Tuesday, June 4, 2024

Bitcoin as a technology play, pointless tokenization, economic jitters and more

“People can foresee the future only when it coincides with their own wishes, and the most grossly obvious facts can be ignored when they are unwelcome.” – George Orwell ||

Hello everyone! I hope you’re all well!

A programming note: I’m travelling this week and next (Edinburgh and Warsaw), so publishing will be erratic. For now, it looks like this newsletter will have to skip Friday-Saturday and then Tuesday-Wednesday. I should be able to get something short out this Thursday and next Monday, if airport wifi cooperates.

IN THIS NEWSLETTER:

• Bitcoin as a technology play

• Tokenizing violins – why?

• Economic jitters

• Mexico risks and opportunities

If you’re not a subscriber to the premium daily, I hope you’ll consider becoming one! I’d be really grateful for your support! You’ll get ~daily insight into the growing overlap between the crypto and macro landscapes, as well as some useful links. And there’s a free trial!

WHAT I’M WATCHING:

Bitcoin as a technology play

As if the narratives supporting bitcoin’s price movements weren’t complicated enough (is it a macro asset? is it a store of value?), another one is emerging as a meaningful force: Bitcoin as an emerging technology.

Of course, we all know that Bitcoin is a technology, a radically innovative one at that. But it’s assumed to be boring, inert, unchangeable. After all, one of its security characteristics is that Bitcoin doesn’t change.

Only, that’s not really true. The underlying code may be thoroughly baked by now, well-tested, resilient and much scrutinized. But the application of that code is evolving.

This is especially intriguing since we, collectively, are bad at seeing what new technologies will be used for. We didn’t get the potential of the internet in its early days. The same with GPS, the phonograph, and many other inventions. It would be naïve to think that we clearly see what Bitcoin will become.

You may remember the spurt of network activity earlier this year as a new type of transaction became popular. “Ordinals” assign a unique identifier to each satoshi (the smallest recognized unit of a bitcoin, with 1 BTC comprising 100 million satoshis), opening up the network’s use cases to include NFTs, provenance and other functions requiring the removal of fungibility.

According to CryptoSlam.io, Bitcoin is now the second largest NFT blockchain, behind Ethereum and ahead of Solana.

(table via CryptoSlam.io)