Dec 16, 2020

Open Letter to family and friends

 Money is a Touchy Subject

Most people don’t like to talk about it; either because they have little and are ashamed, or because they have lots and are afraid. Even fewer people know anything about the nature of our money, which is quite shocking — after all, money is an essential tool of our civilization. Money can be thought of as evil, but I prefer thinking that the love of money is evil. Money is like multiplying together time and talent.  We, as a society, need Bitcoin more than it needs us. Money is an essential tool for any large-scale co-operation. It is a measuring device, a solution to the problem of barter, a vehicle to store your wealth over space and time, and many other things. In short, money is essential for a complex society to function. However, a series of financial crisis and a recent event like Covid-19 has clearly shown that our money is fundamentally broken.

2009-02-11 - Link Satoshi Nakamoto

"The root problem with conventional currency is all the trust that's required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust."

Covid-19 highlighted the ridiculousness of our financial and monetary system. In a matter of days, we went from printing billions to trillions of dollars. The Fed wants inflation at 2% and we just believe that this is a normal idea -- it is not. 25 years ago it cost me $300 dollars a month to leave my Farmer Joe Movie on the Internet -- now it costs me nothing on Youtube, in fact I get paid. The Fed's lingo is fantasy -- the logic of forcing 2% inflation while printing 64.5% more M1 currency in 2020.  That goes for the Modern Money Theory as well (think John Maynard Keynes) Actually Austrian Economics is closer to the truth.

Scarcity has value.

However, as a store of value, Bitcoin is superior to land (and gold, for that matter) in many ways. No other asset can be magically beamed across the internet or other communication channels. Bitcoin has the highest value density of all assets since it is pure information. You could have a billion dollars worth of bitcoin in your head, retaining your wealth, even if stripped naked at a border crossing.

While there are many misconceptions about Bitcoin, the following are probably the most prominent:

Bitcoin is too expensive

Bitcoin is old technology

Bitcoin is too complicated

Bitcoin is risky and speculative

Bitcoin will be replaced by another coin

Let’s briefly go through these one-by-one.

Bitcoin is too expensive: To the contrary! Don’t let the “I need a whole coin” unit bias fool you. Bitcoin is still very cheap. However, if you think that way, you’re in good company. People have been thinking that bitcoin is too expensive since its inception. It will always be too expensive if your perspective is still rooted in fiat money.

Bitcoin is old technology: First of all, Bitcoin is a monetary invention rather than a technological one. It aims to replace the monetary base layer of our society — it isn’t the next viral app for your smartphone. Second of all, Bitcoin is improving and evolving at a rapid pace. It’s virtually impossible to keep up with all developments across the board. I just added a Lightning wallet to my node. Click here to give me some sats.

Bitcoin is too complicated: Granted, Bitcoin isn’t exactly easy to understand. (But neither is the traditional financial system.) Luckily, as with all other complex technologies, usage doesn’t require complete understanding. If it would, you probably couldn’t use your smartphone, use the internet, or drive your car. And in terms of usage, Bitcoin becomes easier every day. Just like using the internet a couple of decades ago wasn’t exactly easy, using Bitcoin today can be challenging at times.

Bitcoin is risky and speculative: Don’t speculate. Stay humble and start stacking sats. If that’s not good enough for you, how about the fact that a portfolio of 5% bitcoin and 95% cash outperformed stocks on risk and returns every year for the past 6 years? Still too risky?

Bitcoin will be replaced by another coin: Bitcoin is the undisputed king and the only serious contender for digital scarcity. It has the best network effects, the highest liquidity, and the highest security by many orders of magnitude. Nothing else comes close, and I don’t want to waste any digital ink naming any other coin. All I will say about Bitcoin’s copy-cats is this: do not touch them. While the Siren’s song of shitcoins is hard to resist, they are called shitcoins for a reason. Bitcoin can’t be copied. It is a path-dependent-invention in a winner-takes-all environment. This is hard to explain without reading "The Bitcoin Standard" by Saifedean Ammous or better yet read a book I helped with, "Thank God for Bitcoin" by Jimmy Song.


Nov 24, 2020

Bitcoin hits an All Time High


Today Bitcoin hit an all time high. It has been almost 3 years since Bitcoin was at $25,000. In that time most people would have bought and sold their Bitcoin multiple times. I didn't set people up with Bitcoin on the last pomp because I just wasn't sure how high Bitcoin was going to go. However, this time around no one is asking for help to buy Bitcoin as most purchasers are institutional investors - they don't need much hand holding.

The last time we were at an ATH there was a market cap of 3 Billion, now we have a market cap of 3.5 Billion. We just passed the market cap of Mastercard and are approaching Visa's market cap.  Or another way of viewing this is by country not company.  More Bitcoin exchanged hands than what is currently exchanging hands in New Zealand. We have printed 1,782,000  Bitcoins since the last ATH. Everyone who is into Bitcoin knows the supply of Bitcoin was reduced to 900 a day back in May 2020. That is why there isn't enough supply for the big companies like Paypal.

The main thing that caused the runup in Bitcoin's price is that Paypal has allowed their users to buy and sell Bitcoin. Now you can store your wealth in Bitcoin and pay anyone of their 20 million active merchant accounts for the items you want. There is no need to go through BSIQ to get your Bitcoin converted into fiat.

May 11, 2020

Bitcoin Halving 2020

What does the Bitcoin halving mean?

Well, the day has finally arrived. It has taken 11 years, 4 months, 9 days or 5,971,680 minutes. The minutes value might confuse you because who counts 11 years in minutes. Well let me explain.
When Satoshi first launched Bitcoin- Jan 3, 2009 he decided that the 21 million Bitcoins would be released gradually so that he and Hal Finley wouldn't get to keep all the coins. Satoshi thought the fairest way to do this was via a gradually predictable disbursement of money. Not like today when most government are just helicoptering money in and giving it mostly to the banks.
In fact, it was on May 22, 2010, when Laszlo Hanyecz made the first real-world transaction by buying two pizzas in Jacksonville, Florida for 10,000 Bitcoin. So, it took over 1 year for someone to consider Bitcoin worth something in the real word. Bitcoiners could celebrate Bitcoin pizza day, and some do, but most of us celebrate today -- the Bitcoin halving. The reason is because Satoshi decided that for every 210,000 blocks mined the Block Subsidy would be cut in half. So, yes once the block 630,000 is found the reward for finding the nonce will get cut in half. This indirectly says that if you buy Bitcoin before the halving epoch you got cheap Bitcoins. Only 1,312,500 Bitcoins will be created in the next 4 years, which is now equal to the stock to flow model of gold.  So, the question now becomes, "Do you like gold or Bitcoin.
Getting the reward subsidy is a lot easier then scraping together the transactions fees because on chain money transactions can occur at 1 sat per byte if the network is handling less that 3.5 transactions per second.  It is only when a lot of wallets want to exchange Bitcoins that the transactions fees are why the miners try to find the nonce.  On what block did you say I do? or are you like me and got married before there were Bitcoin blocks being formed. Currently over 10 billion US dollars change hands every day via the Bitcoin network.

Apr 8, 2020

This Easter reminds me of a passover long ago.

Over 3500 years ago the Lord commanded the Israelite in Egypt “...none of you shall go out of the door of his house until morning...”. 2000 years ago "John sees Jesus coming unto him, and says, Behold the Lamb of God, which taketh away the sin of the world." John 1:29
Today a lot of us are locked in our houses trying to figure out the meaning of life. Some would say, "We are self isolating trying to avoid getting the Corona Virus". I would say, Fear makes me think harder about the meaning of life". Are we alive just to watch Netflix? Realizing the truth about other people's lives is important, but realizing that we need a relationship with the Creator is crucial. Bible vs Netflix
My friend Daniel posted a picture about the moon he saw today and I couldn't help but wonder what the lighting was like when the Angel of Death roamed the streets of Egypt. Having just experienced 14 days of lock up, and now it looks like another 2 months of self isolation, a lot of intro-inspection can take place. Especially for someone like me who has a low time preference. Trying to plan for a recession is hard work. Besides, I keep thinking "is this really happening?"
Living on a farm you get to see His seasons more clearly. Sure I download the weather app but with so many bad hay bales in my hay shed I think should I believe more on what the horizon is telling me rather than some meteorologist? And that is how I am starting to live.
I get the best hard facts data I can and rely on that for important decisions. Other people might help me see what is coming, but it is up to me to know if I should cut the hay or, in a spiritual sense, believe that God whats us to help our neighbor.
The dream Nebuchadnezzar had about God's plan for the world has been running through my head. Especially the part of iron not mixing the clay. Will Italy, France and Germany really not get along? The hard part is figuring out how His Story (prophecy) affects my timeline today. I don't live in Europe so do I have to worry about how the French and the Italians get along? Nebuchadnezzar's Dream happened in 603 BC so understanding the prophetic implications via Daniel's 2603 year old eyes is hard for me to do. I have been relying on others like Bo to help me get this right.
From my perspective we have arrived at a period of time where morals are breaking down. The Canadian government thinks it can helicopter money into the economy without consequences. Justin even tried to print money without the House of Commons authorizing it. Renters don't have to rent anymore. Employees get free money and probably worst of all mortgages don't have to be paid. Sure I have been called a "Bitcoin Bozo" on Twitter, but this faith people have in government more than the Creator has got me baffled. To me it is now time for the season of Matthew 24:4 "Take heed that no man deceive you. 5 For many shall come in my name, saying, I am Christ; and shall deceive many."  So many of us throw out the baby with the bath water, ie. Don't bother to understand the truth. We must all learn to understand the seasons. We must learn to trust God and put our faith in Him and not in world leaders. May God pass over your household this Easter season. Keep your faith strong.

Mar 6, 2020

Affiliated Links

A lot of people think you have to spend a whole lot of money to get into Bitcoin.  This is not true. I have used 2 websites to give me $10 each a month in Bitcoin value. One is Fold on which I have 53,360 satoshis and the other Coinsquare which I have received 43,775 sats (see image). Getting 100,000 in satoshises might not seem like much, but hey it is $10 / month and if Bitcoin doubles in 1 year it is like another free golf game. Yes I am down here in California golfing. It costs me U$25 per game. I have a hard time paying that much to sink a white ball into a little hole.
Affiliate links works a lot like the click through links on the ads you see on this website (if you click on the ad and buy something I get paid --almost a dollar) except clicking on the link lets you know that I have tried out the service and thereby you should feel more comfortable trying it out also.
Come to think of it, I am not really happy with Coinsquare, even though they gave me $10; they took $100 in fees last month when I understood they wheren't going to charge me anything.

Feb 6, 2020

Understanding Bitcoin

Bitcoin ATM
The last few days I have spent educating people about Bitcoin. Basically, I am teaching the technically challenged about how Bitcoin works under the hood. My friend Ted says “There is too much misinformation out there.” If you head over to you would almost have to agree with him. People like to get information from whomever they know so I will do this post. Social Media does help people learn, but people don’t want to take the time to learn something complicated or even teach something complicated unless they are learning from a friend. So, here is my contribution to the Internet so that Ted (whom I know irl) can understand bitcoin.
How do I acquire Bitcoin?
You work for it or sell something you own.
Why should I acquire Bitcoin?
You need to get some product or you want someone to work for you.
Is Bitcoin really that simple?
Yes! After plugging your Rasberry Pi4 onto the Internet, you download Make sure you have Layer 2 — the Lightingnetwork installed, so you don’t have to pay a lot for on chain transactions. Note: Bitcoin is limited to 5 transactions per second and if you want to guarantee that your transactions makes its way onto the next block you might have to pay a fee of more than 180 Satoshies. Then you make a segwit on-chain wallet either on your RasberryPi4 or on your cellphone (or both) making sure to write down your keys. Most people call them Private Keys because if you let anyone else know your 24 words your money might move to another wallet. You do have the option of making your wallet usable via 2 to 5 private keys. Bitcoin has been improving a lot thanks to the cyberpunks over at github.  

Only 30 million entities have bothered setting up a wallet because of a number of different reasons.

1. It is too hard.

That is a valued concern. I have been offering my time at 1 million Satoshies per hour (.01BTC or C$100), but now that Bitcoin is at C$13k per 1 BTC, I am thinking of lowering my wage. $130 / hour seems a little steap for some reason. I just solve computer problems I am not a C+ / javascript programer. It’s it weird how hard money causes people to lower their wage instead of always expecting a wage increase.
2. Who is it backed by?
We the users. The evidence for this lies on July 21, 2017 which proved that the users of Bitcoin proved that they were in control. The story goes — the miners where content to keep on slowing the transactions throughput thereby increasing the mempool thus making the users pay more fees to have their transactions included in the next block. This Bitcoin Improvement Proposal (BIP) 91 forced a lot of us Bitcoin users to run our own node even though we were content to allow the miners to do the hard work. After the Segregated Witness upgrade was activated at block 477120, the amount of data per transaction was reduced to 180 Bytes. This forced miners into giving up there quest for higher fees and they started to enjoy receiving just the 12.5 BTC as a reward for finding the nouce. Finding the nouce allows the miner to receive the reward and the fee into his wallet.
3. Ok, I agree the miners don’t control the nework, but don’t the programers control the network?
No, every Bitcoin node has the right to download the latest upgrade to the Bitcoin network. If you look at this website Dashboard | Clark Moody Bitcoin you will see that tBitcoinhe last 3 versions of the Bitcoin software are used about equally (people upgrade their node if and when they feel like it.)
4. Ok, I agree the wallets (users) control the network, but don’t you need guns or nukes to have the ability to print money?
In Venezuela Bitcoin is used daily even though Maduro controls the army and airforce. Mind you, now days Maduro has conceded to allow the Venezuelan people to useo to a ne the US dollar in thier transactions with others. A few months ago the Venezuelan banks were not allowed to accept the US dollar.
5. Ok, ok, ok … but wouldn’t the government just shut down part of the Internet?
This Bitcoin threat, I am not sure that this can be prevented. If you look at Egypt, Iran, Russia or China as a case study in controlling information exchange. VPN, tor and other means always have come through with the goods to allow people to communicate with each other. And if you think about it Bitcoin really is just a communication platform that allows you to send time to each other.

If you have come this far down the rabbit hole with me and if I where you, I would start sending messages with the money of the Internet

Jan 27, 2020

Bitcoin has gone from government laughing at it till governments fighting it.

"first they ignore you,
then they laugh at you,
then they fight you,
then you win"
On Jan 17, 2020 Her Majesty’s Revenue and Customs offered 16 Bitcoins to any one who is willing to do Bitcoin Block-chain analysis to deanonymize bitcoin transactions.  This is the last step before Bitcoin becomes the currency of choice. Sure it has been 7 years since the US arrested/convicted Ross Ulbricht for allowing people to buy drugs anonymously. Some people have been trying to use Coinjoin to avoid KYC (Know your customer) rules. The problem with using Bitcoin is you can't send the whole amount in your address so whatever is left behind at least one person knows who you are.
Is there a better way to keep your privacy? Several of the most prolific Bitcoin Core contributors — including Pieter Wuille, Anthony Towns, Johnson Lau, Jonas Nick, Andrew Poelstra, Tim Ruffing, Rusty Russell and, indeed, Gregory Maxwell — are working on a Schnorr signature proposal that would include Taproot, all in one protocol upgrade. If this upgrade goes ahead it will be harder to deanonymize bitcoin transactions. There is not a time frame on this proposal, but probably will be available for smart contracts in a years time. The second layer Lightning network does help deanonymizing bitcoin transactions because there is no permanent block-chain record -- just signatures that you lost x amount of Bitcoin to the cosigner. x amount of on chain BTC is still available in your wallet.
Iran has been sending oil to China even though the US outlawed it. Venezuelan has had a hard time trying to avoid US sanctions.  Maybe in the future Central Banks will be asked how much Bitcoin they have rather than how much gold they have stored at Fort Knoxs.

AMEN Do That.