves to capitalize on future growth.

For node operators, understanding Max Flow means being able to optimize their channels for better performance. It helps them manage liquidity more effectively, ensuring that payments flow reliably, and improving the user experience for those interacting with the network.

Conclusion: Max Flow is the Metric That Matters

As the Lightning Network evolves, Max Flow will be essential to its health and performance. While traditional metrics like node count and channel capacity offer a limited view of the network, Max Flow reveals how efficiently value can move through the system—a critical insight as Bitcoin grows and the demand for reliable payments increases.

Max Flow is more than just a new way to measure the network—it’s the key to unlocking the Lightning Network’s full potential. By focusing on the metrics that matter, node operators and investors can help the network scale smarter, ensuring that Bitcoin’s role in the global economy continues to expand.

TL;DR

Traditional metrics like node count, channel count, and capacity don’t provide a full picture of the Lightning Network’s performance.Max Flow is the right metric to assess network health, as it evaluates the probability of feasible payments and liquidity optimization.As Bitcoin’s price appreciates, the Lightning Network’s capacity to handle larger payments grows naturally, and Max Flow helps monitor this process.Max Flow has proven its value in optimizing complex networks in industries like telecommunications, supply chains, and transportation.Max Flow will play a critical role in helping the Lightning Network scale efficiently, making it an essential tool for both investors and node operators.

This is a guest post by Jesse Shrader. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

About Amboss:

Amboss is building the infrastructure for the Bitcoin Lightning Network, enabling seamless, real-time transactions across industries. With machine-learning-powered routing and liquidity optimization, Amboss ensures billions of low-cost payments happen securely and efficiently. As AI-driven economies emerge, Amboss provides the backbone for autonomous systems to transact at scale.

Seeing Bitcoin’s price rally as Donald Trump takes the lead on the world’s largest prediction market, Polymarket, made me do some research on what Polymarket is and who uses it.

And now I have to say — I believe that Polymarket leans pro-Trump. We need to account for that bias, and here’s why.

Let’s look at some data. Polymarket shows Trump surging to a massive 28% lead over Harris. Another prediction marketplace, Kalshi, also shows Trump leading by 18%. Meanwhile, most other polls have a tight race. This huge skew makes no sense – unless Polymarket’s user base is disproportionately pro-Trump.

Which it is. Polymarket only allows crypto betting and blocks US users. This filters its audience toward offshore Bitcoin and crypto enthusiasts or US crypto users who use VPNs, and studies show that crypto users tend to lean conservative.

And with Trump pledging to Implement crypto-friendly policies, he is a no-brainer for Bitcoin and crypto users.

Some add that Trump’s bets are part of “a coordinated effort to change the perception of this race.”

This may also be the case, but it should be clear that Polymarket polls are biased.

Does this make Polymarket corrupt? I don’t think so. It offers insightful predictive data and it’s a free market platform where anyone can bid if they think otherwise. Which makes it one of the best tools to know the market sentiment.

But anything showing Trump or Harris with a massive lead at this point in the election should warrant scepticism. Traders can recognise and exploit this bias. I’d look to buy Harris, anticipating the race tightening as election day nears. Polymarket odds should normalise closer to even odds.

In summary, Polymarket caters to Trump-friendly Bitcoin and crypto crowds, which distorts its election odds substantially compared to other polls. Knowing this, some people can capitalise accordingly.

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

Company Name: Bitaxe

Founders: Skot

Date Founded: Early 2023

Location of Headquarters: North Carolina + remote team

Amount of Bitcoin Held in Treasury: N/A

Number of Employees: ~12 regular contributors

Website: https://bitaxe.org/

Public or Private? Open-source project (not a company)

Bitaxe’s founder, who goes by the nym Skot, has taken his hobby of tinkering with electronics and not only transformed it into a full-time gig but has catalyzed thousands to follow his lead.

Harnessing his training as electrical engineer and his Bitcoin enthusiasm, Skot began deconstructing Bitmain’s Bitcoin mining machines approximately two years ago. After gaining a better understanding of how they work, he reverse engineered one, creating the blueprint for Bitaxe — the first ever open-source ASIC-based Bitcoin mining machine — in early 2023.

“It was just a technical challenge initially,” Skot told Bitcoin Magazine.

That technical challenge has transformed into something bigger than he ever could have imagined, though. Skot created a low-power and affordable Bitcoin miner that anyone can plug in at home without running up a huge energy bill, while his work also paved the way for others interested in open-source Bitcoin mining to begin contributing to Bitaxe and other open-source mining initiatives like it (and related to it).

“The project has morphed into something that’s bringing mining back to the open source fundamentals of Bitcoin itself,” Skot said.

“I’ve really become convinced that to be truly decentralized, which I think most people understand Bitcoin needs to be, all aspects of the development of Bitcoin needs to be open source,” he added.

“It needs to be open so that anyone who’s even remotely interested can get in.”

Skot’s Journey To Bitaxe

Years back, while taking liberal arts courses at a community college, Skot stumbled on an issue of Make Magazine, a publication that features tutorials for DIY electronics projects. A switch flipped inside of him as he perused the magazine.

He completed a degree as an electrical engineer and then co-founded a design consultancy for Internet of Things (IOT)-related products, which he ran for 10 years. Skot enjoyed the work, but admitted that the downside was that he was constantly working on other people’s ideas.

In 2011, a friend introduced him to Bitcoin at a party — showing him how to use bitcoin to buy drugs on the now defunct Silk Road. While he was intrigued, it wasn’t enough to get him to buy bitcoin (or drugs) at the time.

Two years later, Skot learned about Bitcoin mining, and, soon after, built his first Bitcoin miner.

“I actually built a FPGA Bitcoin miner,” recalled Skot. “FPGAs were the precursor to ASICs.”

FPGA miners were designed with open-source code, making it easy for Skot to figure out how to construct one.

While he lost all of the bitcoin that he mined in a pool hack, he didn’t become discouraged. In fact, he became more fascinated with this cross section of electronics and the permissionless nature of Bitcoin.

“When I was learning about it, I was like, ‘Well, okay, so these are the rules of how Bitcoin mining works, but who made these rules? Who enforces these rules?’” recounted Skot.

“Learning that no one is at the center of this and no one enforces these rules — or we all do — was mind-blowing. It’s a beautiful thing technically, and that intrigued me,” he added.

A few years later, he dove in deeper and developed the Bitaxe.

What is Bitaxe?

A Bitaxe is technically just open-source code that anyone can use to build a physical mining machine.

Skot has only built about a dozen Bitaxes himself, while thousands have been built and sold. Anyone can build and sell Bitaxe’s under its open-source license.

The circuit board for physical Bitaxes isn’t much bigger than a credit card, while the device’s fan protrudes out about 3 cm from the board. (There are different versions of Bitaxes that vary slightly in size.)

The machine runs on a 5 volt power source and connects to the internet over WiFi. Users interface with Bitaxes via their personal computer or phone. The devices use between 12 and 18 watts of electricity, which is comparable to an iPad charger.

Running a Bitaxe full-time should only increase users’ energy bill by a few dollars per month (this varies based on jurisdiction), and it costs less than what running a Bitcoin node costs to run.

The odds of finding a block with a Bitaxe are infinitesimally low (though, a Bitaxe did find a block this past July), but users can direct the hash power they produce with their Bitaxe to almost any mining pool for smaller payouts.

Ideally, Bitaxes are used to decentralize the hashrate, though this will, in the end, only lead to really meaningful decentralization if mining pool centralization decreases along with it.

“My hope is that by decentralizing the number of brains that are operating these things that enough people will make different decisions,” explained Skot. “If we can exponentially increase the number of different brains and all the crazy ways that they think, I think they will pick different pools.”

Bringing more of these brains in was part of Skot’s motivation creating Bitaxe (which I’ll touch on more in just a moment), while another part of his motivation was simply to bring a new kind of Bitcoin mining machine to market.

Bitaxe vs. Industrial Bitcoin Miners

Most Bitcoin mining equipment is built for the major players in the industry.

“99.9% of the Bitcoin mining hardware that’s out there is designed specifically for being used in an on-grid data center,” said Skot. “They’re all designed to be plugged into the grid and operate full power 24/7 on industrial power.”

Skot explained that while this is great for industrial miners who tend to point their hash power at the big mining pools, it does very little for the Bitcoin enthusiast who wants to contribute to the hashrate.

He also shared that ASIC chips aren’t currently sold independently of Bitmain miners and that it’s difficult to understand how the chips work, because the machines in which they operate are designed with closed-source code.

“We have essentially just one chip maker right now when it really comes down to it — that’s Bitmain,” said Skot.

“They’re really far ahead of the pack, but I don’t think that advantage they have is going to last forever. I think some of these other chip makers will come up,” he added.

While Skot is patiently waiting on the ASIC chip that Jack Dorsey’s Block is developing, which will be able to be used in any mining device, he continues to work on open-sourcing the Bitcoin mining stack so that it’s easier to compete on the ASIC market.

“Let’s open source as much of that stack as we can, because, like we saw with the internet, random people can do cool stuff in their garages that sometimes turns into a market standard,” said Skot.

And he should know, as he created a new standard in Bitcoin mining in his figurative garage with the Bitaxe just over a year and a half ago, which has led to many others following his lead.

“I’ve been doing it for about a year and a half, and it’s growing exponentially,” said Skot. “My goal is to keep up this exponential growth.”

The Open-Source Mining Movement

After receiving a grant from OpenSats early this year, Skot has been able to focus full-time on Bitaxe and the community that’s formed around the project.

“When I first started this, I met some random person on Bitcoin Talk who was like ‘I’m going to start a Discord group, and it’s going to be called Open Source Miners United — you should come check it out,’” explained Skot.

Start this Discord group the gentleman did, and it now has over 4,000 members, all of whom share ideas for how to further Bitaxe and the broader open-source mining movement. But Open Source Miners United (OSMU) has become even bigger than just a group in which people share ideas.

“It’s been set up so that anyone who wants to contribute to the Bitaxe project can do so, whether it’s a random person who wants to donate or the manufacturers of Bitaxe that contribute back to the project,” explained Skot.

“OSMU has this fund, this treasury now that’s growing because we’re selling lots of Bitaxes, and we provide small grants to other people working on open source mining,” he added.

Skot also shared that for every Bitaxe sold, approximately $5 is donated to OSMU, which helps to financially support both himself and OSMU grant recipients. (He stressed in a follow-up email that this practice is totally optional and that he is very appreciative of the manufacturers that choose to do this.)

The Future For Bitaxe and Open-Source Bitcoin Mining

The Bitaxe and open-source mining movement has taken on a life of its own, according to Skot. That is, Skot doesn’t necessarily feel that he’s at the center of it anymore — it’s become decentralized. And while he’s excited about the pace at which the movement is growing, he’s still grounded and mission-focused.

He hasn’t created a roadmap for what comes next for Bitaxe and the community he helped found, though he is quite sure of what the aim of his work is.

“I’ve been so intrigued and motivated to promote this idea that Bitcoin is fundamentally open source,” said Skot.

“This decentralized network needs to be developed in a decentralized way. We can’t have one without the other. So, I think this open-source part is so important,” he added.

“Bitcoin mining has somehow just totally forgotten about the open source ethos of Bitcoin and how important open-source development is. We’ve got to bring this back.”

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This morning, River announced its Bitcoin Interest on Cash feature through which it will offer a 3.8% interest rate — paid out in bitcoin — on the dollars you leave in the custody of the platform, which is FDIC insured up to $250,000.

This yield is comparable to what you’d earn in a high-yield savings account through an online bank like Ally, but again, you’re earning bitcoin with River.

If you’re like me, a Bitcoin enthusiast who still likes to keep a sizable cash buffer in case of emergency, this is a pretty sweet deal. See, I have one of those high-yield savings accounts through Ally, and I tell myself I’m going to take the yield I earn each month and buy bitcoin with it, though, I rarely remember to do this.

Now, with River, I can essentially automate that process, allowing River to convert that filthy fiat yield into bitcoin for me at the end of each month.

(Well technically, I can’t do this because I live in New York State, one of only two US states in which River doesn’t serve clients. We have this thing in New York — a land once home to free people but that is now drowning in bureaucracy — called the “BitLicense,” which makes it quite difficult for Bitcoin startups to do business in the state, but I digress.)

There are no monthly fees or minimums to get started using this product, and users can withdraw their cash whenever they please.

This isn’t just something for Bitcoiners to celebrate, but it’s also a great way to onboard normies to Bitcoin, most of whom are scared to buy bitcoin because of its volatility. Now, they don’t have to buy it; they can just earn it for holding onto the type of money they’re much more used to holding.