Bitcoin is Bitcoin

Bitcoin is Bitcoin

Someone once tried to sell me a used Rolex for $500 when the fair market value of this “Rolex” would be around $4,500.  The watch said Rolex, it definitely looked like a Rolex and for someone who never had worn a Rolex before….. I guess it also felt like a Rolex.  But… this watch was definitely NOT a Rolex and I thankfully did not make this purchase. This is pretty much the analogy for anyone buying Bitcoin Cash today and thinking it’s Bitcoin.  It looks like Bitcoin, it may feel like Bitcoin and somehow there are people out there who refer to it as “the real Bitcoin.” I mean after all, Bitcoin.com has multiple PSA references and warnings about it. Unfortunately, they aren’t warning you (to your benefit) at all.  They are one of the biggest proponents in the spreading of misinformation. The whole damn website is lousy with inaccurate and downright factually incorrect information. But why? Why would Bitcoin.com along with a handful of other “bad actors” try and doup the public? Do they really believe that Bitcoin Cash or as we like to say “BCash” is actually Bitcoin?  Did the guy trying to sell me that watch actually believe it was in fact a real Rolex? Was he just being “nice” by pricing it at 10% of the actual cost of the watch? Or did he know the watch was not genuine? Both salesman in my analogy have one goal and that is to sell you a cheap knock off product. BCash is like buying a fake Coach bag on Canal Street. You’re free to buy it, you can use it, but you’d be lying to yourself if you thought for a minute this was “the real thing.”  By fleecing the public and bilking you, they are the ONLY ones who are profiting and they’re not doing you any favors. This is all by design and there are some serious BCash players that coordinate these “pumps.” I mean, you have CNBC outright telling you to buy BCash. You have Blockchain.info (the largest mobile wallet globally) who for some reason still has not implemented Segregated Witness in their wallets. Why would this be? Perhaps it has something to do with Roger Ver (owner of Bitcoin.com) being one of (if not their largest) investors.  It took Coinbase (supposedly the “leader” in this space) over a year to implement the basic OPTIONAL network upgrade (which only helps the network and their customers by lowering transaction costs) and their priorities instead were to add BCash first. Of course they also did it with zero notice and in the sketchiest way by pegging the price at $3,500 on the open and the entire roll out seemed like an insider trading paradise. Then again, we’re in a pseudo regulated market and of course nobody is being questioned or will ever go to prison because somehow these fraudulent practices are not yet illegal.        

I feel sorry for the newcomers entering this space, doing their homework and being sold this bill of goods.  The crypto space is lousy with scammers, schemes and just about every con job imaginable. All designed to separate you from your Bitcoin.  Cloud mining, Bitconnect type ponzi scams, the idea of purchasing some “masternode” that is going to throw off huge dividends, crypto trading courses, machine to machine payment pipe dreams, smart contract platforms and partnership rumors, buying into “the next Bitcoin” and that’s just for starters.  Why oh why do people think they need to “do something” with their Bitcoin? Maybe it’s the ADD society we’re living in and being a HODLer isn’t exciting enough. It’s truly unfortunate that most newcomers visit the Bitcoin.com website and probably leave thinking that this was somehow “Satoshi’s true vision.”  Only time will tell what happens and how this all plays out. Hopefully Bitcoin.com one day will be as irrelevant as Internet.com is today. Or is it more like a Pepsi vs. Coke or McDonalds and Burger King? Is there a place for BCash in the future and does it solve a problem? They would like you to think so but actually with ON CHAIN Bitcoin transaction fees NEAR ZERO, there is no need for this useless BCash altcoin.  

Or better yet, let’s take Grisham’s Law and try to apply it here.  Grisham’s Law basically states that if there are two forms of money in circulation, which are accepted by law and similar, the more valuable one will gradually disappear from circulation.  In other words people spend the least valuable money first. If you had an equal amount of Bitcoin and BCash, and had to spend one…. which one would you choose? I, without hesitation, would dump that BCash almost instinctively. It’s not even up for debate, in my brain.  I don’t have any BCash by the way. But, there ain’t no way, that I’m spending my precious Bitcoin, if faced with that choice. So, if people in general are forced to choose, what do you think they will do? Does this strengthen Bitcoin’s use case as a long term store of value…..  YES. If you had to lock up all your money in one crypto (or something) for 20 years and went to sleep, how would you choose to store those funds? What would you do? For starters., if you’d rather lock it up in BCash, then you’re out of your mind. Reality is, that if you are smart, you’d probably choose Bitcoin.  It’s the only answer. There is however, a 100% guarantee of one outcome. If you choose to lock that money up in dollars, your purchasing power will ONLY be devastated over time. Government spending is the greatest bull market in history, it’s never gone down.

Why are small blocks paramount for Bitcoin’s success?  Why can’t Bitcoin just hard fork and raise the block size limit?  On the surface it seems like this is a logical solution to a problem of full blocks and high fees.  By the way, 1-2 megabyte Bitcoin blocks are CURRENTLY NOT FULL and the 8 megabyte BCash blocks are damn near empty.  Bitcoin gives anyone with a $50 laptop the ability to download an entire copy of the blockchain and interact directly with the Bitcoin Network.  There is no trusted 3rd party involved. There is no need to rely on someone else’s node. Your blockchain.info wallet is what is actually technically referred to as  an SPV wallet. You yourself are not actually directly broadcasting your transaction to the Bitcoin Network. You are relying on the SPV (simplified payment verification) provider.  Therefore, your money is not actually under your control. It’s like having a bank account. You ask permission to send a Chase quickpay and they allow it to happen. You ask permission to send a wire and they allow it to happen.  In fact, you’re actually asking permission to even withdraw “your money”….. And then they allow it. Bitcoin is powerful because it’s permissionless. This is a crucial and non-negotiable aspect that must be maintained. For those not familiar with Moore’s law and still have not read the Bitcoin Whitepaper in which it is referenced, it states that the number of transistors in an integrated circuit doubles approximately every two years.  Smaller blocks are what allows this ratio to not be at risk in regards to Bitcoin scaling. A harfork to raise the block size is always a last resort option. In fact Segwit does increase the Block size in a small and manageable way over time. We’re already seeing some 2 megabyte Bitcoin blocks since it’s debut and the adoption is only at about 35%. Adoption is important and Segwit is what is known as a “soft fork” because it’s completely optional and backwards compatible.  If you don’t want to use a Segwit address, you don’t have to but you’ll pay higher fees by not doing so.

What does this all mean?  Why are big blocks bad? For example, assume people actually used BCash and their 8 meg blocks were full.  In a very short time, the average computer would not be able to run a full node and you would be forced to rely on a third party provider.  No different than our banking system today. This is actually what they want. They want you to be beholden to them. Watch this insane Craig Wright speech (fake Satoshi) where he says “if you can’t afford a $25,000 computer to run your own node then go piss off.”  I know it’s hard to give an hour of your life to this video but if you want the real picture of what a scam BCash is, then it’s a must watch.  Think for yourself. This video and big blocker propaganda should make the decision very easy. Is this what you want? This guy went on record claiming he was Satoshi and then it was publicly debunked.  He should have been written off as a laughing stock. It’s a miracle he wasn’t burned after that, how quickly people forget. Or you have someone like Adam Back, who was actually cited in the Bitcoin Whitepaper giving this speech about scaling.  Who do you want to trust with your life savings?  It’s a complete juxtaposition from Craig Wright’s demeanor.  One is sane and a brilliant computer scientist who’s project Hashcash was directly cited in Satoshi’s White Paper and an actual cypherpunk from that era.  The other is like a traveling carney selling you snake oil and “exercising daemons” on stage.

Segwit was a milestone for Bitcoin and it took over three years of development and testing.  It was so thoroughly tested that in the process Blockstream and the Bitcoin Core developers indirectly discovered an open SSL bug that existed in over 30% of all websites on the internet.  Doesn’t this sound like the type of innovation that you want from the people securing your money? The smartest people in the world are working on Bitcoin, not on Bitcoin Cash.

If you feel like you are missing out because the price is pumping, don’t be fooled.  You want BCash because it’s cheaper? You get what you pay for.

Bitcoin. My Generation

Bitcoin.  My Generation.  

When I first got into real estate in New York City, I heard many, many stories and have personally met people who “bought a building for $1” back in the 1980’s and even still severely underpriced NYC real estate throughout the 1990’s.  How incredibly ridiculous does it sound today, to buy an entire building in the East Village for one dollar and having everyone you know telling you how “out of your mind” you were. Believe it or not, that was the situation back then. Were these people out of their mind?  Are us Bitcoiners out of our minds? Here is the situation today. Those same NY buildings are easily selling for prices between $6 and $20 million dollars. That’s insane yet that’s the reality. If you told someone in 1985 that the townhouse you bought for a dollar was going to be worth 12 million in 30 years, you’d have endured absolute ridicule.  Yes, you were right. A 13 room apartment in The Dakota off Central Park West was selling for around 100k in the 1970s. Central Park was a disaster, the city was teetering on bankruptcy and everyone thought you were clinically insane for buying it. I met a woman who purchased one and I believe she it sold for about 25 million dollars.

Were these pioneers really crazy?  I don’t think so. In fact anyone who is in their 20s or 30s really has almost a zero percent chance of ever seeing an opportunity like this in their lifetime.  This was my biggest complaint through most of my 20’s. When I was born! I missed all the best opportunities. I was barely old enough to open a brokerage account when the 1990s dot com and tech bull markets were in full swing.  Yes, that did not end well for most but depending on how you played it, you could have made a killing. Even the 30+ year unstoppable bull market in bonds would have made a conservative portfolio a “boat load” of money over time. These sweet pitches don’t come around all that often.  Yet, at the time they aren’t always viewed that way. These opportunities are few and far between. That brings us to today.

Where is our opportunity?  Where is the “home run” investment of my generation?  Well, I would say the only chance we really have is Bitcoin.  Notice I am purposefully singling out Bitcoin and not referring to “crypto currencies” or “smart contract platforms” or ICOs, Tokens, altcoins or anything other than…., the Big…. Bad….. Bitcoin.  

You think you missed your chance?  You want to invest in “the next Bitcoin” or some type of “better Bitcoin.”  It’s a futile effort and yes it can be fun and sometimes lucrative to take a trip to the “shitcoin casino.”  There’s nothing wrong with that. But let’s be real here. There is no better Bitcoin and I really doubt there is ever going to be a “better Bitcoin” in our lifetimes. Maybe ever, for that matter.  Bitcoin will continue to improve, the Bitcoin network is functioning better than ever and is always where the major innovations have and will continue to come from. The brightest and smartest people in the world are working on Bitcoin.  

The CME adding futures contracts for Bitcoin was the first new “commodity” product added since Gold was added in 1972.  You could argue that CME has added currencies over the years but I don’t really think Bitcoin falls completely in that currency category.  I know for me personally, it’s only really a store of value at this point with slightly more usability and decent liquidity should I need it.  It’s remarkably similar to gold except gold is incredibly difficult to sell in a pinch. Either way, bottom line, CME futures is a big deal and an important step forward in integrating Bitcoin into the fabric of our current financial system.  This is clearly here to stay and finding its way into currently regulated markets. With these positive fundamentals, Bitcoin has all the characteristics and scarcity to make every single one of these outlandish price predictions a reality. I’m talking about the 250k predictions all the way to the million dollar prediction.  This is not only completely possible but in my opinion also inevitable and most likely the “home run” investment of “my generation.”

We just hit a milestone the other day and officially passed the 17 million Bitcoin total supply number.  Sounds like a lot? It’s an incredibly finite amount of supply and the upside potential is actually unlimited.  There will only be 21 million Bitcoins EVER and they will not all be in circulation until the year 2140. If you are familiar with the Bitcoin halving schedule you know that every 4 years the mining reward is cut in half. The current reward is 12.5 BTC every block (or approximately 10 minutes). The deflationary aspects of where Bitcoin is currently at and what lies ahead is incredibly strong and support much higher prices.  The next having is going to happen around May of 2020 and from that point forward you’re looking at a 6.25 BTC mining subsidy. It’s only going down.

Will the world run out of Bitcoin?  Absolutely not because it’s divisible to 8 decimal places.  This means there are 100,000,000 units (referred to as Satoshi’s) in just 1 Bitcoin.  In other words….. That’s a crap ton.

Furthermore there are wild estimates of how many Bitcoins are “lost” or unretrievable.  There are estimates upwards and beyond 4 million Bitcoins that are completely gone forever.  You can then also add in Satoshi’s 1 million coins that have never been moved since he mined the first 50 in the Genesis block.     

If you are like me, then you feel like you’ve have been waiting for Bitcoin your entire life.  It rivals the Internet in terms of importance and advancement of our society. You can still buy 1 full Bitcoin for under $10,000.  You can dollar cost average in and acquire one over time. It really doesn’t matter how you get your hands on 1 full Bitcoin but that should be everyone’s goal who wants to participate in the best investment of “my generation.” Because that’s what it looks like this is.  Make no mistake about it, your kids will be using Bitcoin and it’s going to be a lot different than the Bitcoin of today. How long did it used to take to load one single web page? Am I that old? It would take you half a day to watch 1 movie. Do you remember those days?  Look where we are at now. The exact same process is happening and will continue to happen for Bitcoin over the years to come.

The debit cards are coming.  Slowly but surely, Coinbase is issuing debit cards to spend “crypto” in our daily lives.  Which by the way, spending your precious Bitcoin is probably the dumbest thing you can do.  Unless it’s absolutely necessary to do so, why would anyone spend the currency that is appreciating in value if they had a choice?  You don’t get travel miles with Bitcoin? You don’t get the paper trail for tax purposes like you do with traditional banking. You almost always are better off spending the dollars.  This runway for Bitcoin being spent with a Visa/Mastercard at merchant point of sale will have a positive multiplier effect for the fiat coming into the system. Yes, the Bitcoin being spent is then liquidated and the merchant receives payment in fiat.  That in itself is not bullish for the price. But the fact that Bitcoin adoption, widespread use and the “hyper bitcoinization” has not even really gotten started should absorb (if there even is any) negative price effects of people spending it. This is going to be hardwired into our daily life and very, very simple to use.  This is the “new money.” In fact, more and more merchants are going to actually want to be paid in Bitcoin and actually keep their Bitcoin. As long as Bitcoin continues to outperform every other investment that you can compare it with, why wouldn’t everyone want to participate in it’s rapidly appreciating trajectory? My landlord would be a fool not to accept my rent payment in Bitcoin and I would be a fool to pay my rent with Bitcoin.

If you, or your business had the foresight to accept $100.00 in BTC, a few years ago and then just did nothing with it.  You would be sitting on like $5,000 today plus all the forks, dividends and “free money airdrops” that came along the way.  Yes, Bitcoin is actually a productive asset and if you are savvy, you can sometimes profit greatly from selling this garbage.  So a hundred bucks in 2013 is five grand today. …….and it’s only going to continue. If you were to accept $100 in Bitcoin today it would be equivalent to around $3,000 when the price gets to around $270,000.  The only absolute 100% guarantee is that your dollar purchasing power will erode over time with cash that you are holding today. Quite the opposite with Bitcoin. If long term store of value and preservation of purchasing power is a primary financial objective (like it is for me) then you have to consider keeping most of your money in “the better money.”  Which certainly appears to be Bitcoin.

It’s too expensive?  “I want to wait until the price drops.” Don’t try and play guessing games with the price.  The second best time to buy Bitcoin will always be today. Know what you are doing! You must be careful and take some time to learn how Bitcoin works.  A lot of responsibility comes along with the financial sovereignty that Bitcoin brings. If you are careless, you will fall victim to the unknown black hole of unretrievable funds.  So many scammers, so many ridiculous “schemes” and “ things” people try to do with their Bitcoin to get more Bitcoin. Avoid all cloud mining, claims to get rich, lending scams or anything promising interest payments.  Doing nothing but safely store your BTC, be in possession of your private keys and HODL Bitcoin.

That being said.  This is it. This is the investment of “my generation” and truly a once in a lifetime opportunity.  I think everyone’s first goal should be to have 1 full Bitcoin and somewhat know how “it” works. If you have 21 Bitcoins, you effectively own 1/1,000,000th of the total supply.  THAT’S FUCKING RIDICULOUS! If you don’t see the potential here, I don’t know what to tell you. If it’s hard for you to buy Bitcoin here at these prices, then you’re going to lose your mind when we’re at $42,000 Bitcoin in a blink AND YOU STILL DON’T HAVE ANY.  Buying 1 full bitcoin anywhere below 10k, is a gift. Enjoy it now because there might only be a few days left.

Bitcoin Daily Price Analysis

BITCOIN:

Well, With about 3 minutes left in the candle as I’m writing this…. it’s nice to see a solid green candle that could have ended much worse. Early this morning we were down pretty decently and the price reversed higher on the day. That’s a good sign to me. Bulls are chasing off the Bear attacks pretty well here. Most likely outcome is that it continues for a while and best case scenario is that we see them at least come out and buy these dips. Hopefully with a voraciousness, like they did today.

Definitely shows strength and it’s not just Bitcoin 0.06% either, the alts are starting to dust off their boots and help start the party. I know it’s overall still overwhelmingly bearish out there. Every friend you have who knows you’re a Bitcoiner and are not themselves on board….have a little extra spring in their step. Poor little Bitcoin 0.06% has been battered since the all time high at or around 20k. Yeah, there has been a “crap load” of technical damage done on the long term BTC 0.06% chart.
And that…. is going to take some time to heal.

However, let’s get real for a second here. 1 year ago the BTC 0.06% price was like $1,265. That’s an absurd move. Bottom line is we should have never ran to 20k so quickly. We should have paced up to 10k and sat around for a while. Maybe peaked at like $12,500 and dipped to like 8k. And the action right now would be very normal if that were the case.

For anything really good to happen, we have to get back above the 50 day moving average at around the $8,400 level and we need to stay above it. Maybe even bounce off it once or twice as support once we finally do get above it. But we need to actually get above it first, that’s for damn sure.

If we do get above it and maybe have some wind in our sails, we’ll probably get all the way up to the $9,700 level where the price will meet it’s “next mini boss” the 200 day moving average. Where it could get smacked down “like a frightened turtle” or best case scenario would be to flirt with it for a while and then “hit it and quit it” if you know what I’m saying.

And of course… this is all just a pipe dream because we’re a long way from there now at the $8,200-ish area we’re camped out around.

I do love this long saucer formation that is on the verge of breaking to the upside. If the price wants to go higher this definitely supports it.

This is our point of no return though. This should bring a waterfall of selling. If we tuck back into the downtrend, we have a huge, huge, intermediate to longer term problem. So that’s the ultimate threat and Death Star to be avoided.

The old random number generator says we have to trade above yesterday’s close at $8,171 to paint a nice green 3 on the chart. Are we going to get a 9? Do we always assume we get a 9? If so, the we could have 6 more days of a slow and steady grind upward. If not, then we do a “crap sandwich”…. I mean what else can you say?

What do you think?
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Friends Don’t Let Friends …
Buy Shitcoins

An example of a nice “HODLE” together between friends.

Why the smile?  Kevin, Paul and Winnie always feel great and sleep easy because they hold between 95-100% of their “Cryptocurrency” in Bitcoin or often displayed as (BTC).  They also don’t attempt to trade their Bitcoin, they just add to their positions when the price has meaningful pull backs.  After years of seeing various “exit scams” and hacks, they have heard about every horror story you can imagine.  They even had some coins on Mt. Gox when it went down.  Now they take their Bitcoin security much more serious and have their BTC safely kept in what some people call “cold storage.”  Which basically means paper wallets, offline hardware wallets, thumb drives, etc.  The best practice being a combination of them. Now they are always in control of their private keys, utilize BIP38 Encryption and never leave any substantial amount of money on exchanges or in SPV wallets unless absolutely necessary.  These are consistent practices of more experienced Bitcoin users and most HODLERS.

What about the “free shitcoins” and are they missing out on all these forks or “crypto dividends?”  A true HODLER (like the ones pictured above) is careful enough to wait until the dust settles before he or she starts breaking out their respective “Private Keys” to get a nominal amount of some new alt-coin aka “free shitcoin.”  When the time is right, they will sit down and separate the forked coins, if it’s worth it to do so and probably sell it on an exchange.  Most likely since they are often referred to as “Bitcoin Maximalists” they will exchange the dividend for more “legacy chain Bitcoin” or possibly “stack” more Litecoin for “funzies.”  Why not also take these forking opportunities to combine small transactions and utilize Segwit addresses, as well as the low fees that Segwit Transactions allow users to enjoy.  Sometimes on a weekend day, you can get transactions through for 1 Satoshi per byte.