P01 - proof of study notes session 10.13.23 [812036] Report: #Bitcoin First Revisited by Fidelity Digital -- The primary value driver of bitcoin tokens is scarcity and a reliable supply cap of 21 million units Based on this scarcity, bitcoin is uniquely positioned to be the primary monetary good and another digital asset is not likely to supersede bitcoin in this role While Bitcoin is not the most scalable, it is currently the most secure and decentralized network at the base layer A centralized blockchain is simply a database and these have existed for decades The decentralized blockchain employed by Bitcoin is the radical innovation and offers the important qualities of immutability, seizure resistance, censorship resistance and trustless design Bitcoin is a global open-source protocol for value transmission In contrast to TCP/IP, ownership of the base layer is possible via purchasing bitcoin tokens Each bitcoin token is divisible into 100 million smaller fractions called Satoshis Every application built on Bitcoin increases the value of the network and therefore also increases the value of ownership tokens for the network which are called bitcoins (lowercase b for the asset, capital B for the network) Lightning is a layer two application built on top of the Bitcoin base layer Lightning is a decentralized network that allows off-chain transactions between persons with the ability to make final settlement on the base layer Lightning increases Bitcoin’s scalability while maintaining Bitcoin’s security with the option to settle any time on the base layer It is beneficial for investors seeking to better understand digital assets to separate Bitcoin and all other digital assets into separate categories bitcoin is the scarcest monetary asset in human history and deserves to be considered separately from all other experimental tokens in the digital asset space that are separate from Bitcoin While nation state attacks and protocol bugs remain risks to Bitcoin, those risks continue to diminish each day as the network grows stronger with more users, miners and infrastructure being built — 21min pgs 15-19

Finney fact: In January 2009, Hal Finney was the Bitcoin network's first transaction recipient

"The computer can be used as a tool to liberate and protect people, rather than to control them" - Hal Finney [November 1992]

P01 - proof of study notes session 10.12.23 [811869] Report: #Bitcoin First Revisited by Fidelity Digital -- Lindy Effect: the longer a non-perishable thing survives, the more likely it is to survive in future Antifragility: when something becomes stronger with each attack or stressor it faces Bitcoin is antifragile and every second, minute, day, month it survives increases the likelihood it will continue to survive Most people underestimate the volume and intensity of negative events Bitcoin has already endured Due to network effects, it is likely that one digital monetary good will dominate the global market It is unlikely that another digital asset will supersede Bitcoin as a monetary good Blockchain trilemma: a decentralized database can only deliver on two of three guarantees at one time: decentralization, security, or scalability Security: likelihood of the network being attacked or compromised As the Bitcoin network grows with more nodes and miners distributed across the world, it becomes harder and more expensive to attack Bitcoin Bitcoin is by far the most secure digital asset when measured by hash rate securing the network Decentralization: how much control any one person, entity or group has on a system or network The opposite of a decentralized network is a conpletely centralized network where a signle intermediary controls all aspects of the network Decentralization = lower network throughput (lower scalability) but higher security Bitcoin is the most decentralized digital asset and continues to show increasing decentralization over time Scalability: how well a network can handle growth of number of users and volume of transactions Bitcoin optimizes for decentralization and security and as a result has a slower transaction throughput capability Bitcoin scales in layers built on top of the base layer, not on the base layer itself Bitcoin is currently the most secure and decentralized monetary network The transaction throughput of Bitcoin is limited by the time between each block (approx 10min) and the block size (just over 1mb) which limits the number of txs that can fit into each block Blocksize war: a battle to increase block size which would decrease decentralization over time (because running a node would be more expensive over time with bigger blocks creating more data to store) This war resulted in a hard fork which created a code change that was not backward compatible All hard forks from Bitcoin to date have either failed completely or struggled to gain any kind of market dominance This signals that the market values a highly secure and decentralized store of value more than another payment network Bitcoin's revolutionary invention was solving the problem of digital scarcity and creating a digital store of value, not making an incremental improvement to a payment system - 21min pgs 8-14

P01 notes session 10.11.23 Hardware wallet review: Jade by Blockstream -- - Fully open source hardware and software. Gold standard that is rarely met in the HWW industry - Affordable compared to alternative products. Uses commodity hardware - Simple to use, great support, compatible with Blockstream Green, Sparrow, Nunchuk, Specter - QR scan, BIP85, duress pin - Fully air gapped. Enables sending bitcoin without connecting to the internet - Immune to physical key extraction from device alone (virtual secure element with 3 secrets - Jade secret on device, pin, remote blind oracle) - DIY-able (firmware can be installed on inexpensive, off the shelf hardware - Can be used as a 2FA device - Can mine bitcoin (cool but not profitable)

We chose to name our team after this Legend. Never forgotten, eternally grateful

P01 notes session 10.10.23 Report: The Lightning Network grew by 1212% in 2 years by @River -- The number of users, transactions and volume on lightning have been accelerating significantly over the past years 6.6 million routed Lightning txs in August 2023 (lower bound estimate) 1212% growth since the 503k tx estimate for August 2021 This growth was despite a 44% bitcoin price drop and 45% decrease in search interest Avg Lightning tx size of 45k sats ($11.84) in Aug 2023 Lightning is extending Bitcoins utility by enabling low value payments over the internet Est. ratio of 1:8 non-custodial to custodial Lightning users 173 companies in the Lightning industry across 28 categories Lightning enables millions of people to trustlessly and instantly move money back and forth without having to settle each tx on the Bitcoin blockchain It has been 7 years since the Lightning Network Whitepaper was published There is no way to identify all private nodes on the Lightning network An estimated 70-80% of Bitcoin users have their funds on exchanges today 21min Pgs 1-10

P01 notes session 10.9 Report: #Bitcoin First Revisited by Fidelity Digital Bitcoin is the only digotal asset that matters. It is fundamentally different than all other digital tokens in its security and decentralization It is not vulnerable to innovative destruction from competitors bitcoin the asset vs Bitcoin the network Bitcoin is best understood as a monetary good A monetary good is a good that is valued for its tradeability for other goods, not its consumption or use Bitcoin is superior money to gold and fiat currency based on properties of durability, divisibility, fungibility, portability, verifiability, and scarcity Bitcoin's value is driven by its enforceable scarcity of 21 million bitcoin Unlike gold which is relatively scarce, bitcoin is provably finite There will only ever be 21 million bitcoin Two key characteristics underpin the scarcity of bitcoin: decentralization & censorship resistance Bitcoin has promising potential to be the primary monetary good for humanity The value of a network increases exponentially as the number of its users grow Monetary network effects are extremely powerful Bitcoin is the first and only truly scarce digital asset ever created Any subsequent monetary good will be reinventing the wheel. The wheel can only be invented/discovered once 21 min Pg 1-7 #finney21 #bitcoin

Gradually then SUDDENLY #Bitcoin is portfolio insurance for suddenly moments Our spidey senses smell suddenly Brace for impact Suffer well It's gonna be way better in the new world

The halving is programmed but not priced in Act accordingly Study & Buy #Bitcoin