Dr Craig S Wright has outed himself (a second time) as the person behind the name Satoshi Nakamoto and as the person who invented Bitcoin.
To my surprise this announcement didn’t change anything in regards to Crypto markets. There was the usual backlash from the BTC and BCH loyalists who react to any news about Craig Wright as a scam. Other than that, it was another day in Crypto.
So, let’s dig deeper. Why would Craig Wright claim to be Satoshi in 2019? One answer is that he had no choice. He’s being sued for a 1.1 million Bitcoins (3.5 Billion USD) in this lawsuit filed by Ira Kleiman, the brother of Dave Kleiman. Dave was Craig’s partner in creating Bitcoin. Since the court documents will be public and will show Craig’s involvement in Bitcoin prior to 2009 it’s possible Dr Wright is getting ahead of the game by owning his role as Satoshi Nakamoto.
Now that Dr Wright has made this statement he’s opening up about the history of Bitcoin, his original design and the mistakes made along the way.
What we’re seeing as more information is released is that Bitcoin was in development for 20+ years. The blend of technical, legal and economic knowledge required to produce a decentralized, nearly instant and resilient cryptocurrency is unfathomable. Mastery of any one area would be a lifetime of work. Somehow it seems Dr Wright has mastered them all and keeps on going. Among his achievements are many university degrees and a recent statement that he’s been awarded his 1,000th patent. Incredible if true. I am confident Dr Wright will be in your children’s textbooks next to other geniuses of the past 100 years.
Take a look at his Medium page where Dr Wright has released a new article almost daily for most of 2019. Much of what has been written there is game changing when digested properly. It takes a lot of work just to understand what’s being shared but once you do you begin the journey down the endless rabbithole that is Bitcoin. You are seeing a genius at work.
Say what you will about Dr Wright, much of the criticism about his communication is valid, he possesses an incredible, hardworking intellect. No one knows Bitcoin as well as he does.
Bitcoin SV is the only version of Bitcoin that Craig Wright supports with his numerous patents and where he focuses all of his time and effort. Dr Wright has shared his vision for Bitcoin numerous times. Bitcoin is an immutable ledger. A commodity ledger. An affordable place to store information in perpetuity.
What arises from Bitcoin as a shared global ledger is Metanet. Metanet becomes the new source of truth in the world because the information on Metanet has value. That’s a bold and slightly abstract statement. Let me rephrase this as every device, electronic or not, can be valued, tracked and be part of a global system. This is BIG data on steroids but with more privacy.
This ledger functionality includes moving the entire Internet to Bitcoin. As of today websites exist on Servers in datacenters. In the future that data will reside in Bitcoin transactions. Here’s a simple example:
Introducing "Alice in BitcoinLand".
The World's First Server-less Website contained in a SINGLE Bitcoin Transaction.
Wed Feb 6, 2019 2:04pm ESTComments Off on Buying Blood
Deflating a bubble is painful, expectations are crushed, portfolios liquidated, communities disbanded. Malinvestment warps any market.
The gold rush caused by BTC appreciation caused a market for shitcoins to emerge that rivals other bubbles in history. There is a predictable cycle to all things and crypto is not immune:
We’ve all heard “Sell when others are greedy and buy when others are fearful”. This is easier said than done! It is difficult to act counter to emotion and market momentum. Yet, acting counter to the trend is where the most money is made…and this is one of those times.
End of 2017 we had “Weak Men Create Hard Times”. The BTC core team and the shitcoin project devs looking for easy money created hard times for the entire market. Fear, Uncertainty and Doubt was everywhere. Clowns like McAfee were given platforms to shill their scam projects. Emotions ruled.
2018 has been “Hard Times Create Strong Men”. During this bear market projects have died, money has been lost, hype unraveled. And yet, development has continued in Bitcoin. There’s been a stunning number of advancements from developers like the pseudonymous _unwriter as well as advances in projects like MoneyButton and HandCash (all on Bitcoin SV).
This continued work in a down market has prepped us for the next phase. “Strong Men Create Good Times”. The foundation has been laid. Let’s see how it’s being built on.
CEO of Twitter, Jack Dorsey, was recently on the Joe Rogan podcast. They discussed Bitcoin and Jack stated he only held Bitcoin. Jack also owns Circle which has BTC listed for purchase. What’s significant about this is Jack stated he’s interested in what coin is resilient. In that Twitter thread Jack is redpilled by numerous tweets about BSV vs BTC.
This is important because there are many Billionaires with pro Bitcoin stances. Jack, Novogratz, Draper etc. The thing is they are all backing BTC, but they are now hearing about BSV. When these billionaires inevitably shift their investments there will be an upheaval in BTC and BSV markets.
One reason I believe this will happen is that the conversation around Bitcoin is maturing (slowly). One example is this video by “Bitcoin and Beyond”. (put aside that they look like homeless basement dwellers and just listen to the audio)
This video lays out a series of events which builds a story around Bitcoin. Looking at the history of events a pattern emerges. It would take a few hours of following the links in the video to get the full picture but since I have already done that I can say that what emerges is a consistent message about Bitcoin over the past several years, all linked back to Craig S Wright. This consistent years long message is becoming more and more manifest in Bitcoin SV.
The plan is coming together.
Bitcoin SV plans to scale capacity aggressively, open the use of Bitcoin SV as a commodity ledger and to lock the protocol so that businesses can build on top of a stable platform that is decentralized, supports instant transactions and is immutable.
Most of the crypto community has not reconciled all of these developments for themselves for numerous reasons, but they are coming around. As they do, they find that these capabilities only work on Bitcoin SV. One example is Kevin Pham, who previously was a hardcore BTC proponent, and is now tweeting positively about BSV. These are the early tremors of a major shift.
Today it’s Kevin Pham. Tomorrow it’s the Bitcoin billionaires and Wall Street discovering the truth about BSV for themselves and buying.
You have the opportunity here to be positioned for greatness. It’s not easy to make bold bullish predictions in down markets but this is a unique opportunity. Bitcoin SV is Bitcoin and it will be the only surviving Cryptocurrency as well as a universal commodity ledger for information worldwide.
Wed Jan 16, 2019 12:50am ESTComments Off on The Power of Money Button
If money is power then control of money is absolute power.
Give me control of a nation’s money supply, and I care not who makes its laws.
The power of the control of money allows major payment processors (and by extension governments that regulate processors) to curb free speech as evidenced by bans of Wikileaks, Gab and the deplatforming of content creators from YouTube, Twitter etc.
On a global basis the US uses economic sanctions to exercise power around the globe which is all enabled by the USD as the world’s reserve currency. The US can limit another nation’s ability to transact on the global banking system. Now that is power.
Any routing of funds through a third party makes a transaction subject to the laws of payment processors, governments or platform providers EUA.
How to solve this issue in our connected world?
Money Button is a digital currency payments button for websites and apps. Payments are nearly instant, nearly free, work everywhere in the world, and cannot be reversed or blocked. This is how money should be.
If you have a MoneyButton account you can simply drag the button from left to right and I will receive $1 in BSV nearly instantly with near zero fees. This cannot be stopped. This is an incredibly powerful tool built in just a few lines of code.
If you don’t have a MoneyButton account this button may appear gray. You can buy BSV and load your own MoneyButton account to enable MoneyButton anywhere on the Internet.
Now imagine MoneyButton on sites across the Internet. How many times have you been stopped by a paywall for an article you wanted to read but the prospect of handing over a credit card for a subscription wasn’t feasible? Or a site was so loaded with ads you lost patience before the site loaded? Or the site had so many popups you closed it out of frustration?
The content creator lost out. No wonder digital news sites are struggling. Any value they create is locked behind a byzantine and archaic payment system. Do I really need to input my credit card and address to read this editorial? That system doesn’t work.
The New York Times could easily add MoneyButton paywalls that are simple, secure and easy for users. This would turbo charge their revenue model. The valuable content would be rewarded and can be featured. Rewarding value changes the whole landscape of the web. It’s a Win/Win.
Simple, automatic, uncensorable microtransactions of value are the future of the Internet. MoneyButton is the leader in this field.
MoneyButton runs exclusively on top of Bitcoin SV. Due to this fact, you always control your own money.
Tue Jan 15, 2019 11:26pm ESTComments Off on Crypto Will Die in 2020
There are over 2,100 coins listed on CoinMarketCap.com. This is the result of the greatest hype and speculation cycle in modern times.
I have been pondering how this clusterf*ck resolves itself. Coins, unlike companies, don’t go bankrupt. As long as a group of nerds is mining a coin in their basement that coin can survive. This means that hundreds of shitcoins can survive with minimal support/investment. Zombie coins are a barrier to resetting the hype cycle and narrowing the field to the few (or only) survivor of Crypto.
If coins don’t go bankrupt what will happen? They will be attacked. Bitcoin is a competitive system. Failed coins will be picked off by Bitcoin one by one. Their use case will be made obsolete by Bitcoin. Their users will be assimilated. Their transactions will move to Bitcoin. Bitcoin can do anything a shitcoin can and do it better, more securely and cheaper. Within a few years I expect there to be only a few coins and eventually, only one.
Failed dot coms went bankrupt.
Failed coins can't claim bankruptcy. Instead, they will be 51% attacked.
I also posted a lot of charts and forecasts that did not happen (*cough* $50 EOS *cough*) but overall, not too bad IMHO. I wish I traded as well as I forecasted, but such is life.
Now, onwards for 2019.
The SP500 will continue falling. This volatility is not a sign of a strong market experiencing a dip, it’s the algos rushing for the exits as orderly as possible. I expect a 50% retrace from the top after Q1 2019. Caveat is Trump goes full maniac mode, bypasses the Fed, and orders emergency measures to prop up the market. This will be uncharted territory and may cause extreme volatility but the market will still correct.
Zooming out a bit that 50% retrace takes SPY to the highs before the 2009 crisis. All those easy money gains erased. 50% is not a difficult call. The big question is will it stop there? pic.twitter.com/Q0iEahdf7z
Real Estate will correct. This is a general statement as local markets vary but if you live in a city start to take notice of the number of For Sale signs around your neighborhood. Are they increasing? Open Zillow and notice how many properties show recent price declines. That’s the early warning sign of a correction. During the 2009 crisis banks bought distressed real estate with free government money and held that real estate off market. This caused a building boom and prices increased due to reduced supply. Now inventory has caught up, free money has tightened … yet prices remain hopelessly out of reach for millenials. Rents in Southern California have doubled in a few years. $3,000/month rent for 800SF condos is not uncommon. $600+ per SF sales prices in urban walkable neighborhoods are normal. These are not typos.
Generally speaking, most prospective homeowners can afford to finance a property that costs between 2 and 2.5 times their gross income. Under this formula, a person earning $100,000 per year can afford a mortgage of $200,000 to $250,000.
Yet many 700SF condos in Southern California are selling for $400k+. Are those 700SF condo owners making $200k/year? I think not. We are back in a bubble in San Diego and many other areas.
Another example of the financial fantasy we live in today is $12 avocado toast. Two pieces of bread with an avocado for $12 on credit cards with 24% interest rates and a $500 BMW payment on a $50k salary is par for the course for many under 30. We learned nothing from the 2009 crisis. This cannot end well but let’s hope it ends soon. But in the meantime, #YOLO.
Urban San Francisco is a dystopian nightmare yet has the highest real estate prices in the Country. This will end. LA, NY, Orange County, New York and parts of Chicago will all go through the natural downswing after a decade long boom. This starts in 2019 and gains steam for several years. Great deals will be available in 2022 and beyond.
Trump will finish his first term and will not run for a second term. The Mueller investigation is a bust.
Let’s be straight here, winning the election was the worst thing that ever happened to Trump. Trump doesn’t enjoy being President. Look at his life pre politics: being a billionaire with near zero accountability and semi celebrity status with freedom to grope beauty contestants to now being under the microscope trapped in the White House with nothing but Fox News and Twitter. Trump wouldn’t admit that winning was bad for him but it definitely is a sour situation for himself and his family. The fact Trump won shows the sorry state of American politics.
So who could win a Presidential election? I would bet on a popular non politician. I know nothing about Dwayne The Rock Johnson’s political ideals, US citizen status or experience but his likability, outsider status and lack of scandal may have made him a formidable candidate. It worked for Ronald Reagan. Will he make a run? If not, could we have President Kanye West? At this point in the post Trump era anything is possible.
I believe career politicians have an uphill battle for President. The system is broken. It’s us vs them.
The founding fathers expected political offices to be held by esteemed members of the community. Their ideal of government was a combination of experts from various backgrounds doing the will of the people for a limited time before rejoining society. This system worked well for a long time but unfortunately it is no longer the system we have today. US government is now crony capitalism where power is brokered daily and an entrenched incumbent can trade political favor for self enrichment. The US system needs a shakeup. It will either be a decade long movement or a violent upheaval. Timeframe unknown.
Holding hunks of shiny metal may be a sane choice in an insane world. I’ve held precious metals in the past as a hedge but they are really for the extreme worst case scenarios. The goldbugs are a unique group. I can sympathize but I can’t say I’m one of them. The only people more out there than goldbugs are the crypto crowd which I will get to next.
Gold may break the recent highs of mid 1300’s but I don’t think a new all time high will happen in next 5 years. Gold is a fax machine in an email world. The characteristics of gold overlap with the characteristics of crypto except crypto is also easily divisible and easy to send anywhere for free. Advantage: crypto.
I sold my precious metals a few years ago for crypto. If I still held metals I’d do the same today. If you can afford a couple sleeves of gold eagles of even a few bars of shiny gold in a safe, knock yourself out. You’ll be hedged against disaster. However, if we resort to exchanging hunks of metal for goods and services we’ll have bigger problems to address than choosing the best performing asset class.
Here’s a video of Peter Schiff vs Erik Voorhees debating Bitcoin vs Gold.
It seems every week, month, year is a critical time for Crypto. Any technology or revolutionary movement is most vulnerable in its formative stages. Bitcoin just hit it’s 10 year anniversary this month. Bitcoin is still a infant as an asset class.
Crypto is at a make or break point. After an extreme hype cycle and gross misallocation of resources and funds Crypto is facing a do or die scenario in 2019.
Here’s my viewpoint and why I think every other forecast for Crypto I’ve read so far is complete junk.
Most forecasts will focus on BTC, ETH, EOS, XRP and maybe they will mention LTC, XLM or XMR. Insert other random coins as needed. Most of them will not address Bitcoin SV (BSV).
You can throw all of those forecasts in the garbage. They are worthless. None of those projects are addressing scalability in a realistic fashion. In fact, many of those projects are now openly discussing Proof of Stake or centralization as a solution. This is ironic given Bitcoin, the foundation of all things crypto, was designed to be decentralized peer to peer and based on Proof of Work.
The coin to watch is BSV. The BSV roadmap is the only coin that includes decentralization, proof of work and scalability. BSV has many challenges to overcome and I’m more skeptical now than I’ve been in the past but it’s still the only game in town. The goal is that BSV is adopted as a currency / commodity ledger by commercial and or government by 2020. That’s what matters in Crypto. Scalability and adoption. Everything else, and I mean EVERYTHING ELSE, is a sideshow.
A post explaining the details of BSV would be very long. I’ve written about BSV here, here, here and here. It’s BSV or bust.
Those are my predictions for 2019. Let’s see how they play out.
Sun Dec 9, 2018 9:33pm ESTComments Off on Bitcoin: The Endgame
Crypto is going through a typical bubble cycle. After euphoria we have capitulation, despair and then a resumption of trend at a more sane pace.
Looking back at history we can see this bubble cycle play out again and again. As the legendary investor Jesse Livermore said:
“There is nothing new in Wall Street. There can’t be because speculation is as old as the hills. Whatever happens in the stock market today has happened before and will happen again.”
What surprises me is the amount of pundits who say BTC still has a shot at reaching all time highs again. While it’s true Amazon lost over 80% in value during the dot com crash before becoming a $1T dollar company many companies that had much higher valuations than Amazon during the crash are no longer around. The difference is Amazon had a viable business model, great leadership and a roadmap beyond the hype. I can’t say that about BTC.
The darlings of crypto 2 years ago are mostly faint memories. Today’s market leaders may not be top 10 coins by mid 2019. There comes a point where not only does the hype die off but the market learns and applies hard lessons to future valuations.
Pundits like to point back to times Crypto had a huge decline and then posted new highs. Those were different times. Crypto was not on CNBC 24/7 during those runs. The market has gotten smarter. The pundits have not.
Gone are the days of a whitepaper and a website generating millions with an ICO in 24 hours. That’s never coming back in Crypto. I mean it. NEVER.
Yet many people are buying shitcoins like it’s 2017. These people lack decorum and will have their funds liquidated post haste.
What matters now is adoption. Real world users with real world use cases. I’m not talking about credit cards that debit your Crypto balance or being able to buy Crypto via Square. That’s the status quo putting a yoke on Crypto. If that’s our future then Crypto lost.
The bloom is off the rose. 2019 will be the year Crypto proves itself. Bitcoin Is Dead. Long Live Bitcoin.
Taking this criteria what looks good? What coins have potential to step into that role? What does it take to fulfill that role? Who are the leaders to watch?
I’ll make it easy for you. Only one coin has a roadmap and has taken the first steps towards that future. Bitcoin SV (BSV).
In this future I’m talking about companies using Bitcoin as a commodity ledger. Using Bitcoin smart contracts to execute business processes, loans, logistics, escrow and payments. Using Bitcoin as the way to assign value to every piece of information in the world. Once we can value information effortlessly our information becomes more valuable. It’s a repeating and self reinforcing cycle.
Using Bitcoin’s utility inside Bitcoin will change how business is done. One of the things Bitcoin can provide is transparency. In other words, integrity. Imagine Enron or Lehman or AIG if their books were verified on a commodity ledger (this does not mean anyone could view it but it could mean that it’s accuracy could be independently verified). In this example companies could state the hash of their financials publicly via a Bitcoin transaction. Each hash is unique. This hash locks the statement about the data into a public record. Auditors can then verify that hash against the files they receive from the company. New quarterly financials can be posted with a new hash.
The mortgage meltdown happened in part because banks could no longer track all the terrible loans they had repackaged into toxic packages and resold to retirement funds. That would not happen if Bitcoin were tracking those loans.
An immutable blockchain means those firms can’t fudge their numbers. There is no erase. You can only write new data. The audit trail is always there.
Imagine the Pentagon held to account. They’ve only lost $7T in taxpayer money in the past couple years and that doesn’t cause a revolution? Bitcoin could stop that with just a few quarterly or yearly transactions.
That’s a game changer.
That’s just the start. Imagine every webpage on the Internet linked to payments in Bitcoin. What has value is rewarded. What doesn’t have value is not. Information becomes our new currency. The fear, uncertainty and doubt that has led to human misery, unfair advantages, economic upheaval and even war is exposed. Truth wins because truth has value.
Now, imagine every component of your car has a supply chain history via Bitcoin. Now scale that to everything.
This is Bitcoin.
So while Jesse Livermore’s quote above is still correct: “there is nothing new in the market” we are now entering a new phase. Jesse is speaking about the speculation phase and he’s correct. Now, we are entering a new phase. This Time is Different.
Bitcoin has shrugged off the pretenders. Now it’s time to really show what Bitcoin can do.
I expect Bitcoin to rally in 2019.
Unless stated otherwise when I say Bitcoin I am exclusively referring to Bitcoin SV (BSV). BSV is Bitcoin and the only crypto that has the ability to scale with a roadmap that includes Metanet and global cash.
If you like this post feel free to tip BSV to: 1EtHhqACn1hTFPQyC9MCAQyNZymTSoUs9o
Craig Wright is talking about Metanet … in 2014! In London last week during this presentation Dr Wright describes Metanet by name:
To recap key points:
Bitcoin is a decentralized, trustless, peer to peer system
Bitcoin is designed to scale globally
Bitcoin is competitive
Metanet will be built on top of Bitcoin
With me? OK, here’s more. IPV6 is the future of Internet addressing. Metanet can use IPV6 to address every object globally and then make payments. Per the example in the video, my Coke can have an address. If my can makes it to a recycling center I will have my recycling deposit paid back in Bitcoin. If my Coke can ends up in a river my deposit goes to recycling costs (or I am possibly fined). This creates an end to end economic system where incentives drive behavior and all of it is recorded on Bitcoin. Before you object with a “big brother” scenario the blockchain at scale is still pseudonymous while reinforcing behaviors with value. This is a leap forward compared to systems of today where your data is the product.
In this example Bitcoin remains decentralized, trustless, peer to peer AND creates a system of incentives. Lay this system on top of anything and the possibilities of that system alter dramatically because Bitcoin can now incentivize participants instantly. Behaviors will dramatically shift.
Bitcoin could alter the Actor – Observer bias. This bias theorizes that when we see someone else run a stop light we instantly judge and condemn that person but when WE run a red light we have excuses and reasons for OUR behavior. This simple bias blocks us from seeing our actions truly as others see us. Bitcoin could be that private observer for each of us helping us see ourselves as others see us and acting with a higher level of consciousness/awareness.
Now, let’s imagine Bitcoin is global. The incentives in Bitcoin extend to society. Society becomes decentralized, trustless and peer to peer. Borders fall away. Wars stop. What remains are incentives.
Metanet provides incentives that are decentralized and reward what’s valued. Clickbait dies. Good content flourishes. Efficient systems naturally replace Government bureaucracy.. Waste and grift lose value. Value, in whatever form, is rewarded by others. Truth wins.
Bitcoin has a limit of 21M coins and a distribution schedule that ends in 2140. This is humanity’s chance at a new future and it roughly lines up with our natural resources crisis. Bitcoin / Metanet can order our limited resources in a way that we make it past current projections as a species. We’ll either make this transition or we won’t. I shudder to think if we fail this test.
Metanet is the future and it’s running on Bitcoin’s economic system.
Unless stated otherwise when I say Bitcoin I am exclusively referring to Bitcoin SV (BSV). BSV is Bitcoin and the only crypto that has the ability to scale with a roadmap that includes Metanet and global cash.
Song below is sampled on one of my favorite Kanye West tracks, Touch the Sky.
Crypto is careening down a vertical cliff towards a bottomless pit.
Yet here I am long Bitcoin (BSV) and sleeping like a baby. Why?
Because with BSV separated from BTC and BCH Bitcoin now has a shot at realizing it’s potential. Bitcoin is shedding the dead weight and growing up.
During the CoinGeek Week conference in London at the end of November many new ideas were discussed including a concept called Metanet. Here’s Dr Craig Wright’s presentation:
At a high level, Metanet is the Internet running on Bitcoin. Imagine loading a webpage and a micropayment is made on Bitcoin. This micropayment provides: revenue for miners to keep blockchain secure, keeps the Internet properly incentivized for what has value vs being forced into servitude to FANG’s algos and potentially begins to create a new economy where things that have value are rewarded and those that do not fall to the side.
This is a wholly new economic model for humanity. Ever wonder how the economy ran in the TV show Star Trek? I could argue Bitcoin is the basis of that kind of economy Pure capitalism rewards value and removes waste.
Only Bitcoin SV can scale to meet this need. The plan is 1TB blocks every 10 minutes. At that level Bitcoin SV can handle all payments globally. That’s something to get excited about.
Another takeaway from the conference is “commodity ledger”. Use Bitcoin as a commodity ledger. Anything and everything on Bitcoin for a fraction of a cent. This adds up to increased adoption and increased value.
BSV is ~$100 at the writing of this post. I expect $1,000 by end of 2019.
All the other coins and their promises don’t stand a chance. If you’re holding any coin except BSV I expect it to go to zero. It’s BSV or bust.
In my last post I said I sold all my ABC coins for BSV. I followed this process. If you choose to do this be careful. You can lose all you funds if you don’t understand what you are doing.
Mon Nov 26, 2018 10:16pm ESTComments Off on Back From The Killing Fields
I write to you from beautiful Thailand, specifically, Koh Lanta island. I am working from kohub.org for the month of November and December. I may be permanently ruined for living in the US as this is next level lifestyle. I haven’t worn proper shoes or socks for a month. Last night’s sunset:
I could fill the Library of Congress about how my life is better than yours so let’s talk about why you’re here. You want to see me either:
Ascend to legend status assuming the ethereal form of fuck you money
Get my crypto ass raped
Well, this week has been a bit of both. I won’t bore you with details so here’s the summary.
Bitcoin Cash was scheduled to have an upgrade. Due to two development teams who did not reach agreement by the November 15 deadline Bitcoin Cash split into two coins: Bitcoin ABC and Bitcoin SV.
During a fork holders get equal amounts of each coin. Think of it as a stock split except now your shares are on two different tickers.
What to do with my now equal stacks of Bitcoin ABC and Bitcoin SV? I went full degen and sold every Bitcoin ABC to buy Bitcoin SV at 4:1. Some would say this is a gamble. But so is life.
As Bitcoin SV goes so will I. Fuck you money or McDonalds. There is no in between.
On November 15 Bitcoin Cash hard forked when two developer groups disagreed on the future of Bitcoin Cash. I covered the background in this post. Read that for a primer on how we got here.
When there are multiple groups competing to be the default ruleset and client used to run the Bitcoin Cash network the issue is resolved using Nakamoto Consensus. At a high level Nakamoto Consensus says that in the event of a conflict Bitcoin miners will choose what software to run thus declaring a winner (via majority) and, very importantly, a loser (more on that later). From the Bitcoin Whitepaper:
They (miners) vote with their CPU power, expressing their acceptance of valid blocks by working on extending them and rejecting invalid blocks by refusing to work on them. Any needed rules and incentives can be enforced with this consensus mechanism.
Nakamoto Consensus is baked into the design of Bitcoin.
Bitcoin is the work of a group of geniuses providing many breakthroughs such as: Byzantine General’s problem, Triple Entry Accounting, Game Theory, Turing Completeness in Bitcoin script, AI etc. Anyone who does not recognize the staggering achievement of Bitcoin as a system is ill informed or disingenuous about their motivations for being in the Cryptocurrency space and not to be trusted.
Furthermore, I am quite clear who is the surviving member of the Satoshi team. I believe this person will be stepping forward with proof soon. And if they do not, that is OK. Bitcoin was designed for Satoshi to be anonymous. Satoshi would only step forward to save Bitcoin, and that may be where we are headed.
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. In the Forbes article ,Why was Sir Isaac Newton Such A Jerk?‘, Steven Ross Pomeroy writes:
He was not given to lightness of manner, nor did he show any capacity for self-irony. When angered, he became unbalanced and, it must be said, vindictive and petty.
Though his personality didn’t endear him to almost anyone, it served his career remarkably well. Ruthlessness is a surprising bedfellow to scientific success. When two other scientists, Robert Hooke and Gottfried Leibniz, offered criticism or competed with Newton for claim over the revolutionary ideas of gravity and calculus, Newton pursued personal vendettas against them. These grudges persisted even after Hooke and Leibniz were in their graves, with Newton trashing the reputations and discoveries of both Leibniz and Hooke while elevating his own.
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.”
It’s unfortunate. Here’s why:
In the BCH hash war there are two sides. Bitcoin ABC, led by Amaury Sechet and Bitmain vs Bitcoin SV, led by Craig Wright and nChain.
In the weeks leading up to November 15 Craig Wright bluntly told a lot of people to “fuck off”. Here’s an email he wrote to Roger Ver, the CEO of Bitcoin.com
That was just one example. Other notable statements were made about bankrupting exchanges that chose to run Bitcoin ABC software. Basically, anyone who disagreed with Craig was mocked, blocked and/or publicly flayed. Not a good look when heading into a battle for the future of Bitcoin. Dr Wright’s many attacks on persons and organizations in Crypto opened the door to ABC offering a safe haven alternative to a powerful nChain fighting for Satoshi’s Bitcoin.
Why was Craig so cocky? Craig had reason to believe that with his investment in hash power he could beat ABC. To prepare for threats during the year leading up to the past week nChain and sister company Coingeek invested HUNDREDS OF MILLIONS to build a Bitcoin mining operation in support of defending Bitcoin Cash as outlined in the Bitcoin Whitepaper.
When Bitcoin ABC proposed changes that differ from that path the November 15 upgrade became the deadline for a hash war.
On November 15 there were multiple livestreams broadcasting the fork with ongoing commentary from Crypto experts. Something was odd from the start. Watching the pro ABC teams there was something fishy. They looked incredibly confident, cocky even. Something in their mannerism was not consistent with a team at war in a high stakes battle. Then, this was said by Andreas Brekken on a livestream:
What is Andreas saying? Bitcoin ABC changed the rules of the fight. They broke from Satoshi’s design of Bitcoin to avoid a negative outcome from Nakamoto Consensus. They used a software checkpoint to prevent any group of miners from rewriting their chain.
Further, they distributed this software change to exchanges in secret. They created a cartel. Bitcoin was designed to be decentralized. ABC is now centralized by the group of players who are holding the checkpoints.
Putting it bluntly, ABC cheated. But all is fair in love and war, right? OK in that case, I’ll retract the “cheated” statement. Even so, the facts are ABC subverted the design of Bitcoin and Nakamoto Consensus to ensure their chain survived. This has caused a split. Now BCH is two coins: BAB (Bitcoin ABC) and BSV (Bitcoin Satoshi’s Vision).
That means double the coins ~17M to 34M. Two chains. Inflation. Confusion. Rather than a decisive battle won by hash we have a protracted war with two blockchains sharing the same resiliency features. Bitcoin was not designed to split. It is designed so that the strongest version survives. That is what makes Bitcoin Bitcoin. It’s resilient. Evolving. Always getting stronger. Bitcoin ABC put that aside in their own self interest.
With a single line of code Bitcoin ABC dealt a massive blow to the hundreds of millions in real capital nChain invested in securing the BCH chain.
BRUTAL is an understatement.
ABC ignored what makes Bitcoin Bitcoin and instead chose to create a new genesis block at the checkpoint. Unfortunately, many are following this coin as if it were Bitcoin. ABC is DEFINITELY not Bitcoin. ABC is an experiment with altered economics.
Bitcoin is a system. It draws on multiple disciplines. One of the primary features of Bitcoin is the economic model of mining and security. ABC threw economics out the window. Forcing a split vs a winner take all has a hugely negative impact on all of Crypto.
So now what? ABC is claiming victory. SV is vowing to fight on.
The Hash War continues. And we know there are no winners in war. This graphic from Cointelegraph shows the current 24 hour burn rates. Actual cost are likely much higher as the war has escalated. nChain has stated they are prepared for a very long war. At some point the losses will be too large to sustain and ABC or SV will have to concede.
Here’s my personal take:
Bitcoin ABC does not understand Bitcoin. They are a group of developers. As developers everything they see is through the eyes of a developer. Their answer to everything is MORE code. Their major backer is the mining giant Bitmain who is behind a new coin called Wormhole which is generated by burning BCH. Bitcoin ABC is a threat to the promise of Bitcoin. Bitcoin is about the economics, stupid. Code is a tool to express the economic model, not the other way around.
Craig Wright is a dick. Craig’s tirades and personal attacks opened the door for ABC to collude with exchanges so they accept a checkpoint as compromise and protection from nChain. There has been a lot of damage. Jimmy Nguyen, Calvin Ayre, where were you? We needed calmer heads to prevail. We now have a huge mess with two coins and an extended battle ahead.
With that said. I firmly support Bitcoin SV and I denounce Bitcoin ABC.
Bitcoin is hard money. It’s world changing, but it’s not invincible. There are real world economic and adoption problems to solve before the next halvening. Plain and simple, the only Crypto I see that has a chance at fulfilling on the potential of world money is Bitcoin SV.
I encourage everyone to consider what you support and then make it known. This is a Call to Arms.