Bitcoin outperformed Nasdaq by a factor of ten, says Bill Miller IV. The notes in the hand of MicroStrategy represent its only debt, he said.

Bill Miller IV, a portfolio analyst at Miller Value Partners, announced in a letter to shareholders the incorporation into the Income Strategy fund, managed by that firm, of a percentage of MicroStrategy’s convertible bonds or notes, based on bitcoin (BTC).

One of the reasons for acquiring MicroStrategy’s convertible bonds is CEO Michael Saylor’s managerial performance, Miller said in the investor communication. Miller noted that Saylor managed to reverse a severe crisis of his company; after the company had wasted 99.86% of its market value.

The executive also points out an explanation given last December by his father, Bill Miller III, founder of Miller Value Partners. After explaining the basics of bitcoin technology, the 21 million caps on its supply, and the fact that growing activity on the network could revalue BTCs whose scarcity is already evident, Miller asks, “Why would I want to someone have some bitcoin?”

Then, using data from the IMF, the World Bank, and the Organization for Economic Cooperation and Development (OECD), Miller states that with its market capitalization of $ 700 million, ‘Bitcoin is approximately 0.5% of the global money supply of 130 trillion, despite the advantages it has over the traditional monetary system.

The investor claims that from the end of 2019 to October 2020, the global money supply grew 20%, while the supply of Bitcoin only grew 2.5% in 2020 and highlighted the unique advantages of bitcoin over other financial systems.

User’s supply will not change due to new jurisdictions, policy errors, or unforeseen consequences. No one will threaten to temporarily shut down owners’ access to Bitcoin due to a pandemic. It is more challenging to steal than other stores of value and changes hands much more quickly. There is more transparency around Bitcoin than in any currency in world history, and buyers know that they are pretty confident about their investment in the money.

Bill Miller IV, Miller Value Partners

Miller provided users with a detailed summary of the performance of the first cryptocurrency as an asset. He highlighted that bitcoin achieved the best performance in eight of the last ten years.  “Its annualized yield has pulverized the next best performer, the Nasdaq, by a factor of ten in the last decade.”

Miller continued refuting the main arguments against Bitcoin. For instance, those that it is a Ponzi scheme, that it has no intrinsic value, that it is too volatile to be a haven asset, or that it is good but that regulators will forbid it, among others.

The investor then explains the reasons for purchasing convertible bonds from those issued by MicroStrategy. This firm carried out the issuance for a total of USD 650 million in mid-November.  According to Miller, that is the only debt that MicroStrategy has. He also   estimates that the amount of the assignment is approximately half the value of the company.

By: Jenson Nuñez

Airlines will be able to verify the health status of their passengers through the platform. Hyperledger Indy developers are currently working on that platform for travelers.

Around 300 airlines constitute the International Air Transport Association (IATA) worldwide. They recently revealed that their blockchain platform would be ready for use starting in March. The tool, called Travel Pass, will allow verifying the health status of each passenger at the time of boarding.

IATA says in an official statement that they developed a mobile app that will store the COVID-19 tests and vaccine certifications of passengers. Although each user manages the data, the platform connects with government agencies and health centers that issue COVID-19 tests. This seeks to ensure that verified information reaches those who need it safely.

According to the document, the launch of the Travel Pass will come amid expectations about its usefulness for allowing airlines to resume their flights. IATA also expects the economic recovery of the industry after a year of inactivity due to the COVID-19 pandemic.

Features of That Blockchain-Based Solution

The head of security products at IATA, Alan Murray Hayde, explained that the platform has four independent components that interact with each other. He said that these modules include a registry with precise information on the entry requirements of each country or territory.

The second module consists of a registry of the test centers and laboratories that meet the requirements of the places of destination. Through an app, authorized laboratories and test centers can send data on test results or vaccination certificates to passengers. According to the Future.Travel website, the last module allows issuing the digital pass.

Users send the results of their tests to the Timatic system, which confirms whether or not they are fit to travel. Airlines access this database to verify passengers’ documentation.

Extension of the Pass to Other Countries

Concerning UAE airline Etihad Airways, they will test the tool during the first quarter of the year. The company said they will extend the pass to other destinations if it is successful.

Another airline, Emirates Airlines, will conduct a series of tests in Dubai to validate the diagnostic tests for COVID-19. IATA says in another statement that this validation is necessary so that passengers can board each flight.

In this initial phase, Emirates Airlines customers will be able to share the status of their COVID-19 tests directly with the airline. This will be possible even before arriving at the airport, starting in April.

Self-Sovereign Identity Blockchain App

According to Murray Hayde, the Travel Pass is an extension of the contactless identity app that IATA was developing before the pandemic. The trade association has been working on the tool jointly with Evernym. The latter is a company that uses blockchain technology to develop self-sovereign identity networks.

They explain on their website that their blockchain platform allows each user to retain control over their digital identity. In this way, they seek to guarantee the inalterability of citizens’ data by creating a decentralized ecosystem of digital credentials.

For some time, governments and companies have been studying the implementation of blockchain-based passes. The idea is to be able to return to everyday normality. Spain was already doing pilot tests for this type of technological solution in May of last year.

Regardless of the advantages of this type of app, one of the great concerns is the use of users’ private data. There was increasing nervousness among users as errors have exposed their private information, as happened in Argentina last year.

By Willmen Blanco

The objective of the latest improvements to the Bitcoin code is to increase the privacy and efficiency of the network. Taproot and Schnorr signatures are among the initiatives that need support from the nodes for their adoption.

One of the most notable years for Bitcoin was 2020 when its market had unprecedented growth. The 12-year-old network has grown larger and more mature month by month. Last year, the full track record of the blockchain managed to reach over 300 gigabytes despite difficulties.

In addition to the expansion of the network, there have been improvements to some of its technological advances. These include the presentation of Minsc languages, Schnorr signatures and the Taproot suite of updates. Likewise, a proposal for multi-signature transactions and an advance in smart contracts (DLC) for Bitcoin appeared.

Network users are looking for much more privacy, efficiency, and interactivity, which has led to updates and new features. Some technological advances in Bitcoin from last year promise to positively impact the network’s behavior in 2021.

Discrete Log Contracts (DLC) for Bitcoin

Discrete Log Contracts (DLC) allow two or more parties to agree to exchange money depending on the outcome of a certain event. They work based on an oracle, which is in charge of informing the correct result. After the event, the oracle publishes a commitment to the result, which one of the parties can use to claim their funds.

DLC developer Tadge Dryja said that these contracts can allow Bitcoin to enter the dApp market. The researcher described DLC “as one of the most important advances in Bitcoin today.” He noted that this feature will allow betting, borrowing, or even decentralized trading between Bitcoin and other cryptocurrencies or physical assets. Other networks including Ethereum, Tron, EOS have been exploring this concept.

Minsc Language for Bitcoin

The Minsc language is another advance in smart contract technology that could have great relevance in the future of Bitcoin. This scripting-like programming language allows the coding of complex contracts and transactions on the network. Minsc is a tool that seeks to expand the programming capabilities of Bitcoin.

Its developers, among those who are Nadav Ivgi, say that Minsc will generate the Bitcoin Script code starting from direct and simple instructions. Those behind the non-commercial and open source project have implemented it in Rust and posted its source code on GitHub. The new language could improve the performance of atomic swaps or contracts on the Lightning Network.

Upgraded Version of CoinSwap Protocol

Unlike other privacy products such as CoinJoin or PayJoin, CoinSwap creates a 2-of-2 or 2-of-3 multi-signature. That allows an on-chain atomic swap, so users can send their coins to a third address that they control. Chris Belcher, Developer of the protocol, says that it makes the transaction path more complex and more difficult to trace.

CoinSwap would mix Bitcoin from multiple owners and transfer them into a single address, making it difficult for tracing companies. In the case of this mixer, the transaction of the funds would involve several addresses simultaneously. Besides, CoinSwap does not leave any traces since there are no records that someone used this tool.

Taproot and Schnorr Signatures on the Bitcoin Code

The Taproot protocol and Schnorr signatures are complementary solutions that seek to increase Bitcoin’s privacy and scalability. Schnorr signatures emerged as a replacement for the Elliptical Curve Digital Signature Algorithm (ECDSA). The latter allows third parties to verify a transaction without the need to compromise privacy. Schnorr converts multiple transactions into one, thus reducing storage space and enabling faster confirmations.

For its part, the Taproot protocol provides privacy to the Bitcoin network as it makes regular transactions indistinguishable from complex transactions. In other words, Taproot allows a Coinjoin transaction with multiple signatures to go completely unnoticed. Along with the Schnorr firms, Taproot has gained acceptance from the Bitcoin mining industry, with 90% support.

By Alexander Salazar

Some traders acquire large sums of Bitcoin to keep them for the long term. The price of the pioneering cryptocurrency has grown thanks to the savings off exchanges.

“Hodlers”, those traders who buy Bitcoin to save it, could be leading the cryptocurrency market. These traders maintain their long-term positions, which cause a lack of liquidity not seen since 2016.

Glassnode recently indicated that around 270,000 BTC have moved to “savings entities” in just the last 30 days. The outflow of large sums of Bitcoin from exchanges could be contributing to driving the price higher.

“Bitcoin is undergoing a process of liquidity depletion not seen in years. Not only are there withdrawals of funds from exchanges, but coins continually go into ‘strong hands’,” analytics firm Glassnode reported.

At least since December 2018, the shortage of Bitcoin on exchanges has been on the rise. However, it is possible to compare the current peak with the depletion that occurred between August and September 2016. At that time, the outflow of Bitcoin from the market exceeded 300,000 units per month.

Incidence of Institutional Investments in Bitcoin

This situation acquires new dimensions as this kind of depletion has only occurred four other times between 2011 and 2012. Institutional investment is a relevant factor that could be driving the scarcity of the main cryptocurrency on the market.

Records of Bitcoin Treasuries indicate that institutional investors have put almost USD 30 billion into cryptocurrencies. Given the skepticism of some institutions, this is a figure that no one could even imagine a few years ago.

In December 2020, institutional investments in Bitcoin reached USD 20 billion. There was an increase of almost USD 10 billion in just 30 days, which proves the interest that companies show in Bitcoin.

Regardless of market volatility, it seems that institutional investments in Bitcoin will continue to grow. For example, MicroStrategy founder and CEO Michael Saylor reported that his company had purchased another 314 BTC for USD 10 million. With that acquisition, the company’s holding reaches 70,784 BTC.

Given that Saylor was one of the biggest critics of Bitcoin, this case is particularly curious. This exemplifies the resistance that entrepreneurs exhibited in the past. In December 2013, Saylor attacked the cryptocurrency saying that it “is nearing its end.” On that occasion, he predicted that it would suffer the same fate of online gambling in “a matter of time.”

Reasons for the Shortage of Bitcoin

The shortage that Bitcoin has recorded the last month is the continuation of the lack of liquidity that it recorded in 2020. The analytics company CryptoQuant highlighted that there were withdrawals of around 626,000 BTC between March and December of last year.

Adding to the amount that Glassnode reported, traders with “strong hands” went from holding 270,000 BTC to roughly 900,000 BTC off the exchanges. This means that there are potentially long-term positions and those coins will not re-enter the market until further notice.

Only 22% of the amount of existing Bitcoin could be part of the market. In other words, around 4.8 million BTC, out of a total of 18.6 million units, would be changing hands.

By Alexander Salazar