Bellscoin Investment Thesis
“To the Lurking Bellscoin Discord Whales — I would soon rather cast my keys into the hellfire than sell a single Bellscoin to you under fair market value. You will never get me to capitulate at the bottom. If price goes lower, I will buy lower. I have unlimited time and have read Wolong: The Game of Deception. I, among many others, know that this is a fairly launched, decentralized POW, Layer 1 OG Meme coin launched by Billy Markus that will command a premium in a market full of pure centralized shit. Long live the Scrypt Ecosystem!”
-Scrypt System Block Boy (OG)
Introduction
Proof-of-work Crypto Currencies (PCC’s) are unique and separate from most Crypto Currencies (CC’s) given that they require people, in the physical world, to exert their physical efforts in order for the PCC to survive. Without a physical space to mine, physical mining equipment, a stable electricity source, and all the other considerations that come with PCC mining — it would be impossible. We can sum up all the physical efforts that go into PCC mining and call it the Hash Rate (HR).
The HR is the single most important metric to use when gauging the potential of a PCC. The HR can also be used as a signal as to whether-or-not a CC will survive and thrive, or die. It’s simple, HR equals people’s efforts in the physical space and signals their vote of confidence in either the current state of a PCC or its future potential. Otherwise, why would a person or company go through all the effort to set up miners, rent a space, and direct hash power towards something that is neither currently profitable nor holds great future potential?
The overall goal of this paper is to describe how HR analysis of Bellscoin, using Dogecoin (DOGE) as a proxy, along with comparing/contrasting differing qualities between Bellscoin, Litecoin, and Dogecoin, can enable one to formulate reasonable estimations of the potential Bellscoin has within the overall Scrypt Mining Ecosystem.
What is the Scrypt Mining Ecosystem & Why does it matter?
The Scrypt Ecosystem is currently defined as LTC + DOGE because they are by-far the 2 most dominant PCC’s using Scrypt. Scrypt is a specific mining algorithm that Litecoin (LTC), DOGE, and now Bellscoin use. Bitcoin uses the SHA-256 mining algorithm — which is completely separate from Scrypt. This is important to know because most PCC mining is done by ASIC miners that are optimized for their respective hashing algorithms (SHA-256, Scrypt, etc). In essence, Bitcoin ASIC miners are not optimal for mining LTC & DOGE and LTC & DOGE miners are not optimal for mining Bitcoin — they can be thought of as two separate ecosystems. The term “Ecosystem” refers to the major players in the game right now: Ethereum, Bitcoin, Solana, XRP, etc.
What does Dogecoin have to do with it?
We have been here before — history doesn’t repeat, but it often rhymes. LTC was successfully mining on the Scrypt algorithm for over 2 years prior to DOGE’s arrival. The vast majority of miners at that time were mining LTC because it was the most dominant coin for Scrypt. When DOGE was released to the public as a new Scrypt PCC, miners had to choose which one to mine. When miners “choose”, this means that all of their mining equipment, space rentals, and electricity usage are re-directed to mining DOGE. In other words, “they put their money where their mouth is”.
Upon the initial launch of DOGE (a new and unknown PCC at the time), miners signaled there was great potential in the project by siphoning HR from LTC and directing it to DOGE. In (Fig 1), you can see the places where the LTC HR decreased, and the DOGE HR increased in proportion. This is a important signal because, again, the miners aren’t just pressing buttons on a computer or posting Tweets — they are operating expensive physical machinery.
Thought Experiment
Imagine owning a gold mining business which has several bulldozers, backhoes, water trucks, etc. Currently, this business is set up in central California and consistently makes profits by extracting gold out of the ground. A visitor comes along and says “there is way more gold over in northern Arizona”. Upon hearing this assertion, most gold mining companies would continue with their current operations (mining gold in central California) and perhaps explore the visitor’s thesis. A small majority would move their operations in search for potentially more gold. However, the act of moving operations is expensive. The risk to the company who moves to northern Arizona is catastrophic if it turns out there is no gold there.
This analogy can be applied to PCC miners who switched from mining LTC (sure thing) to DOGE (unsure thing) at the time. We are now in this same scenario with Bellscoin as it relates to the Scrypt Ecosystem.
Using Dogecoin as a Proxy for Bellscoin
DOGE can be used as a proxy to determine the potential of Bellscoin given they operate under the Scrypt Ecosystem, and Bellscoin has profound similarities with DOGE (listed below).
Given the similarities between Bellscoin and DOGE, we can study the HR of DOGE in relation to LTC, prior to it becoming merge mined, to glean insight as to the most likely trajectory of Bellscoin. Out of all the PCC’s, Bellscoin and DOGE are most similar.
DOGE was siphoning HR from LTC, the dominant Scrypt PCC at the time. Prior to DOGE’s release, LTC reached an independent HR of approximately 100 Gh/S. As DOGE’s HR increased, LTC’s HR decreased in proportion.
As of this writing, the dominant Scrypt PCC can be thought of as LTC + DOGE because they are merge mined — an octopus with 2 tentacles. Around mid-Jan 2014 DOGE’s HR and LTC’s HR were equal signaling that the potential existed for DOGE to reach parity with LTC’s market capitalization. The HR’s remained equal for 1.5 months, which indicates that the miners were signaling an ongoing belief in the potential of DOGE.
The same exact scenario is playing out with Bellscoin. Upon the release of Bellscoin in December 2023, the initial HR of Bellscoin was approximately 475 TH/s at its maximum. Coincidentally, the LTC and DOGE HR’s dropped significantly in proportion as seen in (Fig3) and (Fig4). This strongly indicates that it was Bellscoin that siphoned off HR from LTC and DOGE upon its initial launch. Which is consistent with DOGE siphoning HR from LTC upon its launch.
The significance of Bellscoin commanding 475 TH/s upon release, when the total Scrypt Ecosystem HR was approximately 900 TH/s at the time, establishes that a large number of the Scrypt Ecosystem miners were redirecting their power towards Bellscoin. In 2013, shortly after DOGE’s initial launch, HR parity was reached with LTC. Shortly thereafter, the market capitalization of DOGE would reach parity with the market capitalization of LTC (Fig5).
It is reasonable to conclude that since Bellscoin siphoned approximately 52.7% of the Scrypt Ecosystem HR, that Bellscoin is potentially worth 52.7% of the current Scrypt Ecosystem’s market capitalization — which is $32 Billion at the time of this writing.
Inflation
A CC’s inflation rate is the rate at which the number of coins in circulation rises over time. Like DOGE, Bellscoin has a high initial inflation rate. The differentiating factor between the two is that Bellscoin has a high initial inflation rate but suddenly, and dramatically, deflates its block reward after Epoch 5. Every 60 seconds, DOGE will have an ongoing 10,000 coin block reward whereas Bellscoin will have an ongoing 2 block reward (after Epoch 5), which will both remain unchanged.
Where Bellscoin really shines is in its strategic reduction in block rewards that are termed as “Epochs”. (Fig 7) Epochs can be likened to halving events like with Bitcoin & Litecoin. Given stable, 60 second block times, each Bellscoin Epoch is expected to take approximately 90–180 days, with the final Epoch occurring approximately 1 year after Bellscoin was released in December 2023. As each Epoch passes, a massive reduction in emissions occurs in a relatively short period of time. The Epochs are initiated once certain blocks are mined, rather than a specific time-frame.
The truly unique aspect of Bellscoin as compared to DOGE & LTC is the fact that it not only has a traditional halving event where the block rewards are reduced by 50% at the start of Epoch 3, but is the only known PCC that has a 90% reduction in rewards — termed as a 90-Percenting. These 90-Percentings happen two separate times after Epoch 4 and again after Epoch 5. The chart below (Fig 7) demonstrates the massive deflation that occurs through the Epochs.
To determine what Epoch Bellscoin is in, you can search to see what block number is currently being mined. At the current date (5 APR 24), Bellscoin is on block 79,232, putting it in Epoch 2. (Fig 8) shows at what block each Epoch starts & ends, along with the rewards reduction that occurs once the Epoch ends.
Bellscoin will have a lower inflation rate than DOGE once it reaches Epoch 5 (charts below). Quoting directly from the DOGE official website “Dogecoin has a diminished inflation rate because it has a fixed yearly issuance of 5 billion coins. This means that each year, the rate of inflation decreases comparative to the total supply, and in a very predictable way, making Dogecoin the perfect candidate to be used as a currency”. The same exact concept applies to Bellscoin — a fixed yearly issuance of ~1,051,200 BEL per year.
As of this writing, DOGE’s inflation rate is approximately 3.4% per year. By 2040, it will be at 2.2%. Bellscoin, when entering Epoch 5, will have a 1.8% yearly inflation rate. DOGE will not reach a 1.8% inflation rate until 2040. By then, Bellscoin will have a substantially lower inflation rate (1.4%). DOGE’s inflation rate will be higher than Bellscoin until at least 2050 — but realistically much longer than that. This is significant because Bellscoin not only has a lower circulating supply than DOGE, it will forever have a lower inflation rate.
Comparing these numbers to LTC, Bellscoin will still have a slightly higher inflation rate by 0.02% — which is negligible. According to litecoinblockhalf.com, LTC’s current inflation rate is 1.78% per year until the next halving (estimated to be 30 JUL 2027) in which it will drop down to 0.84%. In essence, LTC and Bellscoin will have the same inflation rate from 2025–2027 but, with Bellscoin having a substantially lower circulating supply.
Scarcity
Bellscoin is currently the most scarce asset within the Scrypt Ecosystem, and will remain that way for the next 15 years, or until 2040. As of this writing, LTC has a circulating supply of ~74 Million and ~143.8 Billion for DOGE. Bellscoin however stands in stark contrast to both of these. At block 518,400, the circulating supply of Bellscoin will be ~58.5 Million. From Epoch 5 forward, Bellscoin will add ~1,051,200 BEL to its circulating supply per year.
To put it all into perspective, the chart below shows how many years it will take for Bellscoin to catch up to LTC’s circulating supply — which is currently 15 years. Bellscoin will never catch up to DOGE’s circulating supply. To put this into perspective, 15 years is the same amount of time that has passed since Bitcoin was created in 2009.
Daily Mining Rewards Comparison
The daily mining rewards and CC price are a gauge of miner profitability. At the time of this writing, the daily mining rewards for LTC are $365,000 (www.litecoinhalving.com) and $2,880,000 for DOGE (chart below). The Bellscoin daily mining rewards are estimated to be currently at $213,000 per day in Epoch 2, and $1,526 after Epoch 5 (chart below). The $1,526 calculation assumes the USD value of a Bellscoin stays at $0.53 from the time of this writing until Epoch 5 — approximately 1 year from now.
Currently the USD value of the Bellscoin daily mining reward is 58% of LTC’s and 7.4% of DOGE’s daily mining reward due to its high initial inflation. However, when Epoch 5 passes at block 518,400, and only 2880 Bellscoin are mined per day, the percentages above change. If the Bellscoin price stays the same, then the USD value of the Bellscoin daily mining reward will drop to only 0.42% of LTC’s and 0.053% of DOGE’s daily mining reward. In Epoch 5, if Bellscoin were to reach 58% of LTC’s and 7.4% of DOGE’s daily mining reward USD value, it would have to be priced at approximately $70, as shown on the graph in the following page. In essence, you can currently buy 1 day’s worth of Bellscoin Epoch 5 mining rewards for $1,526. Given the potential Bellscoin has to siphon market share from LTC & DOGE, this presents a unique opportunity.
Conclusion
Bellscoin is likely to continue grow and thus continue to take up an increasing percentage of the Scrypt Ecosystem market capitalization. It possesses many similar qualities to both DOGE & LTC, but has lower scarcity and lower inflation than DOGE, along with lower scarcity and equal inflation with LTC until 2027. Bellscoin has powerful memetic properties due to it pre-dating DOGE along with it being created by Billy Markus — was also created DOGE. Next, it was fairly launched, is a Layer 1 Block Chain, and will soon attain increased network security by it being merge mined with the Scrypt Ecosystem. The decision to formally merge mine Bellscoin along with its large siphoning of HR from the Scrypt Ecosystem upon its launch, demonstrates that it has great potential. There is a high probability that Bellscoin will also siphon off a significant amount of market share and market capitalization from the Scrypt Ecosystem like DOGE did to LTC upon DOGE’s release. Given its tokenomics, miner interest, and memetic qualities, Bellscoin will make it an attractive investment for years to come within the Scrypt Ecosystem.
