Bit out of the Ordinal: Lightning Network, Ordinals, and BRC-20 Fundamental Analysis
Edition 38 - The Elite Cryptocurrency Investment Strategy Newsletter
Out of the estimated 320 million users of cryptocurrencies, you would be hard-pressed to find one that has never heard of Bitcoin.
Learning about the fundamentals of Bitcoin is a journey that takes our understanding from ‘internet money’, to propagating buzzwords like ‘decentralization’, ‘permissionless’, ‘censorship resistance’, ‘anti-fragile’, et al. – while trying to understand what makes these buzzwords important.
While we understand Bitcoin to be a response to the 2009 Global Financial Crisis, the truth is, it has been a long time in the making, a product with over 4 decades of computer science research and development leading up to its deployment.
To deeply understand Bitcoin, we must evaluate how the monetary system works, why it’s broken, and how Bitcoin fixes it.
It cannot be learned overnight, and it takes an invariable amount of time for each person to truly appreciate why Bitcoin is necessary before having a ‘lightbulb moment’.
For these reasons we would need a book to aptly explore Bitcoin, as such, this piece isn’t purposed to explain Bitcoin from start to finish, we are likely all in different places on our learning journey toward this end, and arguably it is a lifelong journey that can take your understanding on an entirely different trajectory than the friend we all have that you pressured into buying it “‘coz it’s the future”.
Given it is the original cryptocurrency, or at least the genesis of blockchain technology as we know it today, this piece isn’t purposed to replicate or summarize the tens of thousands of hours of educational or even philosophical content on the matter. Andreas Antonopoulos, Marc Andreessen, Changpeng Zhao, Anthony Pompliano, Raoul Pal, and Michael Saylor – have aired thousands of hours between them on their thought experiments on the value and implications of Bitcoin. For those still building fundamentals, you would realize value from evaluating their perspectives.
Instead, this piece assumes a basic knowledge of Bitcoin and builds upon a handful of technical concepts to understand emerging use cases. Specifically, what is the Lightning Network, what is the significance of the Segwit and Taproot upgrades, what is an unspent transaction output (UXTO), and how do these functions give rise to Inscriptions and the propagation of Ordinals and BRC-20 assets.
Following an explanation of each piece of the Bitcoin network, we will discuss, at length, the possible implications for Bitcoin as it plays catch up to achieve the functionality of the myriad of smart contract layer-1s.
Keep reading with a 7-day free trial
Subscribe to CCI - Elite Cryptocurrency Investment Strategy Newsletter to keep reading this post and get 7 days of free access to the full post archives.