Some in the Bitcoin space claim to only be in it for the tech, maintaining that bitcoin’s price doesn’t matter much to them. 

Whether they’re just posturing or whether they really mean it, they’re overlooking a major factor that keeps the Bitcoin network secure and healthy — the price of bitcoin.

Lyn Alden did an exemplary job describing why bitcoin’s price matters in the follow post:

Because money is a network good.

Liquidity feeds more liquidity. And eventually broad enough liquidity feeds stability, which makes it more usable. Which then feeds more liquidity.

It is similar to why we are here on this platform whether or not we like the recent owner.…

— Lyn Alden (@LynAldenContact) October 24, 2023

Her main points included:

• The more liquid bitcoin becomes, the less volatile and more usable as money it becomes.
• Price is a market signal: five years of stagnant price action would send a negative signal to the market about bitcoin’s value.
• If bitcoin (a finite asset) was designed as a counter to fiat (an infinite asset), its price should increase as more liquidity is injected into the system (i.e., as more fiat is printed or more debt is created).

I’d like to help further Lyn’s argument by including the following points:

• The security of the Bitcoin network depends in large part on the amount of people or institutions that mine bitcoin. As the block subsidy decreases every four years, bitcoin has to continually increase in price for miners to remain incentivized to mine the asset.
• Bitcoin’s price adds to its legitimacy: the closer bitcoin’s market cap gets to the market cap of gold, the more investors view the assets as comparable.
• An increase in bitcoin’s price incentivizes holders to continue to do things to keep the network healthy, like running nodes, and to defend the network against its detractors. After all, as Jeff Booth says, “We Are Bitcoin,” and its success depends on us.

So, if you were pumped when bitcoin’s price hit a new all-time high this week, good for you.

Even if you weren’t necessarily thinking about the points made above as bitcoin’s price reached new highs, it’s also okay to simply be happy about having greater purchasing power.

Really, at this point, Coinbase is just embarrassing itself by not buying Bitcoin and doing silly buybacks.

Coinbase just had a bad quarter. After reporting disappointing Q3 earnings, its stock plunged over 10%. To instill confidence, Coinbase announced a $1 billion share buyback. But that flopped, too, with shares barely budging.

This whole debacle just shows that Coinbase is foolishly ignoring the obvious strategy here — buying bitcoin.

Instead of share buybacks, imagine if Coinbase put $1 billion into bitcoin for its corporate reserves. That would have sent a real message. It would show they have skin in the game and truly believe in Bitcoin and crypto’s future.

Let’s be clear – Coinbase should be all-in on Bitcoin’s upside. This is the industry they pioneered! Yet here we are in 2024, and Coinbase won’t follow the proven Bitcoin reserve model that is literally being flaunted in their face by MicroStrategy.

Look, I am not any financial engineering expert to tell public companies what to do, but it’s just too evident for crypto companies at this point.

MicroStrategy started buying Bitcoin in 2020. And look what’s happened — their market cap now exceeds Coinbase’s! This software company, with 1/10th the revenue of Coinbase, has surged past the OG Bitcoin and crypto exchange. All thanks to stacking sats.

How embarrassing for Coinbase! They’ve been around since 2012, when Bitcoin was $5. Just imagine if they went all-in on BTC back then. But it’s still not too late.

No more wasting money on share buybacks or lame projects. The solution is staring Coinbase right in the face — just keep stacking sats!

It’s painfully obvious at this point. Any self-respecting Bitcoin and crypto company must hold Bitcoin on its balance sheet. It aligns interests with shareholders and strengthens credibility.

So wake up, Brian! No more excuses. Coinbase literally owes its existence to Bitcoin. It’s time to go all in at last.

This article is a Take. Opinions expressed are entirely the author’s and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

It has now been sixteen years since the original publication of the Bitcoin whitepaper on the cryptography mailing list. Satoshi went and dropped the paper in the place it would be best received, where all of the cypherpunks and cryptography nerds who had been obsessed with digital cash systems for years hung out and regularly discussed that and other related topics.

The whitepaper was by no means even close to a comprehensive description of the Bitcoin protocol. It didn’t describe the scripting language at all, it didn’t go into a difficulty adjustment algorithm, it just vaguely described the concept of one. It didn’t define the exact protocol blocks were propagated across the network with (just a vague description), or the difference between consensus and policy rules. It didn’t define an issuance schedule or a total supply, just that it could be finite at some arbitrary value and eventually end issuance to support the network based solely on fees.

None of the actual implementation details or specifics of the actual system were described in any way whatsoever. Just the general concept of a proof-of-work secured blockchain and how it could function without a central third party taking the role of record keeper for the transaction history to prevent double-spending.

This is still a rather profound document given all of its shortcomings when weighed against the Bitcoin protocol itself in totality. Applying proof-of-work with a difficulty adjustment to the double-spend problem is the profound breakthrough that actually differentiated Bitcoin from prior attempts at digital cash, such as bitgold or e-cash.

While the whitepaper itself is by no means close to enough information to reimplement the protocol as it stands today, it is enough to replicate a similar enough system. It’s the heart of it, the bits that really had to exist for the protocol we know to be brought into the world. Despite its lack of details and specificity, it will stand the test of time as one of the most important academic papers released in the 21st century.

Everything brought into the world starts with an idea, and the ideas in this paper are truly profound in the implications and consequences they have had, and will continue to have on the world around us.

Happy Whitepaper Day. 

This article is a Take. Opinions expressed are entirely the author’s and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.