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kneehighs

Blockchain Revolution: from the internet of information to the internet of value

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@kikepa?  I had to go through your post history to see if that was really you.  Good to have you back.

For what  it's worth,  my interest in crypto/blockchain has evolved into 80% managing risk by using Technical Analysis.  20% news/tech by following very select twitter accounts from the likes of @TuurDemeester, @TechBalt, @WorldCryptoNetwork, @WhalePanda and a few others.  There's a couple of Telegram groups I belong to as well.  Mainstream Media is my last resort and is assumed  a contra-indicator to price action.  By the time it hits mainstream media, it's probably already too late.

Nick Szabo is far and away the best reading for technical/philosophical/legal things about Bitcoin.  His knowledge of bitcoin technology AND  money is unparalleled.  He denies being Satoshi Nakamoto,  but his BitGold blog posts from his blog unenumerated leave  others wondering.   

In the meantime, Billionaire Novogratz called a bottom, 40+ year trading veteran Peter Brandt called a "Compound Fulcrum" bottom, and since the Dec/Jan bull run Bitcoin has never dipped below 100 Billion market cap (6K range).  If one enters now, the risk one won't break even gets lower as time goes on.  As Bitcoin ROI has outperformed Apple Stock for 6/7 years now, it's probably a good time put some $ into it now.  

DISCLAIMER: This is not financial advice.  I am not a financial advisor.  If you want advice about wearing  heels though, I can show you by my actions.  

Edited by kneehighs

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Yesterday marked 10 years from when Satoshi Nakamoto announced the creation of Bitcoin to the cryptography mailing list. This marked the birth of a new monetary policy with the power to change the financial and technological worlds for decades to come.

Here are my top 10 reasons why I believe Bitcoin has the power to become the next Global Reserve Currency. I don't believe in it because it's cool (it's not). I believe in it because it has the power to invert existing monetary systems around the world on their head. It could mark a digital wealth transfer much like the information age changed the world as we know it.

1. Money works when it's difficult to reproduce. If the value of gold increases, more can be mined without limit (save natural limits). If the value of the US Dollar increases, the Fed can print more without limit.

2. Bitcoin has a fixed production limit of 21 million. Even if the value of a Bitcoin grows to 1 million per Bitcoin, more can not be mined in response. It's 21 million. Period.

3. Bitcoin has a fixed production schedule that is transparent. That production will decrease with time. The # of Bitcoin mined gets cut in half every 4 years. From 2009-2012, 7200 Bitcoins per day were mined; from 2012-2016 3600 per d2ay; from 2016-2020 1800 per day, from 2020-2024 900 per day. Around the year 2140 the last Bitcoin will be mined.

4. Bitcoin is scarce. Bitcoin gets more scarce every 10 minutes. As demand of a scarce object increases, it's value will grow. New institutional demand will grow with Bakkt, Eris X, Fidelity, Coinbase Custody, and more. These organizations have created infrastructure for institutional money to invest in Bitcoin with regulatory clarity. Ultimately there will be Trillions of dollars competing for the 21 Million Bitcoins.

5. Bitcoin has the highest yield of return per unit of risk across all asset classes.

6. "But it's too late get into Bitcoin!" It's actually less risky to get into Bitcoin now than it was in before 2018. The Lindy Effect states, "every additional period of survival implies a longer remaining life expectancy." With each new block mined every 10 minutes, with over 200 companies working on secondary layers of Bitcoin now, with the best programmers and best engineers in the world it's life expectancy grows more secure over time.

8. "But no one takes Bitcoin though!" Bitcoin is still early in the evolutionary process of a new money. Bitcoin is a synthetic commodity that has properties of money. It will go from collectible to Store of Value to Medium of Exchange to Unit of Account. Once it's optimized as a Store of Value it will move to a Medium of Exchange. Bitcoin is not competing with Venmo, it's competing with existing monetary policy of Central Banks, Investment Banks, and Retail Banks. Next.

9. "But Bitcoin is volatile!" The only way Bitcoin can go from worthless to worth a lot, is to endure volatility. Overall, Bitcoin is a net positive asset. As Bitcoin's traded volume grows, as it's order books become more abundant, as there's more infrastructure, as there's greater security and as it's market cap increases, it's volatility will decrease.

10. "But Bitcoin can be hacked!". Actually, the base layer ledger of the Bitcoin blockchain has never been hacked. Secondary applications have, exchanges have been hacked, but not the Bitcoin blockchain.

Onwards and Upwards (In heels)

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As much as I see the potential, to the regular guy on the street, Bitcoin doesn't mean jack.They can't go buy a six pack of beer at the local gas station, or the bar, so it's worthless to the local yocal. Walmart doesn't accept it at the cash register - - - 

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That’s true.  Bitcoin isn’t a good medium of exchange right now.  And it may never be.  I like to believe it’ll go from collectible to store of value to medium of exchange to unit of account.  It’s still optimizing in the store of value stage, which explains the institutional infrastructure like Bakkt, Eris X, Fidelity, and Coinbase Custody etc. have been built.  

 

To improve it’s function as a medium of exchange, Secondary layer applications like Lighting Network address that.  Bakkt for example partnered with Starbucks and Microsoft.  Eventually they plan to enable exchanging Bitcoin for a cup of coffee at the point of sale (on an off chain secondary layer).

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"It's still early in the lifecycle of digital assets but there is a compelling case for investors to allocate some portion of their portfolios to this new asset class. A lot can happen over the next few years, but remember: Diversification is a free lunch and asset allocation is all about the long game."

"Looking at the results, it appears that portfolios containing an allocation to digital assets performed even better than the global 60% equities/40% bond portfolio, on both an absolute and risk-adjusted basis."  Pensions and Investments.com

It should be noted that David Swenson, who took the Yale Endowment fund from 1B to 29B just invested 400M into 2 crypto Hedge Funds.  Harvard, MIT, and Stanford soon followed suit.

Win the decade, not the day; for history has been unkind towards those that bet against new technology.  

 

 

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Hmmm...Bubble Memory, space stations, supersonic flight...

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14 hours ago, kneehighs said:

That’s true.  Bitcoin isn’t a good medium of exchange right now.  And it may never be.  I like to believe it’ll go from collectible to store of value to medium of exchange to unit of account.  It’s still optimizing in the store of value stage, which explains the institutional infrastructure like Bakkt, Eris X, Fidelity, and Coinbase Custody etc. have been built.  

 

To improve it’s function as a medium of exchange, Secondary layer applications like Lighting Network address that.  Bakkt for example partnered with Starbucks and Microsoft.  Eventually they plan to enable exchanging Bitcoin for a cup of coffee at the point of sale (on an off chain secondary layer).

Well - - as I have joked before - - I live in the sticks. Starbucks is 20 miles away, (I rarely go there), Microsoft is just the OS that comes on a computer, and folks still use cash. Hell, I can't even buy good beer in my neck of the woods. I inquired at the local bank if they were dealing with crytocurrencies such as bitcoin, and the response was ""What's that??""

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I'll stay with the stock market....  thanks....   sf

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Mid-term risk to reward analysis of Bitcoin.

If you buy Bitcoin at 5200 your downside is 50% even if it drops to 2700

(you can add more on dips to 4400-3400)

Potential Upside is 100% @ 10,400 1:2

Potential Upside 200% @ 15600 1:4

Seems like a good  Risk to Reward ratio for me!  Especially over the 10 year long term.

p.s. A non Main Stream Media (MSM) thread on the origins of Bitcoin.   Authored by Phil Wilson.

DsET_UfX4AEtQ7N.jpg-large.jpeg

Edited by kneehighs

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My current analysis of the crypto market bottom, which is defined by Bitcoin price action.   This is my analysis,  so do what you will with it. Primarily, b/c bitcoin is the foremost gateway to crypto.  

This is the definition of Brave New Coin.  It's an index from 6 top exchanges.  It's a weekly chart.  Log scale. 

Compare the bear market capitulation of Jan 2015 with what the market needs now to capitulate.  True capitulation hasn't happened yet.  More blood to come.  Period of accumulation will follow true capitulation.  Will probably have to wait another 4 years before another period of accumulation opportunity will present again (at next bitcoin halving).  

NOTE: resistance of the 2013 bubble occured at it's peak price of $268.   That's the price at which the bounce off the support line in September 2014 occured.  If same holds true, I'm prepared for bitcoin to hit around $1100-$1200 (All Time High of previous bubble) before true capitulation occurs.

I started dollar cost averaging in a bit too early  (back in Q2 2018) on Bitcoin.  Always had a sell limit order in though to manage risk.  Oddly, my sell limit triggered when btc broke 6K while I was on a plane.  

UPSIDE NOTE: oversimplified.  Resistance turns into support.  This means the 2017 all time high of 20K will someday be support to be broken before true capitulation occurs in the next bubble pop.  Can you imagine  how high bitcoin will go in the bull run?  It'll be driven by Wall Street Institutional money.  The gains will be astounding. 

2135493718_Screenshot(327).thumb.png.f7d99a344687341128b6a277315975ed.png

Edited by kneehighs

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So I'm still 100% in on Bitcoin.  I firmly believe in it's economics. 

1.  Nothing has value outside the consciousness of men. 

2.  Michael Craig Martin's "An Oak Tree" (see screen shot) holds value to art community different from it's value to water deprived communities.  Conceptual art gets value not just through the aesthetic experience of beauty, but through it's cognitive value. Contrast value of "glass of water" to communities that suffer a lack of healthy drinking water.

3.  The same holds true for Mediums of Exchange, Stores Of Value, and Units Of Account.  Value changes by context and subjective valuation of the consumer.  

4.  Bitcoin holds value because there is an emerging institutional consensus surrounding it's value.   Fidelity, the owners of the The New York Stock Exchange (ICE) started BAKKT for institutional clients, and ERIS X started as a competitor to BAKKT.   Unlike the 2015-2017 bitcoin bull market, regulatory compliance for institutional money on boarding now exists. The competition for limited bitcoin after the 2020 halving will be tremendous. Demand will rise, supply won't.

5.  Institutions drive 60-70% of all volume/price action in traditional markets.  This volume imho will also drive a new behemoth bitcoin bull run in 2020-2021.

6.  Irregardless of bull runs, bitcoin holds value as "hard money".  Unlike other Mediums Of Exchange where supply can be increased in response to an increase in demand, bitcoin holds value because new supply can not be inflated to meet new demand.  In 2020, the number of bitcoins mined will get cut in half.  

7.  I'm looking for price to move above the 200 Day Moving Average and for the 50 Day Moving Average to cross over the 200 Day Moving Average.  To me, this will mark the beginnings of the next bull market.  This strategy also holds true for the $SPX.  (see screen shots).

8.  La Belle Époque, the Gilded Age, Pax Brittanicca marked an era of unprecedented prosperity in Arts & Culture.  These era correlated w/ an Int’l gold currency standard of over 50 countries.   Trades were easier to settle across uniform weight of exchange.  Bitcoin is similar,  but better than gold as it can not be confisicated.  

9.  Bitcoin is an equity based growth system based on savings.  It's not a credit based growth system based on fractional reserve lending.  Born in the internet.  Made for the internet.  It's the future for sure.

 

Michael Craig Martin %22An Oak Tree%22.png

Screen Shot 2019-02-14 at 12.32.01 PM.png

Screen Shot 2019-02-14 at 12.27.03 PM.png

Edited by kneehighs

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JP Morgan is starting its own cryptocurrency, JPM coin, to speed up the transfer of money around the world by bypassing the traditional wire transfers and clearing houses.

Consumers won’t be able to buy it, though. It’s for corporate transactions.

And it’s no good as an investment because it’s a stable coin concept whose value is pegged to the US dollar.

https://www.cnbc.com/2019/02/13/jp-morgan-is-rolling-out-the-first-us-bank-backed-cryptocurrency-to-transform-payments--.html

@kneehighs The question I have about the state of bitcoin now is what are the emerging markets, if any, for bitcoin that will drive investment into the market?

The Chinese government slammed the brakes on their citizens’ export of currency via bitcoin, so that shut off one large source of demand.

Global financial troublespots like Venezuela, Iran, and Russia, and a certain volume of illegal transactions like the black market will always be there, but they’re small potatoes, relatively speaking.

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1 hour ago, alphax said:

JP Morgan is starting its own cryptocurrency, JPM coin, to speed up the transfer of money around the world by bypassing the traditional wire transfers and clearing houses.

Consumers won’t be able to buy it, though. It’s for corporate transactions.

And it’s no good as an investment because it’s a stable coin concept whose value is pegged to the US dollar.

https://www.cnbc.com/2019/02/13/jp-morgan-is-rolling-out-the-first-us-bank-backed-cryptocurrency-to-transform-payments--.html

@kneehighs The question I have about the state of bitcoin now is what are the emerging markets, if any, for bitcoin that will drive investment into the market?

The Chinese government slammed the brakes on their citizens’ export of currency via bitcoin, so that shut off one large source of demand.

Global financial troublespots like Venezuela, Iran, and Russia, and a certain volume of illegal transactions like the black market will always be there, but they’re small potatoes, relatively speaking.

On the upside, JP Morgan’s Coin could be a “gateway drug” to the crypto market in general for institutions.  On the downside, JP Morgan’s coin is centralized, closed source, inflatable since it’s on par with the $USD, and it’s confiscatable.  It’s the antithesis to the unconfiscatable, decentralized, open source monetary system that Bitcoin creates.

Regarding China, the government outlawed exchanges, but not the ownership of bitcoin.  As far as I know P2P is still legal in China.

Regarding which markets will drive investment? Institutional money IMHO.  Just google Bakkt, Eris X, Fidelity, TD Bank, Yale Endowment. 

My argument is that Bitcoin doesn’t have to be a Medium Of Exchange or Unit Of Account to create value.  If you take the combined market cap of the top 5 payment processors (Amex, Square, MasterCard, Visa, and PayPal) you get 700 Billion total.

Gold, which acts as a Store Of Value, on the other hand, has a market cap of 7 Trillion.

As a Medium Of Exchange, I’m looking to the Bitcoin Lightning Network to create wider adoption for smaller payments.   Lightning will divide 1 Bitcoin into 100,000,000 Satoshis.  Google Blockstream.  They have a satellite that enables Bitcoin transactions independent of governments and corporate backing.

 

 

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On 9/23/2018 at 9:33 PM, Bubba136 said:

Wow, that’s saying a lot!   

Aye, that was a bit wordy indeed.  :)

Fortunately, it's taking off like wildfire.  :)

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From a technical perspective, I've been bullish on Bitcoin as a long term investment through the whole bear market.  Here's my analysis of why I think Bitcoin will hit an All Time High of $70,000+ per Bitcoin in Q4 2021.  This isn't gospel.  It's not absolute truth.

If history repeats itself (Fear and Greed in human psychology don't change), when Bitcoin breaks it's former All Time High (ATH) of 20K, irrational exuberance will kick in.  The Alt Coin Market Cap historically goes parabolic shortly thereafter.  So if one is looking for high risk large % gains in small cap coins, that's a good time to apply disciplined investing strategy.

Bitcoin Cycle Chart.jpg

Edited by kneehighs

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I wish you the best....  I am an aggressive investor, but bitcoin not for me, wayyyy to volatile...    sf

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Do something safe with your money - take it to Vegas and put it all on red.

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1 hour ago, SF said:

I wish you the best....  I am an aggressive investor, but bitcoin not for me, wayyyy to volatile...    sf

Similar sentiments back at ya for whatever more conservative investments you've chosen for yourself.

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roger, wilco....   sf

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I personally don't believe Bitcoin needs to be adopted as a Medium Of Exchange to have a valid use case.  Why?  Take the combined market cap of the top 5 payment processors (Amex, PayPal, MC, Visa, Square) and it's only 700B.  Gold is 7T.  With that said, AT&T today announced they will accept Bitcoin as payment.

https://www.theblockcrypto.com/tiny/mobile-carrier-att-will-now-accept-payments-in-crypto/

Volatility Is Normal For Price Discovery With Store Of Value Candidates

Seems a common fear is Bitcoin's volatility.

If you go back to barter times, before money existed, there was a problem. It's called DOUBLE COINCIDENCE OF WANTS. Let's say I have a loaf of bread. And you have tomatoes. I want your tomatoes, but you don't want my bread. You want eggs. In barter times, I'd have to play the law of numbers, approach prospective egg holders for trade for bread, negotiate the value of bread vs. eggs, and then go back to you for your tomatoes (provided you hadn't already traded them). This whole process is inefficient and why money was invented. It increases efficiency of trade. Eventually groups of people in a free market will decide that one collectible, usually a commodity, makes the best Store Of Value. 

With time, some collectibles in a group become more widely demanded than others.  Some are more divisible into smaller units without loss of value, some more durable over long periods of time, some more transportable over large distances. All of these advantages make for greater marketability.  As experimentation with Store Of Value Candidates grows in groups of barter societies, SOV candidates will experience volatility as it's portability, divisibility, and durability is tested in the market.  The more durable, portable, and divisible the collectibe aka Store Of Value candidate is, the more marketable it becomes.   The more marketable it becomes, the more likely it becomes a stable Store Of Value and Medium Of Exchange for that group (as consensus grows).

My argument is BItcoin's volatility stage is no different from any other collectible as it evolves in value.  

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Facebook is coming out with a cryptocurrency.  At risk of oversimplifying, I think this will help on board people to crypto like the Petro did in Venezuela.  When people learn that FB coin is merely a derivative of a broken fiat monetary policy (easy money, easy to inflate, credit based growth system), they will eventually migrate over to Bitcoin (hard money, hard to reproduce, equity based growth system).  

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Really don’t care what money people do as long as they don’t mess with my BelgianFrancs!

;-)

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On 6/9/2019 at 10:31 PM, kneehighs said:

When people learn that FB coin is merely a derivative of a broken fiat monetary policy (easy money, easy to inflate, credit based growth system), they will eventually migrate over to Bitcoin (hard money, hard to reproduce, equity based growth system). 

I think Facebook's Libra will be:

net good for people in developing countries, for Bitcoin (for reasons quoted above), free choice about money (people can choose beyond FIAT). 

net bad for MoneyGram (that's why Ripple invested 50M), Western Union, and traditional banks.

50/50 it doesn't get launched.

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On 6/21/2019 at 1:23 AM, kneehighs said:

50/50 it doesn't get launched.

With the general attitude toward Facebook along with some other big tech by the Government, I suspect it won't get launched. If it does, I'm inclined  to think it won't last.

 

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On 6/23/2019 at 9:10 PM, Heelster said:

With the general attitude toward Facebook along with some other big tech by the Government, I suspect it won't get launched. If it does, I'm inclined  to think it won't last.

 

Agreed.  50/50 it gets launched.  Part of me thinks it would be beneficial to economies in developing worlds.  It would "bank the unbanked".

Too bad it's a derivative of broken fiat monetary systems. 

Sound/hard money that preserves the wealth of it's savers--instead of fractionally reserving it, instead of inflating it away, instead of printing more to pay for wars-- is where it's at (for me).

Edit, did you see the BIS response in the Financial Times, lol?  Agustin Carstens of BIS (The Central Bank of Central Banks) no less.  Governments & tech companies want to code the global standard of international settlements.  Nobody wants someone else's engineers.  

But everybody could benefit from a global standard that nobody controls. That might just be the most valuable feature. 

That is Bitcoin. 

ft bis.jpg

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D-Y7J45XkAMfWB6.png

Edited by kneehighs

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On 5/17/2019 at 8:09 AM, kneehighs said:

From a technical perspective, I've been bullish on Bitcoin as a long term investment through the whole bear market.  Here's my analysis of why I think Bitcoin will hit an All Time High of $70,000+ per Bitcoin in Q4 2021.  This isn't gospel.  It's not absolute truth.

If history repeats itself (Fear and Greed in human psychology don't change), when Bitcoin breaks it's former All Time High (ATH) of 20K, irrational exuberance will kick in.  The Alt Coin Market Cap historically goes parabolic shortly thereafter.  So if one is looking for high risk large % gains in small cap coins, that's a good time to apply disciplined investing strategy.

Updated my chart from May. 

The black vertical lines indicate Bitcoin halvings.   

When Bitcoin halves, Bitcoin production gets cut in half.   This should happen again in June 2020.

Historically, Bitcoin goes parabolic the year after. If history repeats itself, the charts would suggest Bitcoin clearing 20K around Q4 2020.  

When Bitcoin clears former All Time Highs, the alt coin market historically goes parabolic too.  

Anything could happen.  Institutional money will be involved this time.  It's a good start for planning.

 

BTC halvening.jpg

Bitcoin Cycle Chart.jpg

Edited by kneehighs

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Within the last week, the President of the United States, The Secretary of the Treasury, and the Chairmen of the US Federal Reserve have all publicly discussed bitcoin/crypto.

Bullish on Bitcoin.  Bearish on crypto (until Bitcoin breaks 20K).

EDIT: yesterday the US Sec of the Treasury Mnuchin, “if the US doesn’t increase its debt ceiling, then by September the US will run out of money to fulfill it’s obligations”

WTF???

Yes, Mnuchin said that.  We could be in for a Wall Street (fractional reserve) versus Silicon Valley (fully reserved banking) showdown sometime soon (5-15 years..who knows). Cryptocurrency will be at the forefront of the next big global risk event.

The US Dollar backed by the US Govt has more debt than it can service.  Facebook and Google with fully reserved cryptocurrency’s could wind up being the next big global behemoth Banks.  They’d have the AML/KYC requirements for regulators met to the maximum.

So if the US doesn’t want to allow it’s citizens to participate, FB with it’s global reach and Swiss based Libra, will just leave the US out.  The US could be left behind.

 Will the US give up some of this control to Silicon Valley for a backdoor into what could be the next global behemoth banking system?  Or will it support Wall Street (again) and it’s system which has lead us to where the US is today?

Ultimately Bitcoin with no CEO control, no government control, and based on sound money is the solution.

 

 

 

 

 

 

Edited by kneehighs

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Anyone else in here read Ray Dalio's Paradigm Shift?  He's predicting global currency devaluation in the next paradigm shift.

https://www.linkedin.com/pulse/paradigm-shifts-ray-dalio/

"It is also a good time to ask what will be the next-best currency or store hold of wealth to have when most reserve currency central bankers want to devalue their currencies in a fiat currency system."

Dalio concluded Gold will be a solid Store Of Value in the next paradigm shift. 

Then there's Bitcoin.  It's not FIAT.  It's not controlled by any government.  It can't be controlled by any government.  It's the future.

Buy Bitcoin!  (I've got limit buys laddered between 8.5-9K).

Edited by kneehighs

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I have a friend who called me before I retired telling me he had bought some rural land in Vermont largely with money made from buying Bitcoin. Just another way to invest. I would, however, offer one word of advice when contemplating any investment involving Facebook or Google: RUN!  Both these companies have shown their disdain for the privacy of ordinary people and have helped make the City of San Francisco unlivable for average folks. Better than 44,000 evictions since 1991 is evidence of that. No wonder the homeless problem is at epic levels there. HinH

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