I heard about the Lightning Ring of Fire concept on @NunyaBidness podcast this morning.

Anyone interested in trying out a Bitcoin Mastodon Ring? The concept seems very interesting and as a LN noob I'd love to get my hands dirty, seems like a great way to learn.


@NormieNorm @flexbit I have never used this software, but it sounds like LNDHub might be what you want: bluewallet.io/lndhub/

afaiu, LND itself will only create a single wallet, but LNDHub can allow you to manage multiple (custodial) wallets from it (the LND node owner is the custodian). Found this through: github.com/lightningnetwork/ln

I'm shutting down my nicebit.net server and moving my mastodon account to @nicebit_net -- please follow me there, this one is going to get deleted soon. Thanks! bitcoinhackers.org/web/account

My niece turns 4 next week. She was born the year I fell down the rabbit hole. I decided to give her bitcoin instead of dirty fiat for her birthday and Christmas gifts. The amount I’ve given her has appreciated over 900%. Hopefully by the time she turns 18 it will help give her some degree of financial independence. Bitcoin is the greatest savings technology we’ve we seen.

Even the Mongols knew the importance of a sound monetary policy back in the 13th century. Amazing how people forget the failure of debt and an inflationary currency over and over again throughout history.

Current Open Positions:

Sold 2021-03-26 Call $75,000
Premium Price/BTC $790
1.8 BTC mini (0.018 BTC)
Collateral locked: 0.18 BTC
Premium: $14.22
Fees: $0.09
Net Gain: $14.13

Sold 2021-03-26 Call $60,000
Premium Price/BTC $1,425.68
18.8 BTC mini contracts
Collateral locked: 0.188 BTC
Premium: $268.03
Fees: $2.82
Net Gain: $265.21

Baseline Comparison
Trading Options: +26.65%
Buy and HODL: +27.71%

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My 3/12 puts expired out of the money so I collected $28.48 in premiums. With the collateral released I had a total of $1038.48. I decided to buy 0.018 BTC at $54,600 giving me a total of .206 BTC. LedgerX settles BTC purchases the next business day so I had to wait before I could sell more covered call options.

Woke up this morning and BTC broke new ATH and by the time my 0.018 BTC purchase settled the price was $61,300. I decided to sell 3/26 call options with a strike price of $75k.

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What is worse?

I don't like the smart dumb people getting in this cycle. If they didn't hold bitcoin through 2017/2018 there is a good chance I don't care what they think.

I had some remaining fiat in my account. I debated about between using the funds to buy more bitcoin so I could sell more calls or sell puts. I decided sell the puts so I could keep some fiat in my account.

Sold 2021-03-12 Put $48,000
2 BTC mini
Collateral locked: 960
Premium: $28.68
Fees: $0.30
Net Gain: $28.38

Sold 2021-03-12 Put $38,000 (sold this to use up my remaining available funds)
0.2 BTC mini
Collateral locked: 76
Premium: $0.128
Fees: $0.02
Net Gain: $0.10

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Not bad but at least I was able to secure bitcoin for less than $50k. Now I can sell some call options for my next round.

Round 2:

Ended up selling the 3/26 $60k calls. I found these to be the best balance between collecting a decent premium while still retaining some upside in case the calls end up in the money.

Sold 2021-03-26 Call $60,000
18.8 BTC mini contracts
Collateral locked: 0.188 BTC ($9400 @ $50k/BTC cost basis)
Premium: $268.03
Fees: $2.82
Net Gain: $265.21

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I sold $50k puts for ~$700 per bitcoin so my breakeven price was $49,300. The options expired today with bitcoin price at $49,211.

I sold 20.2 BTC mini contracts (100 BTC mini = 1 BTC) but only 18.8 contracts were exercised.

So I ended up with
0.188 BTC (worth $9251.67)
$700 collateral returned
$143.67 net premium gained
Total $10,095.34
Return = 0.95%

Baseline Buy & Hold Comparison:
Starting bitcoin price - $48,000
Expiration price of bitcoin - $49,211
Return = 2.52%

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Sold Put: $10k*
Expiration: 2021-03-05
Strike Price: $50k
Premium collected: $146.7*
Fees: $3.03*
Net Gain: $143.67*

*These figures have been changed to protect the innocence of the actual figures. No numbers were harmed in the chronicling of these options. I lost everything I own in a tragic boating accident.

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If bitcoin price drops below $50k then the buyer can exercise the option where I’d have to buy bitcoin at the strike price of $50k. I will have succeeded in acquiring bitcoin at 50k but the downside is I might have been able to buy in even lower.

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March 3
Track price hoping to get a chance to buy below $50k. During the day price breaks 52k briefly so I switch my strategy and look at selling put options. There are options with 3/5 expiration date & $50k strike price. If I sell these puts and they are out of the money (i.e. bitcoin is above $50k by 3/5) then I collect a decent premium for 2 days of work.

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Day 1 – March 2

I deposited funds in my account. Bitcoin price at the start of my journey was $48k. Initially I planned to use funds to buy bitcoin and start selling covered call options. Set some limit orders at $47.5k because I’m a cheap. Next thing you know price runs to 50k by the time I go to bed.

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My primary strategy is to sell call& put options. Primarily want to focus on selling covered out of the money call options. If the options expire out of the money I collect the premium. If they expire in the money I will collect the premium and sell for a profit but miss out on upside above the strike price. The downside risk is the bitcoin I buy to cover the call options tank so I end up with an asset worth less than what I paid for it. We all know that’s not happening though...

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