bit gold: Unforgeable Costliness as a Design Goal
bit gold asked what would have to be true for a string of bits to be expensive in the way a metal is.
Primary sourceOrigins
00A diffusion index of fifteen years
Crypto history, above and below the line.
Fifty is the line between expansion and contraction. Fifteen years of crypto is a sequence of things crossing it in both directions, and almost none of the people living through it could tell which side they were on.
A purchasing managers' index is not a price. It is a count of how many respondents said a thing got better rather than worse, and fifty is the point where those two groups are the same size. Above it the thing is expanding. Below it the thing is contracting. The number itself carries no information about size, only about direction.
That is the most useful lens anyone has for crypto, and almost nobody uses it. Capital, attention, credit, belief, users, developers and regulation have each crossed that line more than once since 2008, in both directions, and the crossings rarely happened at the same time as each other or at the same time as the price.
So every piece on this site is written to answer three questions. What was expanding. What was contracting. And who, at the time, could actually tell. The third one is usually the interesting one, because the answer is normally that almost nobody could, including the people whose later accounts say they did.
01The eras, and what defines each one
The spans below are approximate and say so. Era boundaries in crypto are contested, most of the confident ones were drawn after the fact by whoever was writing the retrospective, and this site does not state a contested boundary as a fact. What defines a period here is what was happening in it.
Origins
Expanding
roughly 2008 to 2011
A paper, a mailing list and a client nobody was using yet. Almost everything from this period survives as a document, which is why it is the best documented era and the one most often misquoted.
35 pieces
Early exchange
Both at once
roughly 2011 to 2014
The first places to buy the thing, and the first places to lose it. Custody arrived years before anybody had worked out what custody meant.
1 piece
The token sale era
Expanding
roughly 2016 to 2018
Programmable issuance met an audience with no way to price it. This is where the gap between what a document promised and what a contract did became the whole story.
nothing published yet
On-chain finance
Expanding
roughly 2019 to 2021
Market structure rebuilt as public code: pools instead of books, incentives instead of intermediaries, and a new class of failure that nobody had a name for yet.
1 piece
Institutional arrival
Both at once
roughly 2020 to 2022
Balance sheets, funds and regulated wrappers. The interesting question is not that institutions arrived, it is what they were and were not willing to hold directly.
nothing published yet
After the collapse
Contracting
roughly 2022 onward
A sequence of failures that were reported as market events and turned out, in the filings, to be bookkeeping. The record here is unusually good because so much of it went through a court.
nothing published yet
02Recently published
Hardcoded Checkpoints Were an Admission, and a Reasonable One
A checkpoint is the developers telling your node not to bother reconsidering the distant past.
Primary sourceOrigins
The Bug That Created Coins Out of Nothing, and the Fix That Rewrote History
The supply rule was broken by an integer overflow, and the repair required the network to abandon blocks it had already accepted.
PostmortemOrigins
The Supply Schedule Is a Rule in Code, Not a Promise in a Document
The cap is enforced by every node choosing to run software that enforces it, which is a different kind of guarantee than most people hear.
Primary sourceOrigins
b-money: A Short Proposal That Named Most of the Problem
b-money is short enough to read in one sitting and honest enough to say where it does not work.
Primary sourceOrigins
There Was a Key That Could Broadcast a Message to Every Node
For years the network shipped with a mechanism for a few people to display a message on everyone's screen.
Primary sourceOrigins
03What this site does not do
It quotes no price.
Not a market capitalisation, not a valuation, not a figure for what anything was worth on a given afternoon. The history is what happened and what the record says; a chart is a different site.
It makes no forecast.
No target, no view on what is cheap, no prediction. Everything here is written with hindsight the people involved did not have, which is a reason for humility rather than a licence to extend the line.
It invents nothing.
No date, no quote and no claim about what a named person said, unless it is verifiable. Where a claim is contested the contest is named. Where a source is dead the piece says so, and says what it said.
ISM50 is written by Khaled Hawari, who goes by Kal. He is a tax and financial consultant and a senior technical project manager, working from Ottawa. Why a practitioner keeps this recordis set out on the about page.