The Bitcoin Business Newsletter | The Game Theory of Adoption
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Key insight
This week’s key insight, written by our consultant Brady Tinnin, focuses on game theory and the importance of frontrunning competition.
Game theory is a phenomenon that analyzes the strategic behaviors and decision-making processes of individuals or entities in competition with one another. When a competitor acts on a given decision, it can create a strategic advantage over others who have not yet acted. Depending on the situation, both competitors might act, while in others, both may opt out. The resulting dynamics depend on how other competitors react in the face of one competitor’s actions.
In the game of money, bitcoin is increasingly forcing the hands of businesses to adopt it as a strategic component of their financial strategies, demonstrating the game-theoretic properties that bitcoin introduces to the competitive company landscape.
To understand what’s going on between companies, however, we first need to understand the fundamentals of bitcoin that are compelling people all around the world to get on board with it, rather than trying to fight against it.
Bitcoin is a permissionless network, and the only way that it can remain permissionless is thanks to miners pooling enough computational power to outweigh any outside bad actors from overriding it. If some entity wanted to stop the bitcoin network from transmitting data between its participants, it would need to round up enough hashpower to override the entire decentralized, global force of miners. And they would have to continually maintain that sufficient level of output each and every day to retain control. Simply put: it is virtually impossible to override the bitcoin network.
As a result, everyone, from everyday citizens to national governments, is instead choosing to bend to the rules of the bitcoin network, rather than trying to write the rules themselves. It’s simply a more efficient use of their time and energy. People thus have two choices to make when encountering bitcoin: ignore it and risk missing out, or adopt it in case it proves advantageous.
In the past week, one of the first movers in corporate bitcoin adoption, MicroStrategy, had their former CEO Michael Saylor give a three-minute pitch to Microsoft about adding bitcoin to the balance sheet in an effort to remain competitive, protect against systemic risks, and stop the bleed of its multi-billion-dollar capital reserve.
Did you know that over 60 publicly traded companies have already adopted bitcoin on their balance sheet?
As inflation eats away at stagnant capital, as financial instruments like Bitcoin ETFs become more accessible, and as the word continues to spread, more and more companies are waking up to the reality of bitcoin’s necessity in any 21st-century financial strategy. Any prospective company now faces the game-theoretic risk of not adopting bitcoin, and what that could mean for the company’s future. Regardless of their own personal beliefs about bitcoin, the pressure is on to take one of two risks: adapt or ignore.
Top News Stories
Bitcoin Surpasses $100K Milestone
Bitcoin’s rise past $100,000 on December 5th, 2024, celebrates its adoption and resilience, silencing skeptics who doubted the milestone.
Trump Nominates Pro-Bitcoin Paul Atkins as SEC Chair – Bitbo
Donald Trump has nominated Paul Atkins, a former SEC commissioner with pro-Bitcoin views, to lead the SEC, pending Senate confirmation.
Coinbase policy executive predicts fast crypto regulation under Trump
Faryar Shirzad highlighted that two legislation pieces could quickly pass as soon as Trump's term starts.
NYC Mayor Eric Adams Celebrates Bitcoin Paycheck Gains – Bitbo
New York Mayor Eric Adams proudly highlighted his Bitcoin paycheck gains amid Bitcoin's 129% surge this year, silencing critics.
BlackRock’s Bitcoin ETF Surpasses 500,000 Bitcoin
BlackRock's iShares Bitcoin Trust holds over 500,000 Bitcoin worth $48 billion, reflecting rising institutional interest.
Putin Approves Bitcoin & Mining Tax Framework in Russia – Bitbo
President Vladimir Putin has enacted a law creating a legal framework for taxing cryptocurrency mining and trading in Russia.
MARA Holdings Plans Another $700M Raise to Acquire Bitcoin – Bitbo
MARA Holdings plans a $700 million private offering of zero-coupon convertible notes, primarily to acquire Bitcoin and repurchase existing debt.
Boyaa Interactive Converts Ethereum to Bitcoin in Strategic Reallocation
Boyaa Interactive converted 14,200 Ethereum to 515 Bitcoin, highlighting its focus on Bitcoin amid growing institutional adoption
Michael Saylor Urges Microsoft to Embrace Bitcoin – Bitbo
Michael Saylor claims Microsoft could boost its value by $5 trillion by investing heavily in Bitcoin.
MicroStrategy Acquires $1.5 Billion in Bitcoin as Saylor Advocates for Microsoft’s Adoption
MicroStrategy buys 15,400 Bitcoin for $1.5B as Saylor pushes Microsoft to adopt Bitcoin.
Vancouver Mayor Ken Sim Proposes Adding Bitcoin to City’s Reserves
Vancouver's mayor proposes exploring the integration of bitcoin into the city's financial strategy, positioning the city as a leader in bitcoin adoption while potentially hedging against inflation.
Bitcoin Blockspace: A Strategic Resource for U.S. National Security
The United States faces an urgent need to secure its economic and national security interests. With Donald Trump’s recent election as President of the United States, his campaign promise of creating a strategic bitcoin reserve has seen renewed interest. Senator Cynthia Lummis’s Bitcoin Act proposes a strategic reserve,
Other Noteworthy News
📘Canton of Bern Parliament Approves Study on Bitcoin Mining and Energy Grid Stabilization
🟢Spot Crypto Exchange Volume Hits $2.7 Trillion in November
⛏️Canton of Bern Approves Plan to Explore Bitcoin Mining
✈️Aviation Company Leverages Aircraft for Bitcoin Mining
📈Shares of Chinese Bitcoin miner SOS Ltd. surge 40%+ after announcing purchase of $50M worth of Bitcoin as a store of value.
💹Metaplanet has issued Moving Strike Stock Acquisition Rights to raise up to 9.5 billion yen ($62 million).
🔴Putin: 'No One Can Ban Bitcoin'
Recommended Articles
Adopting Bitcoin in El Salvador 2024: A Bold Vision in Action | Sovreign Bitcoin Consulting
Read Raúl Guirola's article from Adopting Bitcoin in El Salvador. Three years in, El Salvador's Bitcoin adoption boosts tourism and remittances while facing challenges like financial literacy. Innovations and supportive laws solidify its role as a global model for financial inclusion.
Read this great article by our consultant, Raúl Guirola, from Adopting Bitcoin 2024. As El Salvador continues its bitcoin journey, its experiment serves as a blueprint for other nations exploring the future of money.
Fed Governor Waller says he is 'leaning toward' a December rate cut, but worries about inflation
Federal Reserve Governor Christopher Waller cited recent data indicating that progress on inflation may be "stalling."
This article highlights Fed Governor Christopher Waller's indication that he is leaning toward a December rate cut while expressing concerns about stalling inflation, with October’s core inflation rising to 2.8%.
Then They Fight You: Bitcoin and the United States’ Fiscal Crossroads
In this chapter from The Satoshi Papers, Avik Roy explores the U.S. government’s looming fiscal crisis and presents three potential responses from the United States: restriction, paralysis, or assimilation. Could Bitcoin emerge as a solution—or spark further conflict?
This essay explores bitcoin’s potential to replace the US dollar as the dominant store of value by 2044, analyzing government responses: suppressing bitcoin, political inaction, or embracing it for fiscal recovery. It highlights bitcoin's resilience and global financial impact.
Recommended Podcasts and videos
How Bitcoin Can Save Your Business | The Bitcoin Business Podcast
Trump, QAnon, Numerology, Conspiracy Theories, PEPE, and Bitcoin with GMONEY (WiM531)
Entering the Digital Golden Era - U.S. 2024 Election Recap - Galaxy Research from Alex Thorn
The MOST Bullish Bitcoin Podcast of ALL TIME!($100K Bitcoin SOON)
Chart of the Week
This week, Bitcoin's price surpassed $100k—a long-anticipated milestone that has been building up for quite some time.
“Gradually, then suddenly.”
– Parker Lewis
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