Chris Burniske > Quotes

“Cryptoassets, like gold, are often constructed to be scarce in their supply. Many will be even more scarce than gold and other precious metals. The supply schedule of cryptoassets typically is metered mathematically and set in code at the genesis of the underlying protocol or distributed application.”
― Chris Burniske, Cryptoassets: The Innovative Investor's Guide to Bitcoin and Beyond

“When reading the white paper, the first question to ask is: What problem does it solve? In other words, is there a reason for this cryptoasset and its associated architecture to exist in a decentralized manner? There are lots of digital services in our world, so does this one have an inherent benefit to being provisioned in a distributed, secure, and egalitarian manner? We call this the decentralization edge. Put bluntly by Vitalik Buterin, “Projects really should make sure they have good answers for ‘why use a blockchain.”
― Chris Burniske, Cryptoassets: The Innovative Investor's Guide to Bitcoin and Beyond

“The only way attackers can process invalid transactions is if they own over half of the compute power of the network, so it’s critical that no single entity ever exceeds 50 percent ownership. If they do, then they can perform what’s referred to as a 51 percent attack, in which they process invalid transactions. This involves spending money they don’t have and would ruin confidence in the cryptoasset. The best way to prevent this attack from happening is to have so many computers supporting the blockchain in a globally decentralized topography that no single entity could hope to buy enough computers to take majority share.”
― Chris Burniske, Cryptoassets: The Innovative Investor's Guide to Bitcoin and Beyond

“Theoretically, a better chip for mining is the graphical processing unit (GPU). As its name implies, GPUs are used to generate the graphics that appear on screens, but they are now also widely used for machine learning applications. GPUs are massively parallel processing units, meaning they can run similar calculations in parallel because they have hundreds or thousands of mini-processing units, as opposed to CPUs that have just a handful of processing units.”
― Chris Burniske, Cryptoassets: The Innovative Investor's Guide to Bitcoin and Beyond

“Robert Shiller, author, professor, and Nobel Prize winner, defined a bubble as “a social epidemic that involves extravagant expectations for the future.”
― Chris Burniske, Cryptoassets: The Innovative Investor's Guide to Bitcoin and Beyond

“Paying to use Ethereum’s world computer—also known as the Ethereum Virtual Machine (EVM)—is reminiscent of when schools and libraries had shared computers that students could use.”
― Chris Burniske, Cryptoassets: The Innovative Investor's Guide to Bitcoin and Beyond

“When Mt. Gox opened, bitcoin was worth less than $0.10, and just a year later it was worth over $10. While $10 may not sound like much, consider that in the period of a year bitcoin increased 100-fold, meaning that a $100 investment had turned into $10,000.”
― Chris Burniske, Cryptoassets: The Innovative Investor's Guide to Bitcoin and Beyond

“As a cryptoasset gains greater legitimacy and support, an increasing number of exchanges carry it. As mentioned in Chapter 9, the last exchanges to add a cryptoasset are the most regulated exchanges, such as Bitstamp, GDAX, and Gemini. These exchanges have strong brands and relations with regulators that they need to protect, so they won’t support a cryptoasset until it has undergone thorough technological and market-based vetting.”
― Chris Burniske, Cryptoassets: The Innovative Investor's Guide to Bitcoin and Beyond

“Long term, the thinking is that bitcoin will become so entrenched within the global economy that new bitcoin will not need to be issued to continue to gain support. At that point, miners will be compensated for processing transactions and securing the network through fees on high transaction volumes.”
― Chris Burniske, Cryptoassets: The Innovative Investor's Guide to Bitcoin and Beyond

“Cheap credit often fuels asset bubbles, as seen with the housing bubble that led to the financial crisis of 2008. Similarly, cryptoasset bubbles can be created using extreme margin on some exchanges, where investors are effectively gambling with money they don’t have.”
― Chris Burniske, Cryptoassets: The Innovative Investor's Guide to Bitcoin and Beyond

“Utility value refers to the use of the cryptoasset to gain access to the digital resource its architecture provisions and is dictated by supply and demand characteristics. For bitcoin, its utility is that it can safely, quickly, and efficiently transfer value to anyone, anywhere in the world.”
― Chris Burniske, Cryptoassets: The Innovative Investor's Guide to Bitcoin and Beyond

“After a valuation analysis is done, or at the very least current value is contemplated, the best thing the innovative investor can do is to know and understand the cryptoasset developers and surrounding community.”
― Chris Burniske, Cryptoassets: The Innovative Investor's Guide to Bitcoin and Beyond

“one of the most powerful use cases of blockchain technology was to inscribe immutable and transparent information that could never be wiped from the face of digital history and that was free for all to see. Satoshi’s choice first to employ this functionality by inscribing a note about bank bailouts made it clear he was keen on never letting us forget the failings of the 2008 financial crisis.”
― Chris Burniske, Cryptoassets: The Innovative Investor's Guide to Bitcoin and Beyond

“In his blog post, Buterin mentions colored coins. These involve the marking of an address in Bitcoin with information beyond just the balance of bitcoin in that address. Further identifiers could also be appended to the address, such as information that represented ownership of a house. In transferring that bitcoin in that address to another address, so too went the marker of information about house ownership. In this sense, by sending bitcoin, the transaction also signified the transaction of property rights to a house. There are several regulatory authorities that need to recognize that transfer for this example to become an everyday reality, but the point is to show how all kinds of value can be transmitted through Bitcoin’s blockchain”
― Chris Burniske, Cryptoassets: The Innovative Investor's Guide to Bitcoin and Beyond

“smell tests” are easy to begin with. First, do a quick Google search for “Is _______ a scam?” If nothing pops up, then check to see if the project’s code is open source.”
― Chris Burniske, Cryptoassets: The Innovative Investor's Guide to Bitcoin and Beyond

“Bitcoin provides for a maximum of 21 million units by 2140, and it gets there by cutting the rate of supply inflation every four years.”
― Chris Burniske, Cryptoassets: The Innovative Investor's Guide to Bitcoin and Beyond

“commodities are wide-ranging and most commonly thought of as raw material building blocks that serve as inputs into finished products. For example, oil, wheat, and copper are all common commodities. However, to assume that a commodity must be physical ignores the overarching “offline to online” transition occurring in every sector of the economy. In an increasingly digital world, it only makes sense that we have digital commodities, such as compute power, storage capacity, and network bandwidth. While compute, storage, and bandwidth are not yet widely referred to as commodities, they are building blocks that are arguably just as important as our physical commodities, and when provisioned via a blockchain network, they are most clearly defined as cryptocommodities.”
― Chris Burniske, Cryptoassets: The Innovative Investor's Guide to Bitcoin and Beyond

“On August 18, 2008, Bitcoin.org, the home website for information on Bitcoin, was registered”
― Chris Burniske, Cryptoassets: The Innovative Investor's Guide to Bitcoin and Beyond

“bitcoin and issued guidance on its tax treatment with IRS Notice 2014-21. Without detailing the fine print of the ruling,27 the basic message was that although bitcoin may be called a virtual currency, for tax purposes the IRS would treat it as property. For example, stocks, bonds, and real estate are also considered property.”
― Chris Burniske, Cryptoassets: The Innovative Investor's Guide to Bitcoin and Beyond

“In addition to the developers and miners, there is a third level of governance among the procurers: the companies that offer services that interface between the cryptoasset and the broader public.”
― Chris Burniske, Cryptoassets: The Innovative Investor's Guide to Bitcoin and Beyond

“While the Thiel Fellowship was an indication of what was to come for Buterin, $100,000 wasn’t enough to sustain his team. To that end, from July 23, 2014, to September 2, 2014, they staged a 42-day presale of ether, the cryptocommodity underlying the Ethereum network.16 Ether was sold at a range of 1,337 to 2,000 ether per bitcoin, with 2,000 ether per bitcoin on offer for the first two weeks of the presale and then declining linearly toward 1,337 ether per bitcoin in the latter half of the sale, creating momentum by incentivizing people to buy in at the beginning. Overseeing the legal and financial nuances around this sale was the newly created Ethereum Foundation headquartered in Zug, Switzerland.”
― Chris Burniske, Cryptoassets: The Innovative Investor's Guide to Bitcoin and Beyond

“It wouldn’t be until the summer of 2010 that a formidable place of exchange would come into existence”
― Chris Burniske, Cryptoassets: The Innovative Investor's Guide to Bitcoin and Beyond

“granddaddy of them all appeared: application-specific integrated circuits (ASICs). As the name implies, ASICs are application-specific, meaning that the physical hardware must be designed and manufactured with the application in mind. CPUs, GPUs, and FPGAs can all be bought generically and, with proper engineering, be applied to a specific purpose after the purchase. The physical layout of ASICs, on the other hand, needs to be etched into the chip at the semiconductor fabrication factory.”
― Chris Burniske, Cryptoassets: The Innovative Investor's Guide to Bitcoin and Beyond

“Microsoft provides Blockchain as a Service (BaaS) for developers within its Azure cloud platform.”
― Chris Burniske, Cryptoassets: The Innovative Investor's Guide to Bitcoin and Beyond

“One of the more interesting recent consortiums was the Enterprise Ethereum Alliance. It went public in late February 2017, and its founding members include Accenture, BNY Mellon, CME Group, JPMorgan, Microsoft, Thomson Reuters, and UBS. 25 What is most interesting about this alliance is that it aims to marry private industry and Ethereum’s public blockchain. While the consortium will work on software outside of Ethereum’s public blockchain, the intent is for all software to remain interoperable in case companies want to utilize Ethereum’s open network in the future.”
― Chris Burniske, Cryptoassets: The Innovative Investor's Guide to Bitcoin and Beyond

“The word blockchain was not mentioned once in Satoshi’s 2008 white paper.”
― Chris Burniske, Cryptoassets: The Innovative Investor's Guide to Bitcoin and Beyond

“One of the most important, but often overlooked, indicators of a cryptoasset’s ongoing health is the support of the underlying security system. For proof-of-work based systems, such as Bitcoin, Ethereum,1 Litecoin, Monero, and many more, security is a function of the number of miners and their combined compute (or hashing) power.”
― Chris Burniske, Cryptoassets: The Innovative Investor's Guide to Bitcoin and Beyond

“As much as these comments about premines and instamines can sound black and white, the reality is there may be appropriate reasons for different issuance models. Issuance models are evolving as developers sort through the cryptoeconomics of releasing cryptoassets to support decentralized networks.”
― Chris Burniske, Cryptoassets: The Innovative Investor's Guide to Bitcoin and Beyond

“Ethereum initially planned to issue 18 million ether each year in perpetuity. The thinking was that as the underlying base of ether grew, these 18 million units would become an increasingly small percentage of the monetary base. As a result, the rate of supply inflation would ultimately converge on 0 percent. The Ethereum team is currently rethinking that issuance strategy due to an intended change in its consensus mechanism. Choosing to change the issuance schedule of a cryptoasset from the plan at time of launch is more the exception than the norm, though since the asset class is still young we are not surprised by such experimentation.”
― Chris Burniske, Cryptoassets: The Innovative Investor's Guide to Bitcoin and Beyond

“Bitcoin has done something arguably more impressive than Uber, Airbnb, and LendingClub. Those companies decentralized services that were easily understandable and had precedent for being peer-to-peer.”
― Chris Burniske, Cryptoassets: The Innovative Investor's Guide to Bitcoin and Beyond