I’m reading through @_Checkɱate 🔑⚡🌋☢️🛢️'s and David Puell’s Cointime Economics paper and wanted to make three observations about chapters 1 -3. 1. The concept: the authors propose to analyze a new aggregate variable of value and time. They call this a “coinblock”, and you can also think of it as a precise measure of BTC∙time (i.e. 1 BTC held for 10 years is equivalent to 10 BTC held for one year). The authors offer this approach as an alternative to the clustering of UTXOs into groupings like STHs and LTHs because that technique relies on proprietary data science; by contrast, this approach uses a universal and simple variable, and the findings of the authors are therefore instantly verifiable and replicable. The paper seeks to establish a new standard unit of measuring on-chain activity. 2. This chart (page 12) really struck me as the first bit of explanatory power of the model. It looks at coinblocks created and therefore its shape looks a lot like the supply curve–this is because the number of coinblocks created on any given day is tied to the supply in existence. For instance, you can see that today’s value is somewhere around 3B coinblocks created per day, which makes sense since we have 19.4m BTC in supply today that is confirmed roughly 144 times per day, thus 19.4 x 144 = 2793.6 or 2.79 billion coinblocks per day. What struck me about the chart is the China mining ban, visible in between the two peaks of the 2021 cycle top. The coinblocks created takes a plunge and appears to be at values as low as back in 2013 briefly. This makes sense when you consider that if blocks come in slower than expected, coindays created will slow meaningfully since they will not get their 144 confirmations per day. The spike down on this chart, and the clockwork return to trend are beautiful indicators of the effect this ban had on the network, and also the resilience in recovery and return to normal. 3. The authors establish measures of Liveliness (the ratio of the sum of blocks destroyed to the sum of blocks created) and Vaultedness (the ratio of the sum of blocks stored to the sum of blocks created) to tell the story of Bitcoin since its inception. https://cdn.nostr.build/i/2b5d5e9dd5054b0793f3be6c7e9d28bdcde9d7e58ad80d218d952eaa960d08b1 This chart from page 20 shows that Liveliness and Vaultedness (which always sum to 1.0) have gone through several phases as Bitcoin is monetizing. Satoshi’s dormant coins and the lack of exchange price dominated the network until the first blow-off mania, at which point network activity picked up significantly and started destroying coinblocks at a much faster rate. This repeated in subsequent cycles to a lesser extent to the point of today, where the authors argue the plateau of ~60% liveliness and ~40% vaultedness represents stability, maturity, and the development of external markets (derivatives, for example) as BTC settles into its primary use case–and you can observe on the chart how little these metrics have changed despite the fluctuations in price since 2018. I find this report fascinating and will be back with more after I’ve read the next part!

#[0] I was listening to you on #[1]'s show with #[2] and I was struck by your point about concentration of wealth. Do you think there's a worthwhile idea to explore around the idea that the difference between BTC's wealth concentration and fiat's is that the former's is one-time and the latter's perpetual? Let me try an example. Imagine someone--someone handsome, with a good heart--buys socks for Bitcoin. He will never be able to replace the equivalent BTC in the future and thus the spend is decentralizing in nature. He will have less money and more socks, and when he goes to buy socks again, he'll find that the price he paid last time is outrageous, but that the new price is very low indeed. He will be happy to exchange some BTC for socks even though he knows BTC will buy him more socks in the future because he needs them now. In this world anything you can save for a future person will be of immense value. A person will never have more Bitcoin than he has now, but ultimately it won't matter because every time he wants or needs something he will find the price to have fallen and the money is ample. In the fiat world, you buy the socks and next time you go to buy them they're more money. So people with money acquire hard things that rise with inflation, while people without money are forced to work harder and harder thanks to society's difficulty adjustment (inflation). In this world anything you save will be of no value (imagine my grandfather burying his life savings so I could have them today) and so the people who can hoard the hard assets have a perpetual motion machine of continual deception and exploitation. Do you think this could be a productive area to explore? I really think the difference is once you spend it it's gone, whereas in a debt world the ability to borrow against your hard asset is a true perpetual motion machine that means you never really spend anything that mattered, hence wealth concentration. What do you think?

#[0] and #[1] on Layered money around the 36:30 minute mark where they are talking about local vs global money there was a great insight. The community adopting Bitcoin is not the same as the historical spread of ideas from a geographic epicentre; instead, there is a new digital society emerging of common values or beliefs. It doesn't look big to any of us because it's so spread out, but already on a global level it's a massive "country" of shared beliefs and significant economic power (even a voting bloc in some places). It made me realize that when adoption happens it won't start somewhere and spread; it will start everywhere, like painting a wall with a million tiny brushes. Brilliant conversation, thanks so much.