Fed Economist Explains Something About Bitcoin That Almost ...
Fed Economist Explains Something About Bitcoin That Almost ...
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3 Reasons Bitcoin Just Tanked Below $11K for First Time in a Month
Bitcoin prices tumbled 6.2% Thursday, falling below $11,000 for the first time in a month. The price drop trimmed the largest cryptocurrency’s 2020 rally to 50% and sent digital-asset market traders and analysts scrambling to explain the sell-off. The Standard & Poor’s 500 Index of large U.S. stocks retreated Thursday after climbing to a new record high earlier in the week. A report showing new U.S. jobless claims at 881,000 in the final week of August was better than feared – and the lowest since the pandemic hit earlier this year – but still well above the 665,000 level that marked the high point of the last recession in early 2009. Pantheon Macroeconomics called the figure “still grim,” while Navy Federal Credit Union economist Robert Frick said the labor market was “continuing to struggle, and not showing improvement despite COVID-19 levels that declined in August.
the most influential mathematicians of all time, Sir Isaac Newton, lost a fortune by investing in the South Sea Bubble of 1720.When asked why, with all his mathematical prowess, he could not foresee the collapse of the stock, he is reputed to have said that ‘he could not calculate the madness of the people’. And who can blame him for being unable to understand the seemingly irrational behaviour of hundreds orthousands or, sometimes, millions of people – the madness of crowds, as the journalist Charles Mackay coined the phrase in an 1841 bestseller on financial bubbles. Mackay’s nineteenth century interpretation for why bubbles occur is still how most of us would explain the spectacular and seemingly inexorable rise of asset prices during a bubble. Think of the dotcom bubble of the early 2000s. Orthe housing bubble that caused the Great Recession of 2008. Or, most recently, the bitcoin bubble. At the start of 2017, the price of bitcoin was below $1 000. By its end, it was $20 000 and there was wide speculation that it could go much higher because – and this is a frequent associate of bubble rhetoric – ‘this time is different’. It was not. Bitcoin lost 72% of its value the next year. Economists’ explanations have become somewhat more sophisticated since Mackay’s days. Nobel laureate Robert Shiller argues that bubbles can largely be explained by behavioural economics.The ‘irrational’ behaviour of investors, he argues, can be attributed to cognitive failings and psychological biases that cause prices to rise beyond their objective value. Or it may be because a small group of investors suffer from overconfidence bias, overestimating the future performance of an asset class. Orthey may sufferfrom representativeness bias when investors erroneously extrapolate good news and overreact. But a new book – Boom and Bust: AGlobal History of Financial Bubbles, by financial historiansWilliam Quinn and JohnTurner – argues thatthe focus on individual biases are insufficientto explain why financial bubbles continue to occurregularly three centuries after Newton lost his fortune.They attribute bubbles instead to three features of assets themselves: marketability, money and credit, and speculation. Marketability is the ease with which an asset can be freely bought and sold.An assetthat can be legally bought and sold is more likely to be traded.An assetthat is divisible in smallerquantities will also increase tradability.The ease offinding a buyer or seller and the ease with which the asset can be transported matter. The second factor necessary for a bubble is money and credit.As Quinn andTurner note,“a bubble can form only when the public has sufficient capitalto invest in the asset and is therefore much more likely to occurwhen there is abundant money and credit in the economy”.
3 Reasons Bitcoin Just Tanked Below $11K for First Time in a Month
Bitcoin prices tumbled 6.2% Thursday, falling below $11,000 for the first time in a month. The price drop trimmed the largest cryptocurrency’s 2020 rally to 50% and sent digital-asset market traders and analysts scrambling to explain the sell-off. The Standard & Poor’s 500 Index of large U.S. stocks retreated Thursday after climbing to a new record high earlier in the week. A report showing new U.S. jobless claims at 881,000 in the final week of August was better than feared – and the lowest since the pandemic hit earlier this year – but still well above the 665,000 level that marked the high point of the last recession in early 2009. Pantheon Macroeconomics called the figure “still grim,” while Navy Federal Credit Union economist Robert Frick said the labor market was “continuing to struggle, and not showing improvement despite COVID-19 levels that declined in August.
I’m writing this because I wish to explain in layman terms why the global economy is broken. Most people intuitively feel that the economy is a mess and bad things are happening. Words like corruption, crony capitalism, money printing and bailouts are being tossed about as explanations why the economy is in trouble. While all these things are problems our economy is facing and deserve attention, they are all consequences of a fundamental problem that needs to be understood first and foremost. That is, money itself is broken. To understand how fiat money we use is broken, one should view money as a commodity just as you would any other good. Any economist would agree that setting a price for a good or service is a bad idea, but for whatever reason, mainstream economists (Keynesians) believe that money is exempt from the disastrous effects of price fixing. As a quick refresher why price fixing is never a desirable policy let’s take a look at the classic example of rent control. Let’s say the average cost of an apartment in your city/town is $1000. Your politicians say that this is outrageous and make a sweeping policy saying that no apartment can be priced above $100. Suddenly the supply for housing cannot come close to matching the demand at this price. Landlords no longer care about the upkeep of the apartment because even if the apartment turns into a shithole, someone will still take it for $100. People no longer have incentives to build new housing or renovate existing housing because they can no longer charge a market rate. The end result is a city in ruins. Try your logic at why price fixing doesn’t work with any good. The market is distorted. Supply and demand are unable to reach equilibrium and everybody loses. The price of money is the interest rate. When the Federal Reserve engages in interest rate targeting, this is price setting. The Fed will say that the cost of money is too high! We need to get more money into the hands of more people to stimulate the economy, so let’s set the price of money to zero. Take a minute to think about what this means. In a free market the interest rate is established by the supply of money (savings) and the demand for money (borrowing). The interest rate can never be zero. It can only approach zero if the supply (savings) is reaching infinity and/or the demand (borrowers) for money is reaching zero. When the Fed fixes the price of money, it is sending a false market signal across the whole economy about how much money is saved to properly be used for investment. This is where irrational economic behavior occurs on a macroeconomic scale. Strictly speaking, individuals are operating rationally. If the price of money is zero, it is only rational to borrow money and not save your money. The problem is not the individual but rather the Central Bank has distorted the reality of the most important commodity of them all, money itself. What are the consequences of setting the price of money so low? Think about how this affects borrowers. The economy is operating under the assumption that there are more savings available for investment then there actually are. This leads to malinvestments. Imagine your buddy says he has a million dollars saved and would be happy to lend you this money free of interest. Maybe you’d build a fancy new house or put down a lot of capital to start a business. Then halfway through building your house, your buddy says, sorry, I only had $100,000, not a million. You began building something you should never have started building had you previously known how much money was actually available. You have to scrap your project and you end up with a worthless half built project. How does this affect savers? Imagine if I had a million dollars in my savings account. With the interest rate so low, I’m being given very strong signals to not keep that money in the bank to be loaned out. If the price of money is zero, why in the world would I want to sell (loan) my money for no profit? You wouldn’t. Your money is losing value everyday it sits in the bank account because the Fed is pumping out more money and giving it to banks to keep the interest rate at zero. You need to buy something with that money. You end up buying a house, stocks or whatever commodity you think will increase in price because you don’t want to see the value of your cash inflated away. As investments are undertaken that should never have been started and commodities are purchased that should never have been purchased, asset prices rise and we see bubbles forming all over the economic landscape. By messing with price of money the whole economy has become infected. And unfortunately at this stage, there is no cure. We are in too deep. The financial system will implode and the dollar will collapse. Please protect yourself and buy bitcoin.
Why the Covid-19-induced Economic Downturn Can be a Blessing in Disguise
https://preview.redd.it/ei56m90o8hz41.png?width=1024&format=png&auto=webp&s=b23062c417a8b87d8fd0f228165dabef2f6adf2f Chief Economist of the International Monetary Fund, Gita Gopinath has written a piece reporting and predicting the disastrous consequences of the Coronavirus pandemic on the global economy. Hoping that the economies will be able to restart by the 3rd quarter of the year 2020, this year will see a global GDP growth rate of -3%. This is not only worse than the 2008 financial crisis, Gopinath writes; it is the worst recession since the great depression of 1930s. The cumulative losses to the global GDP over 2020 to 2021 is predicted to be equivalent to approximately 9 trillion dollars, which is greater than the economies of Japan and Germany combined. How Can the Economy Bounce Back? All these assumptions will hold true if the economic institutions are able to bounce back properly. The labour markets and human capital development may be stunted with the crisis in the health and the education sector. So, one of the most crucial factors of production might be in scarce supply even after the economy restarts, in most countries. Investment is also likely to become a big problem as the investors are becoming increasingly risk averse in the wake of this crisis. This is particularly bad news for the developing economies, as they will be facing a lot of capital flight. This again will have negative consequences for the global economy. As a consequence there will be huge job losses, shutdowns and shrinking in the per-capita income. Even the stock and commodities markets are in an exceptionally bad state. On May 13, both stock and oil prices have taken a hit, as there is an increasing fear of a second wave of Covid-19. Indices across the globe plummeted, especially after the statement by Anthony Fauci, the Head of Center for Disease Control, United States, signifying the possible negative consequences of an early lifting of the lockdown, therefore indicating the prolongation of the economic lockdown. Can Digital Assets be the Answer to Global Financial Woes? In the light of these instabilities in the global economic system, it is not surprising that people are looking for alternatives, and are in fact being compelled to do that. In fact, the World Economic Forum, which is the vanguard of the global economic order, has passed been considering how blockchain technology could be used to improve the global supply chains, to make them more resilient in the face of crises like these. Similarly, the COVID-19 crisis has led to a 72% increase in the use of fintech apps in Europe. In late April, according to CoinMarketCap, Bitcoin prices rose by 23% to 9500 dollars in less than a day. This is indicative of a greater interest in cryptocurrencies; and also of the fact that how cryptocurrencies can be much more resilient in the face of a crisis, given that they are not subjected to policy changes, and other forms of market manipulation and direct exogenous forces affecting fiat and equities alike. Therefore in a globalised world they will show the way. Why Cryptocurrency Trading has Seen a Sharp Rise The uncertainty surrounding the current global economic scenario has renewed interest of many traders in the crypto sector. Almost all digital assets trading platforms, or cryptocurrency exchanges, have reported a sharp rise not only in number of new registrations, but in trading volumes as well. Even new traders, without any previous experience in trading either traditional assets, or digital assets, are also taking the plunge into crypto trading. While these are exciting times, there are also risks associated with volatility of digital assets. However, with some inside knowledge into how trading (in its different avatars) works, traders can be empowered to take informed decisions and protect their investments alongside making handsome profits. Leading digital assets trading platform, Bithumb Global, has introduced many innovative options which make trading easy in these times. For example in a time of capital shortage, margin trading can be a great way to leverage the opportunities of crypto trading to make profits. How Does Leverage Trading Work? While we have explained through a step-by-step guide on how new traders can register on the Bithumb Global platform for margin trading activities, let us explain the process and its intricacies a bit better. Bithumb Global margin trading adopts the full-position mode, and provides 5X leverage. At the same time, when the transaction is generated, the currency is automatically borrowed and returned, eliminating the steps of active borrowing and repayment. Considering you have registered onto the platform, or are logged in to it and have also transferred assets in your margin trading account, the system will automatically allocate funds based on the available assets in your margin trading account and leverage multiples. The borrowable value is the largest loanable asset that the user can currently borrow from the platform and it depends on how much asset the user hold in the margin trading account. For example, if the amount of assets in the margin trading account is 10,000 USDT (it will show on the page), the user can borrow a maximum of 38,000 USDT. Therefore, through margin trading, the maximum amount that the user can operate with is 10,000 + 38,000 = 48,000 USDT. Assuming that the price of BTC is 7000 USDT and you are bullish it will reach 8000 USDT, you can borrow USDT from the platform to buy BTC. Now, your USDT position is 10,000 USDT and your maximum loan limit is 38,000 USDT. When buying 5 BTC for a pending order, a loan will be generated immediately after the pending order is placed. The loan amount is: 5 * 7000–10,000 = 25,000 USDT. In the order operation area, click the loan summary to view the asset balance, loan amount and interest payable in each currency. When BTC rises from 7000 USDT to 8000 USDT, you sell 5 BTC at 8000 USDT and the profit is 5 * (8000–7000) = 5000 USDT. You open the position (your target of 8000 USDT per BTC) and once target price is reached, you need to close the position. Our platform provides users with three modes of operation: 1) Quick liquidate In the Quick liquidate mode, the system will automatically calculate the user’s openable quantity. The user only needs to enter the target price and click “sell” to realize the sale of the pending order with the number of openable positions, thus achieving the effect of one-key closing. 2) Close loan In the close loan mode, the system will automatically calculate the amount of money and interest payable by the user. The user only needs to enter the target price and the system will automatically calculate the amount to buy or sell. You can realize the pending order for the corresponding amount of loan repayment. 3) Normal orders After opening a position, in the normal order placing mode, click 100% of the amount to buy or sell to realize the reverse opening order. Let us take the long BTC as an example to understand the three modes. User buys 5 BTC at 7000 USDT, and closes the position when BTC rises to 8000 USDT. The user will automatically close the position by quick liquidate mode. The system will automatically calculate the number of BTC that the user can close. The user has to click “sell” after the BTC price reaches 8000 USDT, to generate a pending order to sell 5 BTC at 8000 USDT in the current commission area. In the close loan mode, the system will automatically calculate the 25,000 USDT and interest payable that the user needs to repay the loan. When user enters 8000 USDT and click on “Sell BTC” to close the loan, he can generate 8000 USDT in the current commission area for sale. In the normal order placing mode, the user enters 8000 USDT and clicks 100% to sell BTC. A pending order with a quantity of more than 5 BTC will be produced. After the pending order is completed, the position will be converted from long BTC to short BTC. In summary, it is recommended that users complete the liquidation operation through quick liquidate when repaying the transaction. In addition, closing a position can also be done by transferring assets. The user transfers the loan amount from spot trading account to margin trading account, and the system will realize automatic repayment. Conclusion You have used money from the platform as a loan, bought assets, opened a position and made a handsome profit when the target was achieved. After paying back the loan as well as the interest on the money that you used, the remainder is your net profit. Margin trading also protects your downside. Your investments are protected when the price of an asset goes down. There are stops placed at the lower end to help you minimize your losses. So it is imperative that you try out margin trading with a small amount to understand the nitty-gritties and feel confident about it. All in all, margin trading has helped thousands of traders on Bithumb Global to leverage the current bullish sentiments in the cryptocurrency markets to make profits and hedge their risks in digital assets. Will you be the next successful trader?
The below is the text from my latest blog post about bonds, if you want to see the original with pretty pictures, charts, graphs etc then click on this link. Ok, the title is an obvious dad joke, but as it happens it still fits in with my naming convention for posts so happy days! On to more serious stuff. The most common proposed asset allocation for people pursuing FIRE seems to involve having absolutely as much invested in equities (or to a lesser extent property) as possible, and reducing every other asset class to as little as possible. Which is certainly one way of doing things, and given the great performance of shares and property over the last 20 years or more there is an argument to be made for doing things this way. It’s certainly not the only way of doing things though, and I will be trying to show why there is a case to be made for investing some money in other asset classes, in particular Fixed Income aka Bonds. So what are bonds? Bonds are a type of debt that is issued by governments, semi-government organisations, and corporations, so basically you’re lending them money. In Australia we also have what are called hybrid securities, but they’ve got some big enough differences that I’ll talk about them in a future post (probably). Bonds are also one of those fun areas where there is an exception to every rule, so although what I’ve written below is broadly accurate there is always going to be some type of bond or a specific issue that breaks one of the rules. So please don’t be an internet hero and “well ackshually” me about premium redemption/issue bonds, soft calls, hard calls, investor puts, floaters, PIK notes and all the rest of it because broadly speaking it isn’t going to make much difference for the purposes of explaining bonds. Basically play nice readers! Talk numbers to me… Bonds are all about math. As I’m sure regular readers of this blog can imagine this makes me very happy, and probably explains in part why I spent a large part of my career working in an area where understanding bonds was crucial, although to make things more interesting we added on a bunch of other stuff like equity options, credit derivatives, FX etc. The main numbers to think about are the price you paid for the bond, the coupon on the bond, the yield on the bond, the time to maturity, and the maturity value of the bond. From those main numbers we also derive a bunch of other numbers I’ll talk about later. Bonds are normally issued at a price of 100, with a fixed coupon (interest payment based on the maturity value of the bond) and a fixed maturity value at a known maturity date. So that’s 4 of the numbers covered already, happy days! A lot of the time though you’re not going to be buying that bond when it is issued, you’ve buying it when it’s already trading in which case chances are pretty good you didn’t pay 100 for the bond. Buying it along the way doesn’t affect the coupon or the redemption amount at maturity or when it matures. What it does affect though is the yield. There are a bunch of different yield measures but I’m going to go with yield to maturity, ie what yield (return) will you get if you hold the bond to maturity. It’s not a perfect analogy, but one way to think about bonds is that they’re like a term deposit where the amount that you can buy it for moves around. If you buy a bond for $10,000 that is going to mature in a year and it has a 2% coupon and redeems for $10,200 (redemption price plus coupon payment), then your yield (2%) is the same as your coupon (2%). But if interest rates have changed and so the price of the bond has changed and you buy that bond for $9,900 or $10,100, then your yield will be different from your coupon, either 3% or 1% respectively. Hopefully that makes sense? BTW I’ve rounded the numbers here to try and keep it nice and simple. Most bonds pay interest on a semi annual basis (I used an annual payment in the example above to make things easier) so to figure out how much interest you get when it gets paid it’ll be the coupon divided by two. Hopefully all of that makes sense, if not let me know in the comments. Issuers of Bonds As I said above the main issuers of bonds are governments, semi government organisations, and corporations. Debt issued by governments is generally the safest type, because so long as they control the printing press then they can always print more money to pay you back. The Eurozone is a bit of an exception to this (understatement of the year) but in most of the other major sovereign bond markets like the US, Australian, the UK etc it’s true. Emerging markets are a bit different because they often issue debt in USD, which means that if things go pear shaped then they can’t just print more money to pay off bondholders. There can also be issues with getting your money back from sovereigns if they have too much debt, such as when they either don’t control the printing press (Greece) or the bond is issued in a different currency (Argentina) but for the most part if you lend money to a developed country in their own currency then you can pretty reliably count on getting your money back. There are also bonds issued by semi government organisations like the World Bank, European Bank for Reconstruction and Development etc, these are slightly less safe for the most part but you’re still not taking on much risk of not getting your money back. Debt issued by corporations is riskier, partly because businesses obviously can’t just print more money to pay you back, and because corporations can and do go bust. Sure it doesn’t seem likely that Telstra or Woolworths or the big banks are going to blow up any time soon, but there are plenty of other bond issuers out there with much more fragile finances. As you would expect the more risk you are taking on the more return you want in order to be compensation for doing so. This is because unlike a term deposit the value of your capital isn’t protected. If you put $10,000 into a term deposit for a year with an interest rate of 2%, then you know that in a year’s time you will get back that $10,000 plus $200 in interest. If for some reason the bank you invested that money through goes bust, the government will make you whole (up to the value of $250,000 per entity per approved deposit institution. If you invest in a corporate bond and the company goes bust, well you’re probably not going to get all or maybe any of your money back. The good news is that you’re more likely to get money back than equity holders, but if the debts of the company are a lot more than the assets then you’re going to be in trouble. There’s a clear framework for what happens if a company goes bust and who gets paid first and in how much etc, the short version of this is that equity holders are absolutely last in line but depending on what type of bonds you own you may not be a meaningful better position either. And unlike a stock, when you own a bond you don’t own a piece of the issuer of the bond, you just own part of their devt. So if the company does great and starts making a fortune, you as a bondholder don’t get paid any more than what the terms of the bond state. Basically you can get a fair chunk of the downside and none of the upside beyond the terms of the bond. On the plus side this doesn’t happen particularly often, most of the time you’ll get what you were promised Bond ratings Now obviously some companies are more secure and stable than others. If you take a bond from the biggest company in the ASX200 which is CBA, then it’s more likely to fulfil the terms of the bond than whatever the 200th company is. That’s not to say the 200th company won’t, just that there is more risk. The actual degree of this risk is quantified in a couple of different ways. First of all there are ratings agencies out there who will assign a rating from anywhere to super safe (AAA) to D (in default) with a bunch of graduations in between. Anything rated from AAA to BBB- is what is called Investment Grade (IG), everything below that is called High Yield (HY) or less politely Junk. Just because a bond is IG doesn’t guarantee it will pay off, likewise something which is HY isn’t guaranteed or even likely to fail. For the most part though the different ratings given tend to play out that way in the real world, with far less defaults for bonds rated AAA vs bonds rated BB for example. The big three ratings agencies are Standard & Poors (S&P), Moodys, and Fitch, and between them they’ll rate most of the bonds and/or issuers. They tend to be fairly backward looking in my opinion, and they were hugely and obviously wrong on rating mortgage backed securities back in the GFC. Still, they will generally give you a reasonable idea of the creditworthiness of the bond issuer. Because bonds are also traded in the marketplace you can take the yield offered on a bond with a particular maturity, compare it to an equivalent government bond, and using some fun math (yeah baby!) back out a credit spread which that bond trades over treasuries (or swaps but I’m not going to get into that). The higher the spread, the higher the perceived risk of the bond, and vice versa of course. Are bonds safe? Well it kinda depends on what you mean by safe. If you mean are the bonds likely to deliver what the issuer of the bonds promised, then generally yes. As I said with government and semi government bonds you will almost certainly get all your coupons and the maturity value of the bonds delivered on time. Yeah, there are some exceptions to this but you’re unlikely to run into trouble with Australia, the US, the UK, the more economically sensible members of the Eurozone etc. Similarly with corporates the vaast majority of the time you will get your money back on investment grade bonds, and it’s pretty rare to not get your money back on high yield bonds as well. That’s not to say it doesn’t happen, but it doesn’t happen much. If you mean am I going to get back what I put into the bond, well no they’re not necessarily safe, particularly if you sell before maturity. Remember when I said bonds are kinda like term deposits that can trade? Well when they trade those prices move around, and they can move around a lot! Why do bond prices move? There are a bunch of reasons why bond prices move around, the main ones are changes in the interest rate environment, changes in economic conditions, and changes specific to the issuer of the bond. We’ll talk about interest rates first. Bond prices have an inverse relationship with bond yields, which is a fancy way of saying if interest rates (yields) go down then bond prices go up. How much do they go up? Well that depends on the magnitude of the change in rates, and a bunch of factors involving the bond. Basically the longer till maturity on the bond, and the lower the coupon on the bond, the more sensitive it will be to changes in interest rates. This is measured using modified duration and convexity. Modified duration takes into account the timing of the cashflows of the bond (so coupons and maturity) and gives you a number which is typically a little less than that number of years to maturity, the higher the coupon the more it decreases the modified duration. If you multiply that modified duration by the change in interest rates in percentage terms, it will tell you how much the bond price will move by (in theory at least). So if you have a modified duration of say 7.117, then for every 1 percent move in interest rates the bond price will change by 7.117 points. So if your bond price was previously 100 and rates moved down by 1%, then your bond should now be worth 107.117. Happy days! Conversely if rates moved up, well your bond is now worth 92.883. Not so happy days. I’ve used the [ASX bond calculator](http://%20https//www.asx.com.au/asx/research/bondCalculator.do) to give a couple of examples using the current Aussie 10 year bond. You can hopefully see below that by changing the yield on the bond from 1.5% to 1% the market price has gone from 116.87 to 121.83, roughly a 4.25% change in price for a 0.5% change in rates, so presumably the modified duration on the bond is about 8.5. To make things slightly more complex, that relationship isn’t fixed due to something called convexity. Instead of being a linear relationship, it’s actually a changing one (a curve rather than a line). Basically the more bonds prices move away from where they were issued the more that relationship will change. Then there are things like GDP numbers, employment numbers, consumer sentiment surveys, PMI surverys, and all sorts of other economic news which will potentially move bond yields around, generally pretty slightly but it really depends on how important that economic number is and how much of a change from expectations it is. On top of that for corporations changes in their own situations will have an effect on what their credit rating/spread is which will affect prices as well. If a company goes from being loss making to suddenly making a profit, then that’s going to be good for their credit and the bond price is likely to go up. Bad news like a profit warning will potentially mean a higher credit spread and lower price for the bond. There is also general investor appetite for risk, so if investors are happy to take on more risk in their asset allocation (risk on) then they will likely sell off lower risk assets like bonds and buy higher risk assets like equities and to a lesser extent property. If things change and they want to go risk off, then the reverse happens and money tends to come out of equities and into bonds. What happens to bonds if the stock market crashes or we have another GFC? A stock market crash is actually one of the more compelling reasons to invest in bonds. This is because when stock markets crash investors tend to put their money into asset classes where they feel a lot safer ie, bonds. The rationale is that getting your money back is now hugely important, and even more important is not losing all your money as you will in those horrible equities which you knew you should never have invested in but that horrible financial adviser talked you into. People. Are. Not. Rational. People panic. People sell assets which are going down in value even though they know they should be holding on for the long term. This applies not just to retail investors, but also to professionals who should know better. In the GFC I spent plenty of time talking to institutional investors with a long term time horizon (ie 5 or 10 years etc) who suddenly decided they had to get out because of bad one month performance. People will bail out if the proverbial is hitting the fan. I wrote a bit about my experiences with the GFC here, and believe me there are a lot of people who are not going to be as cool calm and collected as they think they will be. It’s very very very very (extra very for emphasis) important to note here that at this point in time investors will not be thinking that all bonds are much the same. When they are looking for somewhere to put their money that they now have after panic selling out of equities, they will park it in the safest place they can find, ie government bonds (aka treasuries). This will cause the price of those bonds to rise because of supply and demand. If they still want to take on some amount of risk then they might put some into investment grade bonds, again this will push the price up a bit. They will almost certainly not put money into high yield bonds, because those are risky and in a crisis will behave pretty similarly to equities, ie they will fall in value. If anything they will more than likely try to pull money out of HY bonds, pushing the price down. This excellent post really shows this in the below graph which shows the average performance of different types of bonds for a 10% or greater fall in the stock market (all of this is for the US but the same principle applies to Australia). It doesn’t work in every case, as shown below (same source), but in almost all cases of a big crash in equities, treasury and to a lesser extent IG bonds gave you a big positive return to help out. HY, not so much and in some cases actually gave you a worse performance than equities themselves. Please believe me when I say it is a huge help psychologically to have some of your investments going up when the others are going down, which to me at least is a great reason to have some money invested in bonds. You’ve convinced me, how much should I have in bonds? Ok so I’m probably being slightly optimistic here given the number of posts I see on reddit about how VDHG would be so much better if Vanguard got rid of that terrible 10% that’s invested in bonds and put it all in equities instead. It would be nice to think though that some people are now realising that come the next crash they too might not behave entirely rationally, and it sure would be nice to own some assets that are going to zig when the stock market zags, so to speak. On the off chance that I have actually convinced people, well it really comes down to your particular risk profile. This is going to be hard to believe for some people, but in the US the default portfolio for most investors is 60% stocks and 40% bonds. Looking at Oz , the default balanced investment option for most super funds over here are supposed to have something like a 70:30 split between growth assets (shares and property) and defensive assets (bonds and cash) although the reality is a long long way from that if you actually look into how they invest (that’s a discussion for another time though). So that maybe provides a useful starting point. I know that the average FIRE portfolio that gets talked about particularly from younger bloggers (who have likely never experienced a sustained down market) is pretty much 100% equities and property, maybe even leveraged up. Which is fine if you can hold on through the downturns, but not everyone can do this because it is extremely difficult to do psychologically. I wish them all the best of luck, but I am pretty sure that at least some of them will decide that it’s all too much and sell whenever we have the next crash. There are exceptions to the rule though. One of my favourite bloggers, and someone who I know thinks deeply about this sort of stuff, is the FI Explorer who has about 15% in bonds and 15% in defensive alternatives (gold and bitcoin) as per his latest portfolio update. Whilst I don’t like Bitcoin myself, or gold for that matter, he writes a good explanation about why he holds both here. I still don’t like either asset myself, but I recognise that I am not infallible, I could well be wrong about this, and certainly historically they have worked well as hedges. In any case the more important point here is that there is basically a 30% allocation to what would be regarded as defensive type assets. This is actually a bit over his actual target of 25% in defensive assets, but he probably sleeps just fine at night. I’m a little more aggressive in only having about 21% of my assets (excluding PPoR) in cash and bonds, but it’s not a huge difference. Both of us have been invested through stock market crashes and hopefully have come to realise that we are not the hyper rational investors that economists believe we are, and therefore it’s best to have a bit invested in stuff that will go up or at least hold it’s value when everything else is crashing. How do I buy bonds? You can buy bonds individually, but you tend to need to have a fair amount of money to do so and you can run into a lot of problems with liquidity, big bid/ask spreads etc, it’s hard to build up a diversified portfolio etc. I buy bonds the same way I buy stocks, ie via an ETF. Most of the major ETF providers have some variety of index ETFs tracking Treasury only or Treasury plus Investment Grade bonds, or you can buy HY stuff if you want. Personally I just use one ETF which has about 75% in treasuries and the rest in IG. There are also some actively managed bond funds out there, either as ETFs or managed funds. For the reasons I outlined above about bonds being a psychological safe harbour I personally would (and do) only invest in bonds which are likely to up in a crisis, but different strokes for different folks applies as always. Any more questions? I’ve only really scratched the surface here of talking about bonds, but at the same time I feel like it’s an overwhelming amount of information. If you have more questions then as always I’m happy to answer them in the comments! Do you invest in bonds? If you enjoyed this post and would like to read more like it then please subscribe!
Elaborating on Datadash's 50k BTC Prediction: Why We Endorse the Call
As originally published via CoinLive I am the Co-Founder at CoinLive. Prior to founding Coinlive.io, my area of expertise was inter-market analysis. I came across Datadash 50k BTC prediction this week, and I must take my hats off to what I believe is an excellent interpretation of the inter-connectivity of various markets. At your own convenience, you can find a sample of Intermarket analysis I've written in the past before immersing myself into cryptos full-time. Gold inter-market: 'Out of sync' with VIX, takes lead from USD/JPY USD/JPY inter-market: Watch divergence US-Japan yield spread EUUSD intermarket: US yields collapse amid supply environment Inter-market analysis: Risk back in vogue, but for how long? USD/JPY intermarket: Bulls need higher adj in 10-y US-JP spread The purpose of this article is to dive deeper into the factors Datadash presents in his video and how they can help us draw certain conclusions about the potential flows of capital into crypto markets and the need that will exist for a BTC ETF. Before I do so, as a brief explainer, let's touch on what exactly Intermarket analysis refers to: Intermarket analysis is the global interconnectivity between equities, bonds, currencies, commodities, and any other asset class; Global markets are an ever-evolving discounting and constant valuation mechanism and by studying their interconnectivity, we are much better positioned to explain and elaborate on why certain moves occur, future directions and gain insights on potential misalignments that the market may not have picked up on yet or might be ignoring/manipulating. While such interconnectivity has proven to be quite limiting when it comes to the value one can extract from analyzing traditional financial assets and the crypto market, Datadash has eloquently been able to build a hypothesis, which as an Intermarket analyst, I consider very valid, and that matches up my own views. Nicolas Merten constructs a scenario which leads him to believe that a Bitcoin ETF is coming. Let's explore this hypothesis. I will attempt to summarize and provide further clarity on why the current events in traditional asset classes, as described by Datadash, will inevitably result in a Bitcoin ETF. Make no mistake, Datadash's call for Bitcoin at 50k by the end of 2018 will be well justified once a BTC ETF is approved. While the timing is the most challenging part t get right, the end result won't vary. If one wishes to learn more about my personal views on why a BTC ETF is such a big deal, I encourage you to read my article from late March this year. Don't Be Misled by Low Liquidity/Volume - Fundamentals Never Stronger The first point Nicholas Merten makes is that despite depressed volume levels, the fundamentals are very sound. That, I must say, is a point I couldn't agree more. In fact, I recently wrote an article titled TheParadox: Bitcoin Keeps Selling as Intrinsic Value Set to Explode where I state "the latest developments in Bitcoin's technology makes it paradoxically an ever increasingly interesting investment proposition the cheaper it gets." However, no article better defines where we stand in terms of fundamentals than the one I wrote back on May 15th titled Find Out Why Institutions Will Flood the Bitcoin Market, where I look at the ever-growing list of evidence that shows why a new type of investors, the institutional ones, looks set to enter the market in mass. Nicholas believes that based on the supply of Bitcoin, the market capitalization can reach about $800b. He makes a case that with the fundamentals in bitcoin much stronger, it wouldn't be that hard to envision the market cap more than double from its most recent all-time high of more than $300b. Interest Rates Set to Rise Further First of all, one of the most immediate implications of higher rates is the increased difficulty to bear the costs by borrowers, which leads Nicholas to believe that banks the likes of Deutsche Bank will face a tough environment going forward. The CEO of the giant German lender has actually warned that second-quarter results would reflect a “revenue environment [that] remains challenging." Nicholas refers to the historical chart of Eurodollar LIBOR rates as illustrated below to strengthen the case that interest rates are set to follow an upward trajectory in the years to come as Central Banks continue to normalize monetary policies after a decade since the global financial crisis. I'd say, that is a correct assumption, although one must take into account the Italian crisis to be aware that a delay in higher European rates is a real possibility now. !(https://coinlive.io/ckeditor_assets/pictures/947/content_2018-05-30_1100.png) Let's look at the following combinations: Fed Fund Rate Contract (green), German 2-year bond yields (black) and Italy's 10-year bond yield (blue) to help us clarify what's the outlook for interest rates both in Europe and the United States in the foreseeable future. The chart suggests that while the Federal Reserve remains on track to keep increasing interest rates at a gradual pace, there has been a sudden change in the outlook for European rates in the short-end of the curve. While the European Central Bank is no longer endorsing proactive policies as part of its long-standing QE narrative, President Mario Draghi is still not ready to communicate an exit strategy to its unconventional stimulus program due to protectionism threats in the euro-area, with Italy the latest nightmare episode. Until such major step is taken in the form of a formal QE conclusion, interest rates in the European Union will remain depressed; the latest drastic spike in Italy's benchmark bond yield to default levels is pre-emptive of lower rates for longer, an environment that on one hand may benefit the likes of Deutsche Bank on lower borrowing costs, but on the other hand, sets in motion a bigger headache as risk aversion is set to dominate financial markets, which leads to worse financial consequences such as loss of confidence and hence in equity valuations. !(https://coinlive.io/ckeditor_assets/pictures/948/content_2018-05-30_1113.png) Deutsche Bank - End of the Road? Nicholas argues that as part of the re-restructuring process in Deutsche Bank, they will be facing a much more challenging environment as lending becomes more difficult on higher interest rates. At CoinLive, we still believe this to be a logical scenario to expect, even if a delay happens as the ECB tries to deal with the Italian political crisis which once again raises the question of whether or not Italy should be part of the EU. Reference to an article by Zerohedge is given, where it states: "One day after the WSJ reported that the biggest German bank is set to "decimate" its workforce, firing 10,000 workers or one in ten, this morning Deutsche Bank confirmed plans to cut thousands of jobs as part of new CEO Christian Sewing's restructuring and cost-cutting effort. The German bank said its headcount would fall “well below” 90,000, from just over 97,000. But the biggest gut punch to employee morale is that the bank would reduce headcount in its equities sales and trading business by about 25%." There is an undeniably ongoing phenomenon of a migration in job positions from traditional financial markets into blockchain, which as we have reported in the past, it appears to be a logical and rational step to be taken, especially in light of the new revenue streams the blockchain sector has to offer. Proof of that is the fact that Binance, a crypto exchange with around 200 employees and less than 1 year of operations has overcome Deutsche Bank, in total profits. What this communicates is that the opportunities to grow an institution’s revenue stream are formidable once they decide to integrate cryptocurrencies into their business models. One can find an illustration of Deutsche Bank's free-fall in prices below: !(https://coinlive.io/ckeditor_assets/pictures/946/content_2018-05-30_1052.png) Nicholas takes notes of a chart in which one can clearly notice a worrying trend for Italian debt. "Just about every other major investor type has become a net seller (to the ECB) or a non-buyer of BTPs over the last couple of years. Said differently, for well over a year, the only marginal buyer of Italian bonds has been the ECB!", the team of Economists at Citi explained. One can find the article via ZeroHedge here. !(https://coinlive.io/ckeditor_assets/pictures/953/content_2018-05-30_1451.png) Equities & Housing to Suffer the Consequences Nicholas notes that trillions of dollars need to exit these artificially-inflated equity markets. He even mentions a legendary investor such as George Soros, who has recently warned that the world could be on the brink of another devastating financial crisis, on lingering debt concerns in Europe and a strengthening US dollar, as a destabilizing factor for both the US's emerging- and developed-market rivals. Ray Dalio, another legend in the investing world and Founder of Bridgewater Associates, the world’s largest hedge fund, "has ramped up its short positions in European equities in recent weeks, bringing their total value to an estimated $22 billion", MarketWatch reports. Nicholas extracts a chart by John Del Vecchio at lmtr.com where it illustrates the ratio between stocks and commodities at the lowest in over 50 years. As the author states: "I like to look for extremes in the markets. Extremes often pinpoint areas where returns can be higher and risk lower than in other time periods. Take the relationship between commodities and stocks. The chart below shows that commoditieshavennot been cheaper than stocks in a generation. We often hear this time it is different” to justify what’s going on in the world. But, one thing that never changes is human nature. People push markets to extremes. Then they revert. " !(https://coinlive.io/ckeditor_assets/pictures/954/content_2018-05-30_1459.png) Bitcoin ETF the Holy Grail for a Cyclical Multi-Year Bull Run It is precisely from this last chart above that leads Nicholas to believe we are on the verge of a resurgence in commodity prices. Not only that but amid the need of all this capital to exit stocks and to a certain extent risky bonds (Italian), a new commodity-based digital currency ETF based on Bitcoin will emerge in 2018. The author of Datadash highlights the consideration to launching a Bitcoin ETF by the SEC. At CoinLive, our reporting of the subject can be found below: "Back in April, it was reported that the US Securities and Exchange Commission (SEC) has put back on the table two Bitcoin ETF proposals, according to public documents. The agency is under formal proceedings to approve a rule change that would allow NYSE Arca to list two exchange-traded funds (ETFs) proposed by fund provider ProShares. The introduction of an ETF would make Bitcoin available to a much wider share of market participants, with the ability to directly buy the asset at the click of a button, essentially simplifying the current complexity that involves having to deal with all the cumbersome steps currently in place." Nicholas refers to the support the Bitcoin ETF has been receiving by the Cboe president Chris Concannon, which is a major positive development. CoinLive reported on the story back in late March, noting that "a Bitcoin ETF will without a doubt open the floodgates to an enormous tsunami of fresh capital entering the space, which based on the latest hints by Concannon, the willingness to keep pushing for it remains unabated as the evolution of digital assets keeps its course." It has been for quite some time CoinLive's conviction, now supported by no other than Nicholas Merten from Datadash, that over the next 6 months, markets will start factoring in the event of the year, that is, the approval of a Bitcoin ETF that will serve as a alternative vehicle to accommodate the massive flows of capital leaving some of the traditional asset classes. As Nicholas suggests, the SEC will have little choice but to provide alternative investments. Bitcoin as a Hedge to Lower Portfolios' Volatility Last but not least, crypto assets such as Bitcoin and the likes have an almost non-existent correlation to other traditional assets such as stocks, bonds, and commodities, which makes for a very attractive and broadly-applicable diversification strategy for the professional money as it reduces one’s portfolio volatility. The moment a Bitcoin ETF is confirmed, expect the non-correlation element of Bitcoin as a major driving force to attract further capital. Anyone Can BeWrongDatadash, But You Won't be Wrong Alone Having analyzed the hypothesis by Nicholas Merten, at CoinLive we believe that the conclusion reached, that is, the creation of a Bitcoin ETF that will provide shelter to a tsunami of capital motivated by the diversification and store of value appeal of Bitcoin, is the next logical step. As per the timing of it, we also anticipate, as Nicholas notes, that it will most likely be subject to the price action in traditional assets. Should equities and credit markets hold steady, it may result in a potential delay, whereas disruption in the capital market may see the need for a BTC ETF accelerate. Either scenario, we will conclude with a quote we wrote back in March. "It appears as though an ETF on Bitcoin is moving from a state of "If" to "When." Datadash is certainly not alone on his 50k call. BitMEX CEO Arthur Hayes appears to think along the same line. On behalf of the CoinLive Team, we want to thank Nicholas Merten at Datadash for such enlightening insights.
Daily analysis of cryptocurrencies 20191105 (Market index 54— Neutral state)
https://preview.redd.it/nckyr1qb1vw31.jpg?width=1280&format=pjpg&auto=webp&s=54af97ca72f567d38a962224ab84464c5a258bd5 Coca-Cola Embraces Blockchain Technology Developed By SAPAlabama-based Coca-Cola has become the latest major corporation to recognize the advantages of blockchain technology.According to a recent Business Insider report, Coca-Cola’s bottlers now rely on the blockchain solution, which was developed by German software corporation SAP to keep track of all transactions that take place within 70 franchises. Æternity Blockchain Developers Take On Ethereum With Final HardforkThe core development team for Æternity, a next-generation, open-source blockchain for building decentralized applications, announced its LIMA hardfork on Nov 5, releasing the latest software to miners and in fact, handing over governance to the community. The third major æternity protocol upgrade this year, LIMA adds a sophisticated, improved Virtual Machine, governance, and naming system to challenge Ethereum and other blockchain platforms. Æternity is one of the most active blockchain developer communities measured by code activity. Core developers proposed hardfork, LIMA software release to miners, who will mine or not mine fork of aeternity blockchain. Bangkok Bank To Launch Blockchain-Based L/C Service Next MonthBangkok Bank (BBL) is set to roll out a blockchain-based letter of credit (L/C) service next month and aims for the innovative financial service to increase the bank’s trade finance business.The bank will use R3’s Corda-powered Voltron platform to digitise the L/C process, said executive director Charamporn Jotikasthira.BBL is the only Thai bank among the eight founding members of Voltron, which include BNP Paribas, HSBC, ING, and Standard Chartered Bank. Chinese Regulator Investigates Firm’s Blockchain Efforts Amid Stock SurgeAn obscure porcelain and education firm is under investigation by a top Chinese regulator after it became one of the most sought-after blockchain stocks last week.Guangdong Great Wall Group, whose stock price skyrocketed for five consecutive days last week after Chinese president XI Jinping praised blockchain technology, said it was under investigation by the China Securities Regulatory Commission. The investigation comes as the government appeals for “rational” investments in Chinese blockchain and fintech firms. https://preview.redd.it/l92x7g7b0vw31.png?width=504&format=png&auto=webp&s=dc8a2baef8563304f79bc5617f8d7ee08b85cc34 BTC — BTC rose rapidly in the early hours of this morning, reaching a maximum of $9645, now falling back to around $9400. In the past 24 hours, the net outflow of BTC funds is close to US $50 million, and the outflow of market funds is significantly increased compared with the previous cycle. BTC made a tentative pull in the early morning to test the upper resistance. In terms of the 4-hour line, the overall volume is not obvious, and the follow-up strength is insufficient, and the breakthrough is not successful. The domestic market is still dominated by shocks, and may withdraw again after the failure of short-term breakthrough to prepare for the next round of offensive. The upper resistance continued to focus around $9600, while the lower support continued to focus on $9000. In terms of operation, it is suggested to control the position and wait for the right opportunity to build the position. Review previous articles:https://firstname.lastname@example.org
Encrypted project calendar（November 5, 2019）
Nexus (NXS)：05 November 2019 Tritium Official Release “Remember, Remember the 5th of November, the day Tritium changed Distributed Ledger. Yes, this is an official release date.”NEM (XEM)：05 November 2019 Innovation Forum — Kyiv NEM Foundation Council Member Anton Bosenko will be speaking in the upcoming International Innovation Forum in Kyiv on November 5, 2019.TomoChain (TOMO):05 November 2019 TomoX Testnet “Mark your calendar as TomoX testnet will be live on Tuesday, Nov 5th!”aelf (ELF):05 November 2019 Bug Bounty Program Ends On Oct 24th, 2019 aelf’s biggest bug bounty will launch with a large reward pool. The event will run for almost 2 weeks.ICON (ICX):05 November 2019 Seoul Meetup “We are pleased to announce that the ICON x Steem DApp SEOUL MEETUP will be held in the ICON Lounge on November 5th.”Utrust (UTK):05 November 2019 Lisbon Meetup “We’re hosting a meetup for anyone interested in blockchain & crypto adoption! Industry leaders like Cointelegraph, BetProtocol & others…”Siacoin (SC):05 November 2019 Zurich Meetup “Join us Tuesday, Nov 5th in Zurich for a Sia meetup with CEO David, and devs Chris and PJ at@impacthubzurich.”OKB (OKB):05 November 2019 Simulation USDT Futures “NEW LAUNCH: The much-awaited $USDT-Margined Futures Trading will soon be available on #OKEx… Simulation launching Nov 5”
Encrypted project calendar（November 6, 2019）
STEEM/Steem:The Steem (STEEM) SteemFest 4 conference will be held in Bangkok from November 6th to 10th.KIM/Kimcoin:Kimcoin (KIM) Bitfinex will be online at KIM on November 6, 2019 at 12:00 (UTC).Nebulas (NAS):06 November 2019 Burn Deadline “Be sure to read this announcement & burn your $NAT by November 6th, 3:00p.m. (UTC+8, Beijing time).”Power Ledger (POWR):06 November 2019 Book Launch ATTN Perth Power Ledger community, we will be hosting renowned economist Ross Garnaut at our WA office for the launch of his latest book…
Encrypted project calendar（November 7, 2019）
XRP (XRP)： 07 November 2019 Swell 2019 Ripple hosts Swell from November 7th — 8th in Singapore.BTC/Bitcoin:Malta The A.I. and Blockchain summit will be held in Malta from November 7th to 8th.Waves (WAVES):07 November 2019 Joins Odyssey “#Waves is joining Odyssey… We’re kicking off on Nov. 7 at Polaris…”Komodo (KMD)and 1 other: 07 November 2019 Block Party Amsterdam Block Party Amsterdam in Amsterdam from 17:30–22:00.Horizen (ZEN):07 November 2019 Weekly Insider Team updates at 3:30 PM UTC/ 11:30 AM EDT: Engineering, Node network, Product/UX, Helpdesk, Legal, BD, Marketing, CEO Closing thoughts, AMA.
Encrypted project calendar（November 8, 2019）
BTC/Bitcoin:The 2nd Global Digital Mining Summit will be held in Frankfurt, Germany from October 8th to 10th.IOTX/IoTeX:IoTex (IOTX) will participate in the CES Expo on November 08TOP (TOP):08 November 2019 Mainnet Launch “So excited to announce that on November 8th, TOP Network will officially launch the mainnet…”OKB (OKB):08 November 2019 OKEx Talks — Valencia “Meet us at our next OKEx Talks in Valencia on 8 Nov with speaker Gustavo Segovia@sepu85who will look at the benefits of creating
Encrypted project calendar（November 9, 2019）
CENNZ/Centrality:Centrality (CENNZ) will meet in InsurTechNZ Connect — Insurance and Blockchain on October 9th in Auckland.HTMLCOIN (HTML):09 November 2019 (or earlier) Mandatory Wallet Update Mandatory Wallet Update: there will be a soft fork on our blockchain. This update adds header signature verification on block 997,655.
Encrypted project calendar（November 10, 2019）
Bibox Token (BIX):10 November 2019 Bibox Summit “Bibox Summit 2019 — Maximizing Profit On Uptrend Season” from 1 PM — 5 PM (ITV) in Ho Chi Minh City.
Encrypted project calendar（November 11, 2019）
PAX/Paxos Standard:Paxos Standard (PAX) 2019 Singapore Financial Technology Festival will be held from November 11th to 15th, and Paxos Standard will attend the conference.Crypto.com Coin (CRO):and 3 others 11 November 2019 Capital Warm-up Party Capital Warm-up Party in Singapore.GoldCoin (GLC):11 November 2019 Reverse Bitcoin Hardfork The GoldCoin (GLC) Team will be “Reverse Hard Forking” the Bitcoin (BTC) Blockchain…”Horizen (ZEN):11 November 2019 (or earlier) Horizen Giveaway — Nodes Horizen Giveaway — Win Free Node Hosting! Entries before November 11th.SINOVATE (SIN):11 November 2019 Roadmap V3 SINOVATE (SIN) Roadmap V3 will be released with new upcoming technologies and proof of concepts!
Encrypted project calendar（November 12, 2019）
BTC/Bitcoin:The CoinMarketCap Global Conference will be held at the Victoria Theatre in Singapore from November 12th to 13thBinance Coin (BNB)and 7 others: 12 November 2019 CMC Global Conference “The first-ever CoinMarketCap large-scale event: A one-of-a-kind blockchain / crypto experience like you’ve never experienced before.”Aion (AION)and 17 others: 12 November 2019 The Capital The Capital conference from November 12–13 in Singapore.Loom Network (LOOM):12 November 2019 Transfer Gateway Update “If you have a dapp that relies on the Transfer Gateway, follow the instructions below to make sure you’re prepared.”
Encrypted project calendar（November 13, 2019）
Fetch.ai (FET):13 November 2019 Cambridge Meetup “Join us for a@Fetch_ai#Cambridge #meetup on 13 November@pantonarms1.”Binance Coin (BNB)and 5 others: 13 November 2019 Blockchain Expo N.A. “It will bring together key industries from across the globe for two days of top-level content and discussion across 5 co-located events…”OKB (OKB):13 November 2019 Dnipro, Ukraine- Talks Join us in Dnipro as we journey through Ukraine for our OKEx Cryptour on 11 Nov.Centrality (CENNZ):13 November 2019 AMA Meetup “Ask our CEO@aaronmcdnzanything in person! Join the AMA meetup on 13 November in Singapore.”OKB (OKB):13 November 2019 OKEx Cryptotour Dnipro “OKEx Cryptour Ukraine 2019 — Dnipro” in Dnipro from 6–9 PM (EET).
Encrypted project calendar（November 14, 2019）
BTC/Bitcoin:The 2019 BlockShow Asia Summit will be held at Marina Bay Sands, Singapore from November 14th to 15th.Binance Coin (BNB):and 4 others 14 November 2019 BlockShow Asia 2019 BlockShow Asia 2019 at Marina Bay Sands Expo, Singapore from November 14–15.Basic Attention Token (BAT): 14 November 2019 London Privacy Meetup “If you’re in London on Nov. 14th, don’t miss our privacy meetup! The Brave research team, our CPO@johnnyryan, as well as@UoE_EFIHorizen (ZEN):14 November 2019 Weekly Insider Team updates at 3:30 PM UTC/ 11:30 AM EDT: Engineering, Node network, Product/UX, Helpdesk, Legal, BD, Marketing, CEO Closing thoughts, AMA.IOTA (MIOTA):14 November 2019 Berlin Meetup From Construction to Smart City: IOTA, Maschinenraum & Thinkt Digital will explain, using concrete use cases, how to gain real value from..Dash (DASH):14 November 2019 Q3 Summary Call “Dash Core Group Q3 2019 Summary Call — Thursday, 14 November 2019”NEO (NEO):14 November 2019 NeoFest Singapore Meetup “Glad to have@Nicholas_Mertenfrom DataDash as our host for #NeoFest Singapore meetup on 14th Nov!”
Encrypted project calendar（November 15, 2019）
TRON (TRX):15 November 2019 Cross-chain Project “The #TRON cross-chain project will be available on Nov. 15th”Bluzelle (BLZ):15 November 2019 (or earlier) CURIE Release CURIE release expected by early November 2019.Zebi (ZCO):15 November 2019 ZEBI Token Swap Ends “… We will give 90 days to all the ERC 20 token holders to swap out their tokens into Zebi coins.”OKB (OKB):15 November 2019 OKEx Talks — Vilnius “Join us for a meetup on 15 Nov (Fri) for our 1st ever Talks in Vilnius, Lithuania.”
Encrypted project calendar（November 16, 2019）
Bancor (BNT): and 2 others 16 November 2019 Crypto DeFiance-Singapore “Crypto DeFiance is a new global DeFi event embracing established innovators, financial market disruptors, DApp developers…”NEM (XEM):16 November 2019 Developer’s Event “BLOCKCHAIN: Creation of Multifirma services” from 10:50 AM — 2 PM.
Encrypted project calendar（November 17, 2019）
OKB (OKB):17 November 2019 OKEx Talks — Lagos Join us on 17 Nov for another OKEx Talks, discussing the “Life of a Crypto Trader”.
Encrypted project calendar（November 18, 2019）
Maker (MKR):18 November 2019 MCD Launch “BIG changes to terminology are coming with the launch of MCD on Nov. 18th Say hello to Vaults, Dai, and Sai.”
Encrypted project calendar（November 19, 2019）
Lisk (LSK):19 November 2019 Lisk.js “We are excited to announce liskjs2019 will take place on November 19th. This all day blockchain event will include…”
Encrypted project calendar（November 20, 2019）
OKB (OKB):20 November 2019 OKEx Cryptour Odessa Ukr “Join us in Odessa as we journey through Ukraine for our OKEx Cryptour!”
Encrypted project calendar（November 21, 2019）
Cardano (ADA):and 2 others 21 November 2019 Meetup Netherlands (AMS) “This meetup is all about how to decentralize a blockchain, the problems and differences between Proof-of-Work and Proof-of-Stake…”Cappasity (CAPP):21 November 2019 Virtuality Paris 2019 “Cappasity to demonstrate its solution for the interactive shopping experience at Virtuality Paris 2019.”Horizen (ZEN):21 November 2019 Weekly Insider Team updates at 3:30 PM UTC/ 11:30 AM EDT: Engineering, Node network, Product/UX, Helpdesk, Legal, BD, Marketing, CEO Closing thoughts, AMA.OKB (OKB):21 November 2019 OKEx Talks — Johannesburg “Join us the largest city of South Africa — Johannesburg where we will host our OKEx Talks on the 21st Nov.”IOST (IOST):22 November 2019 Singapore Workshop Join the Institute of Blockchain for their 2nd IOST technical workshop in Singapore on 22 Nov 2019. The workshop includes IOST’s key tech.OKB (OKB):22 November 2019 St. Petersberg Talks “Join us in St. Petersberg on 22 Nov as we answer your questions on Crypto Security. “
Encrypted project calendar（November 22, 2019）
IOST (IOST):22 November 2019 Singapore Workshop Join the Institute of Blockchain for their 2nd IOST technical workshop in Singapore on 22 Nov 2019. The workshop includes IOST’s key techOKB (OKB):22 November 2019 St. Petersberg Talks “Join us in St. Petersberg on 22 Nov as we answer your questions on Crypto Security. “
Encrypted project calendar（November 27, 2019）
OKB (OKB):27 November 2019 OKEx Cryptour Vinnytsia “Join us in Vinnytsia as we journey through Ukraine for our OKEx Cryptour!”Fetch.ai (FET):27 November 2019 London Meetup “Join us on 27 November@primalbasehqto hear an exciting progress report as we prepare for the launch of our #mainnet”
Encrypted project calendar（November 28, 2019）
Horizen (ZEN):28 November 2019 Weekly Insider Team updates at 3:30 PM UTC/ 11:30 AM EDT: Engineering, Node network, Product/UX, Helpdesk, Legal, BD, Marketing, CEO Closing thoughts, AMA.
Encrypted project calendar（November 30, 2019）
Ethos (ETHOS):30 November 2019 (or earlier) Rebranding “In November, we unveil the broker token, a dynamic utility token to power our commission-free crypto trading and broker platform, Voyager.”Digitex Futures (DGTX):30 November 2019 Public Testnet Launch “…We can expect to see the world’s first zero-commission futures trading platform live on the Ethereum public testnet from 30th November.”Monero (XMR):30 November 2019 Protocol Upgrade “Preliminary information thread regarding the scheduled protocol upgrade of November 30.”Chiliz (CHZ):30 November 2019 (or earlier) Fiat to CHZ Exchanges “We will add another two fiat to $CHZ exchanges in November…”Skrumble Network (SKM):30 November 2019 (or earlier) P2P & Group Calling “P2P & Group Video Calling,” during November 2019.Aergo (AERGO):30 November 2019 (or earlier) Mainnet 2.0 Upgrade Mainnet 2.0 Protocol update by end of November.Akropolis (AKRO):30 November 2019 (or earlier) Beta Release “All functionality has been deployed to mainnet.”Nash Exchange (NEX):30 November 2019 (or earlier) Mobile Strategy Phase 2 “Phase 2 of our mobile strategy will be live soon with our wallet and portfolio app hitting stores in November!”
Best Quotes from Saifedean Ammous book "The Bitcoin Standard"
"Bitcoin can be best understood as distributed software that allows for transfer of value using a currency protected from unexpected inflation without relying on trusted third parties"
"While Bitcoin is a new invention of the digital age, the problems it purports to solve - namely, providing a form of money that is under the full command of its owner and likely to hold its value in the long run - are as old as human society itself"
"People’s choices are subjective, and so there is no “right” and “wrong” choice of money. There are, however, consequences to choices"
"I like to call this the easy money trap: anything used as a store of value will have its supply increased, and anything whose supply can be easily increased will destroy the wealth of those who used it as a store of value"
"For something to assume a monetary role, it has to be costly to produce, otherwise the temptation to make money on the cheap will destroy the wealth of the savers, and destroy the incentive anyone has to save in this medium"
"The monetary media that survived for longest are the ones that had very reliable mechanisms for restricting their supply growth - in other words, hard money"
"The choice of what makes the best money has always been determined by the technological realities of societies shaping the salability of different goods"
"Human civilization flourished in times and places where sound money was widely adopted, while unsound money all too frequently coincided with civilizational decline and societal collapse"
"Whether in Rome, Constantinople, Florence, or Venice, history shows that a sound monetary standard is a necessary prerequisite for human flourishing, without which society stands on the precipice of barbarism and destruction"
"History shows it is not possible to insulate yourself from the consequences of others holding money that is harder than yours"
"Some of the most important technological, medical, economic, and artistic human achievements were invented during the era of the gold standard, which partly explains why it was known as la Belle Epoque, or the beautiful era, across Europe"
"World War I saw the end of the era of monetary media being the choice decided by the free market, and the beginning of the era of government money"
"Government money is similar to primitive forms of money and commodities other than gold: it is liable to having its supply increased quickly compared to its stock, leading to a quick loss of salability, destruction of purchasing power, and impoverishment of its holders"
"With the simple suspension of gold redeemability, governments’ war efforts were no longer limited to the money that they had in their own treasuries, but extended virtually to the entire wealth of the population"
"Had European nations remained on the gold standard, or had the people of Europe held their own gold in their own hands […], history might have been different. It is likely that WorldWar I would have been settled militarily within a few months of conflict"
"The cause of the Great Crash of 1929 was the diversion away from the gold standard in the post-WWI years, and the deepening of the Depression was caused by government control and socialization of the economy in the Hoover and FDR years"
"All spending is spending, in the naive economics of Keynesians, and so it matters not if that spending comes from individuals feeding their families or governments murdering foreigners: it all counts in aggregate demand and it all reduces unemployment!"
"In essence, Bretton Woods attempted to achieve through central planning what the international gold standard of the nineteenth century had achieved spontaneously"
"Hyperinflation is a form of economic disaster unique to government money. There was never an example of hyperinflation with economies that operated a gold or silver standard"
"With government money, whose cost of production tends to zero, it has become quite possible for an entire society to witness all of its savings in the form of money disappear in the space of a few months or even weeks"
"Hyperinflation is a far more pernicious phenomenon than just the loss of a lot of economic value by a lot of people; it constitutes a complete breakdown of the structure of economic production of a society built up over centuries and millennia"
"Even if the textbooks were correct about the benefits of government management of the money supply, the damage from one episode of hyperinflation anywhere in the world far outweighs them"
"Hanke and Bushnell have been able to verify 57 episodes of hyperinflation in history, only one of which occurred before the era of monetary nationalism, and that was the inflation in France in 1795, in the wake of the Mississippi Bubble"
“The constantly increasing supply means a continuous devaluation of thecurrency, expropriating the wealth of the holders to benefit those who printthe currency, and those who receive it earliest. This is termed the CantillonEffect”
“Whether it’s because of downright graft, “national emergency,” or an infestation of inflationist schools of economics, government will always find a reason and a way to print more money, expanding government power while reducing the wealth of the currency holders”
“It is ironic, and very telling, that in the era of government money, governments themselves own far more gold in their official reserves than they did under the international gold standard of 1871–1914”
“A sound money makes service valuable to others the only avenue open for prosperity to anyone, thus concentrating society’s efforts on production, cooperation, capital accumulation, and trade”
“The twentieth century was the century of unsound money and the omnipotent state, as a market choice in money was denied by government diktat, and government-issued paper money was forced on people with the threat of violence”
“Sound money is an essential requirement for individual freedom from despotism and repression, as the ability of a coercive state to create money can give it undue power over its subjects, power which by its very nature will attract the least worthy, and most immoral”
“Sound money is a prime factor in determining individual time preference, an enormously important and widely neglected aspect of individual decision making. Time preference refers to the ratio at which individuals value thepresent compared to the future”
“Economist Hans-Hermann Hoppe explains that once time preference drops enough to allow for any savings and capital or durable consumer-goodsformation at all, the tendency is for time preference to drop even further as a“process of civilization” is initiated”
“Microeconomics has focused on transactions between individuals, and macroeconomics on the role of government in the economy ; [...] the most important economic decisions to any individual’s well-being are the ones they conduct in their trade-offs with their future self”
“The better the money is at holding its value, the more it incentivizes people to delay consumption and instead dedicate resources for production in the future, leading to capital accumulation and improvement of living standards”
“The move from money that holds its value or appreciates to money that loses its value is very significant in the long run: society saves less, accumulates less capital, and possibly begins to consume its capital”
“Civilizations prosper under a sound monetary system, but disintegrate when their monetary systems are debased, as was the case with the Romans, the Byzantines, and modern European societies”
“What matters in money is its purchasing power, not its quantity, and as such, any quantity of money is enough to fulfil the monetary functions, as long as it is divisible and groupable enough to satisfy holders’ transaction and storage needs”
“The best form of money in history was the one that would cause the new supply of money to be the least significant compared to the existing stockpiles, and thus make its creation not a good source of profit”
“Had government money been a superior unit of account and store of value, it would not need government legal tender laws to enforce it, nor would governments worldwide have had to confiscate large quantities of gold and continue to hold them in their central bank reserves”
“The fact that central banks continue to hold onto their gold, and have even started increasing their reserves, testifies to the confidence they have in their own currencies in the long term”
“Sound money is money that gains in value slightly over time, meaning that holding onto it is likely to offer an increase in purchasing power”
“Unsound money, being controlled by central banks whose express mission is to keep inflation positive, will offer little incentive for holders to keep it”
“With unsound money, only returns that are higher than the rate of depreciation of the currency will be positive in real terms, creating incentives for high-return but high-risk investment and spending”
“Savings rates have been declining across the developed countries, dropping to very low levels, while personal, municipal, and national debts have increased to levels which would have seemed unimaginable in the past”
“One of the most mendacious fantasies that pervades Keynesian economic thought is the idea that the national debt “does not matter, since we owe it to ourselves”
“Only a high-time-preference disciple of Keynes could fail to understand that this “ourselves” is not one homogeneous blob but is differentiated into several generations -namely, the current ones which consume recklessly at the expense of future ones”
“The twentieth century’s binge on conspicuous consumption cannot be understood separately from the destruction of sound money and the outbreak of Keynesian high-time-preference thinking, in vilifying savings and deifying consumption as the key to economic prosperity”
“It is an ironic sign of the depth of modern-day economic ignorance fomented by Keynesian economics that capitalism - an economic system based on capital accumulation from saving - is blamed for unleashing conspicuous consumption - theexact opposite of capital accumulation”
“Capitalism is what happens when people drop their time preference, defer immediate gratification, and invest in the future. Debt-fueled mass consumption is as much a normal part of capitalism as asphyxiation is a normal part of respiration”
“The only cause of economic growth in the first place is delayed gratification, saving, and investment, which extend the length of the production cycle and increase the productivity of the methods of production, leading to better standards of living”
“This move from sound money to depreciating money has led to several generations of accumulated wealth being squandered on conspicuous consumption within a generation or two, making indebtedness the new method for funding major expenses”
“As H. L. Mencken put it: “Every election is an advanced auction on stolen goods””
“As politicians sell people the lie that eternal welfare and retirement benefits are possible through the magic of the monetary printing press, the investment in a family becomes less and less valuable”53.“The majority of the technology we use in our modern life was invented in the 19th century, under the gold standard, financed with the ever-growing stock of capital accumulated by savers storing their wealth in a sound money and store of value which did not depreciate quickly”
“The contributions of sound money to human flourishing are not restricted to scientific and technological advance; they can also be vividly seen in the art world”
“In times of sound money and low time preference, artists worked on perfecting their craft so they could produce valuable works in the long run”56.“Modern artists have replaced craft and long hours of practice with pretentiousness, shock value, indignation, and existential angst as ways to cow audiences into appreciating their art, and often added some pretense to political ideals, usually of the puerile Marxist variety”
“As government money has replaced sound money, patrons with low time preference and refined tastes have been replaced by government bureaucrats with political agendas as crude as their artistic taste”
“The Use of Knowledge in Society, by Friedrich #Hayek, is arguably one of the most important economic papers to have ever been written”
“In a free market economic system, prices are knowledge, and the signals that communicate information”
“Prices are not simply a tool to allow capitalists to profit; they are the information system of economic production, communicating knowledge across the world and coordinating the complex processes of production”
“Any economic system that tries to dispense with prices will cause the complete breakdown of economic activity and bring a human society back to a primitive state”
“The fatal flaw of socialism that #Mises exposed was that without a price mechanism emerging on a free market, socialism would fail at economic calculation, most crucially in the allocation of capital goods”
“In an economy with a central bank and fractional reserve banking, the supply of loanable funds is directed by a committee of economists under the influence of politicians, bankers, TV pundits, and sometimes, most spectacularly, military generals”
“Creating new pieces of paper and digital entries to paper over the deficiency in savings does not magically increase society’s physical capital stock; it only devalues the existing money supply and distorts prices”
“Only with an understanding of the capital structure and how interest rate manipulation destroys the incentive for capital accumulation can one understand the causes of recessions and the swings of the business cycle”
“The business cycle is the natural result of the manipulation of the interest rate distorting the market for capital by making investors imagine they can attain more capital than is available with the unsound money they have been given by the banks”
“Contrary to Keynesian animist mythology, business cycles are not mystic phenomena caused by flagging “animal spirits” whose cause is to be ignored as central bankers seek to try to engineer recovery”
“Economic logic clearly shows how recessions are the inevitable outcome of interest rate manipulation in the same way shortages are the inevitable outcome of price ceilings”
“Monetary history testifies to how much more severe business cycles and recessions are when the money supply is manipulated than when it isn’t”
“A capitalist system cannot function without a free market in capital, where the price of capital emerges through the interaction of supply and demand and the decisions of capitalists are driven by accurate price signals”
“The central bank’s meddling in the capital market is the root of all recessions and all the crises which most politicians, journalists, academics, and leftist activists like to blame on capitalism”
“Imagining that central banks can “prevent,” “combat,” or “manage” recessions is as fanciful and misguided as placing pyromaniacs and arsonists in charge of the fire brigade”
“Central planning of credit markets must fail because it destroys markets’ mechanisms for price-discovery providing market participants with the accurate signals and incentives to manage their consumption and production”
“It is typical of the #MiltonFriedman band of libertarianism in that it blames the government for an economic problem, but the flawed reasoning leads to suggesting even more government intervention as the solution”
“Only when a central bank manipulates the money supply and interest rate does it become possible for large-scale failures across entire sectors of the economy to happen at the same time, causing waves of mass layoffs in entire industries”
“In a free market for money, individuals would choose the currencies they want to use, and the result would be that they would choose the currency with the reliably lowest stock-to-flow ratio. This currency would oscillate the least with changes in demand and supply”
“It is an astonishing fact of modern life that an entrepreneur in the year 1900 could make global economic plans and calculations all denominated in any international currency, with no thought whatsoever given to exchange rate fluctuations”
“The combination of floating exchange rates and Keynesian ideology has given our world the entirely modern phenomenon of currency wars”
“Hard money, by taking the question of supply out of the hands of governments and their economist-propagandists, would force everyone to be productive to society instead of seeking to get rich through the fool’s errand of monetary manipulation”
“Under a sound monetary system, government had to function in a way that is unimaginable to generations reared on the twentieth-century news cycle: they had to be fiscally responsible”
“For those of us alive today, raised on the propaganda of the omnipotent governments of the twentieth century, it is often hard to imagine a world in which individual freedom and responsibility supersede government authority”82“. The fundamental scam of modernity is the idea that government needs to manage the money supply. It is an unquestioned starting assumption of all mainstream economic schools of thought and political parties”
“Having the ability to print money, literally and figuratively, increases the power of any government, and any government looks for anything that gives it more power”
“By placing a hard cap on the total supply of bitcoins, Nakamoto was clearly unpersuaded by the arguments of the standard macroeconomics textbook and more influenced by the Austrian school, which argues that the quantity of money itself is irrelevant”
“Societies with money of stable value generally develop a low time preference, learning to save and think of the future, while societies with high inflation and depreciating economies will develop high time preference as people lose track of the importance of saving”
“With sound money, the government’s war effort was limited by the taxes it could collect. With unsound money, it is restrained by how much money it can create before the currency is destroyed, making it able to appropriate wealth far more easily”
“Unsound money is a particularly dangerous tool in the hands of modern democratic governments facing constant reelection pressure. Modern voters are unlikely to favor the candidates who are upfront about the costs and benefits of their schemes”
“Unsound money is at the heart of the modern delusion believed by most voters and those unfortunate enough to study modern macroeconomics at university level: that government actions have no opportunity costs”
“It is no coincidence that when recounting the most horrific tyrants of history, one finds that every single one of them operated a system of government-issued money which was constantly inflated to finance government operation”
“Unsound money makes government power potentially unlimited, with large consequences to every individual, forcing politics to the center stage of their life and redirecting much of society’s energy and resources to the zero-sum game of who gets to rule and how”
“In the world of fiat money, having access to the central bank’s monetary spigots is more important than serving customers. Firms that can get low-interest-rate credit to operate will have a persistent advantage over competitors that cannot”
“Banking has evolved into a business that generates returns without risks to bankers and simultaneously creates risks without returns for everyone else”
“In a world where central banks allocate credit, the larger firm has an advantage in being able to secure funding at a low rate which its smaller competitors cannot get”
“Bitcoin was the first engineering solution that allowed for digital payments without having to rely on a trusted third-party intermediary. By being the firstdigital object that is verifiably scarce, Bitcoin is the first example of digital cash”
“Whereas in a modern central bank the new money created goes to finance lending and government spending, in Bitcoin the new money goes only to those who spend resources on updating the ledger”
“Difficulty adjustment is the most reliable technology for making hard money and limiting the stock-to-flow ratio from rising, and it makes Bitcoin fundamentally different from every other money”
“Bitcoin is the hardest money ever invented: growth in its value cannot possibly increase its supply; it can only make the network more secure and immune to attack”
“The security of Bitcoin lies in the asymmetry between the cost of solving the proof-of-work necessary to commit a transaction to the ledger and the cost of verifying its validity”
“The Bitcoin ledger of transactions might just be the only objective set of facts in the world”
“Bitcoin is the first example of a digital good whose transfer stops it from being owned by the sender”
“Bitcoin presents a tremendous technological leap forward in the monetary solution to the indirect exchange problem, perhaps as significant as the move from cattle and salt to gold and silver”
“Without a conservative monetary policy and difficulty adjustment, Bitcoin would only have succeeded theoretically as digital cash, but remained too insecure to be used widely in practice”
“Bitcoin’s volatility derives from the fact that its supply is utterly inflexible and not responsive to demand changes, because it is programmed to grow at a predetermined rate”
“As the size of the market grows, along with the sophistication and the depth of the financial institutions dealing with Bitcoin, this volatility will likely decline”
“As long as Bitcoin is growing, its token price will behave like that of a stock of a start-up achieving very fast growth. Should Bitcoin’s growth stop and stabilize, it would stop attracting high-risk investment flows, and become just a normal monetary asset”
“Bitcoin is the cheapest way to buy the future, because Bitcoin is the only medium guaranteed to not be debased, no matter how much its value rises”
“The strict digital scarcity of the Bitcoin tokens combines the best elements of physical monetary media, without any of the physical drawbacks to moving and transporting it. Bitcoin might have a claim to make for being the best technology for saving ever invented”
“Any person who owns Bitcoin achieves a degree of economic freedom which was not possible before its invention”
“For the first time since the emergence of the modern state, individuals have a clear technical solution to escaping the financial clout of the governments they live under”
“Bitcoin, and cryptography in general, are defensive technologies that make the cost of defending property and information far lower than the cost of attacking them”
“If BTC continues to grow to capture a larger share of the global wealth, it may force governments to become more and more a form of voluntary organization, which can only acquire its “taxes” voluntarily by offering its subjects services they would be willing to pay for”
“Contrary to popular depictions of anarchists as hoodie-clad hoodlums, Bitcoin’s brand of anarchism is completely peaceful, providing individuals with the tools necessary for them to be free from government control and inflation”
“The invention of Bitcoin has created, from the ground up, a new independent alternative mechanism for international settlement that does not rely on any intermediary and can operate entirely separate from the existing financial infrastructure”
“Bitcoin can be seen as the new emerging reserve currency for online transactions, where the online equivalent of banks will issue Bitcoin-backed tokens to users while keeping their hoard of Bitcoins in cold storage”
“Bitcoin’s advantage is that by bringing the finality of cash settlement to the digital world, it has created the fastest method for final settlement of large payments across long distances and national borders”
“Bitcoin can be best understood to compete with settlement payments between central banks and large financial institutions, and it compares favorably to them due to its verifiable record, cryptographic security, and imperviousness to third-party security holes”
“BTC, having no counterparty risk and no reliance on any third-party, is uniquely suited to play the same role that gold played in the gold standard"
“If Bitcoin continues to grow in value and gets utilized by a growing number of financial institutions, it will become a reserve currency for a new form of central bank"
“The first central bank to buy BTC will alert the rest of the central banks to the possibility and make many of them rush toward it. The first central bank purchase is likely to make the value of BTC rise significantly"
“While central banks have mostly been dismissive of the importance of BTC, this could be a luxury they may not afford for long. As hard as it might be for central bankers to believe it, BTC is a direct competitor to their line ofbusiness”
“The modern central bank business model is being disrupted. Central banks now have no way of stopping competition by just passing laws as they have always done. They are now up against a digital competitor that most likely cannot be brought under the physical world’s laws”
“If the modern world is ancient Rome, suffering the economic consequences of monetary collapse, with the dollar our aureus, then Satoshi Nakamoto is our Constantine, Bitcoin is his solidus, and the Internet is our Constantinople”
“Should it achieve some sort of stability in value, Bitcoin would be superior to using national currencies for global payment settlements, as is the case today, because national currencies fluctuate in value based on each nation’s and government’s conditions”
“Bitcoin is the only truly decentralized digital currency which has grown spontaneously as a finely balanced equilibrium between miners, coders, and users, none of whom can control it”
“After years of watching altcoins get created, it seems impossible that any coin will recreate the adversarial standoff that exists between Bitcoin stakeholders and prevents any party from controlling payments in it”
“It is high time for everyone involved in BTC to stop concerning themselves with the question of the identity of Nakamoto, and accept that it does not matter to the operation of the technology, in the same way that the identity of the inventor of the wheel no longer matters”
“No single altcoin has demonstrated anything near Bitcoin’s impressive resilience to change, which is down to its truly decentralized nature and the strong incentives for everyone to abide by the status quo consensus rules”
“Contrary to a lot of the hype surrounding Bitcoin, eliminating the need for trust in third parties is not an unquestionably good thing to do in all avenues of business and life”
“A non-Bitcoin blockchain combines the worst of both worlds: the cumbersome structure of the blockchain with the cost and security risk of trusted third parties”
"“It is no wonder that eight years after its invention, blockchain technology has not yet managed to break through in a successful, ready-for-market commercial application other than the one for which it was specifically designed: Bitcoin”
“The most common potential applications touted for blockchain technology - payments, contracts, and asset registry - are only workable to the extent that they run using the decentralized currency of the blockchain”
“All blockchains without currencies have not moved from the prototype stage to commercial implementation because they cannot compete with current best practice in their markets”
“Any application of #blockchain technology will only make commercial sense if its operation is reliant on the use of electronic cash, and only if electronic cash’s disintermediation provides economic benefits outweighing the use of regular currencies and payment channels”
The Statue of Liberty, Mystery Babylon, Freemasonry and The New Roman Empire / Fourth Reich
The Mother of Exiles and the Destruction of Babylon
I've always thought Mystery Babylon in Revelations was America. Lots of signs point to that. Inanna/Ishtar was known as the Whore of Babylon and Mother of Prostitutes because she supposedly started the practice of sacred prostitution. Inanna was the goddess of love, beauty, sex, desire, fertility, war, combat, justice, and political power. https://en.wikipedia.org/wiki/Sacred_prostitution
Sacred prostitution, temple prostitution, cult prostitution, and religious prostitution are general terms for a sexual rite consisting of sexual intercourse or other sexual activity performed in the context of religious worship, perhaps as a form of fertility rite or divine marriage (hieros gamos). Some scholars prefer the term sacred sex to sacred prostitution in cases where payment for services was not involved.
But some scholars believe that this practice never existed and has been misunderstood.
The practice of sacred prostitution has not been substantiated in any Ancient Near Eastern cultures, despite many popular descriptions of the habit. Through the twentieth century, scholars generally believed that a form of sacred marriage rite or hieros gamos was staged between the king of a Sumerian city-state and the High Priestess of Inanna, the Sumerian goddess of sexual love, fertility, and warfare, but no certain evidence has survived to prove that sexual intercourse was included. Along the Tigris and Euphrates rivers there was a temple of Eanna, meaning house of heaven dedicated to Inanna in the Eanna District of Uruk.This will be relevant in my next post about the source of Yahweh's narcissism but for now, I'm just using this to illustrate part of the reason I think America is Babylon.
The Sumerians worshipped Inanna as the goddess of both warfare and sexuality. Unlike other gods, whose roles were static and whose domains were limited, the stories of Inanna describe her as moving from conquest to conquest. She was portrayed as young and impetuous, constantly striving for more power than she had been allotted.
An asteroid will pass directly in front of Regulus, one of the brightest stars in our night sky, next Wednesday — briefly blacking out the star in what astronomers are calling a “once in a lifetime” event. Better yet, New York City falls directly within the viewing path which is literally paper-thin on the earths scale. The event is so small, and so brief, that it will only be visible over a sliver of area. And this area happens to encompass millions of people in New York City, Northeast NJ and Long Island.
On Thursday, March 20 2014, Regulus will participate in a rare celestial event when an asteroid passes directly in front of the star, as seen from Earth. The asteroid in question is 163 Erigone. Asteroid 163 Erigone is about 45 miles (72 km) wide, but its "shadow" slanting to Earth's surface will be 67 miles (108 km) wide. Erigone's shadow will move on a southeast-to-northwest trajectory and will extend from New York City as well as western and central Long Island to Oswego in New York State, and then continues northwest, the length of Ontario to the Hudson Bay shore of Manitoba. Those who are within the shadow path and watching at just the right moment with just their eyes will see an amazing sight: Regulus will seem to abruptly disappear as if a switch had been thrown, blotted out by the tiny invisible asteroid. Regulus will remain invisible for up to 14 seconds (for those situated along the center of the path); an incredible, albeit very brief occurrence.
This "once in a lifetime event" eclipsing right over New York. Where the Statue of Liberty is. Revelations 17
There I saw a woman sitting on a scarlet beast that was covered with blasphemous names and had seven heads and ten horns. 4 The woman was dressed in purple and scarlet, and was glittering with gold, precious stones and pearls. She held a golden cup in her hand, filled with abominable things and the filth of her adulteries. 5 The name written on her forehead was a mystery: 15 Then the angel said to me, “The waters you saw, where the prostitute sits, are peoples, multitudes, nations and languages. 16 The beast and the ten horns you saw will hate the prostitute. They will bring her to ruin and leave her naked; they will eat her flesh and burn her with fire. 17 For God has put it into their hearts to accomplish his purpose by agreeing to hand over to the beast their royal authority, until God’s words are fulfilled. 18 The woman you saw is the great city that rules over the kings of the earth.”
America's colors are red, white and blue. Red+Blue = Purple. Purple apparently represents royalty as well as vanity. Scarlet represents the blood of Christ and martyrs.
The color purple is also associated with royalty in Christianity, being one of the three traditional offices of Jesus Christ, i. e. king, although such a symbolism was assumed from the earlier Roman association or at least also employed by the ancient Romans. In Europe and America, purple is the color most associated with vanity, extravagance, and individualism. Among the seven major sins, it represents vanity. It is a color which is used to attract attention
**8.Bartholdi planned for the statue to be covered in gold.**In order to make the statue visible after dark, Bartholdi proposed that Americans raise the money to gild her. However, given how daunting and arduous a task it had been to gather even enough money to place the statue in New York harbor, no one followed through on paying the enormous cost of covering the massive statue in gold.
Not to mention this little interesting fact that brings the 2nd Beasts actions that are spoken of to mind.
:The second beast was given power to give breath to the image of the first beast, so that the image could speak and cause all who refused to worship the image to be killed. :**9. Thomas Edison once had plans to make the statue talk.**When Edison introduced the phonograph to the public in 1878, he told the newspapers that he was designing a “monster disc” for the interior of the Statue of Liberty that would allow the statue to deliver speeches that could be heard up to the northern part of Manhattan and across the bay. Thankfully, no one pursued that strange promise, which would have led to the odd experience of walking in New York and suddenly hearing the Statue of Liberty “talking.” precious stones and pearls.
The sculptor Frédéric Auguste Bartholdi designed the statue to be fully illuminated, a feature that’s suggested in its official name, “La Liberté Eclairant le Monde,” or “Liberty Enlightening the World.” (At first the Statue of Liberty doubled as a lighthouse, given its position in the New York Harbor, but that didn’t last: It was decommissioned as such in 1902.) Originally the lighting scheme was to be red, white, and blue—with a giant searchlight trained on the statue’s face and shoulders. Officials claimed in 19th-century newspaper accounts that they would make the statue so bright as to cast a glow on the clouds of the night sky 100 miles away. The statue’s face was to be lit by a reflector so bright that newspapers described it as “4 million candle power.” Her diadem was meant to sparkle with electric light. These were lofty goals in the dawn of the electrical age, and they carried symbolism that has lost much of its potency now that electricity is taken for granted.
She held a golden cup in her hand, filled with abominable things and the filth of her adulteries.
In the torch, the flames are covered in gold. Looks enough like a cup. Also, in Isaiah 14:12 (another prophecy detailing the fall of Babylon that I didn't bother copying and pasting all of here) it refers to Babylon (or it's king) as "Lucifer, son of the morning". Lucifer means "light bringer" (hence the torch and the statue's original name being Liberty Enlightening the World) or "morning star" which is another name for the planet Venus which is associated with Inanna/Ishtar.
How art thou fallen from heaven, O Lucifer, son of the morning! how art thou cut down to the ground, which didst weaken the nations!
The beast and the ten horns you saw will hate the prostitute. They will bring her to ruin and leave her naked; they will eat her flesh and burn her with fire. 17 For God has put it into their hearts to accomplish his purpose by agreeing to hand over to the beast their royal authority
The 10 kings + the beast = 11.
The seven heads are seven hills on which the woman sits. They are also seven kings.
It has 7 spikes coming out of the head. https://timedotcom.files.wordpress.com/2013/06/01_00240318.jpg?quality=85 We're a very diverse country and Lady Liberty represents us taking in people from all countries. We pretty much control the world (for now) as the 7 hills represents the 7 continents, which is literally what is said they represent. Plus she's literally sitting on an island in the water.
Then the angel said to me, “The waters you saw, where the prostitute sits, are peoples, multitudes, nations and languages.
Masonic theories abound about the Statue of Liberty’s connection to the masons. Those who do ascribe to the theory cite Bartholdi’s and Eiffel’s membership in the Freemasons, that many original plans for the statue demonstrate the link and that many elements of the statue carry symbolic meaning. In addition, the masons presided over the cornerstone laying for the Statue of Liberty, a moment commemorated in a 1984 plaque in dedication to the masons on the 100th anniversary. In 1884, the grand master William A. Brodie laid the cornerstone with grand lodge members present. Brodie is reported to have said, “Why call upon the Masonic Fraternity to lay the cornerstone of such a structure as is here to be erected? No institution has done more to promote liberty and to free men from the trammels and chains of ignorance and tyranny than has Freemasonry.”
Then there's the poem that is inside the base.
The New Colossus Not like the brazen giant of Greek fame,With conquering limbs astride from land to land;Here at our sea-washed, sunset gates shall standA mighty woman with a torch, whose flameIs the imprisoned lightning, and her nameMOTHER OF EXILES. From her beacon-handGlows world-wide welcome; her mild eyes commandThe air-bridged harbor that twin cities frame. "Keep, ancient lands, your storied pomp!" cries sheWith silent lips. "Give me your tired, your poor,Your huddled masses yearning to breathe free,The wretched refuse of your teeming shore.Send these, the homeless, tempest-tost to me,I lift my lamp beside the golden door!"
The Mother of exiles.
Prophecies of the Destruction of Babylon / America / New York
45 “Come out of her, my people!Run for your lives!Run from the fierce anger of the Lord.46 Do not lose heart or be afraidwhen rumors are heard in the land;one rumor comes this year, another the next,rumors of violence in the landand of ruler against ruler.47 For the time will surely comewhen I will punish the idols of Babylon;her whole land will be disgraced
Welcome to General Election 2016 – The Transition The Hegelian Dialectic is the transition of things. And the Illuminati loves to use it. We have been expecting it. We have read about it. And now it is here, in front of our faces. And many are IGNORING it. Folks, we are witnessing Hegelian logic on display. How we got here is an aside, but here we are. The disease is Hillary, and the medicine is Trump. For most folks, that’s all that matters. Case closed. What most citizens do not realize is that this is all a ruse. A mirage. It is being carried by, “they.” “They” are using the illusion, because America was stationary and stubborn. “You can’t New World Order me!” Americans said, “…Because we know about you.” Did the globalists go away and cry in their beer? Nope. They knew this would happen. It was expected. Butsome of the citizens heard a few radio shows that told them, “we’re gonna win.” Hegel’s dialectic utilizes the “mirage.” And then steers the people through its house of mirrors with scary monsters. In America’s case, the monster is a short woman with a trucker’s voice named Hillary. Their task is simple. Globalism. But how do they get there? Simple: Scare them with the Thesis – Hillary / the Enemy of Freedom. And offset her with the Anti-thesis – Donald the Lion-Hearted / Champion of the People. …Next stop – the Synthesis. Ashes with a rising phoenix. It's right there in front of us. Do you see it folks?
“The Double Headed Eagle of Lagash” is the oldest Royal Crest in the World… No emblematic device of today can boast of such antiquity. Its origin has been traced to the ancient city of Lagash. It was in use a thousand years before the Exodus from Egypt and more than two thousand years before the building of “King Solomon’s Temple.” “As time rolled on, it passed from the Sumerians to the men of Akkad, from the men of Akkad to the Hittites, from the denizens of Asia Minor to the Seljukian Sultans from whom it was brought by the Crusaders to the Emperors of the East and West, whose successors were the Hapsburgs and the Romanoffs.” “In recent excavations, the city-emblem of Lagash was disclosed also as a lion headed eagle sinking his claws into the bodies of two lions standing back to back. This is evidently a variant of the other eagle symbol”. “The city of Lagash is in Sumer in Southern Babylonia, between the Euphrates and the Tigris and near the modern Shatra in Iraq, Lagash had a calendar of twelve lunar months, a system of weights and measures, a banking and accounting system and was a center of art, literature, military and political power, five thousand years before Christ”. “In 102 B.C. the Roman Consul Marius decreed that the Eagle be displayed as a symbol of Imperial Rome. Later, as a world power, Rome used the Double-Headed Eagle, one head facing the East the other facing the West, symbolizing the universality and unity of the Empire. The Emperors of the Holy Roman Empire continued its use and the symbol was adopted later in Germany during the halcyon days of conquest and imperial power”. So far as is known, the Double-Headed Eagle was first used in Freemasonry in 1758 by a Masonic Body in Paris – the Emperors of the East and West. During a brief period the Masonic Emperors of the East and West controlled the advanced degrees then in use and became a precursor of the “Ancient Accepted Scottish Rite”. The Latin caption under the Double-Headed Eagle – “Spes Mea in Deo Est” translated is “My Hope Is In God”.
A part of this sounds familiar
“In recent excavations, the city-emblem of Lagash was disclosed also as a lion headed eagle sinking his claws into the bodies of two lions standing back to back. This is evidently a variant of the other eagle symbol”.
In 102 B.C. the Roman Consul Marius decreed that the Eagle be displayed as a symbol of Imperial Rome. Later, as a world power, Rome used the Double-Headed Eagle, one head facing the East the other facing the West, symbolizing the universality and unity of the Empire. The Emperors of the Holy Roman Empire continued its use and the symbol was adopted later in Germany during the halcyon days of conquest and imperial power”. So far as is known, the Double-Headed Eagle was first used in Freemasonry in 1758 by a Masonic Body in Paris – the Emperors of the East and West. During a brief period the Masonic Emperors of the East and West controlled the advanced degrees then in use and became a precursor of the “Ancient Accepted Scottish Rite”
The imperial bird with two heads simultaneously facing East and West has been Russia’s official coat of arms for centuries, with only a break during the Soviet era. The emblem, however, is far older than the country, with roots dating to ancient civilizations. An eagle on a country’s coat of arms is quite common – this bird is as popular a national symbol as the lion. “He is the king of birds; just like the lion is believed to rule all animals, and he is associated with the cult of the sun,” Georgy Vilinbakhov, head of Russia’s Heraldic Council, explains.
Title of article: Get Ready for the Phoenix THIRTY years from now, Americans, Japanese, Europeans, and people in many other rich countries, and some relatively poor ones will probably be paying for their shopping with the same currency. Prices will be quoted not in dollars, yen or D-marks but in, let’s say, the phoenix. The phoenix will be favoured by companies and shoppers because it will be more convenient than today’s national currencies, which by then will seem a quaint cause of much disruption to economic life in the last twentieth century.At the beginning of 1988 this appears an outlandish prediction. Proposals for eventual monetary union proliferated five and ten years ago, but they hardly envisaged the setbacks of 1987. The governments of the big economies tried to move an inch or two towards a more managed system of exchange rates – a logical preliminary, it might seem, to radical monetary reform. For lack of co-operation in their underlying economic policies they bungled it horribly, and provoked the rise in interest rates that brought on the stock market crash of October. These events have chastened exchange-rate reformers. The market crash taught them that the pretence of policy co-operation can be worse than nothing, and that until real co-operation is feasible (i.e., until governments surrender some economic sovereignty) further attempts to peg currencies will flounder The new world economyThe biggest change in the world economy since the early 1970’s is that flows of money have replaced trade in goods as the force that drives exchange rates. as a result of the relentless integration of the world’s financial markets, differences in national economic policies can disturb interest rates (or expectations of future interest rates) only slightly, yet still call forth huge transfers of financial assets from one country to another. These transfers swamp the flow of trade revenues in their effect on the demand and supply for different currencies, and hence in their effect on exchange rates. As telecommunications technology continues to advance, these transactions will be cheaper and faster still. With unco-ordinated economic policies, currencies can get only more volatile. In all these ways national economic boundaries are slowly dissolving. As the trend continues, the appeal of a currency union across at least the main industrial countries will seem irresistible to everybody except foreign-exchange traders and governments. In the phoenix zone, economic adjustment to shifts in relative prices would happen smoothly and automatically, rather as it does today between different regions within large economies (a brief on pages 74-75 explains how.) The absence of all currency risk would spur trade, investment and employment. The phoenix zone would impose tight constraints on national governments. There would be no such thing, for instance, as a national monetary policy. The world phoenix supply would be fixed by a new central bank, descended perhaps from the IMF. The world inflation rate – and hence, within narrow margins, each national inflation rate- would be in its charge. Each country could use taxes and public spending to offset temporary falls in demand, but it would have to borrow rather than print money to finance its budget deficit. With no recourse to the inflation tax, governments and their creditors would be forced to judge their borrowing and lending plans more carefully than they do today. This means a big loss of economic sovereignty, but the trends that make the phoenix so appealing are taking that sovereignty away in any case. Even in a world of more-or-less floating exchange rates, individual governments have seen their policy independence checked by an unfriendly outside world. As the next century approaches, the natural forces that are pushing the world towards economic integration will offer governments a broad choice. They can go with the flow, or they can build barricades. Preparing the way for the phoenix will mean fewer pretended agreements on policy and more real ones. It will mean allowing and then actively promoting the private-sector use of an international money alongside existing national monies. That would let people vote with their wallets for the eventual move to full currency union. The phoenix would probably start as a cocktail of national currencies, just as the Special Drawing Right is today. In time, though, its value against national currencies would cease to matter, because people would choose it for its convenience and the stability of its purchasing power. The alternative – to preserve policymaking autonomy- would involve a new proliferation of truly draconian controls on trade and capital flows. This course offers governments a splendid time. They could manage exchange-rate movements, deploy monetary and fiscal policy without inhibition, and tackle the resulting bursts of inflation with prices and incomes polices. It is a growth-crippling prospect. Pencil in the phoenix for around 2018, and welcome it when it comes.
So it was a random Sunday: bed, eat, repeat until I went online and I saw a link by a new user called @limon. There was a small introduction to a YouTube video which at first glance didn’t look interesting, but what the hell? Lets read this. https://cdn-images-1.medium.com/max/...lLpi-xYDCw.png He talked about an article from The Economist, year 1988, coin, phoenix and then Zoin… wtf? Anyways, I opened the link (don’t open links from strangers) and watched the video in Youtube, (it’s in Spanish) @limon claims in the video (minute 5) that he actually found a not so well know cryptocurrency (yet) by doing some research on an article from 1988 and he is somehow convinced it’s going to be huge. Yes, @limon saw the writing and thought maybe I should check this and find out which is the coin of the future. As crazy as it seems, finding a cryptocurrency by doing research on a 1988 magazine its quite incredible. Is it a coincidence or is it a prediction? Not even @limon knows, but there’s a few things that can blow up your mind here. This is the article from 1988. It claims that there will be a currency (referred as “phoenix”) that will be used by everybody in several countries in 2018. So yes, you all might say “the coin is called the Phoenix”. There’s actually a coin called Phoenixcoin but that didn’t seem to convince @limon once he checked it out in www.coinmarketcap.com (it sucked even for @limon who wanted to believe with all his heart) But @limon didn’t give up, he thought what if its hidden? So he decided to take a closer look at the magazine cover. https://cdn-images-1.medium.com/max/...LKufsoJVug.png He noticed that he could read the letters backward (um…interesting) https://cdn-images-1.medium.com/max/...Ir1KSVOMbw.png He got XIN3ONd NET by reading the cover letter backwards and he said well, XIN is Chinese, and found out in google translator that XIN meant NEW. Then 3ONd he looked at it and thought this is Russian… and it was. That weird word that would not mean anything to someone meant something for @limon so he decided to google translate it. https://cdn-images-1.medium.com/max/...uui5nS3hFg.png Well yeah 3ONd is Russian and means ZOI, but wait is this a coin? @Limon decided to search “ZOI” in www.coinmarketcap.com. https://cdn-images-1.medium.com/max/...LN2UCCLQwg.png WOW, Zoin existed. He ended up with the sentence NEW ZOI NET, in which Zoi was an actual currency. He starting searching now all about Zoin (DYOR) and liked everything he saw. The team, the community and development its very much updated. Got even more carried away when he saw Zoin’s logo: https://cdn-images-1.medium.com/max/...4CV6Ln5sFQ.png https://cdn-images-1.medium.com/max/...y75KEGoyHQ.png And when he researched even deeper, he found out that ZOIN was left by its first developer and got taken over by its community from all over the world. Yes, Zoin emerged from the ashes. What? wait. Zoin is also a Phoenix. Anyways, @limon found all the signs of a prophecy from 1988. He couldn’t wait so he joined Zoin’s community and shared his video. By the way he bought some Zoin. After finding the last lost prophecy he had no plans on missing out. Check all about Zoin in the following links. You can reach out to the team on Discord, website address is www.zoinofficial.com and their twitter @zoinofficial You better don’t miss it. Its a prophecy. Thank you limon. @torrmara
Money should be a good store of value, medium of exchange, and unit of account. There are a lot of barriers preventing bitcoin’s widespread use by the aforementioned criteria, let’s take a look and see how they might be solved.
Lack of Understanding
Bitcoin is complicated and unfamiliar. This is a huge barrier to entry because people distrust what they don’t understand, and ease-of-use and simplicity is what usually sells a new technology. If you have read this series from the beginning though, you may now see some potential upsides to such a drastically different system than what we are used to. Many resisted smartphones for a time (and a few still do). The benefits have to outweigh the costs of adoption, so we may see niche cases being the early adopters (like citizens of Venezuela or remittances payments). Also, when a new complicated technology rolls around, it sometimes takes a generation before it becomes widespread; young people are particularly adept at adopting new tech.
The tendency of bitcoin’s price to change rapidly or unpredictably is what comprises volatility. When you search for bitcoin you may find that most of the results you get (and the discussions happening on forums) are about it’s price. This is understandable, it has seen some crazy moves both up and down over the years facilitating the potential for huge gains (and huge losses). Still, over time the price certainly is increasing. Unless you bought in a single 2 month period in 2013, holding bitcoin for longer than 2 years at any point in its history would land you in a better position than when you started. And, when viewed on a logarithmic scale (used in long-term stock charts), the trend is quite clear: (Bitcoin Price 2012-2018, Logarithmic Scale (bitcoincharts.com)) There is a risk/reward to adopting new tech, and this is no exception. But, my goal is absolutely not to “sell” it to you as an investment by any means.
This is not financial advice. We’re simply looking at the pros and cons of this space, and I encourage everyone to do their own research and come to their own conclusions. Never invest anything you aren’t prepared to lose.
This meteoric rising (and crashing) of the “price” (which, I’ll point out, might just as well be considered an exchange rate) understandably makes it pretty difficult to use bitcoin as a currency. If it moves a few percent in a day, and can move a few hundred percent in a month, purchasing a car or a house could cost you significantly more by the time your finished closing. That’s just not viable, and certainly not a good unit of account. However, I see the volatility in price simply as growing pains. It is the market that dictates the price of bitcoin, quite literally, it’s traded like a stock. This is referred to as speculation (“the purchase of an asset with the hope that it will become more valuable at a future date”). Speculation happens between national currencies already, but they are generally stable in comparison so it’s not lucrative. People are unsure of how this whole bitcoin thing is going to play out. It’s not like anything we’ve ever seen, it’s difficult to understand (and use), and it’s not accepted at every corner store or online business. Many in the space are just here for a quick buck, and they sell it when the price rises to get back “real” money we are used to, that is “stable” in price against other currencies, and can predictably buy goods and services. The way I see it, all of these will concerns diminish in time. Though Amazon or Target don’t yet accept bitcoin, Microsoft and Overstock.com do. Some cities and towns across the world are embracing it a lot more than others. It’s not surprising to see San Francisco accommodating the new technology. But, other cities like Portsmouth in New Hampshire with numerous cafes and shops accepting bitcoin (and “Dash coin”) might surprise you. There are maps available to see where crypto-currencies are accepted at locations near you, and the amount of them are increasing, albeit slowly. It’s a bit of a chicken-and-egg situation, but that hasn’t stopped revolutions from happening before. Consider when cars first came about, roads were dirt and mud which cars didn’t do well with. It took building massive infrastructure before cars could ever become mass-adopted, but we spent the time, money, and effort because we saw the potential advantages. It will be trivial for businesses to accept bitcoin compared with pouring hundreds of millions of dollars in asphalt to connect our world. Other parallels include train tracks, phone lines, electricity lines, communication satellites, etc. Each of these replaced or iterated on previous functional technologies, and required massive upfront costs before the benefits were available. It’s clear now that we made some good choices there but there were doubts at the time. Despite some pretty major setbacks, bitcoin’s trend is up. Interest is growing and more businesses and individuals are actually using it. But due to the trading mentality, the uncertainty with regulations, uncertainty in the technology itself, uncertainty that the price will not drop, and other factors, emotion and greed encourages people to sell in flocks if the price climbs high enough. Furthermore, right now with a large enough stack of money one can influence this market in drastic ways, and cries of manipulation of the price are not unfounded. So-called “whales” can buy and sell huge amounts of coins and the price can jump a bit each time. Coupled with uncertainty in the space, and so many “investors” trying to time the markets, we end up with a pretty volatile landscape where the price is not stable. My argument is that this is diminishing as it gains in popularity, and it is gaining value because its utility is growing (see the network effect”) and the utility itself is slowly becoming more apparent.
Volatility is actually decreasing.
Bitcoin Volatility Over Time(bitvol.info) In the period from 2011 to 2014 bitcoin’s volatility often spikes into the 15% range. But from 2014 to the present, volatility has only just spiked above 7% twice, spending most of it’s time below 5%. Even the large boom and bust in price at the end of 2018 seems tame compared to the early years. The trends show the price going up over time, and volatility going down. The more actual use the coin has (people saving and buying with bitcoin), the percentage of people entering the space to use it the way it was intended increases, the percentage of “stock traders” declines. And as more capital enters the space, the less influence whales have (because the current against which they swim is getting stronger). And as the price stabilizes, traders will become less interested. There is a critical point where this becomes a negative feedback loop. I could be wrong, but the idea is at least founded in reality, and it would solve the unit of account issue if the price could stabilize to within a few percent per year. Similarly, as a store of value, bitcoin becomes more viable in this scenario. This is coupled with the fact that although bitcoin is somewhat inflationary now as the supply is increasing (bitcoins are “discovered” as rewards for mined blocks), the amount of discovered coins are cut in half every few years. This “halving” is logarithmic, meaning eventually the amount of coins discovered is infinitesimally small, and total supply will asymptotically approach 21 million coins (the maximum supply that we will ever see). This model of supply is actually meant to mimic gold because it’s a well-known store of value and monetary device throughout history (though it is not easily divisible, and not as portable as bitcoin). In both bitcoin and gold, mining is more fruitful in the beginning, and as we extract the low-hanging-fruit, mining requires greater effort and yields less return. World population is increasing which leads to bitcoin becoming deflationary in the future if demand continues (the supply won’t increase beyond 21 million). And, I argue that it will become more valuable in time due to the network effect as bitcoin use becomes more widespread (the value of being able to exchange with more people anywhere, any time, and without permission from anyone). This is a positive feedback loop, and shows how bitcoin is deflationary long-term. While deflation is generally considered negative by economists, the main reason is based around debt which isn’t possible in the same way with bitcoin because bitcoins cannot be created out of thin air like fiat currency. The discussion of deflation vs inflation is an important one, and bitcoin’s monetary policy is an outlier compared with national currencies which are typically inflationary. The US dollar for example averaged 3% inflation since the year 1900. That means that over the last 100 years, a dollar has lost over 95% of its purchasing power. You could buy 95% more stuff with $1,000 last century, or, saving $1,000 from 100 years ago would buy you 95% less stuff at present. Put another way, purchasing power is cut in half after about 25 years, a concern for anyone retiring for over 20 years with a fixed retirement sum. Some other national currencies have higher inflation rates, and there are numerous cases of inflationary spirals over the years. A few examples include Germany 1923, Hungary 1945, China 1947, Vietnam 1988, Peru 1990, Yugoslavia 1992, Zimbabwe 2008, and right now in Venezuela 2018. Entire countries of people have lost essentially all of their money, and it keeps happening over and over. A wise man would tell you it’s dangerous to say “it could never happen here”. *UPDATE: Turkey is also now in financial crisis. This is our money with which we hold and exchange value, our earnings, our savings, our livelihoods. Maybe it’s time we had, at least, another option outside of government control. An option that governments can’t destroy through mismanagement. A neutral option that ignores all borders, is open to everyone, and can be accessed anytime from anywhere.
The Fear of “Hacks”
It’s a very real threat to have all your money stolen, if your bank was robbed you are protected by FDIC (in most cases only up to $100,000). The vast majority of coins that have been stolen have come from hackers attacking “exchanges” and getting away with millions. These exchanges are websites where you can trade bitcoin for other crypto-currencies (or “alt-coins”). You can also buy and sell bitcoin on them, and subsequently people end up storing a lot of coins on these exchanges, and the exchanges hold the “private keys” so they can execute trades. Cryptographic private keys are analogous to a key that opens a door, or, a key that locks a message in a box before it is sent to the recipient. In our case the door opened allows you to sign your message and spend coins, and the message is your transaction on the bitcoin network. Anyone with your private keys can spend your coins. Exchanges are a honey pot of thousands of private keys that represent a lot of money. If a hacker can break into the exchange and steal the keys all at once, their work will pay off. This is why any crypto guru will advise you not to store large amounts of coins on exchanges, and rather transfer them in your own wallets where you hold the private keys. The mantra is “your keys, your money; not your keys, NOT YOUR MONEY!” Of course your own computer can be hacked, but you are not as big a target as an exchange which may hold vast sums of money. There are also some pretty safe ways to store your coins if done right. Centralized exchanges are a necessary evil for many people because they facilitate acquiring and trading coins easily. But decentralized exchanges are becoming more common because they allow you to trade while keeping your coins in your control at all times. They need some work and more users, but it’s a promising solution to this problem. Summarizing the above, the big hacks you read about are virtually eliminated if your keys are in your control and you keep them safe.
Transaction fees are generally negligible in a bitcoin transaction, but in many ways “fees” are holding us back. Interestingly, this is a symptom of being in the very early days. Firstly, there is a lot of work on “scaling” crypto-currencies (making fees even lower than they already are and increasing transaction speeds). This is just an engineering problem, and many people are working on solving it in many different ways. Other currencies like NANO or IOTA have different underlying tech and have zero fees and instantaneous transactions. In fact, most fees people encounter aren’t fees from bitcoin transactions; instead, they get hit with fees when exchanging between national currencies and bitcoins. In order to electronically trade USD($), EUR(€), or YEN(¥) with bitcoin, we need to hook into the closed-off for-profit banking network and we need third-parties to do so (and they take their cut). But even these fees could be avoided in time. For example, you can buy bitcoins with cash directly from a person (localbitoins.com). And, it might seem distant, but in the future you may end up receiving bitcoins as your salary, from a friend, or from accepting them in your place of business. Likewise you can spend your bitcoins directly to other bitcoin users. Getting coins directly eliminates all the exchanging and associated fees because once your money is on the bitcoin network, fees will be negligible (especially as these networks evolve).
Right now it’s easier than ever to acquire some bitcoin. People can download “Coinbase” or “Square App” on their smartphone and purchase some using a credit card in a few minutes. Depending on which service you use and how much you want to buy, you may need to send a picture of your license for KYC regulations. However, as I mentioned above, there are risks to storing all your coins on exchanges, especially with large amounts. I always recommend transferring them to a wallet where you control the private keys. But using wallets and storing private keys (and “seeds”) securely, is not as straightforward as we would like. This is a major factor holding back adoption, because if it’s not easy to use, people will consider it too much effort. The next post in this series digs into wallets and storing your coins.
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