3Jan 2019

Happy 10th Birthday Bitcoin

by Henrik Andersson

Today marks the 10 year anniversary of the launch of the Bitcoin network on January 3, 2009.

The network started with what we know refer to as the Genesis block or block 0. Encoded in the Coinbase of this very first transaction is a message:

The Times 03/Jan/2009 Chancellor on bring of second bailout for banks”.

Coinbase of Bitcoin’s Genesis block.

Coinbase of Bitcoin’s Genesis block.

(You can see this for yourself on eg.’s block explorer if you enter the first transaction hash: 4a5e1e4baab89f3a32518a88c31bc87f618f76673e2cc77ab2127b7afdeda33b)

I think there are two reasons why Satoshi included this message:

  • It proves that the network wasn’t pre-mined. Bitcoin is a distributed timestamp server — by submitting a transaction to the Bitcoin blockchain we can prove that an event didn’t take place later. By including a headline from a newspaper, Satoshi proved it also didn’t take place beforehand. No one cheated, it was fair game with no undue advantage.
  • It wasn’t any message. Bitcoin has libertarian roots. The launch of Bitcoin took place during the last financial crises and and the headline talks about ‘bailout for banks’. Bitcoin unlike the banking system is not based on debt but offers an alternative form of money, a digital bearer instrument.

Ten years later Bitcoin has had an extremely consistent existence. Blocks are found about every 10 minutes, 24/7, 365, transactions are being confirmed and the network is growing. This is despite it being completely open, not controlled by anyone. It has endured an endless amount of technical and social attacks through the years.

The longer an idea or a technology (really anything non-perishable) has been around without failing, the longer its future life expectancy — this is what author Nassim N. Taleb refers to as the Lindy Effect.

We at Apollo Capital think that together with Network effect, the Lindy effect is key when looking at crypto assets. The network effect is why Bitcoin and other crypto assets have value despite having no IP, the code can be copied. The Lindy effect is the reason Gold has a value of USD 8–10tr while Bitcoin is at 68bn — less than 1% of Gold’s value. Gold has been around for a much longer time. The fact that Bitcoin has been around un-harmed despite all that has been thrown at it for the past 10 years bodes well for the next 10 years — it actually gives it more strength.

Today, the debt level in the banking system that caused the financial crises of 2008 is much less, however the total debt level in the world is at record levels. This is the front page The Times today, Jan 3, 2019:

Screen Shot 2019-01-03 at 11.43.16 am.png

The Times warns that a number of British universities are on the brink of a credit crunch after embarking on a record borrowing spree.

We believe the next financial crises that might be fuelled by a long period of record low interest rates and corporate debt will be a net positive for crypto assets such as Bitcoin. While crypto assets are currently off their lows, the volatility in the stock market just increased at the fastest pace ever.

Crypto assets is an uncorrelated asset class, still very young, small with a potential big upside. We think it makes a lot of sense to have some in your portfolio or as Satoshi expressed it:

“It might make sense just to get some in case it catches on.”
– Satoshi Nakamoto

At the bottom’s of today’s edition of The Times there is a block hash. The coinbase transaction of that block includes another message.


Thanks indeed.

Henrik Andersson

Henrik is the Chief Investment Officer at Apollo Crypto and is the fund manager for the Apollo Crypto Fund. He also acts as the fund advisor for the offshore Apollo Crypto investments funds, the Apollo Crypto Frontier Fund and the Apollo Crypto Market Neutral Fund. Henrik's expertise in traditional financial markets comes from spending a decade on Wall Street as a vice president in institutional equity sales. His exceptional understanding of DeFi comes from co-founding two successful DeFi protocols, mStable and dHEDGE.