Monday, August 9, 2021

BTC Halving explained

This topic will be covering the Bitcoin halving event, this post will try and simplify the process so that newer crypto investors can learn about a key event that happens within the cryptocurrency space.

If anyone is interested in previous past posts please see:

  • Fundamental Research on projects: here
  • What is a cryptocurrency wallet: here
  • Staking: the concepts of PoS: here
  • What is the blockchain: here
  • Trading strategies: here
  • Fundamental analysis: here
  • Sentiment analysis: here
  • Mobile device security education for crypto: here
  • The smart money market cycle: here
  • Lump sum vs Cost averaging: here
  • Arbitrage Explained: here
  • Dusting attacks explained: here
  • Liquidity Pools Explained: here
  • ETH London Hardfork Explained: here
  • Defi hacks and exploits explained: here
  • Smart contracts explained: here

BACKGROUND

The value of currencies, assets, goods and services are all based on the economic factor of supply and demand. In the case of fiat currencies, those in control of the money can increase the money supply at any time. However, Bitcoin doesn’t have an entity that controls its supply, so the question would be how does Bitcoin decide how much Bitcoin to produce? … this is done through the process known as the Bitcoin Halving.

THE BITCOIN HALVING IDEA

Satoshi Nakamoto pioneered an idea of removing the human element of the production of an asset and have in its placed a scheduled production that would last a significantly long time (the last BTC is predicted to be mined around the year 2140). This schedule would achieve three important factors: predictability, confidence and trust. Confidence and trust is integral to any currency so that the fact a production schedule is predictable can allow individuals to plan ahead of time for their needs.

For anything to have significant value, it needs to be scarce. Hence the reason gold is seen as so valuable due to its scarcity. Therefore, Bitcoin was given a limited supply of 21 million and through the use of the Bitcoin halving it would have a predictable realised rate.

HOW THE BITCOIN HALVING WORKS

Not to go into details about the Bitcoin mining process but it takes about 10 minutes to mine a Bitcoin block and difficulty is adjusted every two weeks (every 2016 blocks) to keep this time schedule as stable as possible. The miner who does verify the block is rewarded in Bitcoin, when the protocol first started in action it would reward the miner with 50 BTC (worth today $2.25 million with a price of BTC at $45,000.

However, after every 210,000 blocks mined or an estimated time period of 4 years the rewards are cut in half. So the 2012 halving the reward was cut to 25 BTC, the 2016 halving to 12.5 BTC and the 2020 halving to 6.25 BTC. Now one could ask what’s the incentive for miners when the rewards are cut in half? Well simply, look at the price charts, the value of Bitcoin has continued to increase exponentially some time after a halving event due to the supply shock so the incentive is still there for miners despite receiving less rewards. This predicable and time scheduled asset has meant price predictions could be made as long as the demand outweighs the supply. The story of Bitcoin is an innovative and powerful reminder of how scarcity can prevent overwhelming inflation.

As always any topics you want covered just let me know. The following are topics I have on my list:

  • inflation vs deflation
  • Cryptographic Hashing for the blockchain
  • Cryptographic Hashing: a python example
  • Longs vs shorts explained for beginners
  • ETH gas explained
  • Lending and borrowing in defi
  • Yield farming explained
  • Why time in the market beats timing the market
  • The technicals behind NFTs
  • APR vs APY
  • UDP and TCP

AA’s News:

Excuse my brief notes! 🚀

  1. Ten new theatres possible including the LA theatres.
  2. Dozen new build theatres worldwide being finished after COVID
  3. New investors wanted live events and that is happening. 2 UFC events had significant attendance. Concerts coming soon! Halsey/Chance the Rapper. Board member helping with live gaming events. Possible GameStop opportunity!
  4. Crypto. Arkit quantum crypto? Got lost here but he’s on a SPAC and had has learned all about blockchain and he will take Bitcoin for movie tickets. More exploration in crypto! Further serious involvement.
  5. New programming will also take Apple Pay and google pay by year end.
  6. New shareholder Investor Connect program has had 300k Stubs members enroll. New advance screenings coming.
  7. Twitter - His tweets have been read more than 72 Million times and he’s following 2k people interested in AMC.
  8. Labor costs are increasing and 5% ticket cost increase was implemented in many US theatres.
  9. Exclusive theatrical windows- Universal agreement turned out well and he’s pleased - they are very close now. Announced formal agreement with WB in calendar year 2022 for all WB films (45 day rights). In dialogue with all major studios.
  10. Board of Directors discussed insiders maintaining significant ownership in the company. This is already in place for board but not the 19 current Execs. New policy will propose he holds 8 years worth his salary in stock (value) in AMC at any given time. Different numbers of years were named for various positions. AA has still sold no shares and commits to not sell any in September when he is legally able to do so. He is going to start a standard retirement planning program to start selling his shares because he is 67 and this is a very normal process for those near retirement. He will not participate in the choices regarding when the shares are sold.

AMC chasing GAMESTOP & will be accepting Bitcoin as payment by the end of the year!

IM FEELING BULLISH AS FUUUUUUCK! Listening to the call as we speak! First of all AMC smashed earnings!

CEO AA literally just announced he heard our cry to partner with GameStop. He is “chasing” said partnership to expand AMC revenue opportunities!

ADDITIONALLY! By YEARS END AMC will accept Bitcoin as a form of payment!!!!!!

Of the many things AA is announcing, 10 new theaters was on the list!!

We also getting advanced screenings for investor connect members! AMC is also looking to partner with sports and gaming leagues to offer exclusive events at AMC. ALL Warner Brother films will be shown at AMC 45 days before home release! What’s that mean? We gonna have better quarters from here on out. AMC is also looking to gain studio access to produce their own movies!

AA is also proposing that the board own MORE shares (you know, the ones that don’t exist) and it will be voted on at the next meeting. He intends to propose that he own 12 million USD!

He states that his intentions are the same as ours, to increase AMC share holder value.

LET THE ROCKETS BE FUELED! AMC’s BEST DAYS ARE AHEAD!!!!

The answer to Timothy B’s question about dividends- AMC cannot pay a dividend until about a year from now! BUT it’s not off the table!!!! AMC is planning to pay off all of their debt first.

BOOM BOOM CANDLE BABY!


#AMCEARNINGSDAY!!

AMC Earnings Call NEWS on 8/9/2021

1) AMC has executed 2 leases to add 2 new locations in Los Angeles, the highest grossing locations GROVE and Americana and should open this month. Might be 10 total new theaters, not just 2.

2) In 2021, opening a dozen new theaters in Europoe and Middle East.

3) Many new investors have provided great ideas about stengthening the company. Among those ideas were e-sports, concerts and gaming events. AMC will implete on these ideas. First 2 UFC showings in July did very well. New concerts with Chance The Rapper will show in August. Possible partnership with Gamestop.

4) AMC acquiring Arquit, a crypto entity, so AMC will accept bitcoin if purchased online at all USA locations by the end of the year.

5) AMC will accept Apple Pay and Google Pay by year end.

6) AMC Investor Connect, part of AMC STUBS, setting up a program for advanced screenings ahead of normal release dates.

7) 72 million reads on Adam Arons' tweets. He will engage and commit to listen to investors.

8) 5% admission price increase, on average only 50 cent increase, will strengthen the AMC bottom line.

9) AMC and UNIVERSAL agreement still in the works. AMC and WARNER BROTHERS agreement will give AMC exclusive 45 to 60 days first showings. AMC is in active dialogue with every major movie company.

10) AMC will have a new policy that Adam Aron will be required to hold a number of shares AT LEAST equal to the value of 8 years of his salary. Executive VP's will be required to hold 4 years. Senior VP will be required to hold 2 years. This proposal of having management HOLD shares will be voted on in the next shareholders meeting.


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Bitcoin thought

The Bitcoin distributed ledger is a computational rubric implemented for wide use. While, as those expressed in your podcast, Bitcoin is believed to control human nature, I miss the creditability of such beliefs when I zoom out and see Bitcoin exists in a hugely complex human civilization(s). Complex systems often respond in unexpected and emergent ways. Take for instance taxation. While taxation offers a means to organize economic production towards issues that often are impossible through individual actions there are unintended emergent properties such as the transfer of some degree of personal responsibility to large bureaucratic structures that grow unaligned to initial intentions. I can not seem how Bitcoin (and all currencies) can completely circumvent human complexity both at the individual and larger aggregate levels. A longer discussion would be joyful and helpful as I hope it would lead to exploration of why we are observing civilization the way we describe today’s events.

Respectfully


Market sentiment has swung from extreme fear to greed very quickly. I imagine this will likely trigger a wave of FOMO buys soon (if it has not already begun)

Though it can be tricky to interpret exactly what is the market sentiment in crypto, I think it is very interesting to find that major news outlets like CNN and Independent have swung the content in their articles about crypto from a month ago being about crypto flash crashes every time we dropped 5-10%, to now reporting how crypto is now reporting how bitcoin/crypto is entering a new bull run, how Ethereum may flip Bitcoin, and how gold crashes as bitcoin price soars.

Given the latest development in the market this is of course not that surprising, but all I am saying is that this change in major news outlets reporting could easily trigger a major FOMO buying event (if it has not already begun) - especially from people not yet invested in crypto who now reads these bullish news in the mainstream media.

This rapid change in sentiment is also mirrored in the change in estimated market sentiment on the fear and greed index - a month ago being 'Extreme Fear' to now being 'Greedy' (Image below).

https://preview.redd.it/sq26fjijrdg71.png?width=1548&format=png&auto=webp&s=a12441afd5f0170e4256c9ac2be24ee05121c265