OMG, what the world doesn’t need, is another tulip-coin pimp! So you have 20,000 nodes of ledger redundancy (or surveillance nodes), tracking an imaginary computer currency of nothingness pyramid scheme. It only has value to the extent the pimps can keep suckering gullible gambling Muppets into it. Fleecing Muppets can be very lucrative, but it will end with many crying bag holders. Only a physical existent can be owned without counter party risk. Knowledge of a btc private key is not ownership of anything. It’s just a relationship with an issuers protocol (a kind of liability). Btc's designers didn't give it a mechanism to stabilize its value, so it can never be usable for (borrowing/lending) finance. If people could get an education from the government indoctrination centers, they would never buy these surveil-coins! They would insist on a free market monetary system of liberty, in which maintaining anonymity is a top priority! Got gold!
Chris is about as far from being a "Pimp" for BTC as anyone. Read the title of this substack. Liberty. Finance. Bullshit. Taking a deep dive into BTC doesn't mean he's piping anything. I own gold (and BTC) and in my hand gold it has no counter party risk. It's also hard to move $100k in gold out of the country. Three pounds. TSA would seize it from you just for fun. You could have a $billion in BTC on your keychain, or your head (reading about Von Neumann, Maniac is the book). Cut the dude some slack.
What? Bitcoin pimps do nothing but rant about bitcoin incessantly. Why can’t they just do bitcoin, and quit with the tiresome, obnoxious, and overwhelming pimping 24/7?
Excellent article for several reasons. First, it is written in terms simple enough that even an idiot like me can understand; two, it is entertaining and funny; and three, it gets it right about bitcoin and no doubt will annoy and has annoyed the gold bugs who can't see the value in something they can't see with their eyes and hold in their hands, even though most of them don't actually hold physical gold but have electronic accounts documenting the gold allegedly stored for them by third parties. When the grid goes out and electricity fails, they will access their gold the same way folk who access funds electronically stored, disbursed, transferred handle their assets and currency; they won't. Nothing wrong with holding lots of cash you have immediate physical access. Same with gold, except it is heavy to carry and when is the last time you went into a drug store or gas station and provided some gold nuggets for your purchase. Most of us use cash, easily understandable and physical, or we use electricity in the form of credit or debit cards. I'll take my chances with bitcoin aka digital gold and HODL while the lesser fools keep hundreds of pounds of gold in their basements and crawl spaces.
Ever since i heard you on the What Bitcoin did Podcast i kept thinking about the exact question you mention in the beginning of this article. What is it you are buying with Bitcoin?
Well, a couple of days ago i found the answer in Lyn Alden's book Broken Money:
When you hold Bitcoin, especially in self-custody, what you are holding is a stored-up ability to preform global payments that are hard to block, as well as stored-up ability to transfer your value globally if you want or need to. You are holding your slot on the global ledger. It could be an insurance policy for yourself in the future, or you could simply hold it because you recognize that capability to be valuable to others, and therefore recognize that you could sell that capability to someone else in the future. And compared to other cryptocurrencies, Bitcoin is the largest, most liquid, most immutable and most decentralized one.
"Your are buying your slot on the global ledger" is what answers the question for me.
Great piece. We need more Bitcoin education like this. The simpler the better. People can make up their own minds about whether they want Bitcoin or not with the proper education.
In one sentence: Bitcoin is a 1/21millionth share in the BIGGEST and most Decentralized Computer network on the planet, and there isn't even a close second. That network will outlive us, and our progeny. Buying BTC today is buying a share of a one-of-a-kind network, in its infancy. And if you haven't read about the power of networks before - you might click here:
The book, Extraordinary Popular Delusions and the Madness of Crowds, comes to mind. Bitcoin (or is it bitcon?) would fit right into that treasured volume.
It runs where and when there is electricity. One you get electricity again you pick back up. If there is a period of no electricity anywhere then it will be there waiting when there is electricity again. I mean, this is a pretty extreme example and one that affects way more than bitcoin. The current fiat system requires electricity too. Most people don’t have enough cash on hand to make up for no electricity anywhere.
I believe that many people would be surprised at the number of barter transactions occurring utilizing gold and silver (gold for "larger" and silver for "smaller" transactions). Afa bitcoin is concerned it would appear valuable to separate the concept of the "blockchain" and its potential uses in security applications from the concept of the bitcoin as "money". Note that, for discussion purposes and comparison purposes I will focus on the use of Federal Reserve "Currency" (FRC - paper or digital) as "money substitutes" (but could use any contemporary or historical currency instead).
Use of FRCs as pure (fiat) money substitutes has only been the case since 1971 (when President Nixon closed the foreign exchange "gold window"). In the 53 year period since the value of the FRC has declined 98+% against gold and proportionately against a "basket" of items necessary for daily existence in "middle-class" Western societies. Parenthetically - the rise in "Debt" of all types has also been proportionate. As a result we have now reached the point where "hoarding" of all types of "fungibles" (including precious metals/money) and disposal of money substitutes is increasingly apparent. As yet another money substitute bitcoin will be subject to the same phenomenon at some point. Those who "bought low" can now "sell high" as long as there exists a sufficient stream of buyers willing to exchange one currency for another.
This isn't that complicated. If everyone agrees to use a piece of paper with Queen Elisabeth on it as a medium of exchange, that becomes the adopted currency. But it all depends on trust. If trust is broken because politicians decide to print currency out of thin air, trust is quickly lost and the currency loses value and eventually has to be replaced with something else (think Zimbabwe or Weimar Germany). Bitcoin is no different. It all depends on whether enough people trust Bitcoin as a store of value and a medium of exchange. So far, it seems more and more people are trusting Bitcoin, especially with the advent of the spot Bitcoin ETFs. What is clever about Bitcoin is that 1) it can be held and exchanged anonymously, and 2) there is a finite amount of it so it cannot be "printed" out of thin air like fiat currencies are. Yes, Bitcoin only exists in a database (blockchain) so it is technically vulnerable to hacks (although that seems impossibly difficult), and relies on technology (servers, electricity, etc.) which can be shut down in an apocalyptic scenario. But so would just about everything else held in a bank or brokerage account. Only thing that might save you then is gold and silver and food stored in a bunker somewhere. I am not quite there yet!
The bitcoin network is highly scalable but it also will still work perfectly fine on an extremely small scale. Sure 20,000 nodes is great, but as long as there are 10,000 or 10, no problem. Security wouldn’t really be an issue. The only thing someone could do is double spend their own balance. Even with only a few nodes, no one can steal bitcoin they don’t have to private key for. And if only 10 people are still using bitcoin who is going to try to steal it anyway? So maybe it will one day only be a few people still using it, but it will never go away. There will always be some people who want it even if it’s not broadly adopted.
You will really enjoy Dr. Giovanni's BTC Power Law. You have described in laymen's terms how the laws of physics apply to bitcoin. It's all fascinating. You will love reading about the the BTC power law.
Is Bitcoin powercut proof? Is it China-war proof? I'm not trying to be a party pooper because I can see how brilliant Bitcoin is when the world is stable, power grids are stable and when we're not watching war unfold in Taiwan and beyond. You can have a generator at your home supplying power but if the grid goes at 'Bitcoin HQ', we're all screwed. Also, the man who threw his laptop away with his Bitcoin code is still begging his local council to give him access to the dump; he's offered them serious money but they won't playball. Top of the list of priorities for ANY investment is 'Capital Preservation & Security' ABOVE making profits.
There is no 'Bitcoin HQ'. There's no CEO, no marketing department, no oversight committee. Just the code, which anyone can read and change: https://github.com/bitcoin/bitcoin.
As long as 1 copy of the ledger exists somewhere your bitcoin is safe. Assuming you don't literally throw your keys away, in which case, yeah, you might lose it...
Even more important than the redundancy is the fact that you only need one "true" copy of the blockchain to persist - because it will be clearly identifiable as the one that required the most work to generate. You can try to fake one but you will need to do the same amount of work - and that's basically inconceivable now.
Fwiw, as someone who's been in bitcoin for a while, the 2 key things that make bitcoin civilization-changing are:
1. Nobody can stop anyone else using bitcoin and that includes governments. This means that in important sense it transcends governments. A day is coming when governments try to kill it - and they will fail. At that moment everyone will realize where power now lies.
2. It is the first and (i'd argue) only asset with fixed supply. Anything else, when the price goes up it just incentivises greater supply. Eg the potential supply of gold is effectively unlimited - we've only used like a billionth of the reserves even in the earth's crust, it just gets more and more expensive to mine. Humanity is *completely unprepared* for an asset with fixed supply. More on that here: https://open.substack.com/pub/swinehoodsremedy/p/on-the-fair-value-of-bitcoin-and?r=27ar0h&utm_campaign=post&utm_medium=web
Brother, we're in the same boat. A Kitco News anchor interviewed a Stanford Statistician PhD, and what intrigued me was his simple yet brilliant mathematical explanation that Bitcoin will go up 2⁶ power for as many years as it's been in existence. Think deeply on that. This is due to the halving effect, as well as more participants owning more fractional shares of Bitcoin (SATs), which will make the system more secure over time. So in 15 years from now (2024-2009=15), Bitcoin will be 2⁶ more expensive in currency terms than today ($66,040x64=$4,226,560 estimate per Bitcoin by 2039). However with the logarithmic decay of Fiat currency, and given my knowledge in precious metals markets, we know that these bull runs can happen far sooner and can run up far more than anyone can expect, followed by a swift reversal. Especially when discovering the price of money with far less manipulation than other markets. The longer you wait, the harder it will be to obtain 1 Bitcoin. I think it's also wise to hold physical, tradable Gold and Silver, as a decent chunk of people will not adopt, and simply view this digital system as something that they will never be able to obtain, and will attempt to go off-grid. Yet they will find themselves shut out of the rest of society that adopts a CBDC, so we could have many nomads in all of our backyards, the "unbanked". The good thing for those who hold exchangeable currency like Bitcoin , Gold and Silver is that these "unbanked" will be willing and able to work. At least the ones with real life skills and not just people who wanted to obtain useless paper degrees with no skills.
OMG, what the world doesn’t need, is another tulip-coin pimp! So you have 20,000 nodes of ledger redundancy (or surveillance nodes), tracking an imaginary computer currency of nothingness pyramid scheme. It only has value to the extent the pimps can keep suckering gullible gambling Muppets into it. Fleecing Muppets can be very lucrative, but it will end with many crying bag holders. Only a physical existent can be owned without counter party risk. Knowledge of a btc private key is not ownership of anything. It’s just a relationship with an issuers protocol (a kind of liability). Btc's designers didn't give it a mechanism to stabilize its value, so it can never be usable for (borrowing/lending) finance. If people could get an education from the government indoctrination centers, they would never buy these surveil-coins! They would insist on a free market monetary system of liberty, in which maintaining anonymity is a top priority! Got gold!
Check out Goldbacks. I have started building a collection.
Chris is about as far from being a "Pimp" for BTC as anyone. Read the title of this substack. Liberty. Finance. Bullshit. Taking a deep dive into BTC doesn't mean he's piping anything. I own gold (and BTC) and in my hand gold it has no counter party risk. It's also hard to move $100k in gold out of the country. Three pounds. TSA would seize it from you just for fun. You could have a $billion in BTC on your keychain, or your head (reading about Von Neumann, Maniac is the book). Cut the dude some slack.
Pot meet kettle. Most people don’t want gold any more than you want bitcoin. The difference is they just don’t buy it instead of ranting about it.
What? Bitcoin pimps do nothing but rant about bitcoin incessantly. Why can’t they just do bitcoin, and quit with the tiresome, obnoxious, and overwhelming pimping 24/7?
I agree with you there. Totally obnoxious.
Great Post. And now we have Wall Street protecting the 'integrity' of BTC.
Outstanding!
Good comment, I'll save that.
Excellent article for several reasons. First, it is written in terms simple enough that even an idiot like me can understand; two, it is entertaining and funny; and three, it gets it right about bitcoin and no doubt will annoy and has annoyed the gold bugs who can't see the value in something they can't see with their eyes and hold in their hands, even though most of them don't actually hold physical gold but have electronic accounts documenting the gold allegedly stored for them by third parties. When the grid goes out and electricity fails, they will access their gold the same way folk who access funds electronically stored, disbursed, transferred handle their assets and currency; they won't. Nothing wrong with holding lots of cash you have immediate physical access. Same with gold, except it is heavy to carry and when is the last time you went into a drug store or gas station and provided some gold nuggets for your purchase. Most of us use cash, easily understandable and physical, or we use electricity in the form of credit or debit cards. I'll take my chances with bitcoin aka digital gold and HODL while the lesser fools keep hundreds of pounds of gold in their basements and crawl spaces.
Ever since i heard you on the What Bitcoin did Podcast i kept thinking about the exact question you mention in the beginning of this article. What is it you are buying with Bitcoin?
Well, a couple of days ago i found the answer in Lyn Alden's book Broken Money:
When you hold Bitcoin, especially in self-custody, what you are holding is a stored-up ability to preform global payments that are hard to block, as well as stored-up ability to transfer your value globally if you want or need to. You are holding your slot on the global ledger. It could be an insurance policy for yourself in the future, or you could simply hold it because you recognize that capability to be valuable to others, and therefore recognize that you could sell that capability to someone else in the future. And compared to other cryptocurrencies, Bitcoin is the largest, most liquid, most immutable and most decentralized one.
"Your are buying your slot on the global ledger" is what answers the question for me.
Great piece. We need more Bitcoin education like this. The simpler the better. People can make up their own minds about whether they want Bitcoin or not with the proper education.
In one sentence: Bitcoin is a 1/21millionth share in the BIGGEST and most Decentralized Computer network on the planet, and there isn't even a close second. That network will outlive us, and our progeny. Buying BTC today is buying a share of a one-of-a-kind network, in its infancy. And if you haven't read about the power of networks before - you might click here:
https://bagholder.substack.com/p/monopoly
Like I said earlier, “Lightning Node Operator” is the most important job title of this decade.
Don't doubt the redundancy security, my problem is lack of adoption and threat from gov interference not to mention volitility
The book, Extraordinary Popular Delusions and the Madness of Crowds, comes to mind. Bitcoin (or is it bitcon?) would fit right into that treasured volume.
No has answered the question about BTC with sporadic or no electricity.
Gold and silver are hampered in U.S. because 90% of Americans have no clue to its value.
Still I stack the important precious metals: gold silver platinum and lead in brass
It runs where and when there is electricity. One you get electricity again you pick back up. If there is a period of no electricity anywhere then it will be there waiting when there is electricity again. I mean, this is a pretty extreme example and one that affects way more than bitcoin. The current fiat system requires electricity too. Most people don’t have enough cash on hand to make up for no electricity anywhere.
I believe that many people would be surprised at the number of barter transactions occurring utilizing gold and silver (gold for "larger" and silver for "smaller" transactions). Afa bitcoin is concerned it would appear valuable to separate the concept of the "blockchain" and its potential uses in security applications from the concept of the bitcoin as "money". Note that, for discussion purposes and comparison purposes I will focus on the use of Federal Reserve "Currency" (FRC - paper or digital) as "money substitutes" (but could use any contemporary or historical currency instead).
Use of FRCs as pure (fiat) money substitutes has only been the case since 1971 (when President Nixon closed the foreign exchange "gold window"). In the 53 year period since the value of the FRC has declined 98+% against gold and proportionately against a "basket" of items necessary for daily existence in "middle-class" Western societies. Parenthetically - the rise in "Debt" of all types has also been proportionate. As a result we have now reached the point where "hoarding" of all types of "fungibles" (including precious metals/money) and disposal of money substitutes is increasingly apparent. As yet another money substitute bitcoin will be subject to the same phenomenon at some point. Those who "bought low" can now "sell high" as long as there exists a sufficient stream of buyers willing to exchange one currency for another.
This isn't that complicated. If everyone agrees to use a piece of paper with Queen Elisabeth on it as a medium of exchange, that becomes the adopted currency. But it all depends on trust. If trust is broken because politicians decide to print currency out of thin air, trust is quickly lost and the currency loses value and eventually has to be replaced with something else (think Zimbabwe or Weimar Germany). Bitcoin is no different. It all depends on whether enough people trust Bitcoin as a store of value and a medium of exchange. So far, it seems more and more people are trusting Bitcoin, especially with the advent of the spot Bitcoin ETFs. What is clever about Bitcoin is that 1) it can be held and exchanged anonymously, and 2) there is a finite amount of it so it cannot be "printed" out of thin air like fiat currencies are. Yes, Bitcoin only exists in a database (blockchain) so it is technically vulnerable to hacks (although that seems impossibly difficult), and relies on technology (servers, electricity, etc.) which can be shut down in an apocalyptic scenario. But so would just about everything else held in a bank or brokerage account. Only thing that might save you then is gold and silver and food stored in a bunker somewhere. I am not quite there yet!
The bitcoin network is highly scalable but it also will still work perfectly fine on an extremely small scale. Sure 20,000 nodes is great, but as long as there are 10,000 or 10, no problem. Security wouldn’t really be an issue. The only thing someone could do is double spend their own balance. Even with only a few nodes, no one can steal bitcoin they don’t have to private key for. And if only 10 people are still using bitcoin who is going to try to steal it anyway? So maybe it will one day only be a few people still using it, but it will never go away. There will always be some people who want it even if it’s not broadly adopted.
Great article. Thank you.
You will really enjoy Dr. Giovanni's BTC Power Law. You have described in laymen's terms how the laws of physics apply to bitcoin. It's all fascinating. You will love reading about the the BTC power law.
Here's a link to his X account. I'm in his Patreon if you're interested in hooking up with him. https://twitter.com/Giovann35084111
Best of everything.
Thought I was the only weirdo who practiced this daily redundancy. I just bought 3 Bitcoin T-shirts with a Banksy theme.
Nice! I just ordered a BTC Bansky themed tshirt. The one with the balloon.
Is Bitcoin powercut proof? Is it China-war proof? I'm not trying to be a party pooper because I can see how brilliant Bitcoin is when the world is stable, power grids are stable and when we're not watching war unfold in Taiwan and beyond. You can have a generator at your home supplying power but if the grid goes at 'Bitcoin HQ', we're all screwed. Also, the man who threw his laptop away with his Bitcoin code is still begging his local council to give him access to the dump; he's offered them serious money but they won't playball. Top of the list of priorities for ANY investment is 'Capital Preservation & Security' ABOVE making profits.
There is no 'Bitcoin HQ'. There's no CEO, no marketing department, no oversight committee. Just the code, which anyone can read and change: https://github.com/bitcoin/bitcoin.
As long as 1 copy of the ledger exists somewhere your bitcoin is safe. Assuming you don't literally throw your keys away, in which case, yeah, you might lose it...
Even more important than the redundancy is the fact that you only need one "true" copy of the blockchain to persist - because it will be clearly identifiable as the one that required the most work to generate. You can try to fake one but you will need to do the same amount of work - and that's basically inconceivable now.
Fwiw, as someone who's been in bitcoin for a while, the 2 key things that make bitcoin civilization-changing are:
1. Nobody can stop anyone else using bitcoin and that includes governments. This means that in important sense it transcends governments. A day is coming when governments try to kill it - and they will fail. At that moment everyone will realize where power now lies.
2. It is the first and (i'd argue) only asset with fixed supply. Anything else, when the price goes up it just incentivises greater supply. Eg the potential supply of gold is effectively unlimited - we've only used like a billionth of the reserves even in the earth's crust, it just gets more and more expensive to mine. Humanity is *completely unprepared* for an asset with fixed supply. More on that here: https://open.substack.com/pub/swinehoodsremedy/p/on-the-fair-value-of-bitcoin-and?r=27ar0h&utm_campaign=post&utm_medium=web
Brother, we're in the same boat. A Kitco News anchor interviewed a Stanford Statistician PhD, and what intrigued me was his simple yet brilliant mathematical explanation that Bitcoin will go up 2⁶ power for as many years as it's been in existence. Think deeply on that. This is due to the halving effect, as well as more participants owning more fractional shares of Bitcoin (SATs), which will make the system more secure over time. So in 15 years from now (2024-2009=15), Bitcoin will be 2⁶ more expensive in currency terms than today ($66,040x64=$4,226,560 estimate per Bitcoin by 2039). However with the logarithmic decay of Fiat currency, and given my knowledge in precious metals markets, we know that these bull runs can happen far sooner and can run up far more than anyone can expect, followed by a swift reversal. Especially when discovering the price of money with far less manipulation than other markets. The longer you wait, the harder it will be to obtain 1 Bitcoin. I think it's also wise to hold physical, tradable Gold and Silver, as a decent chunk of people will not adopt, and simply view this digital system as something that they will never be able to obtain, and will attempt to go off-grid. Yet they will find themselves shut out of the rest of society that adopts a CBDC, so we could have many nomads in all of our backyards, the "unbanked". The good thing for those who hold exchangeable currency like Bitcoin , Gold and Silver is that these "unbanked" will be willing and able to work. At least the ones with real life skills and not just people who wanted to obtain useless paper degrees with no skills.
Blessings,
Silence DoGood
☕✝️