I’ll be brief in this update. Don’t listen to the FUD about Bitcoin SV. Crypto news is mostly poor reporting and hyped rumors for manipulation. Moderate your BSV bags to your own comfort level and ignore the noise.
Even the 4chan trolls are starting to get it. You don’t have to like Craig Wright to get the message his original design of Bitcoin is the only one that works.
To that point we have another record block on the BSV test network:
Looks like we have another world record on the #Bitcoin#BSV STN Nearly 4 million transactions! 3,983,283 to be precise! Block number #4775! 780mb. pic.twitter.com/UCQO6TzO9E
This test network result shows what’s possible with the original Bitcoin software and destroys competitive narratives that Bitcoin can’t scale. As transaction volume increases miners will be incentivized to upgrade their network to remain competitive. This is how Bitcoin takes over the world.
Then we have the countdown to the Tulip Trust.
1,100,111 Bitcoins in the Tulip Trust and now only 7 weeks until all remaining Bitcoins from the Trust are returned to Dr. Craig Wright according to Trust documents: pic.twitter.com/zqg1j30Lln
Caveats: This is not financial advice. Risk management is key to long term success.
BSV has begun to decouple from BTC but has not broken free yet. The BSV chart is less than a year old and therefore using TA can be difficult and unreliable given volatility and limited history. Technicals have not fully digested fundamentals yet. However, the technical view is beginning to gain clarity.
Trigger warning for BTC fans: fundamentally, BSV is superior to BTC in every way. The market is slowly catching on. Look for the charts to reflect this over the next year.
For fundamentals look at bitcoinblocks.live and coin.dance. Both sites tell the story of BSV growing in transactions and the current disparity in price.
Taking the data from coin.dance and using it to calculate the Fair Market Value price of BTC, BCH and BSV we come up this custom price model:
In the model above I am using hash, transactions and blocksize as three key metrics for arriving at Fair Market Value.
During the past 30 days BSV has been in the 40-50% range in percent of overall transactions and block size measured against BTC and BCH yet has a very small percent of overall hash . If we adjust the market prices to reflect the data from coin.dance we have new FMV prices.
If we accept this premise, given today’s metrics BSV is undervalued by 25x! This represent the investment opportunity at hand in BSV.
As transaction and blocksize metrics continue to tip more in BSV’s favor, which is likely as more data is being stored on BSV via apps like WeatherSV, Preev and a new Air Quality tool, the miners will be forced to move hash to BSV to be competitive. This movement of hash will be the confirmation of a massive shift from BTC to BSV. The setup for this shift in hash is in motion and gaining steam but is not yet fully recognized by the market.
Being ahead of this move in BSV may be the investment of the decade.
Below is a link to this content posted on the BSV blockchain. The same content above is free. There is a $1 moneybutton paywall to get the TA section via the link below.
I am paywalling some info on BSV not to make money but to show the power of BSV and encourage anyone on the fence to start using BSV instead of reading about it. Skin in the game.
A position is not an opinion. An opinion is not a position.
-Jesse Livermore
If you really want to read the TA let me know in comments. I may make it available here for free after a week has passed.
Learn to be indifferent to what makes no difference.
-Marcus Aurelius
In this post we will take a look at how to identify noise vs signal in Crypto.
A signal has credibility while noise begs for attention. Signals whisper to the tribe while noise promotes itself. A signal will cause you to take initiatives while noise will want you to join the cause.
An easy way to identify signal vs noise is signal requires you to think. Signal has substance. Signal is challenging. Signal isn’t easy.
Noise is like junk food. Noise is designed to trigger a dopamine response. Noise is emotional. Noise is simple. Noise is repetitive.
In 2009 there was only Bitcoin. Since then over 2,000 coins were released and Crypto peaked at a market cap just under 1 Trillion dollars. Today the market cap for all of Crypto is less than 250B. The classic market bubble and correction.
After a bubble pops the only survivors are those that prove themselves economically viable.
The true market cap of all "crypto currencies" equals the market cap of BSV.
Keep your eye on what emerges over the next year. Noise will kill your portfolio. Sometimes popular well known personalities show they built their following broadcasting noise. Here is an example this week:
Tone Vays charges $2,400 an hour. Ok, fair play if you can get it. But then he says:
I honestly don't know ANY facts because i never bothered to look at them as it should have been beyond obvious from the start that is not Satoshi
— Tone Vays [Bali – Financial Summit] (@ToneVays) October 13, 2019
Tone Vays charges $2,400/hour and then states “I honestly don’t know ANY facts because I never bothered”. This is a noise maker in an echo chamber. He has 193,000 followers on Twitter and is teaching others how to invest.
Here’s a LITERAL noise maker. A Craig Wright heckler from this week’s CC Forum.
Farmer Craig, Pumpkin Man Craig, go back to your farm, your pumpkins, and your tomatoes, and grow a superfarm. pic.twitter.com/t8w3jBOC9E
This screeching attack is an example of the current conversation in BSV/BTC. I am exhausted engaging with the anti-BSV crowd. It’s no longer a debate it’s wrestling a pig. You both get dirty but the pig likes it.
Enter the Hopium Dealers
There is no shortage of hopium dealers dishing out forecasts of six figure BTC. Many of these “analysts” have 50k+ followers on Twitter. Take a moment to see if these Nostradamus wannabes ever address the fundamentals behind their charts. You’ll see it’s speculation based on new money entering or the halvening causing a doubling of their HODL stash. It’s noise and many fall for it.
Meanwhile, the signal is that BTC has been a zombie coin for over a year. You wouldn’t know this from the talking heads on CNBC but you have to remember, CNBC makes money by amplifying noise.
Also be wary of BSV noisemakers. There are many of them.
The most valuable thing I learned in Crypto is I don’t know anything. Early in my Bitcoin journey I believed that Nick Szabo was the father of Bitcoin. It was only once I realized I knew nothing I could research for truth. It wasn’t easy letting go of what I “knew”.
“In the beginner’s mind there are many possibilities, in the expert’s mind there are few.” -Shunryu Suzuki
Most self identified crypto traders are stuck in their Szabo/Lightning/altcoin phase. They stop learning. They dig in. They identify with a camp and relentlessly attack anyone who disagrees. It’s primal tribalism via the Internet broadcast on Twitter 24/7.
If you aren’t with us, you’re against us.
The majority of Crypto investors are disconnected from reality. Scaling matters. Economics matter. Business matters. Law matters. Governments matter. The Bitcoin Whitepaper matters. This is signal.
Twitter polls don’t matter. This is noise.
In the past year I’ve learned more about Bitcoin than I had in the previous five years. It is crucial that you filter noise. If you can’t filter noise then you’ll start believing noise IS signal. You’ll stop learning just like Tone Vays. You’ll fall behind. You’ll get rekt.
What you know can be dangerous if it keeps you from learning. I’m not ashamed that I had it wrong regarding Szabo. I hadn’t learned to filter noise. What’s shameful is to shut down your brain and live for attacking people that disagree with your view. Seek and value truth above all else, including your ego.
The noise will eventually fade in crypto and only signal will be left. That signal is BSV.
What I consider to be truth now may change in the future. That’s OK. It’s called learning.
I will endeavor to have my future content focus on signal.
As Q4 gains steam I looked back at my 2019 predictions. In hindsight, I could have been more specific with my targets but overall I’d grade myself a B-. S&P can still correct, real estate is getting soft, Gold pumped then retraced, Mueller was a nothing burger, Crypto is a still a mess.
The BSV CG conference last week in S Korea provided a lot of information to digest. There was over 14 hours of video to watch. Here are the links to the videos:
Day 1 content is aimed at developers. There is a table of contents in the vid description. I recommend watching Dr Craig Wright at the 6:37 mark. Dr Wright speaks about Payment Channels which is tech that can be applied to markets everywhere. Think decentralized, secure and publicly auditable NASDAQs and commodity markets with honest brokers. Schwab has commission free trading. BSV will have commission free everything.
Day 2 has more accessible content for the layman. Threshold signatures and the identity service by Pixel Wallet look VERY promising for providing unique and valuable use cases. Again, recommend watching Dr Wright’s keynote to close out day 2.
Something to note, a week after the conference, the day 2 video has less than 4,400 views. It’s still very early in Bitcoin.
BSV is under the $130 level I pointed to as important to watch. BSV is a buy here, but don’t shit your pantaloons if the downward trend accelerates and BSV sits at $80 for a few weeks. Crypto trading is a bad idea. You probably shouldn’t do it.
BSV visited the low 80’s as the market swooned. If you’re not in BSV now, I’d look for the $100 roll to enter on a trade. This one day pump above $90 could be wiped out quickly. If you are setting yourself up for a position before the fireworks in 2020 then any entry before January is likely good.
The entire crypto market cap is ~230 billion. BSV market cap is 1.5B. BSV is less than 1% of the total market cap. I have never seen a more lopsided investment opportunity. The market is extremely irrational but starting to wake up. Only one coins is addressing scaling in a way that provides a path for mass adoption. Scale or die.
Here’s a simple example on scaling, an application called WeatherSV began posting weather data onchain to BSV a few months ago. WeatherSV was roundly dismissed as a gimmick to support a dying chain. Fast forward to today and Preev is now posting market data onchain. The result is BSV is reliably producing larger blocks with more transactions than BTC from two real world applications. What will the doubters say when there are dozens, hundreds or even thousands of apps storing data on BSV?
Given this oversimplified chart I created:
BitCoin economic model in one chart.
High transactions = low fees, competitive mining, secure chain.
Blockstream is going full steam ahead betting the future of BTC on Lightning Network as they debate making the blocksize smaller and potentially inflating supply to pay the developers. You can’t make this stuff up.
While I leave open the possibility I could be wrong as each day passes it looks like BTC digs their hole deeper and deeper.
The debate rages on in Crypto. Frankly, I’m very tired of it. What is happening in reality is BSV is scaling while the others delay. Let the Twitter wars rage, I am looking at what matters.
Looking forward, the 30 day extension in the Kleiman v Wright court case to negotiate a settlement should be expiring soon. This could be a big event. And, in January 2020 allegedly Dr Wright will come into possession of up to 800,000 BTC which he has previously stated would be exchanged for BSV. Even if both of these events are a bust BSV continues to scale on chain.
Scaling is what matters. BSV is scaling.
BSV is an incredible (but not risk free) opportunity.
Sun Sep 29, 2019 11:21pm ESTComments Off on What I’m Watching
A few things I’m watching for Bitcoin this week and for Q4 2019.
Today, Sept 30, is BSV Stress Test Day. Several services and purpose built tools will be used to flood the BSV network with traffic. The goal is to test the limits of the network in number of transactions and block size hoping to exceed the last stress test which produced 210MB blocks. The test starts at 12:00 UTC and can be followed at https://testbitcoin.live/ and https://bitcoinblocks.live/.
October 1st is Day 1 of the BSV CG conference in Seoul, South Korea. Highlights from this article CoinGeek Seoul about to kick off with major announcements expected include nChain Technical Director Steve Shadders discussing progress towards BSV genesis (the restoration of BSV to original Bitcoin code), a fireside chat with Craig Wright and Jimmy Nguyen and another Hackathon. This conference has been a bullish event for BSV price in the past.
The 30 day extension in the Kleiman v. Wright court case should expire around mid October. Could this case be settled in October? This would remove a lot of market uncertainty and setup a potential movement of the Satoshi coins. I wrote more about this court case in Bitcoin Court Case Settlement.
According to statements made in the court case Craig Wright will have full access to a trust containing ~800k Bitcoins on January 1st. If true, Craig Wright has stated several different outcomes. Early in 2019 he stated he would create rolling iceberg orders to sell BTC while simultaneously shorting. More recently he’s pulled back from that and stated he would give the fortune to charity. Either way, the BTC coins could hit the market via court case settlement, Wright’s sell orders or charities selling gifted BTC for fiat. More important than the supply shock may be what this confirms for the market, the Tulip trust is real and Craig Wright had those Satoshi coins all along.
On the technical side we have another stunning project release from anonymous BSV developer _unwriter called Overpool.
Overpool enables a lot of functionality on BSV, including the ability to do a very high number of transactions between two parties then broadcast the end result to BSV blockchain. In many ways this is a simpler and superior solution compared to BTC’s Lightning Network. Overpool was also released for use on BTC and BCH which is a clever dig as these dev teams likely won’t won’t utilize this powerful tool because it signals issues with their currently selected development paths. Kudos _unwriter on the great work.
I am also keeping an eye on the BTC Lightning Network. In early September a bug was discovered but wasn’t disclosed until this week. The recent news for LN is not looking good. While BSV is stress testing and striving for unlimited scale the BTC scaling plan seems to be sputtering.
First, LN is a fragile centralized system.
Nice paper on LN routing. Findings:
1. Centralization: – 5 nodes participate in 60% of the routes – 10 nodes -> 80% of the routes – 30 nodes -> 95%
2. Hijacking potential: – by creating 5 new channels, an attacker can hijack 65% of the routes – 30 channels -> 80% of the routes https://t.co/iGL9ehcFKw
Second, LN operators keep coins at risk for loss for VERY minimal gains.
Lightning network’s biggest node operator, LNBIG, who has more than $5 million locked up in the network, reported that it only receives about $20 each month in fees. That’s a return on investment of 0.0048%. Bonds do better than that.
Lastly I’m watching the charts. As I wrote about in Bitcoin Trading Signals the Mayer Multiple indicator on BSV is flashing a buy signal six days in a row (including today) ahead of the stress test and CG conference.
Mayer Multiple for BSV has triggered buy signal. This has only been triggered 10 times in 2019 based on daily close. https://t.co/RlAhuRZXls
If you’ve been following this blog for a while you may see that many of the things I’ve been writing about are coming together in Q4 and Q1 2020. However, there are many obstacles remaining. BTC still dominates the market and a continued downward slide may pull BSV with it. Can BSV get out from under the shadow of BTC?
While BSV traffic has steadily increased BSV transactions need a hockey stick chart to be ready for the halvening in mid 2020. Also, governments continue to look at Bitcoin from a legal perspective. Any attempts to outlaw Bitcoin, while likely detrimental to the legislating country, will also hurt adoption short term during a time when rate of adoption is key. BSV is designed to work within the law but it may not matter if a country outlaws all cryptocurrency.
The next six months in BSV should be the most memorable yet. From a portfolio perspective, I remain irresponsibly allocated.
Here is a chart of the Mayer Multiple for Bitcoin SV compiled from daily closing price on coinmarketcap.com. MM in blue, 21MA of the MM in red, Price in yellow.
(caveat: plot points before June contain less than 200 days of historical data)
We are looking for extreme deviations from the mean for trading signals.
There have been 9 days in 2019 the MM was below .7 with prices in the low $50 range. When MM approaches .7 in the future this would indicate time to buy as price is severely depressed compared to the past 200 days.
With the overnight swoon in crypto prices BSV Mayer Multiple is now at .67 which is a BUY signal.
There have been 8 days the MM was above 2.6 with prices above $200. A Mayer Multiple this high is a sell signal. Those sales would have been very near the recent top when correlating with price.
Compare these MM numbers against stocks and you’ll note stocks are rarely below .9 or above 1.3. Crypto is volatile. By charting the magnitude of deviation from a slow moving long term average we are able to evaluate objective data about when is a good time to buy or sell.
Hindsight being 20/20 we wouldn’t have known looking at a price chart these were the bottoms and tops at that time. Looking at price can stir emotions and we know emotions are the death of good trading. However, looking at Mayer Multiple it’s clear that the MM was very far from the mean and should be treated as a trading signal.
The current MM is ~.67. The past 200 days the MM has been higher 80% of the time. Keep in mind the Mayer Multiple is not a fast moving signal and as always balance any trading signals with your own research and fundamentals.
On a personal note, I’m back in Thailand till late October. Here’s a song remix from Thailand’s most popular Reggae band.
There is a court document circulating online that indicates there may soon be a settlement in the Ira Kleiman v Craig S Wright court case.
Ira Kleiman is suing Craig S Wright for 500k Bitcoins claiming his deceased brother Dave was part of the creation of Bitcoin and that Craig S Wright owes Ira half of a Bitcoin trust established prior to Dave’s death. Document below.
What are the implications of a settlement?
First, in a settlement Craig Wright would deliver up to 500k Bitcoins valued at ~$5B. Upon receipt Ira would owe estate taxes on the value received. This would force a sale from Ira of at least 100k Bitcoins and upwards of 250k on the market to cover taxes. Even if completed over the counter this would impact price of BTC quite heavily.
Secondly, many BTC holders have claimed Craig Wright is not Satoshi and does not have access to the coins. If Craig settles and agrees to pay Ira from the Satoshi stash of coins then the BTC narrative about Bitcoin takes a big hit. While BTC has been screaming for Craig to provide proof they may finally get it when he moves those coins. Be careful what you wish for. I don’t see this as a net positive for BTC yet many people are cheering the settlement as it’s a judgement against Craig. They are cutting off their own nose to spite their face. Craig Wright settling and moving the Satoshi coins provides credibility regarding everything he’s said over the years including how to scale Bitcoin, which is in contradiction with BTC.
In reality there was no way for Craig Wright to get the full value of his alleged 1.1M BTC holdings. To sell that many coins would crash the market, so losing a portion may not be so tragic for him.
Third, settling the case puts a lot of drama and stress behind Craig Wright and BSV. It clears the way to continue developing BSV. The drama will continue but the fact Craig Wright moved the coins cannot be taken away.
As mentioned, moving the Satoshi coins as part of settlement is one way a person can prove their identity (or at least possession of coins attached to an identity). If Craig moves the Satoshi coins watch the BTC narrative change overnight. There will be claims that moving the coins is no longer proof Craig is the creator of Bitcoin. The existence of Blockstream and BTC hinges on discrediting Craig Wright and his vision on how to scale Bitcoin. Watch the space for new propaganda campaigns. The propaganda shows the level of fear present for those who took BTC in such a drastic direction that Bitcoin forked twice. This is all coming home to roost now and in 2020.
Settling a court case for a $5 billion judgement is usually bad news. In this case I think this will end up being a positive. The drama fades away, the proof is made public, the markets are free to digest the pending movements of massive amounts of BTC and we can know move forward with new information about who’s who in Bitcoin.
Sun Sep 15, 2019 2:25am ESTComments Off on Assessing My Next Move
BSV is under the $130 level I pointed to as important to watch. BSV is a buy here, but don’t shit your pantaloons if the downward trend accelerates and BSV sits at $80 for a few weeks. Crypto trading is a bad idea. You probably shouldn’t do it.
Bitcoin trading changes you. The swings are frequent and violent. The returns and losses are mind boggling. You’re just not the same after going to the movies and walking out of the theater with a 100% profit and by the time you get home a 30% loss.
You don’t get used to it, you just go numb.
So as I consider my next move I see broken markets everywhere. Gold just went on a bender. Yemens bombing Saudi Arabia points to a Oil pump. The dollar is destroying everything. QE to infinity has stocks on a 10 year straight line pump.
This all has to resolve itself somehow.
Crypto might just be the sanest choice in a crazy world.
Sun Sep 8, 2019 11:36am ESTComments Off on I’m Listening
What do you want me to write about? You pick and I’ll give it an objective treatment. Maybe not a full SWOT but I’ll at least cover Pros and Cons.
Do you have questions? Ask me anything in comments. If it deserves a separate post I’ll do that.
It doesn’t have to be crypto but that’s my wheelhouse. You may not know this but I covered stocks and a bit of tech on iBC before I went full Bitcoin years ago. I also do quite a bit of TA. I stopped doing TA on Crypto as I can’t TA a coin if I feel the fundamentals are broken. It’s like putting lipstick on a pig.
So, give me something to work with.
My portfolio is sideways past couple weeks as I’m still irresponsibly allocated in BSV. I’m 70% confident BSV decouples from the crypto market in extreme bullish fashion in 2020 but in meantime won’t be shocked by a market wide swoon. $130 is still important level to watch which I noted weeks ago.
I am flying to Asia late tomorrow to vacation with a group of friends on a tropical island for a couple months. You know, typical Bitcoiner stuff. But don’t hate me too much, it’s a hellish 23 hours of flights and 11 timezones to reach my final destination. I am going to nearly the exact opposite side of the planet from where I am now so forgive any delays next couple of days.
Thu Sep 5, 2019 11:46am ESTComments Off on Bitcoin is Smart Money
When you hear the term Smart Money what comes to mind? For many, it’s institutional investors with privileged information pulling the strings on market movements. Smart Money consists of the insiders, the mythical perfect traders, that group of people that is always two steps ahead of the average Joe and one step ahead of you.
When I talk about Smart Money that’s not what I’m talking about.
When I talk about Smart Money I’m talking about Bitcoin. No, I’m not saying that Bitcoin is a group of people that is smarter than you. I’m saying that Bitcoin IS Smart Money.
What does that mean?
Human civilization has gone from a barter system to trading seashells, shiny rocks, tulip bulbs, precious metals and now, pieces of paper as money.
Future generations will look back at this time and think trading pieces of paper in exchange for goods is as silly as our ancestors trading seashells.
Our money today is dumb. Really dumb. The Pentagon lost over $1 trillion because they couldn’t keep track of where it went. Enron happens because the money is so dumb no one can verify if audited financials are reliable. Madoff was successful for so long because his clients had to rely on his fabricated statements about their investments. Financial crises in 2009 happen because Lehman and AIG can play fast and loose with financial regulations when using dumb money. Hurricane Maria funds for Puerto Rico were mostly squandered because local government had a windfall of relief money and little oversight. Terrorism happens because any organization can be funded anonymously with a few palettes of paper shipped across borders.
These events caused by the abuse of dumb money impact billions of people. Those who control money with little oversight act with impunity causing massive losses for the public, and they often get away with it.
What doesn’t get measured doesn’t get managed.
The US government prints dumb money every day to cover a multitude of poor decisions. There is no limit. They just print it. PRESTO! More money. An Econ 101 student understands Supply and Demand, so how dumb is that?!?
Every fraction of a Bitcoin that has and ever will come into existence is publicly verifiable. I can buy a coffee with Bitcoin with more privacy than if I use a credit card but I can’t transact in Bitcoin illegally with anonymity. This is very important to understand. Bitcoin is private, but not anonymous. Bitcoin is Smart Money.
So what is Smart Money? Bitcoin is programmable. Here’s a basic example in money terms. When you dine at a restaurant you are presented with a check to pay. That check has a breakdown of your meal plus taxes and usually an optional tip. With our current dumb money this puts a burden on the owner to account for taxes, tips etc. Small business owners spend thousands to be compliant with taxes. With Bitcoin your check can be a Bitcoin invoice where taxes (sales tax, municipal, alcohol tax etc) are their own Bitcoin payments separate from food and tips. Send your Bitcoin transaction and every tax, tip and payment gets paid instantly to the final destination. This relieves a huge burden for the owners and governments. This changes the game. Dumb money can’t do this.
Here’s another example. Many countries have lax or difficult to enforce clean air laws. Why spend money to ensure your car runs cleanly if you can externalize the costs to the environment and other humans? Why would chemical plants handle chemicals cleanly if they can dump it in the river? With programmable money clean behavior can be incentivized. Smart contracts on Bitcoin can meter and enforce compliance and/or fees. Dumb money can’t do this.
Many of the ills in society are because individuals or corporations can externalize costs with very little risk. Banks are routinely fined for different reasons yet they continue the unlawful behavior because in the long run dumb money covers their tracks enough times the occasional fine is not a deterrent. Bitcoin, as a distributed ledger, can keep all transactions in compliance. Dumb money can’t do this.
This works because every fraction of a Bitcoin can be instantly verified anytime. There is no “fake” Bitcoin and there is no way to move a Bitcoin that doesn’t leave a public record. Bitcoin is private, but not anonymous. Bitcoin is a global ledger.
Now imagine Bitcoin everywhere. Gas station, groceries, international shipping and trade. Smart Money that is programmable and instant. Tax relief that is immediate and automatic. Accountability that is public and global. The opportunity to commit fraud disappears. Honest Money means Honest Government. Smart Money means Smart(er) Government. Who doesn’t want to live in a country where the Government is just as accountable as the tax payers?
This is what mass adoption looks like as a world currency. Now, which coins fit this criteria? Scalable, honest, on chain.
Once you understand this capability and the impact you can see this system is inevitable. I can’t say exactly how this will look, and realistically this may take a decade or more, but there’s no going back.
Governments will love Bitcoin because it enables immediate and honest tax collection. Citizens will love Bitcoin because their governments will also be subject to immediate and honest reconciliation of tax spending. No more secret funding or government waste. Now, imagine that! This can change humanity.
A global ledger of value (and information) transfer is the next (r)evolution of human transactions.
