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

Searching for Satoshi

In a Miami courtroom on Monday November 22nd Craig Steven Wright is set to take the stand in his own defense against Ira Kleiman. Dr Wright is being sued for ~500,000 Bitcoins and a treasure trove of Bitcoin related Intellectual Property valued at approximately 60+ Billion USD.

In this case both the Plaintiff and Defendant accept that Craig Wright is Satoshi Nakamoto. What’s at stake is whether Dave Kleiman and Craig Wright were partners and if Dave Kleiman was an instrumental part in the creation of Bitcoin. Dave Kleiman passed away in 2013. Ira Kleiman is suing Dr Wright on behalf of his dead brother’s claim to the Satoshi coins.

While the two parties in the case accept that Craig Wright is at least part of the Satoshi Nakamoto team what’s missing is proof that Craig Wright IS Satoshi. This has been the cliffhanger of this case. Will Dr Wright prove he is Satoshi or not? Can Dr Wright prove that he alone is Satoshi and that Dave Kleiman was involved as a dear friend and confidante but was not part of the invention of Bitcoin? If yes then the courts could decide that Craig is the rightful sole owner of over 1,000,000 Bitcoins.

Despite the large dollar value and potential impact on the entire crypto space the case has been mostly under reported until last week. Here’s a summary from the NY Post. An interesting quote from the story:

But by May 2016, he (Wright) had reversed course. Wright vowed to cash out some of Satoshi’s coins in order to prove that he was Satoshi. Then he backed out with a claim, according to Bitcoin magazine , that the transaction could reveal an early “security flaw … that would make it risky for him to move Bitcoin, exposing him to exploitation or theft.”

This could be significant because if Dr Wright secured his coins in a transaction that is now insecure due to changes made by BTC Core development team he could seek a court order to move the coins after proving ownership.

Dr Wright has stated on numerous occasions that this case will end with Satoshi coins moving. Wright (possibly) confirmed this again as late as last week in a comment to Kurt Wuckert when asked about next week’s testimony and Dr Wright stated “I said the coins” and walked away.

This is all speculation and no one knows for sure what will happen on Monday. Dr Wright’s testimony could be a bombshell or a nothing burger.

But if the Satoshi coins move the markets will react violently. Plan accordingly.

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Crazy Times Ahead

I’ve been posting on iBC for nearly 9 years. Most of my posts have been about Crypto and for the past several years heavily focused on BSV.

While most people follow the moonbois I’ve been conversing with the smartest people I can find and those people have been signaling the truth about BSV and Craig Wright for many years. Example from way back in 2016!

Meanwhile the BTC crowd hangs on every tweet from lazer eyed cat avatars posting exponential charts and discussing the latest 250k target that is just around the corner.

But BSV is called the cult.

This week the Kleiman vs Wright trial resumes and the bombshells should start dropping regarding verifiable proof in a court of law that Craig Wright is Satoshi Nakamoto, the inventor of Bitcoin.

It’s been a long time coming, let me tell you.

Do I know how this will turn out? No, but I have narrowed it down to a set of possibilities most of which are very good for me and very bad for the rest of Crypto.

I’m not interested in convincing anyone of who Satoshi is or if BSV is Bitcoin. I’m done with that conversation. But I will share that no matter what your positions are in the markets it’s silly at this point to not hedge with a BSV position pending the outcome of the trial.

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NEVER GO FULL GENGHIS KHAN

The world is getting closer to resolution on an important but as of now still under-reported revelation. Who is Satoshi Nakamoto? The process for this revealing is happening in a Miami courtroom and may be resolved as soon as December 1st.

I’m going to clue you in on something, Satoshi Nakamoto is not a normal person. Anyone who can have the depth of knowledge in the many diverse areas of expertise necessary to architect an achievement like Bitcoin is anything but normal.

At issue is whether long time crypto pariah Craig Wright comes to the table with the proof he has promised regarding his identity as Satoshi Nakamoto. It’s an epic tale and the books / movies to follow will be best sellers.

It’s no surprise to me that the man claiming to be behind the Satoshi moniker is also anything but normal. In fact, he’s a bit mental. As the denoument to this ongoing drama draws near Craig Wright has upped the ante by threatening, well, everybody. Quote below from the Metanet.ICU slack group.

Ironically, the COPA case will fall apart before it even starts.

In a few weeks, the case will end, and the evidence will show that I created bitcoin, alone.

Oh, an injunction to seize a domain takes less than an hour to obtain.

Coinbase could vanish from the Internet in a moment

They are my 1st head

Then Core.

Every dev will capitulate or be enjoined

And, that is from SegWit on.

Resignation now, meaningless

I hope they fight.

I made the offer, I prefer the rejection

I want their heads

I am doing this Genghis Khan style

I am assuming his Genghis Khan statement references how Genghis Khan, when conquering a new territory with 10 villages, would completely raze one village as a message to the remaining nine villages. Succumb to me or be destroyed. Craig Wright, who has quoted himself as being “everything”, is hell bent on going Genghis Khan style.

Do I think going Ghenghis Khan is a great idea? Fuck no. But I don’t have a galaxy brain and possible keys to close to, what latest rumors say, may be over 2 million BTC, BCH, and BSV. Holy shit. That’s beyond nuclear capability, that’s a freaking crypto Death Star.

Craig Wright has made some outlandish statements in the past. What’s different this time around is that there could be very expensive legal repercussions if he doesn’t follow through. The trial resumes Monday November 15th.

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Satoshi Nakamoto on the Stand

Craig Wright takes the stand today in his own defense in the Kleiman v. Wright trial.

At stake are 1,100,000 BTC, BCH and BSV currently valued at over 65B dollars.

Dr. Wright is known to have a combative personality. I expect fireworks as the plaintiff’s lawyers will go after every opportunity to provoke Dr. Wright into harming his own defense with outbursts of the Tom Cruise vs Jack Nicholson variety.

The facts are that in the first week of the trial the Kleiman team have produced ZERO evidence that Dave Kleiman had a partnerships to mine Bitcoin with Craig Wright. However, this is a civil case with a jury comprised of Miami, FL residents. I am not a lawyer but I believe that civil cases with a jury have shown very unpredictable outcomes and damage settelements. It’s anyone’s game to this point.

Crypto is not prepared for the “truth”. Dr Wright has been hinting at revealing information regarding his creation of Bitcoin and many other bombshells. Now, it would be misleading to not mention that there are numerous instances of Dr Wright alleging major moves that never panned out. Will this time be different? This is Dr Wright’s put up or shut up moment as losing this case would cost him billions of dollars in Bitcoin. I’m tracking the case closely because if Craig Wright proves himself to be Satoshi in a court of law, well, that would be PRICELESS.

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TRIAL OF THE CENTURY

Day 2 of Kleiman vs Wright is nearing completion. The mid day update was that “Mastering Bitcoin” author Andreas Antonopolous was cross examined by Craig Wright’s defense team. The defense put forth the theory that Andreas was not a Bitcoin expert but instead a social media celebrity with an economics education equivalent to a high schooler as well as lacking impartiality due to his personal financial interest in Dr Wright losing the case.

Mercifully they did not submit this picture of Andreas into evidence.

One of the best summaries of the current BSV landscape is provided by Unbounded Capital. I highly recommend reading the entire post. The overview section states:

A Florida civil suit over the $70+ billion Satoshi fortune that started November 1st could lead to broad market awareness that Dr. Craig Wright is Satoshi Nakamoto. This could have significant short term price impacts on Bitcoin Satoshi Vision (BSV), a version of Bitcoin which Craig Wright is heavily associated with and endorses as “the real Bitcoin”. We believe that the market has an outdated perception of Craig Wright and the potential that he is Satoshi Nakamoto. Additional scrutiny of existing evidence due to the high profile nature of the trial as well as the potential for new evidence presented in trial could significantly change public sentiment regarding the likelihood that Craig Wright is Satoshi. We believe this could result in a rapid and significant price increase for BSV, due to its association with Craig Wright, its technical merits and market traction which have been overlooked to this point, and in part because of its accessibility to retail investors via Robinhood. BSV is also one of the most shorted cryptos, meaning that there is potential for both a short squeeze and a gamma squeeze, the latter in part due to positions held by Unbounded Capital.

The outcome of this trial could reshape the entire 1 trillion dollar crypto market. Are you paying attention?

The rubber has met the road. It’s all or nothing from here.

 

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Crypto Fundamentals

The term “Crypto Fundamentals” is an oxymoron. The two words don’t belong in the same sentence.

Ethereum network fees are north of $50. Some NFT projects on ETH have suspended operations due to high fees. BTC, the market cap leader in the space, is capped at transmitting 1MB of data globally every 10 minutes. The meme coin DOGE is #10 by market cap.

Do these “leaders” seem like the future…of anything?

This month SHIB, a meme coin based on a meme coin, rose 10x in 24 days.

So, how much longer do you expect this circus to go?

Top to bottom “Crypto” is a joke. The largest exchange Coinbase is shilling hype trains like SHIB. Why? Because more trades make Coinbase more money. This is all a game of musical chairs.

When Coinbase went public in April they shared this information:

In the documents the company released in February for its public debut, Coinbase said Satoshi Nakamoto — the pseudonym used by the individual or group of people who developed bitcoin — could cause significant damage to the company.

If the identity of the creator was revealed, it could cause bitcoin prices to deteriorate, according to the filing.

Coinbase, and nearly every coin and project in Crypto, do not want Satoshi to come forward. A living, breathing Satoshi could easily sway markets away from the scams that Coinbase and others rely on to generate revenue.

I’ll close this post with a quote from April called Fundamentals Matter:

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

Personally, I’m cravin’ the return of sanity to the markets.

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WHO IS JOHN GALT?

In three days the Kleiman vs Wright trial will begin in Florida. Ira Kleiman, estranged brother of the now deceased Dave Kleiman, is suing Craig Wright for 1.1 million BTC on behalf of the estate of Dave Kleiman.

Ira is asserting that Craig and Dave were behind the Satoshi Nakamoto pseudonym and are the joint creators of Bitcoin and as such the estate of Dave Kleiman is entitled to 1/2 of Satoshi’s Bitcoin and Intellectual Property through 2013.

The damages could potentially be up to 65 BILLION DOLLARS.

Notably, this trial is getting almost zero press. This is intriguing given the amount of damages make the trial one of the largest single defendant cases ever bought to court.

This case ASSUMES that Craig Wright is Satoshi Nakamoto. This assumption has been accepted by all sides for the case to proceed.

Why does this matter? Because by defending himself in court Craig Wright can prove he is Satoshi and reveal all the secrets he’s been keeping regarding identities and access to Satoshi’s 1.1 million BTC. Doing this in a court of law under oath is the best way to prove an identity despite what the “pundits” on Twitter may say.

This is also important because $COIN AKA Coinbase cited that the identity of Satoshi being revealed was a threat to their business. This trial could have a large impact on the Crypto market which is now larger than the housing market was in 2009.

Speculation about Satoshi’s coins and identity have been a hot topic since Bitcoin was released in 2009. As Bitcoin has increased in price this speculation has increased. There have been repeated demands of Craig to prove his identity by signing a Bitcoin transaction with Satoshi keys. He’s flatly refused to do this except in rare one on one situations dating back to 2015.

The most interesting theory on signatures and what may happen in court next month is outlined at the 27 minute mark of this video:

As the video discusses, there is a function in Bitcoin called nLockTime. Using this function you can create a transaction that is only valid after a set time (aka number of blocks mined on Bitcoin). With this transaction in hand you can throw away the private keys and those Bitcoin will only move when the time has expired and the transaction is broadcast on the network.

The theory is that Craig used nlocktime to secure the Satoshi coins in a trust. As such, he could no longer sign and was waiting till the trust matured with his nlocktime transaction to move the Bitcoin. The problem is that the BTC devs altered BTC in such a way in 2017 that this nlocktime transaction no longer works. I’m not saying this is what happened but it’s possible. Given that Craig Wright wrote the article below outlining this procedure step by step lends some credibility to the theory.

https://medium.com/@craig_10243/why-the-protocol-is-set-7db4f764c97c

Will Craig prove he is Satoshi in court and that BTC broke the nlocktime function? If so, will the judge rule that BTC must restore nlocktime and/or provide access to those coins to the rightful owner?

Is Satoshi Nakamoto a shadowy anti-government anarchist who designed unconfiscatable money or is he a Capitalist polymath from Australia who created the world’s first public ledger providing transparency & accountability for every transaction on Bitcoin?

And if Craig proves he is Satoshi what does that mean for BTC, BSV and crypto in general?

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An Inconvenient Truth

Fear, Uncertainty and Doubt (FUD) surround new markets, assets and commodities. This is especially true for cryptocurrency. Empirical analysis can cut through FUD and blatant lies. One piece of information that stands out at the moment is this:

In the three vertical columns we see BTC, BCH and BSV. These are the three SHA256 coins laying claim to being Bitcoin. BTC, BCH and BSV share the same hashing algorithm and therefore draw from the same pool of available mining resources. In other words, they compete for the available SHA256 hashing power.

The first two bars, Hash Rate and Network Nodes, indicate the inputs required to drive these networks. Think of it like a breakdown of how much SHA256 hash each network is running out of the total available sha256 hash. Network Nodes measures how many nodes are running the software for each coin. (The Nodes are debatable as a useful metric but that’s a topic for a separate post.)

You can see that BTC hash dominates at 98% of the total being used between the three coins. That’s a lot of energy and resources. This could be expected as Hash follows Price. Miners are pursuing profit and due to the dislocation in price with BTC the miners mine the most profitable coin (but not the most efficient).

The bottom two bars, Transactions and Block Sizes, show each coins percentage of the transactions and block sizes they are producing in relation to the other two. As you can see, BSV dominates here showing 75% of the transactions and a whopping 95% of the block sizes. This is efficiency.

If the top two bars are the coins inputs (the resources needed to drive the network) and the bottom two are the outputs (the production of these coins) we start to see An Inconvenient Truth for BTC fans. BTC consumes 98% of the hash but produces 20% of the transactions and only 5% fo the block size compared to BSV. BSV is vastly more efficient. BSV produces far most outputs with much less inputs, and it’s likely to get worse for BTC.

BSV is aggressively scaling the network while BTC remains stuck at 1MB. The future plans are for BSV to scale to Gigabyte and then Terabyte blocks. This would be 1,000x and 1,000,000x the capacity of BTC’s 1MB block limit. Ooof, for BTC holders that is inconvenient.

This is the data for the past 24 hours. BSV is averaging blocks that are 15-20x larger than BTC, with several blocks that are 100x plus the max capacity of BTC, for the past several days.

And the BSV network will get stronger as more transactions creates more incentives for miners. Meanwhile BTC’s plans to scale off chain weakens the network and moves fees from miners to trusted third parties.

This matters because the subsidy miners receive for mining blocks on the three networks will be cut in half again around mid 2024. The original design of Bitcoin is that fees from transaction volume would replace the diminishing block subsidy. BSV is on that path. BTC is not. This is a truth BTC does not want to face.

The data below shows the comparison in fees and miner profitability for BSV vs BTC. BTC fees have been as much as 100,000x more expensive. Incredible! Miner profitability varies often and usually favors BTC. This could change as BSV transaction volumes increase.

This has been a very slow road. I posted about this eventuality in December 2019. Maybe by end of year we’ll see the market catch up to these realities.

But this isn’t just about An Inconvenient Truth for BTC. BSV has a number of it’s own Inconvenient Truths to work though and one of them is the influence of a singularly frustrating polymath genius named Craig Wright. I wrote this about Craig Wright in November 2018:

Most geniuses are rarely appreciated in their own lifetime. The magnitude of their genius only recognized once the full impact is realized, which often takes decades. Another fact that is lesser known, many geniuses are assholes. You need look no further than Sir Isaac Newton for an example.

Dr Craig Wright, the Chief Scientist of nChain, fits the asshole genius description well. Dr Wright, when crossed, is a world class jerk and this character flaw may have been very costly during the past week’s events. Much like Isaac Newton, Dr Wright, “when angered, he became unbalanced and, it must be said, vindictive and petty.

Far be it for me to write a prescription for how anyone “should” act. Dr Wright has endured more personal attacks than anyone in this space and to his credit he’s weathered them well. I will note however that we each establish a track record for ourselves through our words and our actions and Dr Wright, while an undeniable genius, has an abysmal track record for honoring his word. An Inconvenient Truth for BSV is that Dr Wright’s failure or inability to make good on several claims regarding his disposition of 800,000+ BTC in 2020 has been a dark cloud over his credibility and the credibility of any project he attaches to, namely BSV.

Many people will point to pending lawsuits and larger machinations around securing patents as a defense for the delays. Maybe, but this remains An Inconvenient Truth nonetheless.

Even if Dr Wright never follows through on these statements I see a bright future for BSV. I cannot say the same for BTC and it’s broken economics. If I had to weigh the Inconvenient Truths against each other, I’ll take BSV every time.

So, I remain as always, irresponsibly allocated.

 

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El Salvador Isn’t Using BTC

Let’s get some facts straight on the stories about El Salvador adopting BTC as legal tender.

First, the average retail worker’s wage in El Salvador is ~$400/month. The average transaction fee on BTC is ~$5 and has recently spiked over $50.

Given these facts how would a person making $400 / month use a system that has fees for a single transaction that range from $5-$50? Using BTC just once a day at the lowest fees would result in $150 in fees in a month, or just over 1/3 of their earnings.

The real situation in El Salvador is that the government has partnered with a third party named Strike. Strike claims it will process BTC transactions on the Strike Lightning Network hub. This would require that users in El Salvador install Strike, purchase their BTC from Strike, custody that BTC with Strike and then they can “transact in BTC” using Strike. Using BTC natively *is not feasible*.

The reality is Strike acts more like a bank. The transactions on the Strike app don’t occur on BTC. They can’t due to fees. They occur off chain for the BTC that Strike has in their LN channel. And if a user wants to “close their account” on Strike and withdraw their BTC they have to pay a transaction fee.

This is not “using Bitcoin”. This is using Stike as a centralized bank and using their off chain ledger to transact. It’s a farce and it opens the entire game to corruption. Further, this points to how the BTC devs have handicapped BTC. BTC cannot serve a small country without a third party due to scalability limits and broken economics.

Although the facts point to the absurdity of the claim that El Salvador has adopted BTC as legal tender there are some interesting subtexts here.

Let’s say Strike is used. It would be the biggest test of LN to date. Let’s keep in mind less than 2 years ago LN was actively branded by LN fans as #reckless on social media, meaning that using LN was a risky endeavor and you could lose your funds. Has LN advanced far enough to handle whatever traffic *might* occur from Strike in El Salvador? Signs point to a firm no. LN is still very broken, but this test could be interesting. It’s a controlled sandbox as long as El Salvador users all use the Strike app.

El Salvador is encouraging it’s citizens to peg their savings to a very volatile BTC. Let’s imagine a scenario, however fanciful, where the citizens do adopt BTC on Strike to some measurable degree. Now those citizen’s buying power will fluctuate with BTC price. This could be good but more than likely it will be very bad for the next year. It’s risky either way.

This raises the question of what is the value of BTC? It’s limited to 6MB of data per hour for the entire globe. That’s an awfully small funnel to push global demand through.

The same scenario applies to ETH etc. This is not difficult due diligence!

Yet, billionaires are still buying BTC.

The future of digital assets will be programmable and frictionless to use. That asset will be able to host any country’s fiat currency natively as a token.

BTC does not meet this requirement.

 

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BTC CULT LIVE FROM MIAMI

The largest BTC conference in the world is happening this weekend. Day 1, June 4th, is available here:

Let’s see how BTC Miami is going:

Oof, let’s check in on a keynote from Day 1, Max Keiser and Michael Saylor.

The biggest reason to go to these conferences are the networking opportunities and contacts you make. Imagine paying money to go to a conference to talk to guys like this …

I encourage you to watch Day 1. See how far you can make it and if it makes you bullish on BTC. I watched a few hours of the stream. It was a train wreck. The crowd was noticeably uncomfortable and agitated. After all, they paid $1200 to be in a tent and sit on folding wooden chairs to hear people talk about HODLing. And those were the lucky ones. The rest of the ticket holders were outside waiting in a line that stretched for 14 blocks only to be told the venue was at capacity.

Perhaps more worrisome for BTC is that there was zero talk of innovation, scaling or future utility. There was plenty of discussion about price targets!

Day 2 livestream is here:

Next weekend the BSV focused Coingeek conference happens in Zurich, Switzerland. It will be live-streamed. Watch BTC Miami then watch Coingeek Zurich.

This is the investment opportunity of a lifetime. Do your due diligence now.

 

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