[5 minute read] by Tony Faccenda

Hello! End of Q1 in the crypto calendar and things are looked markedly better than they did at the beginning of the year. Bitcoin looks set to start April above $4k, and many alts are showing encouraging uptrends. Several market commentators, not least Willy Woo, have predicted an April cycle low, so let’s see what the coming weeks have in store.

Back to content, we’re looking at an eclectic mix of topics this week. I’ve tried to keep the summaries brief, but always keen to hear if I’m hitting the right balance.

Here are my top articles for this week…

Article #1

Title: The Ethics of Money and Bitcoin

Author: Nicholas Dorier

Organisation/affiliation: Bitcoin developer


Our first article is built on a rather ambitious premise. The author, a Bitcoin developer, attempts to distil the philosophy of Murray Rothbard, an economist of the Austrian school, and apply it to define morality in Bitcoin. If you’re not familiar with Austrian economics, it’s a branch of libertarianism known for its focus on ‘sound money’, i.e. currency free from government interference. The author was inspired to write this piece after reading Rothbard’s ‘Ethics of Liberty’, in which he analyses the notion of human nature. Rothbard sees human nature as an objective measure against which actions can be deemed moral or immoral. Dorier uses this concept to outline the ‘nature’ of Bitcoin based on a set of accepted characteristics of money, and use this to assess whether developments such as Lightning Network, bigger blocks and SPV wallets are consistent or inconsistent with Bitcoin’s nature.

Key takeaways:

  • Nicolas scores bonus points for boldness. The fact he had to write a clarification post afterwards (see below) shows just how contentious it is to try to define what Bitcoin is or isn’t.  


  • “The nature of money, what distinguish it from any other things, is that money can be easily exchanged at any time in future against another good by another party, where, the specific time, the future good and the other party don’t need to be known in advance. This is the nature of money.”
  • “If you agree with me about what is the Nature of Bitcoin, and that the Ethic of Bitcoin are values which can logically prove that an action is immoral when it goes against the Nature of Bitcoin… With this ethic, you can judge what is “bad for Bitcoin” or “good for Bitcoin” without any subjectivity involved.”


Link: https://medium.com/@nicolasdorier/the-ethics-of-money-and-bitcoin-f6c4f568d9f9

Further reading:

  • For more information on the relationship between Bitcoin and Austrian economics, see The Bitcoin Standard by Saifedean Ammous.

Article #2

Title: On Value Capture at Layer 3

Author: Rocco

Organisation/affiliation: Alpine Intel


With a lot of attention on crypto’s ‘layer 2’, i.e. protocols built on top of base-level blockchains, Rocco turns his attention to ‘layer 3’, i.e. applications built atop layer 2. The article follows on from Kyle Samani (Multicoin Capital’s) post on value capture at layers 1 and 2, which I covered recently. Specifically, he focuses on two projects: Veil (a layer 3 prediction market application which is helping to resolve some of the frictions on Augur, its layer 2 protocol), and Radar Relay (a non-custodial exchange built on top of decentralised exchange protocol 0x).

Key takeaways:


  • When analysing the opportunities and risks around layer 3, the main consideration is dependencies. App developers are relying on the layers below functioning as anticipated. It’s an interesting though whether this serves as an incentive for layer 3 developers to participate in securing layers 1 and 2 (and thus overcoming the ‘tragedy of the commons’ problem).



  • “To value these third layer platforms would normally be through open interest against their current fee models. That seems simple enough — similar to how we measure existing businesses and valuations. However, the factor that needs to be included is the risk of building on multiple layers, each with their own individual risk profile.”

Link: https://medium.com/alpineintel/on-value-capture-at-layer-3-40f3470b9510

Further reading:

Article #3

Title: Picking the right coins and why your definition of an “altseason” is probably wrong

Author: CryptOrangutang

Organisation/affiliation: Crypto trader


As signs of life return to the alts market, CryptOrangutang takes the opportunity to compare it with the famous ‘Alt Seasons’ of 2017/8. The first (beginning March 2017), he notes, happened with a sea of new money into a low value market, therefore bringing massive multipliers. The second (December 2017 – January 2018) happened on the back of Bitcoin’s colossal rise to $20k and brought projects to unfathomable valuations regardless of their respective fundamentals. Orangutan argues “We probably won’t ever see another alt season as we did before and if we do, the chances of it happening now are slim to none.” The reasons he cites include the sheer number of coins on the market currently, the fact we’ve passed the ‘euphoria’ that carried the market in 2017 and that many existing coins have significant resistance levels to try getting anywhere near previous highs. On a positive note, he thinks that individual projects can excel if they can hit a three-point criteria: volume, fundamental catalyst and momentum.

Key takeaways:

  • As alts spring back into action, the post offers some much-needed sobriety. Most importantly, be careful with diving into illiquid coins in the hope of a 5X return. If the market turns, there will likely be a new set of ‘community members’ (bagholders).


  • ”There is currently not enough momentum on the market and even if it was, the amount of coins and their price history makes it unlikely that you will profit from buying a random dead shitcoin during an “altseason””
  • “I am not worried about missing the generational bottom and I am not worried about being cautious when CT folks mock others for being bearish when they themselves were sitting all-in at 6k. What matters is securing the capital, not catching that additional 10%.”

Link: https://medium.com/@cryptorangutang/picking-the-right-coins-and-why-your-definition-of-an-altseason-is-probably-wrong-5095aa9858b5

Further reading:

Article #4

Title: Bitcoin’s Market Dominance

Author: JP Thor

Organisation/affiliation: Bitcoin enthusiast


At first, mathematically-challenged readers like me may feel intimidated by this piece. However, with a bit of persistence, it actually has quite a simple message. It focuses on the notion of ‘market dominance’ and takes exception to CoinMarketCap’s estimation of Bitcoin as having 50.1% dominance over the market. The author argues that market dominance is an inadequate measure, as much of the market is made up of illiquid assets. When taking liquidity into the equation, the author makes a refined calculation that shows Bitcoin possesses around 80% of the market.

Key takeaways:

  • As with the various articles I’ve shared in recent week on new valuation measures for Bitcoin, the point is clearly that looking at projects in terms of simple ‘market capitalisation’ is misguided. CoinMarketCap reinforces this problem as it’s the default site for crypto market data, yet lacks sophisticated metrics.


“It is clear that Bitcoin is the dominant currency when taking liquidity into account. In terms of share, it is consistently over 80% and trending up.”

Link: https://medium.com/@jpthor/bitcoins-market-dominance-a9693ff604bf

Further reading:

Article #5

Title: A crypto manager lays out the market improvements to the currency and says 2019 will be a year to watch

Author: Kyle Samani, op-ed for Business Insider

Organisation/affiliation: Partner, Multicoin Capital


Speaking to a general financial services audience, Kyle provides a comprehensive summary of how well equipped crypto infrastructure is to handle institutional demand . He states that while 2018 was an annus horribilis for the crypto markets, the development work being done to facilitate institutional capital will begin to bear fruits in 2019. Specifically, he covers services in custody solutions (Coinbase, BitGo and Bakkt), prime brokerage (Fidelity), regulated exchanges (CME, CBOE, Nasdaq and Bakkt) and lending desks (Genesis Capital and Galaxy).

Key takeaways:

  • Articles like this are important to speak to audiences outside the crypto goldfish bowl. Amid the gloom of 2018, there were a number of bullish fundamental announcements that can help lay the infrastructure for greater institutional involvement in crypto.


“Many still think that cryptoassets are not shortable, that there are no derivatives, and that SEC-qualified custodians don’t exist, that there are no prime brokerage services, and that exchanges are unregulated. All of these views are incorrect.”

Link: https://www.businessinsider.com/crypto-market-infrastructure-evolution-kyle-samani-2019-3

Further reading:

Tony Faccenda

I am a London-based writer and crypto obsessive.
Follow me on Twitter: @tonyfaccenda