iBankCoin
CAPS LOCK IS CRUISE CONTROL FOR AWESOME
Joined May 7, 2012
189 Blog Posts

DOGE Is Why We Can’t Have Nice Things

DOGE is up 10,000% in 100 days. $1 in DOGE in February is $100 today.

FinTwit has discovered DOGE and they have fallen in love:

DOGE is worth a good laugh but when FinTwit accounts start addressing new people in Crypto about the merits of DOGE I find that to be peak lunacy. I responded with exactly the answer to what he doesn’t understand and I promise you no one watched the video because that would require effort and an investing timeframe beyond 24 hours.

MeekMill is up 15% on his DOGE from yesterday. Congrats to him. But don’t be fooled, this will not last and for every dollar made someone will lose (except the exchanges, they always win and that’s why Coinbase lists so many Shitcoins).

This is beginning to resemble a carnival. “Step up and place your bets. Everyone is a winner!”

Look around for a serious project. One that is attempting to solve the problems that matter.

I have gone from being a crypto champion to a crypto curmudgeon. I’ve seen what’s possible and what’s at stake and I can’t unsee it. At times I wish I could.

If a joke coin like DOGE can threaten the market cap leaders with lower fees and faster transactions what does that say about the merits of BTC and others?

Till this resolves I’ll attempt to regain my good humor and remember, every DOGE has it’s day.

 

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A Primer On ETH

Vitalik Buterin was a barely 21 year old contributor with Bitcoin Magazine when he approached BTC Core about ideas he had for computation on BTC. By this time BTC was under control of Blockstream who were not interested in Vitalik’s project so they blew him off. Vitalik took his ideas and created Ethereum because his project was hamstrung by the limits Blockstream imposed on BTC.

That is the origin of Ethereum in a nutshell. BTC was being throttled and op codes (pieces of script present since the beginning of BitCoin) were being removed so Vitalik created Ethereum to fill the gap with ability to do computations.

I will give credit where it’s due. Creating Ethereum was a bold step from Vitalik and quite an accomplishment for his age. However, Ethereum is fundamentally flawed. Ethereum requires Gas to run computations. ETH has no halting mechanism so the ETH network will run a transaction computation until the gas attached to the transaction is exhausted or the transaction completes. This is very problematic for a global network. Fees are high, scaling is non existent and ETH is flirting with structural changes that hardcore ETH devs are skepitcal will ever launch.

The success of Ethereum and Litecoin led to an explosion of Shitcoins. We have thousands of coins and just as many “Crypto experts” with YouTube channels. The entire market is built on getting everything wrong about BitCoin. I estimate less than 5% of the “experts” understand what they are talking about.

What’s been missing is the knowledge that BitCoin is Turing Complete. Turing Complete means using native BitCoin script you can calculate any calculable number. This includes creating Smart Contracts or any other type of transaction. BitCoin can do it all as originally designed and does it in a way that avoids the problems of Ethereum.

BTC was not a hobby project. It was a decades in the making intellectual masterpiece. Well, until Blockstream got involved.

The problem is that BTC was stripped of it’s functionality, limited to small blocks and saddled with high fees by Blockstream so they could promote their own products. Here is the Blockstream white paper for reference of their vision for BTC in 2014. Enabling Blockchain Innovations with Pegged Sidechains

BSV removed the limits imposed by Blockstream and restored the missing op codes because there was a small group of people who understood the true power of BitCoin. BSV can do everything any other coin can do at low cost, nearly instantly and at large scale.

Do you understand now why I have been pro BSV on this blog through all the bullshit since 2017?

Ethereum is enjoying a lot of publicity and ridiculous gains at $3,000+. However, the truth is spreading about BSV vs Crypto and Ethereum. BSV will soon overtake all of it.

Here’s an Ethereum dev talking about Craig Wright and BSV. It’s a very good collection of videos spanning several years.

My timeframe for BSV assuming dominance is off by more than a year. Meanwhile BTC has gone on a huge run. It’s disgusting to watch if you understand what is at stake: honest money.

Maybe I’m a fool to be optimistic that the game isn’t rigged. Is the idea of a global honest money an unrealistic idea or will it be … Just Like Heaven?

 

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Memes Are The New Money

Viral images/videos are, at their essence, data. Sometimes this data travels the world many times over to the point it becomes a part of a culture’s shared experience. Today there are few opportunities to monetize a meme or any form of unique data on the Internet without access to large centralized platforms like Instagram or YouTube. The “network effect” benefits the network provider, not the content creator. TikTok is simply a new version of a record label.

According to LifeHacker:

The biggest TikTok influencers—ones like Charli D’Amelio (101.5 million followers), Michael Le (42.4 million followers), and Josh Richards (23.4 million followers)—all made at least $1 million in 2020, according to Forbes. However, most of that money is earned through the sales of merchandise and sponsored content for big brands, rather than ad revenue. In fact, TikTok only recently started to share ad revenue through its Creator’s Fund, which content creators have criticized for being underfunded, as they claim it typically only provides a few dollars per day.

They key here is that the biggest TikTok content creators do not make the majority of their revenue on TikTok yet TikTok is worth Billions. Many other examples include celebrities who, in addition to having a platform on Youtube, Twitch or TikTok, add an OnlyFans page so they can more easily facilitate receiving payments for their content.

This is all the early stage of something much, much bigger. A “new paradigm” where value is transacted peer to peer.

New markets begin with price discovery. During price discovery markets are very inefficient but eventually trend towards efficiency as they mature. To get my point across while being meta:

I assert we are in Medieval times with regards to monetizing data. There is a long road ahead to ending the centralized plutocracy where our personal data is a profit center for faceless and powerful elite. The key to breaking free is the stranglehold financial institutions have on transacting value. To be clear, I’m not much of a data conspiracy theorist nor am I anti-banks, but I do foresee a shift and a new world ahead.

Let’s look at some examples. First up is “disaster girl”. She’s 21 now and is selling an NFT for $500,000. Does that make you feel old? Does it make you feel poor? Does it make you feel old and poor?

Take a moment to ponder this transaction in context. NFTs are a new and extremely inefficient market fetching outrageous prices. What’s the point of owning a piece of viral internet history? How does it provide a ROI? In the future, each web page featuring a meme, or any piece of data that has value, could be monetized per view, if there were a low cost and efficient way to process a micro transaction.

TikTok could implement advanced revenue sharing per page view if they could get their head around the incentives. They probably won’t, but the next TikTok definitely will.

Another example of market discovery would be the NBA’s NFT collection:

The NBA’s Golden State Warriors have become the first major professional sports team to sell its own non-fungible tokens. These tokens, or NFTs, will be officially licensed digital memorabilia the team is calling its “legacy” collection. An NFT is a verifiable digital asset vouchsafed by blockchain technology.

You could be the owner of a GIF and a provable chain of custody on a blockchain that may or may not exist in 5-10 years for a few thousand dollars. What a deal!

Again, I point back to the fact that new markets are very inefficient. The craze for NFTs are like the craze for Beanie Babies. I can’t predict the future, and I don’t anticipate the death of NFTs, but I do think NFTs will evolve quickly and the value in owning a limited edition manufactured GIF will be very low in the future and likely near zero.

What will have value in the future will be original content and links to physical assets. Musicians publishing new songs, artwork and funny cat videos. Markets will move towards an efficient solution. I believe that solution will mature as we understand that data is the new money.

A meme is a particular yet valuable type of data. But rather than selling an NFT of a viral moment the world will move to a pay per view model. A fraction of a fraction of a cent per web page view creates an Internet based on value incentives. The Internet will transition to a series of micro transactions that are so small they are barely noticeable but, in aggregate, will add up to sustainable direct revenue to the content creator and will bypass the blood sucking middlemen. Content creators will be on the top of pyramid rather than the bottom.

 

Markets do not stay inefficient for long and we are on the cusp of the biggest market shift  in human history. The market for data.

The first platform to explore this market and capitalize on it will see wild success in the future but it will not be a platform deriving their revenue from traditional online sources.

NFTs will find their proper place. They will be used to track unique objects in the physical world. They will be used to transfer ownership of houses, cars and anything of value. In the future “disaster girl” would prove her ownership of her viral picture with licensing fees routing directly to her BitCoin wallet. It’s a big leap but I see markets solving this problem within a few years. Creators can build a content library that generates revenue for a lifetime.

The reason that valuing content in this matter has not already happened is we have had no way to interact peer to peer for small transactions. The third party processing costs were such that it was not efficient, or so we were told. YouTube is valued in the billions but the top 1% of 1% only make $20M. That seems like a pretty efficient revenue generator for YouTube but doesn’t scale per view? The barrier to entry is…..small transactions.

This is changing, if you know where to look.

Bit equals data.
Coin equals money.
Data is the new money.

BitCoin combines data and money.

HODL till your heart’s content but if your coin of choice can’t be used for micro transactions I suspect you’ll be on the wrong side of history.

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Fundamentals Matter

Crypto has been on quite a tear these past 12 months. The emotions are running high and it’s raining Lambos across the Twitterverse. The conversation around Crypto, if you can call it that, is buy, Buy, BUY!

 

But eventually the euphoria wears off and only the winners are left standing. The winners have the best fundamentals. The winners have utility. The winners stand a chance at sustainable growth.

Think about this, if everyone is blindly swinging from one Shitcoin to another when is a better time to get positioned into fundamentals than before the music stops? Or do you think TikTok Investors raising millions overnight for a token called “ScamCoin” is a sustainable trend? If you’re waiting for that trend to finish I’m afraid you’ve waited too long.

Some of you may have been around for the Dotcom boom. Maybe you read The Fly’s book Journey Into Fear. I was there in 1999/2000 making a full paycheck nearly every trading day trading tickers that no longer exist because they flamed out like supernovas in the spectacular market crash, and I rode them down.

I traded my way to 1,000% gains over 2 years then gave 70% of it back in 5 days. I created a spreadsheet showing I’d be worth $10M within a couple years if I kept winning at my current pace. Now, I laugh at my hubris. How many of you have your own version of that spreadsheet now?

Everyone makes money in bull markets. Very few keep it when the tides turn.

Is Crypto at a top? I don’t know, but it sure looks like it. The signs are everywhere. This may be more than a “local top” or a retrace. This may be the blow off top that redefines the sector. This could separate the wheat from the chaff.

The time to prepare for the storm is when the clouds are forming, not after the ship is being tossed in huge swells and high winds.

With a new asset class like Crypto it can be confusing what constitutes fundamentals. I’ll offer a few thoughts from my experience.

  1. Does the coin have a legal foundation? This will eliminate anonymous coins and most ICOs. Eventually coins that violate the law will be shut down.
  2. Do the Economics make sense? Are the incentives designed correctly?
  3. Can this coin scale efficiently? The coins with the best fundamentals can scale and keep fees low.
  4. Is the development roadmap stable? Will a transaction today be a valid transaction 10, 20 and 50 years from now on the same network?

I could add to this list but take those four points and screen it against any coins you have or are considering holding. Do this with a cold blooded honesty detached from any past profits or previous assumptions.

This may take some work and effort but if I’m right it will save you a lot of profits and possibly provide you with rich returns in the future.

I’ve met old shitcoiners and I’ve met rich shitcoiners but I haven’t met any old and rich shitcoiners.

 

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Real World NFT Use Case

NFT, aka Non Fungible Token, has been a hot topic in the markets recently.

An NFT provides 1) proof that a digital item is unique 2) a chain of ownership. There are a lot of resources about NFT and how they work. I won’t go into the details. Here’s a story from The New York Times about Beeple selling a piece for $69M.

Like most things in Crypto NFTs are not well understood. The hype gets ahead of the reality.

Here’s a simple real world use case for NFTs and how they can facilitate transactions in billion dollar industries.

Respawn Entertainment, owned by Electronic Arts, has made $1B on a game called Apex Legends that is 100% free to download and play. Respawn’s revenue originates from an in game market where players can buy unique items for their characters: cosmetic weapons and outfits. Example below:

Another example of in game cosmetics that creates revenue for developers is the quest for Hats in Team Fortress.

Each of these in-game cosmetic items could be an NFT. That NFT could then be traded between players in the store via auction or via set prices with Respawn taking a cut of each resale. Some of these cosmetics were time limited meaning they can no longer be obtained unless purchased from another player. Respawn currently has no way for users to trade cosmetics. An NFT based user to user store is instant additional revenue for Respawn.

Notice in the screen shot the items are priced in a currency called “Apex tokens”. Here’s the alternative:

What is a Duro you may ask? It’s simply a denomination of 500 Satoshis of BSV. It creates a new Unit of Account for Bitcoin SV that can facilitate transactions. Best of all it’s not a second layer on top of BSV or a new token. A Duro is purely a Unit of Account.

Why would using Duros or BSV appeal to Electronic Arts from a business standpoint? A store based on NFTs and a set in stone protocol like BSV is a build once and replicate many times scenario. BSV is simply a protocol for exchange of value that has nearly zero fees, unsurpassed reliability, instant transactions and unbounded scale. Any gaming company that incorporates BSV as a platform for their in game stores leverages a battle worn protocol they can use across all platforms and all games.

There is a game in beta that will be using BSV exclusively. It’s called CryptoFights. The website is awful, which is a shame, but the idea is groundbreaking and something to watch.

So why not use Ethereum? Two words: Crypto Kitties. In 2017 a project called Crypto Kitties was launched on Ethereum and the traffic clogged the ETH network and spiked fees. Four years later and Ethereum fees are near $30. ETH does not scale.

As I wrote back in August of 2020: BSV Scales or It Dies. No coin is going to be usable on a global scale without scaling with low fees. BSV is the only coin that scales with fees under 1 cent.

I find it incredible that the market continues to miss the big picture. I consider this an opportunity for those who can see what’s important and invest accordingly. Can you see the Forest through the Trees?

 

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Y’all a bunch of Shitcoiners

I leave for a few months and this place turns into iBankShitcoins.

Catching up on a few posts I see the slinging of true garbage with due diligence along the lines of “Some of them even have a working website”.

It’s not hard to bank coin on Shitcoins. I get it. Here is a mock portfolio I put together on March 8th.

I’ve watched the market lose it’s damn mind pumping BTC to over $60k and the BTCBSV ratio touched over 300:1

Incredible. I didn’t see that happening. To say I’ve been salty is an understatement.

Has this changed my investment thesis on BSV? No.

But my timing has been awful. I’m ahead of the market and I lost out on some major opportunities. It all means nothing now.

So here we are, MARKETS IN TURMOIL.

Will we have a 2018 style crash or a deep dip and resume moon lambo time?

I don’t know, but I’ll point to a few things to watch.

BTC fees are $50 and rising.

There is a crisis hitting BTC hashpower as a coal factory in China exploded.

I know it sucks to have to think through a problem but …

Enjoy the Shitcoin profits but FFS put aside some funds in something with staying power you degenerates.

 

 

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FATF ruins Thanksgiving

Crypto swoons on rumors about this tweet from Coinbase CEO Brain Armstrong:

The Financial Action Task Force may be imposing Travel Rule regulations sooner than later. This could mean a lot of things but the short version is in addition to KYC you may need to show proof of funds on HOW you acquired any crypto you already own. That will be a mess, but it’s not so different than traditional finance regulations. The catch is, imho, it’s easier to hoodwink fiat institutions than to fool anyone about how you acquired your coins on a publicly auditable global ledger. But that’s only an issue for those with something to hide.

For the technical folks, I imagine you may be required to register a KYC linked pubkey with your exchange. Then you will only be able to withdraw to addresses generated from the pubkey. You’ll be legally compliant but the tradeoff is you are fully visible to the exchange and likely the IRS.

Again, this isn’t so different from banks.

Worst case is laid out by Ian Grigg here:

The above scenario is much more draconian. The Travel Rule potentially forks Crypto and taints any coins that are not cleared by exchanges. Owning your own keys becomes criminal. This probably won’t happen but no one knows.

Many BSV wallets already include the ability to sign transactions and/or prove identities. Example:

 

This embedded KYC feature is simple but surprisingly novel in today’s crypto world because most Coin value propositions include avoiding banks, taxes and government oversight. Reality is often disappointing and I think a lot of crypto is about to be very disappointed.

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What Does Unbounded Bitcoin Mean?

Humans evolved to develop language to describe our experiences and Science to describe all matters of the Universe.

However, there are a few concepts that still boggle the mind, e.g., exponential growth and unbounded scale. Our brains have difficulty processing the concepts exponential growth and unbounded scale.

This video example of Exponential Growth by Chris Martenson is worth watching as a warm up to the rest of this discussion:

If you can grasp the concept of exponential growth then you’re primed for a discussion on unbounded scale.

What does unbounded scale look like? Every grain of sand on Earth is a limited number. Every atom in the universe is a limited number. We don’t know how to conceive of the Infinite.

Now, I’ll say something that will be surprising. BSV is designed to operate at Unbounded scale. In a BSV powered world every flick of a light switch or liter of gas pumped, any transfer of value no matter how small, would be recorded on the BSV blockchain.

Bitcoin was designed to be unbounded with NO limits. Bitcoin was designed to grow exponentially with unbounded blocks.

Simply put, Bitcoin was designed to serve the entire world.

BSV is the protocol for the new Internet. We don’t measure the number of TCP packets processed worldwide. In 10 years we won’t measure BSV transactions either. At unbounded scale throughput will be a non issue.

This is the goal, and it’s a big one. There is a lot of work to be done.

But let’s assume for a moment we are living in this future and BSV is our single global digital ledger for the transfer of information and value.

What does that world look like?

  • BSV is processing billions of near zero fee transactions every 10 minutes.
  • You own your data. All of it.
  • Producers of valuable information are rewarded without middlemen. Incentives shift worldwide.
  • Fraud is no longer profitable. A global ledger leaves a trail of every criminal activity.
  • Due to volume your transactions are practically untraceable, but still visible.
  • The Fed is dead. Honest money means honest governments.
  • FUD and dishonesty are no longer profitable. Trust is restored.

In my humble opinion, humanity would evolve under these conditions. A global system to reward honest pay for an honest day’s work means humanity will be off to the races towards a new and brighter future.

Today, Money equals Power and we know absolute power corrupts absolutely. Example: our current financial system. This system has led to booms and busts. To an imbalance in work vs reward. To a system prone to increasing levels of fragility vs one that is strengthened with every transaction.

We must separate Power and Money.

We must destroy the modern day financial Ring of Gyges. Plato’s fable tells of a magic ring that makes the wearer invisible:

Suppose now that there were two such magic rings, and the just put on one of them and the unjust the other; no man can be imagined to be of such an iron nature that he would stand fast in justice. No man would keep his hands off what was not his own when he could safely take what he liked out of the market, or go into houses and lie with any one at his pleasure, or kill or release from prison whom he would, and in all respects be like a god among men.

Bitcoin acting as honest money resolves this dilemma.  No man can be invisible in his dealings with another on a global digital ledger. Privacy? Yes, but not invisible.

When Money equals Work then we rebalance the global system for the improvement of the human race. Let that sink in for a moment to get the impact of that statement.

Corruption is the lid on our global society. The check on corruption is honest money.

How do we get to honest money? Bitcoin at unbounded scale.

So why is there so much focus on BTC which doesn’t scale vs BSV which does scale?

To paraphrase Ron Paul when he was speaking about Gold:

“Because Bitcoin (gold) is honest money it is disliked by dishonest men”

Unbounded, Honest money is the invention of the century.

 

 

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FEAR, GREED AND TETHER

Like the PreCogs in Minority Report, I am reporting a murder.

The murder will take place sometime in 2021 and the victim will be Tether. The murderer will be the US Government. The motive, this weekly chart of ~15B of Tether created out of thin air with no USD backing:

The resolution of Tether’s money printing is going to be a shock to the system.

I have a Fear and Greed indicator that has been very useful in bubble assets. This indicator has called tops and bottoms in BTC, ETH, XMR and TSLA.

Here is BTC, Greed indicator sitting around 28k:

 

This indicator produced this signal in January when BSV was under $90:

Another variation, sell 25% whenever a colored line is crossed. Buy under the white line with yellow candles. Current signal, sell 25% of BTC:

Also, this:

BSV has been on the FEAR side of the Fear and Greed equation for the second half of 2020. After hitting a 110:1 ratio it’s come back to 90:1 at current prices of BTC: 19300 and BSV 210. If this ratio comes back to the 200DMA around 60:1 and BTC does push for 28k that would put BSV around it’s ATH of $460.

Here is the Fear and Greed chart for BSVUSD:

Trade it well.

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Divided States of America

The USA is in day 2 of an election that may end up being decided by the Supreme Court.

In my opinion, the election is a good news / bad news scenario.

Whoever loses, that’s the good news.
The bad news is the other guy won.

I was struck by the mundane items that were on the California mail in ballot. In total the ballot addressed spending a few billion on very forgettable propositions while the Federal Reserve is printing Trillions.

It’s all an illusion of Democracy while the Federal Reserve and Military Industrial Complex pillage the wealth of the Nation.

Bitcoin can be used to enable every person on earth to vote on any topic in real time with 100% integrity. Think about what that would make available.

This is just one use case of an unbounded Bitcoin. The future is coming.

(the video below is over 40 years old and just as relevant today was it was in the 70’s)

 

 

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