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.
Wednesday 22 August 2018
Friday 27 July 2018
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.
Sunday 22 July 2018
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.
Monday 11 June 2018
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.
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.
Tuesday 15 May 2018
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.
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.
Saturday 28 April 2018
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.
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