"It’s a terrible store of value...It could be replicated over and over." Jamie Dimon said in an interview with CNBC about BTC in 2014. He knew something better would eventually replace it and 2018 will be the year that everyone realizes that BCH is the real Bitcoin.
"The only value of bitcoin is what the other guy'll pay for it." - Jamie Dimon. You hit the nail on the head there Jamie. This is consensus driven money not government backed (inflationary) promises. /r/Bitcoin
"Its a terrible store of value...It could be replicated over and over." Jamie Dimon said in an interview with CNBC about BTC in 2014. He knew something better would eventually replace it and 2018 will be the year that everyone realizes that BCH is the real Bitcoin.
Arguments rage about cryptocurrencies. They're a scam or a fraud - or are they the future of money? People I talk to are often divided on the question on what amount to political grounds! At the same time their underlying political positions may be very close. "Cryptocurrencies are a symptom of the worst excesses of the financial industry! It's fake wealth at its most obvious" or "Crypto is the way the common man can be freed from the tyranny of central banks". I'm not really sure who is the closest to the truth on that one. In my opinion cryptos are in effect much like precious metals: their monetary cost is hugely greater than the value of their utility and there are limitations on their supply. Crypto coins do have inherent value - by design they can be stored and exchanged independently and easily. Their supply is also limited by the way they work - this leads them having a price. There is no more volatile asset class. A daily 10% move is commonplace. Nevertheless, in most periods since Bitcoin's inception investors would have made money. At this stage in history it's fair to say that they have been good investments. They're different from other asset classes in their histories too: stocks, commodities, currencies, interest rates all existed hundreds of years ago. These legacies remain in the way they're traded and who trades them. By contrast crypto was invented in 2008 by technologists. Their exchanges were created, mostly, by technologists with little history in finance. The results were - by the standards of the financial world - disastrous. Multi-day outages - outages every day! Clients' actual assets lost permanently! But they continue... This is the clearest example of the great distinction between crypto and other asset classes: they come from Wall Street, crypto from Silicon Valley. While crypto exchanges may have the reliability of websites, they gain natural benefits from Silicon Valley too: openness. Stock exchanges don't waste time making their data available - unless there's money in it - and only for reputable clients. Brokers guard their data jealously. With crypto exchanges trading data is free to all on day one, by default - no-one would have discussed any other option. The same with electronic trading: these exchanges were build on web protocols, therefore the API comes for free, basically. This leads to unforeseen results: algotrading. For equities, when finally approved users have to fight through unwieldy, buggy authentication sequences before they can get a trade in with their online brokers like Schwab and TDAmeritrade and remain second-class citizens in getting to the order book. With crypto - there's no broker! You trade straight to the exchange just as an professional trader does. E.g. if you have a BitMEX account, you can be algorithmically trading there in less than 5 minutes from now. I've pointed this out to people - to reactions of stunned amazement: algotrading is supposed to be for professional financial geniuses! But no, it's for everone and I think it's going to change the world. So that's why I created this Subreddit: crypto trading is a special area and algo is its native way to trade.
Media Startup that Accepts Bitcoin is Suffering Censorship Campaign in Europe
Hi, I'm the guy who filed a market abused report against Jamie Dimon! in 2017, after he called Bitcoin "a fraud" and claimed bitcoin is for murderers, drug dealers, and North Korea. Jamie Dimon later said that he regrets calling bitcoin a fraud!. Currently, I am co-founder of investigative media startup Zoom http://zoom.institute Zoom is a young investigative media startup from Europe. We have successfully launched our MVP last week. https://twitter.com/zoom_institute Unfortunately all links to our website https://zoom.institute are currently blocked by Twitter. This might be for some technical reasons. Nevertheless, we suspect an illegal censorship campaign against Zoom by right-wing populist Sebastian Kurz, who is one of the closest allies of Russian president Putin within the European Union. The story is currently a major news story in Austria! Germany! and Switzerland! Show the world once more, that one of Bitcoin's main purpose is to defend journalists and whistleblowers against censorship and support Zoom! (please scroll to the bottom of the linked page) A lot of small donations from many different people will very likely become a big news story, that educates people about the core values of Bitcoin, in German speaking countries. Edit 1: Added cnbc.com link
Finished traveling around the world ... on 1 Bitcoin
Hello BTC Redditors, Just wanted to share a little announcement rather dear to me. August of last year I left Portland, Oregon with a mission: see what BTC communities are like around the world...and make it happen with just 1 Bitcoin. Finally made it :) 18 countries. 12 months. 1 BTC. Bought it for $4,724 hard earned dollars. A month later in September I felt like a chump who bought a new car off the dealer's lot --- because BTC kept loosing value and sunk to $3,350. But I kept riding that rollercoaster. In December the price hit $19k. Just a few days before Christmas too. I felt tempted to cash it all out right then and there, let me tell ya. But a few OG's I met in Hong Kong told me to keep saddled on that bucking Bronco -- feel the adrenaline of the ups and the heartbreak of the downs. So I stuck it through. Man, what a ride. I put a little video together. Not super good at the editing, sorry. But here it is anyway: https://www.youtube.com/watch?v=gjacVPEaCW8 A few highlights: + Met Vitalik Buterin in Shenzhen, China. Wow. Closest I've ever come to meeting an extraterrestrial. I don't mean that in a bad way, either. The guy towered above me (I'm not that tall); he was lanky and gaunt; I could see him thinking about 12 different things while talking to me -- each of them far more important than the small-talk-chitchat he was having with me. + Met John McAfee in Singapore. What a character! Listen to this: I ask him what he thinks about the environmental impact of BTC mining (the hot topic at the time). He tells me "I'll keep MGT mining BTC until the last polar bear drowns." + Volunteered at a diving school in Palawan, Philippians. It was a workaway type of place. The guy running it, Thad, was doing great things -- teaching local kids how to become dive masters so they could earn a good living diving with tourists. Great dude. A little paranoid when talking about him and crypto, but wow, in it from the early days. + Myanmar (Burma). Holy damn. What a country. Incredible ancient ruins. Delicious food. And the friendliest people going through some of the toughest governmental financial bullshit. Corruption, wild inflation, demonetization. And people there would love to use BTC more often to free themselves financially (being part of the unbanked, after all) but they have some of the most fundamental difficulties: (1) shitty cellphone coverage and (2) rampant power outages. + Colmar, France. I met one of my hero's .... Anthony Bourdain. Talked to him about food, travel, Bitcoin. A week later. One week after shaking my hand....he took his life. I keep wishing I would have said something. The right thing. Maybe I could have made a difference. + Amsterdam. Used a bit of my almost-running-out-BTC to taste true wormwood Absinthe. I saw visions of Bitcoin absolutely crushing governmental fiat and putting Jamie Dimon and Charlie Munger on the streets! Haha no, I wish. + Finally made it! 1 BTC! Tonder, Denmark. Just across the border from Germany. I thought I'd make it to Copenhagen. I didn't -- but that's okay. It was a wild ride that opened my eyes in all sorts of ways. Sure I spent months and months sleeping on Couchsurfer's cots, eating the cheapest grocery store mark-down foods, and generally wishing I had cashed out in December --- but I would do it all over again, without cashing out either. Because being on such a strict budget forced me to meet people. Often times we feel tempted to use money to avoid pains. If I traveled on a big budget I could have stayed in hotels. Instead I couchsurfed, met amazing hosts, and told them all about BTC -- which sharpened my own knowledge. If I was on a bigger budget I could have stuck around certain cities and gone to BTC meetup's only on their set dates. But being on a budget I had to reach out to meetup hosts and hope they'd make time to meet me, trade BTC for fiat, and perhaps even introduce me to their crypto friends -- and they did, every time, because the crypto community is awesome. Around the world I met absolute badass crypto OG's, movers-and-shakers, and newbies too. Learned something from everyone :) I suppose my mission resulted in a resounding answer: crypto will set us free. So cheers to a few specific cool cats out there as well as the community at large: Thank you. +R P.S. Here's the website with some extras: BitcoinAroundtheWorld.com
Dash Competitive Basket Index for Monday, 28 October, 2019. Better. And let's take a step back and look at real world use.
Better than yesterday (again), but still nothing to write home about. We’re still in the top 20, so that’s something. Since Thursday, Dash gained 17.9% in dollar value. That certainly helps the buying power of the monthly Treasury. Everybody gained dollar value except the stable coins. All three of the moving average numbers went up again. But let’s look for just a moment at real world use. Let’s be totally honest here, sooner or later, real world use of the actual crypto products HAS TO MATTER. Otherwise, crypto really is just another tulip mania like Jamie Dimon says it is. Jamie Dimon is wrong. Fundamentally, foundationally, bedrock level wrong. Somebody is going to become wildly successful at offering the unbanked and underbanked access to honest, simple, person to person digital cash. Duh….that’s Dash. So let’s look at real world use numbers. When Dash got started in early 2014, LiteCoin had 8-10x the number of transactions that Dash had. Ever since then, Dash has been gaining on LiteCoin. Look at the transaction numbers on the chart below. We regularly beat LiteCoin. Why are we not crushing LiteCoin? In terms of features, governance, innovation, community support and number of transactions, we ARE crushing LiteCoin. For the previous 7 day time frame:
Dash outperformed 7 of the 18 coins ranked above us (39%). The 30 day SMA* is 31.2%.
Dash outperformed 5 of the 10 coins ranked below us (50%). The 30 day SMA* is 33.3%.
In total, Dash outperformed 12 of the top 28 coins (43%). The 30 day SMA* is 32.0%.
Bitcoin dominance dropped 6/10’s after yesterday’s enormous gain. (67.1%).
5 of the top 28 coins beat Bitcoin (17.9%).
25 of the top 28 cryptos were in the green (92.6%).
Don’t listen to what people are saying, look at what they’re doing.
When I was first exposed to Bitcoin I thought it was a fraud and a Ponzi scheme. It didn’t make any sense that people were mining this internet magic money and claiming it had value. I saw Bitcoin rise from $7 to $1,200 before it came crashing down to $200 and I thought that was the end of Bitcoin. However, Bitcoin was still worth about 3 Billion Dollars and I knew I must be missing something important. When something's fraudulent or is a bubble it goes to zero with little to no volume. Roberto Maeda, Bernie Madoff, and Enron all went to zero because it no longer had any value. After some research, I finally understood the power of Bitcoin and the blockchain. I realized that this was a way for people who didn't know each other, like each other, or trust each other could transact in a trustless way. We could own value that nobody else had any claim over which is not how the world works right now. It doesn't matter how wealthy you are because if the government wants to take away your money then there’s really nothing you can do about it. Cryptocurrency solves this problem. The last time something like this happened was during the mid-90s. Individuals were making enormous amounts of money buying companies like Dell, AOL, Microsoft, Netscape and some of the other smaller internet stocks. Institutions had completely missed the bull market and were looking for a way to join. The bear market in 1994-1995 provided a great opportunity for them. Institutions were out saying “Oh anybody buying Internet stocks, you're idiotic” and so you started to see people selling their AOL, Microsoft, and Dell shares. I’m sure you can guess who was buying, it was the institutions. Institutional allocation to venture capital internet deals doubled between 1994-1995, which was exactly when institutions were spreading all this fear, uncertainty and doubt into the minds of small investors. You can go back and look at some old CNBC clips during 2003 and you’ll see them saying “Oh don't buy tech stocks, everyone knows they're evil”. However, if you look at the 10-Ks, 10-Q's and all of the quarterly filings of these institutions then you would find that they’re all loading up on tech stocks. They literally stole all this wealth that should have been in the hands of individuals and put it into their own pockets. From 1995-2000 we saw 5 Trillion dollars come into the market which propelled one the biggest bull runs we've ever seen. This blueprint of creating fear in order to get cheap prices isn't anything new and we’re seeing it again with Bitcoin and Cryptocurrency. Don’t listen to what people are saying, look at what they’re doing
September 12th - Jamie Dimon says Bitcoin is a fraud and that he'll fire any traders caught buying Bitcoin. After that, Bitcoin drops 24%. That weekend the largest buyer of a Bitcoin fund in Europe was Morgan Stanley and JPMorgan.
January 24th - George Soros calls Bitcoin a bubble and that it’s the worst investment in the world. We see bitcoin drop 44%. Fast forward to April and we learned that his 26-Billion-Dollar family office has approval to buy cryptocurrency.
February 7th - Goldman Sachs says that most cryptocurrencies will crash to ZERO. Bitcoin proceeds to drop 27%. Just before May we find out that he bought a cryptocurrency trading platform for 400 Million Dollars.
Christine Lagarde of IMF says that all central banks should band together against cryptocurrency. Have you ever heard her say that all banks should band together against illegal arms, illegal drugs, or human trafficking? No, but they must all band together against crypto?
Larry Fink says “You know what cryptocurrency and bitcoins are good for? Money laundering and drug dealers”. They are now launching an ETF.
You've got to look at this preponderance amount of evidence and think. These people are already wealthy and all they care about are their reputation. If Bitcoin is such a trashy asset why are all these people getting involved? it's difficult for people to visualize a world different from the one that they are currently in. People couldn't understand how smartphones would transform the world and now we can’t seem to live without them.
Follow the Money
Stephen Cohen who's worth between 12 to 14 billion who is by far the smartest hedge fund manager in the world is buying Bitcoin.
Marc Lasry of Avenue Capital Group is worth about 1.7 Billion and has put 1% of his net worth into Bitcoin at around $7,500.
Andrew Horowitz - an early investor in Airbnb, Skype, Facebook, and Coinbase launched a 300 Million Dollar fund.
Wellington Capital, who have a trillion dollars in assets, are getting involved in Bitcoin futures.
Susquehanna - The 12th largest trading firm by volume. They now have their own Bitcoin custody Department, their own trading Department and they're trading Bitcoin and Ethereum.
Goldman Sachs - The new CEO David Solomon, who is coming into power shortly, is the most pro Bitcoin/cryptocurrency guy on Wall Street.
Chicago Board of Options Exchange (CBOE) Since 2014, people have been trying to do these ETF’s. I knew it was never going to happen, there's no way the SEC is going to approve it. The Winklevoss twins have been trying since 2014. There's no way the SEC is going to trust, in their eyes, a couple of kids with a Bitcoin ETF. They’re not Wall Street guys, and they don't think that they have the ability to protect the assets or the end-user. They want to make sure that this doesn't become a giant disaster because if it does, they’ll lose their jobs. Then you have the Chicago Board of Options Exchange, one of the most trusted and most important financial institutions in the United States. It's up there with Swift, the NYSC, and the Nasdaq. They do more derivatives trading than anywhere else in the world and they’re the largest options platform. They came in and they said that they would provide insurance for this ETF, which is huge! If it gets hacked, if there's fraud, if somebody loses the key or anything happens that could potentially impact the value or security of the cryptocurrency held there then they would cover it. So now it's the big boys at the table, it's the adults. The CBOE and the SEC, they speak the same language, they all know each other and they all go to the same places. The fact that the CBOE has put their stamp of approval means that this ETF is going to get approved unequivocally. The earliest it could happen is August 16th, the latest it can happen is Q1, 2019. I don't think it's going to happen August 16th (CONFIRMED 8/8/18). It will happen closer to the end of this year. As people start realizing that this is actually going to happen, the price of Bitcoin will go up significantly. DISCLAIMER: This post was from Teeka Tiwari during an interview with Glenn Beck. I took bits and parts of this interview that resonated with me the most and tried to convey them in an easy to read text. EDIT: Fixed grammar errors.
As someone who has been extremely involved in the cryptocurrency space the past 2 years, and 6 as an investor I want to point some things out.
The whole space is full of egomaniacs
When I first got involved as an investor in 2013 buying 2.5 BTC I thought very little of where it could go. It was a small tight group of believers back then. As the space evolved you found there were more and more Craig Wright's. What I mean by that is there were tons of people with massive egos who did not care what others said. It was okay before 2016-2017 as I wasn't so closely following what was going on. Once I got involved in the space more quit my job and went deep into the space I noticed something. I saw a tom of egomaniacs pretending they really knew what they were talking about, I saw people acting like they knew everything about everything and I saw CEOs who had little to not hope other then big talk and hopium. In my opinion we need more humble leaders in the space, people who truly care about it more than making as much money from people as they can. People who aren't showing off watches during a hash war that ended with zero winners, and led us into the longest crypto winter in the spaces history. The egos need to go in the space and all that big timer, know it all, bickering needs to take the back seat. Guys like Roger Ver, Jimmy Song, and Craig Wright need to stay focused and deliver. How can they do they always competing and putting each other down? It all seems very childish and like the space it is very immature.
Scams, Faulty Exchanges, Faulty Volume
The sickening amount of scams I have seen and that still somehow go on have put a serious dent on the goal for adoption. When one thinks deep enough about this they realize that for us to move forward cryptocurrencies can't be seen as a rabbit hole or a giant scam/Ponzi scheme. There are already options out there like www.trustedintrading.com that make everyone do KYC to be on the platform. They provide insights into projects, they do serious Due Diligence on all projects including (KYC on all members of the team/advisory, Company and business registration checks, location checks etc they verify the company is real. The only issue is many do not even want to do their KYC and that in itself is a bit silly. Scams are easy to pull off if you have ever been to a network marketing / MLM event you will see how they do them in crypto. My issue is the people are still being scammed into this. Just recently evencoin was saying they partnered with some of Thailands top hospitals, then the hospitals denied it, but for many it was too late. So this is a huge burden that seems to have a solution ready made that people will soon use. I just think this has really caused adoption to feel like it won't happen as there have been countless exits. We just saw Quadriga, we have seen Bitgrail, we have seen My.Gox and the list goes on. Why does this keep happening and will dex's be the answer in the short term the answer to that is not really, long term potentially. My huge issue is there are so many scam exchanges that currently exist in the space, using bots and market makers to create approximately 87% of the volume in crypto to be fake. We have seen centralized exchange after centralized exchange be hacked, lose funds most recently Quadriga is a prime example everyone feels it was an exit scam. My point here is who wants to put money on a crypto exchange? Most do not have insurance and most are giant scams with less than 100k of daily volume. Many don't feel secure and think if I can lose everything I better stick to fiat then take this risk. The volume issue is bad enough for a report that was recently completed by bitwise to show, really only 10 real crypto exchanges exist, a scary thought for someone thinking to adopt especially the institutions and several traditional investment firms/banks, VCs and Hedge funds.
JP Morgan and Other haters
We have seen over time big institutions call Bitcoin a scam over and over. We have need Nouriel Roubini bashing on it and several other institutional investors and also the likes of Warren Buffet. Some of them believe that crypto truly is a scam, and that it has very little value for example. We see guys like Jamie Dimon says things like crypto is a scam, I regret saying that to going on saying that hey guys look at JPM coin within the last 3 years. That alone should tell you something, along with the likes that when Jamie said it was a scam the price dropped almost 25%. What's even more ridiculous is the fact that JP Morgans Asian branch bought 100m worth of BTC after that happens what a nice 25% discount right? This hurts and helps adoption actually, in one way many think it still is a scam in another people will think hmm if they have bought maybe it isn't so bad. Also Marc Faber just bought some BTC so this side of things may be improving, but still several people like Roubini and Buffet maintain their stance. We all also know of Jack Dorsey Twitter's CEO buying tons of BTC weekly so sediment might be changing. I recently spoke at the DS Summit in Bangkok, and I saw something eye opening. Several people at their first conference ever as we were focused on STOs at this conference. I spoke at this conference and after when I was outside chatting I met several investment banks, credit Swiss VP of Asia and even banks looking to learn about the space. This was about 3 weeks ago and what it showed me was there is a shift among us where digitized assets are being taken seriously. For this one it's not all bad, but still tons of growth and education is needed for these players to even entertain the market place, or understand why they should even do it in the first place.
People in the space including influencers
This is the big one I'd like to address as I believe this is the biggest issue in the whole blockchain and crypto space. The constant social media keyboard warriors, they know everything, nobody knows better than they do, they won't listen to anyone and when you present good hard facts you are either a fudster or a scammer. The whole space needs to mature I have seen project argue with users via telegram, I have seen projects argue with people face to face in an environment that was totally unacceptable. I have seen influencers screaming on live feeds at conferences at projects they don't like. Constantly I have seen one after another event happen which totally makes everyone in the space look bad. There is a reason so many call scams in this space and it's mostly to do with the fact that we as investors, influencers, educators etc need to stop attacking everyone. When I say this I mean it in the way that I see people make a typo and get crap for it, I see people with good points attacked because someone disagrees I see so much crap everyday like this. I have at several times told people how bad this is for outsiders looking in. We all have a responsibility to evolve and mature the space, but right now it feels like a middle school with kids arguing for the sake of it to be right or be cool. I am so sick of the daily attacks on influencers trying to help for free, this makes it even worse because if you can't even learn without being attacked why would you want to be involved in crypto. I know there are fakers but we all can weed them out together. Why don't we all work together more or at least practice what our moms taught us that if you don't have anything nice to say, say nothing at all? Imagine if people treated each other not with big egos and were truly friendly and wanted adoption to happen how different the landscape would be! To end I would love to see some real adoption of cryptocurrencies worldwide. I know if we started to really help that and focus less money and more on usecase and creating tools to make it easier to get started that would be truly what would be beautiful. I have a friend who says let's get the children out of the way and let the adults do the work. I don't agree if we talk about age but I do agree with her, because she's talking about just mature adults not adults acting like children. Let's start truly helping each other, teams, and supporting real exchanges and real projects with use cases for adoption. Let's see the bad projects die off and lets get the space ready for true adoption. It's time to stop arguing and start building the foundation this space truly needs. Without that nobody I have met from the traditional finance world is truly going to consider this other then for monetary reasons. If you want to connect with me or have any questions please comment below. Joel - Coach K
Want to know why so many young people are buying Bitcoin?
Why has Bitcoin septupled in only half a year? Because if it works as promised, it's decentralized and free of the meddling of any government, especially our own government. Notice the financiers all hate it. JP Morgan CEO Jamie Dimon called it a "fraud," and all of the media repeated it. Bitcoin's value skyrocketed after that. It's because the entire corporate media was unanimous about invading Iraq even though it was based on a lie. That can't be understated - the government knowing and willingly lied to everyone. It wasn't a "strategical blunder." Thousands of Americans died, millions of Iraqis dead, leaving it wide open to the worst extremist groups imaginable. Hundreds of thousands of Iraqi children are being born with defects because of the leftovers of our weapons. No prosecutions, no arrests, no one is punished, nothing changes. We're still at war with even more countries now, and we would be at war with more if not for the protests of citizens. It's because we now know that Saudi Arabia was involved in 9/11, and because the US govt flew out Saudi royalty right after the attacks, and because that country is our "ally" even though they finance Islamic terrorism and have horrendous human rights records. While we're having our own Crucible going on about sexual harassment, Saudi Arabia which treats woman like second class citizens is just okie dokie with us. http://www.cnn.com/2016/09/09/politics/house-9-11-sue-saudi-arabia/ It's because financial institutions and banks, who receive billions of taxpayer dollars from the Fed for free and then get to turn around and loan it out to people at interest before inflation has devalued one cent of it, while we are trillions in debt, who deliberately defrauded MILLIONS of hardworking people out of their pensions, got slapped with fines the equivalent of a traffic fine compared to how much money they make. No prosecutions, nothing happened, nothing changed, and now members of the government during that time are right back working for Wall Street as consultants. While savings accounts pay less than 1% annual return. It's because corporations who enjoy record profits have all the power pay hardly anything in taxes and stash all their profits overseas, while the life of the average working American gets shittier and shittier. It's because grads with student loans were preyed upon with high interest loans because the government let them, and because public university raised their tuition to extortionate higts because the government let them, and sold a bill of goods about how everyone needs a college education only to enter the worst job market in generations with debt so high just to get a B.A. you'd think they just finished medical school. and its one of the only if not the only types of debts that wont go away with declaring bankruptcy, interestingly enough. It's because while the GOP is trying to push through a tax bill that's going to cheat even more Americans out of their wealth, including teachers deducting classroom supplies that they have to buy themselves because public budgets already dont pay for it, all the "liberal" media can talk about is some BS conspiracy theory about Russia that is shown again and again to be completely baseless, and polls have shown that only 6% of Americans consider it a top priority, yet thats all you see on the news every single day. It's because our government of our so-called free country decided that they can decide what substances people can put in their bodies, and therefore created the largest gulag state known to man, where we imprison more people per capita than any other country in the world - more than China, more than Russia, more than North Korea - with 4.4% of the world's population we imprison 22% of the world's prisoners. Nearly one out of 100 Americans are behind bars at any given time. It's because the only politician in our lifetimes that actually seems like he gives a crap about people and not just money was betrayed, cheated and railroaded by our own "liberal" media and our own "liberal" political party, and those who supported him were bullied and manipulated and lied to and insulted and discredited, and are still are, and no one seems to care. It's because we're supposed to praise the gods for having been delivered crappy, byzantine and overpriced insurance, because even though we're the wealthiest country in the world, and even though the vast majority of voters want single-payer, both political parties have infinite numbers of reasons and excuses of why we can never have that. yeah...go bitcoin...
JP Morgan's Jamie Dimon is well known for his hatred of Bitcoin and love for the blockchain. It is understandable that he does not really have any clue what Bitcoin was created for or where its inherent value comes from. In a clip from 2017 at the Institute of International Finance seen HERE. Jamie Dimon was cautioning people saying bitcoin will one day hurt them, that bitcoin has no value, that blockchain is amazing and he loved it. Its really odd that a man would have such a hate for bitcoin and it was also clear that he did not understand the cash he values so highly loses 2-3% per year from inflation.
Inflation of currencies
To put that last statement into perspective, the USD loses between 2-3 cents of inherent value each year. This means if you leave money in the bank the last 5 years your 1 USD from 5 years ago is now worth only $.90. Yes that actually is true and how inflation works, but with bitcoin if you had bought a dollar in 2013 at say around $100 BTC your 1% of the BTC today would be worth over 35USD today. This is because Bitcoin's price is based on supply and demand economics and it is deflationary. Deflationary currencies unlike inflationary ones cannot print an unlimited supply which is actually what causes inflation. If you have 100 USD in circulation and print off more that 100USD actually loses value. This is why so many people say things like the Federal Reserve needs to end. It is because the printing of the USD, has since its inception caused the currency to lose approximately 95% of its original value and decoupling from Gold made the inflation more like hyper inflation without anyone noticing. When I was a child the same chocolate bar that now is 2 USD was $0.50 and I am only 33 years old. So in around 25 years the inflation has caused that chocolate bar to increase 4X in price. Now why is this an issue? Lets look at things like minimum wage, what we see is that has not even come close to rising as much as inflation. This actually causes the Rich-Poor gap to increase as it becomes hard and harder for the average citizens to survive. When we look at Jamie Dimon the reason he does not care is because he is the 1% or the 0.01% so to him inflation does not affect anything. People at that level of society can afford inflation, because they have money to invest. 📷
Impact on the average family
Lets look at the normal family and how inflation affects them. First things cost more actually everything costs more: Education, Insurance, Food, Water, Heating, Electricity, Gas, and the list can go on and on. If your income does not match the inflation in society each year you are at a company you actually are making less. The average family used to have more of a nest egg to invest, but with the global financial crisis of 2008 most have not recovered and sorry to say it but the markets look ripe to drop hard again in 2019/2020. If we do have another recession or worse a global financial crisis, we will see people start to flock towards bitcoin as the government will quantitatively ease and print off billions. Doing so will not really help long term and end up with more debt in society and honestly for many the struggle is real, especially those in the United States and we have seen this time and time again.
JPM Coin and Stablecoins
To wrap this all into the JPM coin and stablecoins in general they are a short term solution. For now they let us store our value pegged to the USD, and potentially in JPM coins case let the banks transfer USD to each other. The Inherent problems around fiat currencies is that they are losing value constantly and are backed by nothing but a government. Stablecoins for now let us hold the USD value of our cryptocurrencies and are a good hedge in the volatile market. What we all need to understand here is Fiat currencies like Venezuelan Bolivars, and the Argentine Peso have been far more volatile and hyper inflation has hit them hard. The thing everyone is missing is when this eventually hits the USD and it already is showing it has on an economic scale what will everyone turn to? With deflationary currencies the solution is already here. For example BTC has 21 million coins that will ever make it into circulation at the time of this article there are 17,542,112 BTC with approximately 4M lost forever. As demand for BTC grows as it has in Venezuela, Brazil, Argentina and Turkey it will be a greater store of value. It will actually increase in price as you cannot make more and this is why John McAfee, Tom Lee and Tim Draper amongst others have put such a huge value per coin in the future of $150,000 to 1 Million USD. 📷 We all need to realize is Stablecoins are not the future, they aren't the solution. When the USD does meet its fate of hyper inflation as other currencies have, we will see cryptos like Bitcoin be the the world standard. JPM and USDT won't matter when the USD is similar to Bolivars and Argentine Pesos and this is what the future looks like. We cannot put a time on when this will happen, but when it does it is likely Bitcoin will be seen as a world currency. Bitcoin will back all currencies someday and this is why stablecoins are just a bandaid solution for the short term. Sorry JPM coin, USDT, USDC etc... You are only a for the short term, it is time to see why Deflationary Currencies are the future! Where you can find me! Joel Kovshoff Founder of BlockRake Inc, CEO of Athena Software Systems Twitter: https://twitter.com/JoelKovshoff Facebook page: https://www.facebook.com/AthenaVIP/ LinkedIn: https://www.linkedin.com/in/cryptocurrencyeducato Telegram: @kovshoff
Bitcoin at $136,000: Can it become the new gold standard?
Over the past year, Bitcoin’s been on a wild ride from a low of $1,183 to a peak of $19,401. With Bitcoin’s skyrocketing prices, detractors from J.P. Morgan chief Jamie Dimon (“[Bitcoin] is a fraud”) to Berkshire Hathaway CEO Warren Buffett (“I can say almost with certainty that [cryptocurrencies] will come to a bad ending”) have been quick to decry the digital currency as a bubble. Predicting a crypto bubble has become the latest trend as Bitcoin and other currencies have risen meteorically. In spite of this, Bitcoin has shown that it is still a new asset with room to grow. Bitcoin’s current market cap of $134 billion, is massive compared to most companies, and even some countries. But this pales in significance compared to traditional assets like gold. If Bitcoin becomes a widely accepted store of value, it may one day replace some of the functions of gold in the market. Today, there is an estimated 190,040 tonnes of gold above ground in the world, with 54,000 known reserves below ground that can be mined. At today’s rate of $1,335 per ounce, that means there’s around $11.5 trillion worth of gold in the world that we know about. Imagine that Bitcoin replaces 25% of today’s gold market. Bitcoin would leapfrog another 17x above today’s current prices. Here’s some (very rough) back-of-the-paper-wallet math: 25% of $11.5 trillion gold reserves = $2.86 trillion $1.975 trillion market cap of bitcoin / 21 million bitcoin = 136,190 price per bitcoin While this scenario may seem extremely far-fetched, it’s not completely out of the realm of reality. In this article, we’ll look at some of the key characteristics that Bitcoin shares with gold that make it useful as a store of value and speculate around how Bitcoin might eat into the dominance of gold. What is a Store of Value? Skeptics like to point out that Bitcoin isn’t that useful as a currency. It can have high fees, long transaction times, and comes with numerous security risks. It’s still much easier to pay for goods and services with a credit card than sending bitcoin to someone’s public address. Yet all these things actually make Bitcoin similar to something people have valued for thousands of years: gold. Gold has certain properties that make it useful. It conducts electricity well, and it looks pretty. But if you compare gold to more common metals such as copper or nickel, it’s actually a lot less useful for making things — it bends too easily. The main utility of gold is that it functions as a store of value. Because gold is extremely scarce and expensive to produce it tends to retain value over time. If you buy gold today, you’ll likely be able to exchange it for a similar amount in the future. To understand how gold functions as a store of value and how Bitcoin might replace it, we have to dig deeper into the history of gold. A Brief Primer on Gold Gold has been valued and used as a store of value for millennia. The first known use of gold as currency began several thousand years ago in Asia. Even with the widespread adoption of paper currency in the form of bank notes in the 19th century, the gold standard remained the most popular financial system in the world. Nations would set a fixed price that they would trade gold for paper money. For centuries, gold was an acceptable form of currency. That’s a big part of why gold is still valuable today — we believe that gold is valuable, and this belief has been culturally ingrained. Gold has a number of properties that make it useful for this purpose. For starters, it lasts a really long time.The chemical half-life of gold is 168 days, compared to 130 days for silver, and a mere 61 hours for copper. Gold is also easy to split up into smaller parts and transport. You can remelt a gold ingot into smaller gold coins, or even smaller pieces of jewelry. It’s also portable: an ounce of gold is worth $1,335 and weighs the same as a slice of bread. It’s estimated that the 190,040 tonnes of gold above ground would fit into a cube with 67 foot sides. Today, we use gold for many different things. Jewelry is the most common use-case representing roughly 48% of all above-ground gold. 21% is used for private investment, whether in the physical form of gold bullion or in financial instruments like exchange-traded funds. Another 17% is used by the official sector by central banks as a reserve currency. The other 14% is used for other purposes, from industrial applications like electronics to dentistry. source: World Gold Council While the gold standard has largely been abandoned, gold remains a useful hedge against currency instability. That’s because gold is inherently scarce, with a limited supply. On average, 1,500–3,000 tonnes of gold is mined each year, adding a mere 1–2% annual increase to the supply of gold. It’s also highly liquid and can be exchanged for money anywhere in the world. Central banks buy gold to avoid currency risks and hedge against inflation. Gold is held in reserve and can be liquidated quickly in times of crises. In 2016, Russia’s central bank purchased 201 tonnes of gold in response to a weakening rouble and international sanctions, making it the largest acquirer of gold. Today, gold continues to retain its significance because it operates as a store of value that’s removed from the financial system. The Bull Case for Bitcoin: Why Bitcoin may replace Gold On the surface, Bitcoin and gold couldn’t be more different. Bitcoin is a digital, peer-to-peer currency created in 2008, and distributed across nodes around the world. Gold is a natural element that is mined from the ground, and which has been used as a store of value for millennia. Despite these differences, Bitcoin and gold both share characteristics that make them useful as a store of value: Just like the supply of gold is constrained to the amount that can be mined, the supply of Bitcoin is written into the code and maxes out at 21 million coins. While gold is relatively portable, can be verified, and divided into smaller units, Bitcoin is cryptographically secured, controlled via private key, and can be divided infinitely. That gives it distinct advantages over gold as a store of value. While gold is useful as a store of value because it’s valuable relative to physical size, this still adds up when you’re operating at scale. For example, when the German central bank wanted to bring home 374 metric tons of gold back to Frankfurt, the gold had to be assessed for purity, be remolded from bullion into bars, then secured and transported. The whole operation cost $ 9 million. There’s a clear argument that a digital currency like Bitcoin would be much better suited to maintain reserves than gold bars. Central banks are already beginning to look at the benefits of digital currencies. The Swedish central bank is investigating the possibility of launching a digital supplement to cash, called the e-krona. Singapore is experimenting with use-cases for cryptocurrency from cross-border payments to creating a digital Singapore dollar. Similar to gold, Bitcoin sees high usage as a store of value in countries with currency controls or instability. In Argentina, for example, people use Bitcoin to circumvent government currency controls mean, saving nearly 40% on foreign currency exchanges. In Venezuela, Bitcoin usage has become widespread to buy everything from food to movie tickets in the face of 2,616% inflation. The Venezuelan government even launched its own contentious cryptocurrency, called the Petro, in an effort to circumvent international sanctions. Like gold, Bitcoin provides a store of value that’s separated from the official financial system. Unlike gold, Bitcoin is far easier to hold onto and exchange. If 25% of the gold that’s used as a store of value in jewelry, private investment, and the official sector moves to Bitcoin, we may see Bitcoin at $136,190. The New Gold Standard Bitcoin rose from the 2008 financial crash, promising a digital currency free from central bank intervention. This is something that we’ve always needed — just look at gold. Gold is useful because it provides a store of value outside of currency and stock markets. Bitcoin, if it’s able to address key technical and scalability challenges, has the potential to do the same. What’s important to remember is that despite the boom-and-bust hype cycle, we’re still in the early innings. https://blog.sfox.com/bitcoin-at-136-000-can-it-become-the-new-gold-standard-ee98b11aacfc
Meet the Venture Capitalist Whose Childhood in Communist Bulgaria Led Her to Embrace Silicon Valley
Dafina Toncheva’s journey to Silicon Valley has been anything but ordinary. She grew up in Bulgaria (like me!) during a turbulent time of change when the country was struggling to emerge from communism. Although her parents were doctors, they each earned only $150 a month. Toncheva spent summers with her grandparents on their tobacco farm where they would pick tobacco leaves and work the land. “As you can imagine, it was just very manual, labor-intensive, and unpleasant work,” she said. But it was on that farm where her grandmother gave her advice that Toncheva would carry with her as she immigrated to the United States, graduated from both Harvard and Stanford, and entered the cutthroat world of venture investing. Her grandmother said, “If you don’t want to make a living with your hands, you need to invest in your brain.” “Her advice ultimately help me grow into an independent, self-sufficient, and self-reliant adult,” Toncheva said. “And those are also the qualities I look for in the founders I back.” Toncheva moved from Bulgaria to the United States in 1998 on a full scholarship to Harvard University. From there, she worked at Microsoft as a software engineer, went on to get an MBA from Stanford, and joined Venrock for her first job in venture capital. She became the first institutional investor in Cloudflare, a San Francisco-based network performance and cybersecurity firm that just went public. Toncheva has spent the last seven years investing in cybersecurity and enterprise software companies at early-stage investment firm U.S. Venture Partners. Last week, she was promoted to general partner. I recently caught up with Toncheva about all of this and more. Below is our conversation. TERM SHEET: When you were 15 years old, you created a peanut business that generated more revenue than the combined income of your parents. Tell me about that. TONCHEVA: I was born in a communist country, but my formative years were spent in a country that was trying to define itself, embrace capitalism, and open up to the world. It was a very turbulent time after [communism fell in] 1989 socially, politically, and economically. There were entrepreneurial-minded people who tried to take advantage of the change by starting businesses. Many people around us were opening small mom-and-pop shops — except for my parents. They were doctors and they felt very limited by their careers. So I remember thinking, “It’s kind of unfair that my parents spent so much of their lives studying, investing in their careers, and being good at what they do, yet we’re still barely making ends meet.” I wanted to help, so I decided to try and start something on my own. What entrepreneurship started to mean to me was courage, expression of freedom, creativity, and growth. It had this very noble, very positive connotation in my mind. So I started buying raw peanuts from local farms, and I began roasting them, packaging them, and selling them through wholesale retailers to restaurant chains. I created a real operation that was powered by me and my younger brother. With that very basic business, I made more money than my parents combined. That was the beginning of my self-sufficiency and independence that my grandmother always talked about. It was both exciting, but also disillusioning in some ways to know that I can make more money than my parents with a lot less education and experience. Why did you decide to immigrate to the United States? One of the things that was so defining for me in my childhood was that my parents valued education, ethics, persistence, and commitment to personal growth. My mother was an ENT (ears, nose, and throat) surgeon, and my father was a neurologist, yet they still barely made ends meet as a family. That was the reality of communism — where everyone was supposed to be equal — that made no sense to me. I knew I didn’t want my life to end up like that. During that time of change in post-communist Bulgaria, many people of my generation saw the U.S. as the symbol of meritocracy and the victory of capitalism. It was a very natural place for me as a teenager who wanted to build a better life to end up, but getting to the U.S. was very difficult. The person who opened my eyes to studying in the States was a young American volunteer who was teaching English in my hometown. Through him, I learned that I could apply to schools in the States, that they give financial aid to foreigners, and that it’s a real possibility. It was a long process, but I ended up contacting over 100 schools. I asked all of them to waive the application fee, and I applied for financial aid at every single school. I was very lucky to get into 12 schools on full scholarship. So I moved here in 1998, started at Harvard, and studied computer science even though I had never owned a computer and was very clearly behind all of my classmates. I thought technology was a growing market, and there was a real need for software engineers. I worked the whole time while I was at Harvard as a teaching assistant, later did internships with Microsoft during the summers, and ultimately, ended up working for Microsoft as a software engineer in 2002. You mentioned capitalism. There’s increasingbacklash against capitalismwith critics saying it needs a major overhaul to better serve society. Given your experience growing up in a country where you witnessed the effects of communism, do you think capitalism needs to be reformed? I firmly believe that we live in the best place in the world, and I say that unapologetically. That being said, I also realize that we have some challenges we need to work through. I love capitalism. It might not be perfect, but it’s the best out there. Having lived through communism and some forms of post-communist socialism, I just can’t imagine that system being a great alternative. Just the thought of communism and socialism depresses me. I envision it as this bleak world devoid of creativity and self-expression with no pursuit of self-improvement. It’s a dead end, it really is. I get scared hearing about people’s fascination with socialism because those are typically people who have never experienced it first-hand. It’s very theoretical for them. It’s just a different feeling for people who have lived through it and experienced it first-hand. I’m sure your parents also have some strong opinions about communism. My dad, especially. He recently told me a story about getting in trouble at school because he wrote “USA” on his bookbag when Bulgaria was still under communism. I’m not surprised at all. In Bulgaria, “USA” stood as a symbol for capitalism and a better life for many, many years. On the other hand, capitalism has left many people disillusioned. The equality gap is wide and widening, and it’s become a vicious, reinforcing cycle. I have to say I do appreciate the discussions going on especially by capitalists like Ray Dalio and Jamie Dimon who talk about ways to create more upward mobility. I think these are good discussions to be had, and it’s a way to evolve capitalism with the times. How did you end up in venture capital? I spent four years at Microsoft as an engineer and a product manager. There, I worked on security products and then decided to go to business school. I attended Stanford, and that’s how I ultimately ended up in venture capital. Toward the end of my second year, I was introduced to Venrock, where I was focused on helping the team source investment opportunities in enterprise software and cybersecurity. While you were at Venrock, you led the first institutional investment round in Cloudflare,which just went public. What did you see in the company and the team that gave you the confidence to back them so early? I invested in Cloudflare exactly 10 years ago. There were three things that stood out to me. They were going after a really painful problem, which was that 50% of traffic is not authentic. It could be malicious. They were going after a customer group which was completely ignored, which was the long tail of the web. They said they would build a service that cleans up traffic to web properties from the long tail of the web — and they would do it for free and find other ways to monetize the business. That was very counterintuitive to how most security companies think. Most security companies would build a product or service and try to sell it to the biggest customers — the ones that have the biggest budgets. It was very contrarian what they were trying to do, but at the same time, it made a lot of sense. The team was thoughtful, persistent, and they had a clear vision around what they wanted to build. I just had a lot of faith in them that they would execute, and I’m really happy with how far they’ve come on this journey. Seeing them go public made me feel validated in my belief in them from Day 1 when they didn’t have anything — they didn’t have a single line of code. For me, it starts with the founders and how clear and persistent they are in their vision. It really is a character judgment that’s very difficult to explain, but it’s one of the most important aspects of early-stage investing. How do you tell if an entrepreneur is a true visionary or just completely delusional? It’s really hard. I think the same person can be both, and probably many of them are both, so it’s very difficult to distinguish between the two. I think the ability to execute is so important, and that’s where the distinction lies. Successful founders stand out in their ability to perform and execute. I also value transparency, honesty, respect for the facts, and self-awareness. I think a grasp for reality and pragmatism has to be there. If those things aren’t there, it’s almost impossible to work collaboratively with the team. What sector or company are you most excited about right now? I work on several areas at USVP focused on the enterprise tech space, but the one I feel most excited about is cybersecurity. I think security problems and security threats evolve faster than issues in almost any other industry. Security threats are aggressive, they evolve really fast, and their mutations are almost infinite. Because of those dynamics, cybersecurity is a very challenging problem to solve. Technologies become obsolete very quickly, and innovation cycles have to be very rapid. Even in the worst of times when budgets get cut for everything else, cybersecurity budgets continue to grow 10% year over year. That makes it a very attractive market for me to continue investing in. What do you think about emerging assets like Bitcoin and other cryptocurrencies? Have you invested in any blockchain companies? We have not made any investments in Bitcoin or blockchain technology. It’s an area I’m following closely and studying, but I don’t feel prepared to make investments in it just yet. There are definitely opportunities in the infrastructure building in that ecosystem to make investments. But I also think as an industry, it’s still in Version 1. There will be more iterations and more opportunities for investors to play in that space in the future. Do you think blockchain technology could have implications for cybersecurity? For sure. I think blockchain as a technology could be quite interesting when applied to security, and also the other way around: Security is a very important consideration for the existence and acceptance for the growth of those assets. Security is a foundational layer and it has to be figured out before [crypto assets] become broadly adopted by the mainstream. It’s been a little more than 10 years since you started in venture capital. How has the ecosystem changed since 2008 and 2009, and how important do you think capital efficiency is in a world of seemingly unlimited funding? It’s incredible how much things have changed in 10 years. When I started, there were only a handful of seed funds, and now, there are hundreds of seed funds on one end of the spectrum. On the other end of the spectrum, the large funds have become even larger. The abundance of capital on the late-stage is just enormous. As a result, we’re seeing inflating late-stage company valuations, companies staying private longer, and massive IPOs by the time they go public. In a time of abundant capital, capital efficiency has become even more important. I think capital efficiency is ultimately freedom. It gives you choices. It gives you options. It gives entrepreneurs the freedom to operate and not be imprisoned by their burn rate. Bigger funds talk a lot about growth at all costs and very rarely mention capital efficiency. I think efficient and responsible growth is way more important in the long-term. We’re starting to see some of that with companies going public that are wildly unprofitable. Public investors don’t seem to agree that the growth at all costs is the most important factor in determining whether a business is successful. Speaking of going public, Snap CEO Evan Spiegelrecentlysaid that going public was a very challenging experience. One specific thing he said that’s made a big difference is being more transparent with investors by providing quarterly guidance. How do you see some of these private companies that are used to keeping things quiet adapt to the more transparent nature of the public markets? Different companies have different boards with different expectations. It’s not as strict or clear cut as it is in the public markets. I have noticed that when a company is doing well and growing rapidly, private investors tend to forgive more. They tend to become less vigilant, while public investors are a lot more strict and much less forgiving. It’s a different mindset, so it really depends on what type of private board a company has been accustomed to. There are private boards that are just as demanding and detail-oriented as public investors. But for some, being public may come as a complete shock when the CEO realizes there’s a whole new way of doing things now. * More Details Here
The Great Bitcoin Bull Market Of 2017 by Trace Mayer
By: Trace Mayer, host of The Bitcoin Knowledge Podcast. Originally posted here with images and Youtube videos. I just got back from a two week vacation without Internet as I was scouring some archeological ruins. I hardly thought about Bitcoin at all because there were so many other interesting things and it would be there when I got back. Jimmy Song suggested I do an article on the current state of Bitcoin. A great suggestion but he is really smart (he worked on Armory after all!) so I better be thorough and accurate! Therefore, this article will be pretty lengthy and meticulous. BACKGROUND As I completely expected, the 2X movement from the New York Agreement that was supposed to happen during the middle of my vacation flopped on its face because Jeff Garzik was driving the clown car with passengers willfully inside like Coinbase, Blockchain.info, Bitgo and Xapo and there were here massive bugS and in the code and miners like Bitmain did not want to allocate $150-350m to get it over the difficulty adjustments. I am very disappointed in their lack of integrity with putting their money where their mouths are; myself and many others wanted to sell a lot of B2X for BTC! On 7 December 2015, with Bitcoin trading at US$388.40, I wrote The Rise of the Fourth Great Bitcoin Bubble. On 4 December 2016, with Bitcoin trading at US$762.97, I did this interview:
As of 26 November 2017, Bitcoin is trading around US$9,250.00. That is an increase of about 2,400% since I wrote the article prognosticating this fourth great Bitcoin bull market. I sure like being right, like usual (19 Dec 2011, 1 Jul 2013), especially when there are financial and economic consequences. With such massive gains in such a short period of time the speculative question becomes: Buy, Hold or Sell? FUNDAMENTALS Bitcoin is the decentralized censorship-resistant Internet Protocol for transferring value over a communications channel. The Bitcoin network can use traditional Internet infrastructure. However, it is even more resilient because it has custom infrastructure including, thanks to Bitcoin Core developer Matt Corrallo, the FIBRE network and, thanks to Blockstream, satellites which reduce the cost of running a full-node anywhere in the world to essentially nothing in terms of money or privacy. Transactions can be cheaply broadcast via SMS messages. SECURITY The Bitcoin network has a difficulty of 1,347,001,430,559 which suggests about 9,642,211 TH/s of custom ASIC hardware deployed. At a retail price of approximately US$105/THs that implies about $650m of custom ASIC hardware deployed (35% discount applied). This custom hardware consumes approximately 30 TWh per year. That could power about 2.8m US households or the entire country of Morocco which has a population of 33.85m. This Bitcoin mining generates approximately 12.5 bitcoins every 10 minutes or approximately 1,800 per day worth approximately US$16,650,000. Bitcoin currently has a market capitalization greater than $150B which puts it solidly in the top-30 of M1 money stock countries and a 200 day moving average of about $65B which is increasing about $500m per day. Average daily volumes for Bitcoin is around US$5B. That means multi-million dollar positions can be moved into and out of very easily with minimal slippage. When my friend Andreas Antonopolous was unable to give his talk at a CRYPSA event I was invited to fill in and delivered this presentation, impromptu, on the Seven Network Effects of Bitcoin. These seven network effects of Bitcoin are (1) Speculation, (2) Merchants, (3) Consumers, (4) Security [miners], (5) Developers, (6) Financialization and (7) Settlement Currency are all taking root at the same time and in an incredibly intertwined way. With only the first network effect starting to take significant root; Bitcoin is no longer a little experiment of magic Internet money anymore. Bitcoin is monster growing at a tremendous rate!!
SPECULATION For the Bitcoin price to remain at $9,250 it requires approximately US$16,650,000 per day of capital inflow from new hodlers. Bitcoin is both a Giffen good and a Veblen good. A Giffen good is a product that people consume more of as the price rises and vice versa — seemingly in violation of basic laws of demand in microeconomics such as with substitute goods and the income effect. Veblen goods are types of luxury goods for which the quantity demanded increases as the price increases in an apparent contradiction of the law of demand. There are approximately 16.5m bitcoins of which ~4m are lost, ~4-6m are in deep cold storage, ~4m are in cold storage and ~2-4m are salable. (http://www.runtogold.com/images/lost-bitcoins-1.jpg) (http://www.runtogold.com/images/lost-bitcoins-2.jpg) And forks like BCash (BCH) should not be scary but instead be looked upon as an opportunity to take more territory on the Bitcoin blockchain by trading the forks for real bitcoins which dries up more salable supply by moving it, likely, into deep cold storage. According to Wikipedia, there are approximately 15.4m millionaires in the United States and about 12m HNWIs ($30m+ net worth) in the world. In other words, if every HNWI in the world wanted to own an entire bitcoin as a 'risk-free asset' that cannot be confiscated, seized or have the balance other wise altered then they could not. For wise portfolio management, these HNWIs should have at least about 2-5% in gold and 0.5-1% in bitcoin. Why? Perhaps some of the 60+ Saudis with 1,700 frozen bank accounts and about $800B of assets being targetted might be able to explain it to you. In other words, everyone loves to chase the rabbit and once they catch it then know that it will not get away. RETAIL There are approximately 150+ significant Bitcoin exchanges worldwide. Kraken, according to the CEO, was adding about 6,000 new funded accounts per day in July 2017. Supposedly, Coinbase is currently adding about 75,000 new accounts per day. Based on some trade secret analytics I have access to; I would estimate Coinbase is adding approximately 17,500 new accounts per day that purchase at least US$100 of Bitcoin. If we assume Coinbase accounts for 8% of new global Bitcoin users who purchase at least $100 of bitcoins (just pulled out of thin error and likely very conservative as the actual number is perhaps around 2%) then that is approximately $21,875,000 of new capital coming into Bitcoin every single day just from retail demand from 218,750 total new accounts. What I have found is that most new users start off buying US$100-500 and then after 3-4 months months they ramp up their capital allocation to $5,000+ if they have the funds available. After all, it takes some time and practical experience to learn how to safely secure one's private keys. To do so, I highly recommendBitcoin Core (network consensus and full validation of the blockchain), Armory (private key management), Glacier Protocol (operational procedures) and a Puri.sm laptop (secure non-specialized hardware). WALL STREET There has been no solution for large financial fiduciaries to invest in Bitcoin. This changed November 2017. LedgerX, whose CEO I interviewed 23 March 2013, began trading as a CFTC regulated Swap Execution Facility and Derivatives Clearing Organization. The CME Group announced they will begin trading in Q4 2017 Bitcoin futures. The CBOE announced they will begin trading Bitcoin futures soon. By analogy, these institutional products are like connecting a major metropolis's water system (US$90.4T and US$2 quadrillion) via a nanoscopic shunt to a tiny blueberry ($150B) that is infinitely expandable. This price discovery could be the most wild thing anyone has ever experienced in financial markets. THE GREAT CREDIT CONTRACTION The same week Bitcoin was released I published my book The Great Credit Contraction and asserted it had now begun and capital would burrow down the liquidity pyramid into safer and more liquid assets. (http://www.runtogold.com/images/Great-Credit-Contraction-Liquidity-Pyramid.jpg) Thus, the critical question becomes: Is Bitcoin a possible solution to the Great Credit Contraction by becoming the safest and most liquid asset? BITCOIN'S RISK PROFILE At all times and in all circumstances gold remains money but, of course, there is always exchange rate risk due to price ratios constantly fluctuating. If the metal is held with a third-party in allocated-allocated storage (safest possible) then there is performance risk (Morgan Stanley gold storage lawsuit). But, if properly held then, there should be no counter-party risk which requires the financial ability of a third-party to perform like with a bank account deposit. And, since gold exists at a single point in space and time therefore it is subject to confiscation or seizure risk. Bitcoin is a completely new asset type. As such, the storage container is nearly empty with only $150B. And every Bitcoin transaction effectively melts down every BTC and recasts it; thus ensuring with 100% accuracy the quantity and quality of the bitcoins. If the transaction is not on the blockchain then it did not happen. This is the strictest regulation possible; by math and cryptography! This new immutable asset, if properly secured, is subject only to exchange rate risk. There does exist the possibility that a software bug may exist that could shut down the network, like what has happened with Ethereum, but the probability is almost nil and getting lower everyday it does not happen. Thus, Bitcoin arguably has a lower risk profile than even gold and is the only blockchain to achieve security, scalability and liquidity. To remain decentralized, censorship-resistant and immutable requires scalability so as many users as possible can run full-nodes. (http://www.runtogold.com/images/ethereum-bitcoin-scability-nov-2017.png) TRANSACTIONS Some people, probably mostly those shilling alt-coins, think Bitcoin has a scalability problem that is so serious it requires a crude hard fork to solve. On the other side of the debate, the Internet protocol and blockchain geniuses assert the scalability issues can, like other Internet Protocols have done, be solved in different layers which are now possible because of Segregated Witness which was activated in August 2017. Whose code do you want to run: the JV benchwarmers or the championship Chicago Bulls? As transaction fees rise, certain use cases of the Bitcoin blockchain are priced out of the market. And as the fees fall then they are economical again. Additionally, as transaction fees rise, certain UTXOs are no longer economically usable thus destroying part of the money supply until fees decline and UTXOs become economical to move. There are approximately 275,000-350,000 transactions per day with transaction fees currently about $2m/day and the 200 DMA is around $1.08m/day. (http://www.runtogold.com/images/bitcoin-transaction-fees-nov-2017.png) What I like about transaction fees is that they somewhat reveal the financial health of the network. The security of the Bitcoin network results from the miners creating solutions to proof of work problems in the Bitcoin protocol and being rewarded from the (1) coinbase reward which is a form of inflation and (2) transaction fees which is a form of usage fee. The higher the transaction fees then the greater implied value the Bitcoin network provides because users are willing to pay more for it. I am highly skeptical of blockchains which have very low transaction fees. By Internet bubble analogy, Pets.com may have millions of page views but I am more interested in EBITDA. DEVELOPERS Bitcoin and blockchain programming is not an easy skill to acquire and master. Most developers who have the skill are also financially independent now and can work on whatever they want. The best of the best work through the Bitcoin Core process. After all, if you are a world class mountain climber then you do not hang out in the MacDonalds play pen but instead climb Mount Everest because that is where the challenge is. However, there are many talented developers who work in other areas besides the protocol. Wallet maintainers, exchange operators, payment processors, etc. all need competent developers to help build their businesses. Consequently, there is a huge shortage of competent developers. This is probably the largest single scalability constraint for the ecosystem. Nevertheless, the Bitcoin ecosystem is healthier than ever before. (http://www.runtogold.com/images/bitcoin-ecosystem.jpg)(/images/bitcoin-ecosystem-small.jpg) SETTLEMENT CURRENCY There are no significant global reserve settlement currency use cases for Bitcoin yet. Perhaps the closest is Blockstream's Strong Federations via Liquid. PRICE There is a tremendous amount of disagreement in the marketplace about the value proposition of Bitcoin. Price discovery for this asset will be intense and likely take many cycles of which this is the fourth. Since the supply is known the exchange rate of Bitcoins is composed of (1) transactional demand and (2) speculative demand. Interestingly, the price elasticity of demand for the transactional demand component is irrelevant to the price. This makes for very interesting dynamics! (http://www.runtogold.com/images/bitcoin-speculation.jpg) On 4 May 2017, Lightspeed Venture Partners partner Jeremy Liew who was among the early Facebook investors and the first Snapchat investor laid out their case for bitcoin exploding to $500,000 by 2030. On 2 November 2017, Goldman Sachs CEO Lloyd Blankfein (https://www.bloomberg.com/news/articles/2017-11-02/blankfein-says-don-t-dismiss-bitcoin-while-still-pondering-value)said, "Now we have paper that is just backed by fiat...Maybe in the new world, something gets backed by consensus." On 12 Sep 2017, JP Morgan CEO called Bitcoin a 'fraud' but conceded that "(http://fortune.com/2017/09/12/jamie-dimon-bitcoin-cryptocurrency-fraud-buy/)Bitcoin could reach $100,000". Thus, it is no surprise that the Bitcoin chart looks like a ferret on meth when there are such widely varying opinions on its value proposition. I have been around this space for a long time. In my opinion, those who scoffed at the thought of $1 BTC, $10 BTC (Professor Bitcorn!), $100 BTC, $1,000 BTC are scoffing at $10,000 BTC and will scoff at $100,000 BTC, $1,000,000 BTC and even $10,000,000 BTC. Interestingly, the people who understand it the best seem to think its financial dominance is destiny. Meanwhile, those who understand it the least make emotionally charged, intellectually incoherent bearish arguments. A tremendous example of worldwide cognitive dissonance with regards to sound money, technology and the role or power of the State. Consequently, I like looking at the 200 day moving average to filter out the daily noise and see the long-term trend. (http://www.runtogold.com/images/bitcoin-price-200dma-nov-2017.png) Well, that chart of the long-term trend is pretty obvious and hard to dispute. Bitcoin is in a massive secular bull market. The 200 day moving average is around $4,001 and rising about $30 per day. So, what do some proforma situations look like where Bitcoin may be undervalued, average valued and overvalued? No, these are not prognostications. (http://www.runtogold.com/images/bitcoin-price-pro-forma.png) Maybe Jamie Dimon is not so off his rocker after all with a $100,000 price prediction. We are in a very unique period of human history where the collective globe is rethinking what money is and Bitcoin is in the ring battling for complete domination. Is or will it be fit for purpose? As I have said many times before, if Bitcoin is fit for this purpose then this is the largest wealth transfer in the history of the world. CONCLUSION Well, this has been a brief analysis of where I think Bitcoin is at the end of November 2017. The seven network effects are taking root extremely fast and exponentially reinforcing each other. The technological dominance of Bitcoin is unrivaled. The world is rethinking what money is. Even CEOs of the largest banks and partners of the largest VC funds are honing in on Bitcoin's beacon. While no one has a crystal ball; when I look in mine I see Bitcoin's future being very bright. Currently, almost everyone who has bought Bitcoin and hodled is sitting on unrealized gains as measured in fiat currency. That is, after all, what uncharted territory with daily all-time highs do! But perhaps there is a larger lesson to be learned here. Riches are getting increasingly slippery because no one has a reliable defined tool to measure them with. Times like these require incredible amounts of humility and intelligence guided by macro instincts. Perhaps everyone should start keeping books in three numéraires: USD, gold and Bitcoin. Both gold and Bitcoin have never been worth nothing. But USD is a fiat currency and there are thousands of those in the fiat currency graveyard. How low can the world reserve currency go? After all, what is the risk-free asset? And, whatever it is, in The Great Credit Contraction you want it! What do you think? Disagree with some of my arguments or assertions? Please, eviscerate them on Twitter or in the comments!
We just celebrated the 350,000 mark 5 days ago and today we are over 360,000. Nice to see this sub and the Bitcoin community in general growing this big and this fast. If you are one of those many just coming in, welcome! I'm sure you'll find this place very interesting, fun and informative. We are here to help you to better understand what Bitcoin is and and how it works, and for ourselves to keep learning. This is my welcome post for newbies:
Bitcoin is a worldwide-distributed decentralized peer-to-peer censorship-resistant trustless and permissionless deflationary system/currency (see Blockchain technology) backed by mathematics, open source code, cryptography and the most powerful and secure decentralized computational network on the planet, orders of magnitude more powerful than google and government combined. There is a limit of 21 million bitcoins (divisible in smaller units). "Backed by Government" money is not backed by anything and is infinitely printed at will by Central Banks. Bitcoin is limited and decentralized. Receive and transfer money, from cents (micropayments) to thousands:
Cheap regardless of amount $$$ sent (more scaling apps coming)
Borderless (no country can stop it from going in/out or confiscate)
Trustless (nobody needs to trust anybody for it to work)
Privacy (no need to expose personal information)
Securely (encrypted cryptographically and can’t be confiscated)
Permissionless (no approval from central powers needed)
Instantly (from seconds to a few minutes)
Open source (auditable by anybody)
Worldwide distributed (from anywhere to anywhere on the planet)
Censorship resistant (no government can stop its use)
Peer-to-peer (no intermediaries with a cut)
Portable (easier to carry/move than cash, gold and silver)
Public ledger (transparent, seen by everybody)
Scalable (each bitcoin is divisible down to 8 decimals)
Decentralized (distributed with no single point of failure)
Deflationary (its supply goes down with time until reaching 21 million ever)
Immutable global registry (can’t be altered/hacked by nobody)
No chargebacks-No fraud ('push' vs' 'pull' transactions).
And that’s just as currency, Bitcoin has many more uses and applications.
Edit: Fixed some non-working links and added new ones.
The ones who were described as "bitcoin's biggest enemy," like JP Morgan (News - Alert) have had their share of doubts about the validity of their own claims against the market. In a recent update by the media, it was said that JP Morgan chief executive Jamie Dimon apparently hosted a secret meeting with Coinbase, the biggest Crypto player. If Jamie Dimon says if you're 'stupid' enough to buy bitcoin, you'll pay the price one day Published Fri, Oct 13 2017 1:38 PM EDT Updated Mon, Oct 16 2017 10:52 AM EDT Evelyn Cheng @chengevelyn Weber shares the same belief of JPMorgan Chase & Co Chief Executive Jamie Dimon, who said that Bitcoin ‘is a fraud’ and “will blow up”. Bitcoin is a digital currency that allows individuals to transfer value to each other in order to purchase goods and services by sidestepping the banks and mainstream financial system. I don't know whether Jamie can top me or not," said Buffett, who at Berkshire's recent 2018 annual shareholder meeting said bitcoin is "probably rat poison squared." Bitcoin has lost more than half its value since topping $19,000 in mid-December, CNBC reported. Dimon and Buffett aren't alone in their disdain for cryptocurrencies. As bitcoin turns 10, one of its most notable skeptics has offered up, if reluctantly, further comment on digital currencies. Speaking at an Axios conference in Los Angeles on Tuesday, Jamie Dimon
JPMorgan's Jamie Dimon Talks Smack About Bitcoin, Value Plunges 10%
http://www.ThinkingCrypto.com Jamie Dimon, JP Morgan Chase CEO, has been a major critic of Bitcoin, calling it a fraud and scam publicly. Jamie also said neg... My response to Jamie Dimon's criticism of Bitcoin as a "fraud." Jamie doth protest too much methinks, because JPMorgan Chase was fined for mortgage fraud. The world's banks have never faced ... Investors were in a hurry Wednesday to dump the cryptocurrency Bitcoin, after JPMorgan CEO Jamie Dimon warned that it “is a fraud” and will eventually “blow up”. Bitcoin is the original ... $5200 Bitcoin price with Richard Heart - Duration: 59:03. Richard Heart 34,538 views. ... Crypto Trading & FinTech World News 🌎 Bitcoin Blockchain Jamie Dimon X22 Report BTC ETH Roger Ver ... BITCOIN TODAY: Jamie Dimon and Jp Morgan has announced that they will provide banking services to Coinbase and Gemini! In this video, I'll go through the Bitcoin news today & I'll make a Bitcoin ...