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.