Genisis Block Day, Proof of Keys Day, Jan 3

Trace Mayer is sparking up an grass roots bitcoin movement to prove our independence and reinforce a high level of trustworthiness in bitcoin institutions every year.

www.proofofkeys.com

Bitcoin Takes a Hit in the 3000s

New Browser Bitcoin Lightning Payments

LGBT is in Crypto Too

Adrian Orr Thinks the NZ Reserve Bank is Tane Mahuta

Adrian Orr, New Zealand's Reserve Bank Governor has been printing money at 6% per year. On national radio today when asked about bitcoin he said that he "detested it" even hearing the word a pain and crypto currency not much better. He proceeded to attempt to paint New Zealand's Reserve Bank as Tane Mahuta. This starkly contrasts the legislative issue at hand about the challenge of insulating the New Zealand economy from Australian Banks. I was also surprised by how loose lipped he was about money printing. 

I don't detest much as a matter of personal policy and I think this is a warning sign of weakness. I think that what is happening here is important and echoed around the world. You can listen to his chalice discussion of money printing for investors here. Reserve banks have become overconfident.

Tane Mahuta is a grand metaphor, part of the legend of the New Zealand forest especially important for Kiwis. There is also a real tree and if Adrian really cared he should know that the tree is in serious threat of dying. This tree is over a thousand years old and considered the guardian of the forest. The reserve bank is less than one hundred and I am stretched to see how it is nurturing and protecting business. We are far more likely to see a new little bitcoin Kauri born, immune to money printing. 

The Intrinsic Value of a 100 Billion Dollar Public Database

People often argue that there is no intrinsic value to bitcoin. The subjective nature off the term aside lets talk about the physical properties of bitcoin. Opponents often bring up the idea that there is nothing tangible about bitcoin as a flaw, that it is simply digital air. However I argue the opposite, that there are some strong physical properties.

Tangibility is very subjective in itself, we could of course the functionality and the brand and reputation of the payment network but we will exclude these utilities and financial properties like spending transferring and safe storage of wealth as they are by products of bitcoin. Here we take a narrow perspective where tangibility must be of the item itself and where it must be something that physically exists. We need to consider existence in the context of atoms and in the context of time. We consider things more tangible if they hold their form and if the last a long time, for example gold and silver. Bitcoin is a mathmatic code stored on thousands of computers around the world, a shared database, 0's and 1's one electrically charged plates of silicon. Exploring how this code lasts over time is also interesting.

We a don’t find it hard it hard in the IT world to see the value of a data base. Consider a list of customer email addresses or a library of knowledge about rocket engines. Often we see a large part of the value in this type of database in the possibility that you might have exclusive access to this information. Public databases are slightly different, more like a search engine or public library. Bitcoins block chain is now supported by "on paper" assets of 100 billion dollars and a similarly large amount of physical infrastructure like computers, miners, apps companies. This value creates strong incentive for the public database to be permanent. People who hold this value have an interest in keeping the database around, further to this there is, by today's math, there is another 24 billion, to be drip fed, incentivising miners to keep it around for the next 100 years. The way bitcoins running costs are structured, the difficulty adjustment formula and node propagation, mean that just a few million would be enough to keep the database alive forever and this is by far exceeded with the price even just above $1. This provides a security and permanence rarely seen in the world. The the database could become alder than the pyramids. It does not suffer from erosion. We must accept that a database is physical, but there is a special intrinsic value in this.

This database primarily records movement of value over time, there is value in that just from an economic analysis perspective. This grows as time passes and it remains accurate. More and more information can be pulled from more data, all stored together in a compatible format. As bitcoins value increases small transactions in the past become more significant. People in the future could take pride in discovering that the family fortune once originated in a cup of coffee purchased in San Francisco at some weirdos café who was quick to get on to this stuff. There is a powerful economic understanding to be gained from knowing these money flows. The information is deeper than anything we have ever seen before. We know that information has real value.

Bitcoins blockchain is however not restricted to holding only financial information, you can put any data in it. It is in this case that the permanence of the blockchain begins to gather unknowable value. To write data to the blockchain you need to spend or at least move bitcoin, you need to pay a fee that is equivalent to the amount of kb stored. Here is where owning the 0's and 1's is crucial. Without this code that you hold secrete you are not able to take advantage of the intrinsic value of the permanent public blockchain. You need to hold these in order to have instant access to this broadcast channel and record for humanity. You can write your name, a political statement, a photo, records, a wedding you can even embed code for an application. I’m even considering writing my a blog to it. 1000’s of people have done it already and what they have done will always be there. The cost of recording things to the bitcoin blockchain, what we could call the most significant public database is set to rise because the amount of data in one block is limited to about 1mb every 10 minutes. How much is a note written to be held up for all time worth?

So you can see from this very narrow perspective that there is some strong intrinsic value in bitcoins 100 billion dollar public database. Future value is secure based on the value of future miner rewards and current infrastructure. The longer the bitcoin database is around the more the value it in itself as a resource grows and the more attractive those block space and bitcoins them selves become, as a way of stamping your name or your thoughts down, permanently, for all time, like with a pyramid, maybe you can cheat death.

How Mt Gox Cleansed Crime From Bitcoin

If you have been around for a while in the crypto world you will know all about Mt Gox and its infamous collapse. Your also probably well aware of the cyber criminal element that so many crypto enthusiasts have been assumed to be a part of. People used to say that bitcoin was just used for buying drugs on the internet. It wasn't true and it is not quite that simple, but now with formal legal proceedings of Mt Gox's bankruptcy turned civil rehabilitation what remnants of the Silkroad economy there once was are being cleansed.

Mt Gox once controlled 80% of the volume of bitcoin trading. Anyone needing to turn bitcoin into cash had to use the site. In the early days, some people had account with verifying their ID's. This later progressed into an over the top photo verification process. Still it is possible that a significant amount of criminal money resided there. Statistically more because criminals, by the nature of their business need to exchange bitcoin and get cash. Investors can simply hold their bitcoin funds offline. 

The legal proceedings of bankruptcy have required more and more privacy intrusion, Id verification, addresses etc and this information is not protected from government legal bodies. This is cleansing the crime from bitcoin because, if you had money gained illegally in Mt Gox, you will now be hesitant to try and reclaim it from the authorities. The question of where did you get these funds can easily arise and in most cases, this risk is more than it is worth. In this way the legitimate credit holders are rewarded.

The rehabilitation is proving to be very liquid. This in the main is due to the huge price rise. It has created a forced hodl situation that has paid off. Crims not wanting to give up ID's though, wont get any of the benefits. Rinse, repeat and bitcoin is becoming squeaky clean.

The One Year Bear

Born in 2014 after a bitcoin bubble theOne Year Bear market is looking like it might be back for seconds. It's taking down altcoins faster still.

With Bitcoin still at over 7k it seems friendlier the second time around. The price is still 10x what it was on the bears last outing. 

New $6000 Floor

The concrete is setting on a new floor. We are on the third bounce. If history is yo repeat we may be looking at base building from here before a new run to a new all time high.

Post Apocalyptic Bitcoin

Power companies start mining, power becomes so expensive you can hardly use it unless your mining. People live in housing projects and business hubs heated by power plants, normal real estate is devastated and there are empty buildings. There are government work camps everywhere and police with dogs, only old bitcoiners live normally without repression, some people try to break the cycle by stealing miners and jerry rigging power and internet connections in abandoned warehouses.

The Shape of Bitcoins Price

We can overlay the major bubbles in bitcoins price going back to 2011. They look very similar. We get a kind of shape that we could call bitcoins heart beat. They are getting less severe and It's looking pretty good because in the past after everyone the price has steadily gone up. The latest chart is in the red and green bars.

Torn by the Screen and the Trees

It has been some time since the last post. I have been busy and have been writing, keeping my Etoro investors happy and have been writing quite a it of stuff. There are some big ideas to come, but they are not finished yet. I have been having some long discussions on Mt Gox, true crime and energy. 

The price of bitcoin seems to be stabilising and old school bit coiners know that is a good time to be learning, building and buying. At the same time I have been trying to get fit and stay away from the screens. 

In world news states and mass media flail. The US dollars lack of intrinsic value is becoming more exposed. People around the world suffer from screen hypnosis, to much Clash Royale and not enough time experiencing the outdoors and spaces in between. Bitcoin backed up by programmers, the power of global culture and an everlasting database is gaining strength. Wizards in the mist, real mist, this is the view out my new bedroom window.

Why Bitcoin is the Only Way to do Money in the Future

For those into sci-fi and futurism, bitcoin is great food for thought for speculation on the future. It is in its cryptography and is digital mysticism a very exciting futuristic thing. Scenes from Neal Stevenson's Snow Crash or more recent Seveneves and talks of Kardershed 2 civilisations explained by Isaac Arthur are almost part of the foundation course. It is by this nerdy long-term thinking, mathematicians, engineers and cosmologists that we move forward. Projecting our civilisation hundreds of years into the future. When we do this, methodically, you can come to some powerful conclusions about how our system of value will need to adapt.

It's not that far out if you believe that technology will continue to improve. most people would agree that the human race may at some stage live in space and that the internet will be part of this. It is not that much of a stretch that energy will become abundant and that technology will mean we can get more and more of what we want. The next step is that this technology would need energy and this would become "wealth" in the future. In many ways it already is. How many wars to countries have over it!

So how does printed money and money held in spreadsheets at banks work into this? It doesn't for many reasons, but in this excerpt, I want to stick to the pull factors for bitcoin, the positive stuff that leads to the idea that in the future Bitcoin is the only way to do money.

Technology based on the assumptions laid out eventually allows anything to be created with enough energy. With ever increasing technology it makes sense that things are valued according to the energy or electricity required to produce them. In a way, we see this already, but we could expect this to be exaggerated over time. In the long term, even materials can be synthesised with enough energy. 3D printers, food production, travel, AI, computer processing, virtual reality, advanced medicine will all become much more powerful and efficient. Eventually, we come to a point where we are only limited by the amount of power we can generate safely. Look at Isaac Arthurs post-scarcity civilisation. In this post-scarcity civilisation, money is not particularly relevant. That is except as a means of fairly distributing electricity. Fair distribution of electricity is one of the only things left of importance economically at this stage.

Bitcoin, as a thing, as a security model, is very much tied to electricity. It cannot be made without either a lot of electricity or vastly superior technology to your participating pears. It is not specifically energy intensive, because it generally only uses excess available energy, but it does involve running powerful computers, which involves lots of electricity at least until quantum computers (and that's another blog to be had), People can magic up a mining rig with their 3D printer whenever they are cold and just want to do nothing, or they can magic up an AI mining bot to heat all the houses on some ice planet, just for fun. The more electricity and technology, advanced cryptographic computers, the safer and more valuable bitcoin and its eternal blockchain record become.

As people do today, we can assume that anyone with spare "wealth" in the future will want to preserve that. Given that wealth is now represented only by access to energy. the more access to energy you have the more "wealthy" you are. These people will be drawn to a value system which reinforces this. Access to energy has a problem as "wealth" because it is not very transportable ie; power stations, batteries, solar panels, fuels. Energy is difficult to transport long distance and is expensive to store. Bitcoin allows people to save their "access to energy" for a rainy day, or to easily transport the value of it to somewhere that needs it more.

Bitcoin makes a lot of sense in a futuristic environment. A way to look at this is that bitcoin is energy spent in the past on security. Notes can be printed and banks computer firewalls overwhelmed by huge computing power. Bitcoins firewall is energy and technology. People are figuring it out and will always want to preserve wealth. It may well be that there is no other way to do money in the future. 

The Miner Cycle

Miners have a serious impact on the price of bitcoin and other cryptocurrencies. These people are experienced in the game, they have been in it for a long time and therefore now have a lot of capitol behind them. understanding the psychology of mining bitcoin and getting ahead is a key to understanding the price waves that we experience.

Miners are acutely aware of the dynamics of profitability between mining and holding bitcoin. they have experienced times when buying and holding bitcoin would have been more profitable than mining, they have also experienced times when mining has been the easiest and most effective way to get bitcoin quickly and at below-market rates. Mining has an advantage of collecting somewhat anonymous funds and so the balance here is dependent on legislation and regulation by the banking system. Buying and holding bitcoin is most scary and often costly when the price is volatile. This lead to a cycle where mining operations are commonly started during times of volatility, after a peak. Buying and holding by smart money happen most in low volatility. Miners, when they have spare bitcoin, which they often do, in times of low volatility, with increasing "mining difficulty" levels are increasingly tempted to hold there bitcoin rather than sell and buy more miners.
Buying both miners and bitcoin require free funds, with mining requiring more time to maintain. Due to legislation and buyers privacy fears, it is easy to sell bitcoin for paper cash and more difficult to sell for wired money. It is nearly impossible to buy miners with paper cash because they are manufactured internationally. It is also not possible to pay power bills with paper cash and difficult to pay with bitcoin. This leads to a tendency for some miners to accumulate paper cash.

If miners are strict they will avoid paper cash but then they will either accumulate bitcoin or wired digital funds from sales on exchanges. Wired funds they will definitely have to pay tax on in that financial year. So the cycle of financial years tax filings in high mining countries has an impact.

When volatility is high there will be a further tendency to want to leave the funds on the exchanges because of withdrawal costs and because of lost opportunity costs, if they choose to also trade there bitcoin. The strategy would simply be mean reversion, which will make good money in high volatility but over time will reduce the volatility through its own practice.

Through these processes, you can see that there is a lot of logic to the patterns of the bitcoin charts in the past, in particular, the last two booms. Whether this cycle continues to be a strong force is not as clear.

10k Close But No More Tulip Talk

Not long ago no coiners would harp on about Bitcoin being like the famous tulip bulbs bubbles of the Netherlands. Now after having been much higher media no longer bring it up, though the price is still very high as compared with previous years. The plant itself isn't actually that bad of a metaphor. The phonomenon is not the same but right now the bulbs might be getting ready to flower. Spring is coming.

Why Bitcoin Holders Can't Wisely Sell Their Bitcoins

If you have been interested in bitcoin for the last few years, there is no doubt that you have made a lot of money. You have been a good hodler, but maybe you want to buy something, a house, a car, some dinner or a holiday.  So you go to sell, but as a thinking person, you find yourself bogged down.

To start there is forking. You don't want to just through money away so you want to cash in on your bitcoin cash and your bitcoin gold before you sell your good old traditional bitcon. That takes time and can be a logistical nightmare. On top of that, there are the other endless forks that are worth a little now, like bitcoin diamond, bitcoin silver, bitcoinx, bitcoin cash plus and super bitcoin that may one day be worth a lot. In a way, bitcoin is becoming an interest-earning asset and it compounds. Forks are even starting on top of forks.

Whether you need to pay taxes or not is a difficult question to answer and increaingly puts a damper on selling. Taxes across the world are confusing, is it a currency, is it an asset, do you pay capital gains or not. In NZ it is supposed to be an asset. if bitcoiners are to be required to pay capital gains when they sell then they will be tempted not to, if they are to pay on gains or interest yearly, then they must either find a way to sell or just try to keep their stash secret or in another jurisdiction.

Anonymity is also at risk when you sell your bitcoins. especially if you have been holding them for a long time it is likely that at least the person who you sell them to will be able to trace those bitcoins back to figure out how many others you likely have and where you or someone close to you has been spending them.

Banks continue to make it hard to sell because they can sometimes not be receptive to large deposits from bitcoin sales, or large cash deposits. When selling bitcoin you often have to do it on an overseas exchange, this leads to a slow four day "swift" (the name sounds so ironic lately) transfer and probably an inquisitory phone call from the banks call centre. If you sell for cash you have a security risk, someone could rob you, and then you can't deposit it without questions, it's also difficult to spend cash on large items. In many cases, cash is treated worse than cryptos. Sellers could be running back to bitcoin so they can buy things on cheapair, overstock and open bazaar.

So when faced with all this.With FOMO from forks and fear of taxes, publicity, banks and cash, in addition to FOMO of the regular 100% gains, I can see why many just decide to crack a homebrew and HODL Lets review some beers. 

Mark Says No to a Billion Dollars

Lightning Apps on Main Net

With new apps coming out and proving themselves lightning is making Visa level transaction volumes real for bitcoin. They are fighting back, but talking about bubbles seems very last month. The big question is will this, combined with other developments like rootstock (rsk), mimblewimble and schnor signatures combine to put pressure on competing cryto currencies?

The Circular Bitcoin Economy

The bitcoin economy is becoming more circular. I would argue that it is sustainable and eco. With super cheap transaction cost all it takes is more users to escape. Check out this town in Italy, Rovereto.

Anti-Lambo

 

You escaped wage slavery, told your friends about your plan, they laughed at you and were too scared. Now you buy a lambo. Why? You want to rub your riches in their face and prove that they should listen to you.

Come on we know it's tempting (I wanted one since I was a kid), but don't be a jerk. This is the peoples movement and the lambo that you crash might just put you right back into the rat race, and your friends will hate you for it.

Soo Forking Easy

You can now fork bitcoin by filling out an online form. Its easy and hilarious, you can select logo rotation, it's called forkgen.

CrytoKitties

If you havn't played this game you're not really into crypto. It's soo fun. Crypto kitties rule 20% of Etherium.

Bitcoin and Etherium Fee Flippining

Tansaction fees are down and the Bitcoin mempool is clearing. What happens if there is a transaction fee flippining, where bitcoin fees go below those of etherium?

The charts have been heading this way in the last month. Currently bitcoin on chain fees are $5.60 and etheriums are $1. Etherium does not have lightning or segwit and its Casper, Sharding and Plasma are seeing long delays. The pressure is on for Etherium in 2018.

View the Lightning Live

Thanks, SLEEPYARK #RECKLESS and SPOCK you're beautiful.

https://lnmainnet.gaben.win/

Lightning is Growing

Muslim Womens Liberation

Did you know that women can't get normal bank accounts in some countries like Saudi Arabia. At least now they can stash crypto.

Bitcoin Gold

What will happen with the first friendly fork? After the first fork many people took the opportunity to secure their coins. Now they are hard to get at bitcoin gold may have an advantage. The price is currently$198USD and number 16 on the list and at least the website doesn't have any spelling mistakes.

Bitcoin Fork for the Starving Millions

I had an idea pop into my head at the local bitcoin meetup last night when talking about M-Pesa and crypto currency solutions for people with only a smart phone in their pockets. It is a challenge that is being tackled in many different ways, however I think there may be a straightforward human solution. "Bitcoin Africa" here's my plan.

We fork bitcoin with a basic fork and encourage bitcoin holders whom receive the new coin to donate it to people in undeveloped countries or who simply in need the money. With the current rate and relative success of bitcoin forks and a potential of $200B this could be one of the greatest charitable programmes of all time.

Before the fork we develop a social media like sign up process for people wanting donations. They could put a up a photo, video or something to verify that they are a real person and would get the wallet at the same time. After the fork people who currently have bitcoin, automatically get an equal amount of the new coin, instead of selling the fork which would drop the price, they donate it directly to someone of their choice online. this has minimal cost to the bitcoin holder and could really enrich the receivers if the Africa coin held its value. The social platform would also allow human influence over distribution.

I suggest the fork would use some small but relevant and well tested technical updates. A new mining algorithm that could run on a cell phone, maybe the light coin mining algorithm, it would have fast small blocks and potentially use POSV (proof of stake x velocity) with a heavy emphasis on velocity if it is easy to implement and not too complex for people to understand. this encourages spending and removes the advantages for wealthy people that are associated with POS.

So that's it, take it and run with it. With new found wealth bitcoiners have a chance to be socially responsible. We just need to decide ón a colour and how far to twist the logo.

Invasion of Tron Fans

Number 14 on the coin market capitalisation list is Tron. The price has sky rocketed recently. No I'm not the creator of Tron. I'm not Tron, Jack Ma is. you know the guy from Alibaba, he's pretty cool, but I kinda think Tron might not be. It looks cool but maybe there is nothing really there. The Altcoin boo is still on, beware of flashy graphics.

 

Ivy - Easy Smart Contracts for Bitcoin

Etherium Solidity like smart contracts meet the bitcoin blockchains ultimate security. Ivy is a platform that makes programming easy and available for the everybody. It's a slow creeper, you can download it here, and read more about it all over the place.

Bitcoin is Not the Bubble It's The Pin

RSK is Live

Bitcoin now has a new sidechain running live, rumoured to have all the capabilities and usability of Etherium. RSK is a big deal.

Bitcoin.com, Bitcoin Cash, Rogers Double Edged Sword

Roger Ver is definitely no longer Bitcoin Jesus "Insider trading is a non-crime" killed that. However I don't think that he's the super villain that r/bitcoin people would have you believe. He's kind of half way between, or maybe just a normal guy with slightly different ideas. Bitcoin cash is not all of our idealised form of bitcoin, but it does address the rising transaction costs on the bitcoin network. This problem, though put simply is just caused by over demand for bitcoin, does still need to be fixed and quickly would be good. It is an important issue for crypto currency as a whole. Bitcoin is mastering the store of value stage and entering the medium of exchange stage. The whole thing has now become so massive now and moves more slowly, characters are larger than life, it brings on ideas from a pod cast I've been listening to about the early roman empire. There is a sence of certainty around the crypto empire despite its division. Is Roger Ver the Romulous to bitcoin cores Numa?

Bitcoin Cash (BCH) though originally thought of as a violent attack to bitcoin, is now becoming  kind of commercial arm. The web site promotes easy cheap transactions stored on a blockchain for everyone. It has a charismatic, handsome anarchist leader who normally keeps his cool and with billions of dollars in cryto behind him and an aversion to state.
 
Bitcoin Core (BTC) has settled into the careful and calculated approach. Thousands of independent developers pine over everything and the code moves very slowly. There is no leader and there is no clear agenda apart from decentralisation. The slow disorganised swarm of certainty and higher morals.

Because of the decentralised ideology there is no central media repository for the original bitcoin. This is a hard ste for the general public to take. Bitcoin.org a volunteer web site may be the closest thing, though it only lists a few news outlets (notably missing bitcoin.com) and even to state that it is the place to go is a kind of decentralist blasphemy.

Bitcoin.com even though it is owned by Roger provides a platform has been a long time mainstay of bitcoin (since the days of satoshi) and is now building a bridge between the two bitcoin forks. Due to the circumstances the site has to retained the concepts of both coins and offer simple explanations to the public in accessible way. It is a view that also provides information on alternative crypto currencies. Just recently it was one of their articles that let me know that the price of doge had reached one cent. whilst it still provides a healthy level of scepticism, Dogeillionares and not quite bitcoin maximalists can appreciate this. It is also good mind food for nubies.

Together attacks to bitcoin and crypto currency are much more easily deflected or infiltrated. Thought they are not allies, and admittedly I sold most of my bitcoin cash early on, I am impressed by the success of bitcoin cash. I wonder how old bankers will counter this new sword and the shield combo. Roger Ver is a force to be reckoned with, people should know this name and I think on the whole he is doing a lot of good.

Cardano is Crap

Alt coins are on anouther teir as of recent with Ripple taking 2nd place and Cardano apearing in the top 5, surprisingly above litecoin. Investors need to make sure they understand what they are doing and research their coins. Cardano and it's currecy called Ada is underdeveloped and imature and unlikely to prove itself. Even it's web site show a clear lack of direction. The writting is ruffer than mine.

People should understand that computer security involves having the most comitted developers, the smallest attack surface and the most processor cycles. Decentralisation is also an important part of the movement and it's strength.

In my opinion Ripple and Cardano are over rated.