BitDigest May 18 · Issue #660

• Bitcoin holding below $10,000 resistance levels
• Fed’s Powell says Fed can issue digital money (but not cryptocurrencies)
• Bitcoin’s hashrate has fallen 36% over the past 7 days

Harry Potter and Bitcoin

I assume that most of BitDigest’s readers have been asked “what is bitcoin,” but the seemingly simple tweet “I don’t understand bitcoin. Please explain it to me,” by Harry Potter author JK Rowling took the cryptoverse by storm over the weekend with everyone from Ethereum co-founder Vitalik Buterin to Tesla’s Elon Musk trying to answer this question.

Rowling had a difficult time understanding the explanations tweeting, “People are now explaining Bitcoin to me, and honestly, it’s blah blah blah collectibles (My Little Pony?) blah blah blah computers (got one of those) blah blah blah crypto (sounds creepy) blah blah blah understand the risk (I don’t, though.),” but she did share her appreciation with all of her followings by adding, “God bless every single one of you now earnestly explaining bitcoin to me as though I’ll grasp it if you break it down properly. Things like this are white noise to me. I cannot and will not ever understand Bitcoin, but I love you for thinking that I can or will.”

a16z’s Crypto Price Innovation Cycle

In the first video of Andreessen Horowitz’s (a16z) Crypto School, Chris Dixon discusses their idea of their crypto cycle in which price acts as a leading indicator to drive interest followed by new ideas and then projects. While price is typically a lagging indicator, he suggests that the appreciation of digital assets has been the primary driver bringing people into the market. In my words: it’s the sweet smelling candy that tempted all of us and inspired our initial interest before falling down the proverbial rabbit hole.

Supporting this thesis, he discusses an analysis of the three cycles a16z uses to view the market: 2009 – 12, 2012 – 16, and 2016 – 19 comparing each of these by price, social media activity, developer activity and start-up activity.  While this report is explained in greater detail in The Potential of Crypto video, a16z released a summary of this discussion in a new blogged titled the Crypto Price-Innovation Cycle.

Crypto Stories Continue on Billions

Billions ran its third episode of the new season last night and for the third week, crypto has played a major role in the story line. In Week 3’s episode, written by the Bitcoin Billionaires author Ben Mezrich, Axe’s son Gordie gets in trouble for shutting down the electrical grid at his boarding school while trying to mine digital currencies. Mezich also throws in a reference to the Winklevoss twins when their last name is used an adjective to represent a child who sets their sights on success at a young age.

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