27 June 2024 · Block Height 849800 · Bitcoin Price $61K

Have you heard of the “Mempool.space Effect”?

We’ll explain — buckle up because this morning’s newsletter is a super long one!

Quick Hits

• Cleanspark buys GRIID

• MagicEden adds sniping protection feature (your JPEGs are safe!)

• Marathon expands to Kaspa Mining

• Hashprice approaches all-time-low

A Bitcoin Renaissance

Maybe you call it Bitcoin Season 2, maybe you say this is the Event Horizon of Bitcoin’s “Black Hole”. While the macro bros are stuck looping on BTC ETF inflows there is clearly something happening on Bitcoin’s cultural layer — signs of a Renaissance.

Just doing a quick temperature check on twitter shows that something is different in the Bitcoin narrative. A Taproot Wizards spaces pulls 10x more than Swan’s Cafe Bitcoin, the NFT shows are talking about Ordinals, and the Ordinals people are talking about OP_Codes.

Last week I wrote about trends I was seeing in Bitcoin UI/UX, but today I thought I would expand on that train of thought and identify more trends across the Bitcoin space.

The Mempool.space Effect

One of the most iconic faces of the heartbeat of Bitcoin is Mempool.space’s home page. The new Bitcoin degen knows well the dinging sound of a confirmed transaction.

A collection of text + pictures called “bitmaps” of different mempool.space block visualizations reached a market cap of $1 billion at it’s height. The simple depiction of transactions in a block has now become iconic and widespread across the ecosystem — so much that the average Ordinals degen may not actually know the origin of the visualization, it’s just baked into ecosystem design language.

This design language has been replicated across the ordinals & runes universe on sites like Ordiscan, Ordpool.space, etc. Recently the leading Ordinals explorer Ord.io released a Runes block visualizer which shows how “full” upcoming blocks are for certain Runes mints.

It’s fascinating to see an ecosystem coalesce so quickly on a particular design scheme. One of the ongoing challenges for Bitcoin, crypto in general, is how to build intent driven products which communicate abstract & technical concepts to end-users. It feels like we’re finally making progress.

Wallet-based login comes to Bitcoin

The word “web3” has been taboo in Bitcoin since it’s inception, it’s even begun to fall out of favor in crypto as retail becomes disillusioned with perceived VC extraction. Nevertheless, I think it is still a helpful mental model for this new era of the internet.

One of the defining trends in web3 is is Wallet-based login. Love him or hate him, Chris Dixon’s “Read/Write/Own” does appear to be a helpful mental model for the evolution of the internet.

The wallet-based login trend has seen adoption everywhere except Bitcoin, until now. The primary window an active ordinals user has to Bitcoin is through their wallet. The wallet is the degen’s badge of honor, their online identity almost as important as their pfp (address reuse notwithstanding 😭).

Now a user gains access to certain chat rooms or information pipelines just by having verified their wallet as owning a certain UTXO (that contains an ordinal → inscription in it).

Behind the majority of these tools in Bitcoin is BIP-322, allowing users to sign messages verifying that they do have a certain private key. While BIP-322 has been in Bitcoin a long time, it hadn’t been common across the ecosystem until ordinals came along.

The Education-for-Engagement Flywheel

The most wholesome type of engagement farming is the “education engagement” trend. This has been a tried and true growth hack strategy over the past decade in the creator economy driven internet, but has historically been a pretty narrow field in Bitcoin. Yes, there are an abundance of newly ascendant macro bros, but there can only be so many Dylan LeClairs before the market gets chart exhaustion.

What has changed are the incentives to create educational content. Historically on Bitcoin, free educational content as a top of funnel marketing tactic would be monetized in a pretty narrow way: a Swan referral link, paid consulting, or buying someone’s book. As the web3 wave crests over Bitcoin we see a multitude of new value capture techniques emerging.

Today, some of the most succinct & pleb-palatable explanations of complex Bitcoin concepts are provided by Ordinals founders as a way to activate their community. This elevates their voices as trusted & informed — incredibly valuable for sustaining the collection floor price or improving the success rate of a future launch. These collections in turn sponsor live events, writing checks bigger than conventionally established Bitcoin brands (source: us at Blockspace).

One of the tried and true strategies to out-trading the market is to have a hands-on technical familiarity with how Bitcoin and Ordinals work. We see some of the best traders “learning in public” and using their twitter timelines to document and codify the knowledge they’ve gained about how Bitcoin or btc metaprotocols work. Some of these content creator-traders then go on to build some of the more important products in the ecosystem.

The parties are cool now

You can only handle so many beefsteaks, poker nights, and gun ranges before you look around and wonder where are all the girls.

My back of the napkin math (cross referenced with my wife, the voice of reason) is that the average Ordinals party is about 30/70 girls/guys. This is about a 10x increase from my lived experience at any previous Bitcoin-only event.

Beyond the ratio, these conference events & parties just feel different all around. There’s not an air of condescension for other blockchains — rather stuff that’s not on Bitcoin isn’t as interesting to the crowd so it’s not discussed as much. I don’t think I’ve heard interest rates mentioned once at any of these shindigs.

These events are also significantly higher budget than your typical Bitcoin party. There’s an emphasis on the visual arts and they are typically executed by a team with event planning experience.

Yes, there are still those viral cringy videos which have a day or two in the sun, but those are going to happen for generations to come. You can dress up the nerd in a wizard costume but you can’t make them uninstall Linux.

Granted, these are just my subjective observations about the new wave of Bitcoin conference parties. Your mileage may vary, maybe you can listen to Don’t Stop Believin’ 5x in a row.

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