Welcome, *|FNAME|*, to my newsletter regarding crypto currencies.
I’ve been a crytpo evangelist for a while. Some of you were at the Property and Freedom Society conference in Turkey in 2013 when after my “Intro to Bitcoin” lecture, I gave out redeemable coupons worth a third of a Bitcoin, then $30. I gave them out for free. Many of the people who took coupons never redeemed them. Today, a third of a Bitcoin is worth almost $3000.
I’m no longer sharing free crypto, but I’m sharing my knowledge, observations and analysis. Blockchain technology is important. I consider it the most important invention of our time.
You are one of the ~ 80 people on this list because:
1) I know you, like you, and want to share interesting and potentially useful information with you.
2) I consider you mature enough to take responsibility for any business decision without holding me liable. I get things wrong sometimes and I bias towards optimism. (And I believe in being biased towards optimism.) My goal is provide insight and analysis only. You should have your own philosophy for measuring risk and reward.
What will I cover?
Crypto currencies and other blockchain technologies. Upcoming topice:
– Categories of Crypto Currencies
– My Watch List
– Advertising Related Crypto Currencies
– Some breadcrumbs for beginners
Crypto and Me
Those of you who didn’t cash the Bitcoin coupons I put in your hands aren’t the only ones who missed the boat. I was first offered Bitcoins when I wrote an article for the radical libertarian website Daily Anarchist.
The exchange rate was less than three dollars! I considered it briefly and asked for cash through Paypal — about $20. For the next article, the editor insisted I take Bitcoin, and I did. I looked into investing, but stopped upon discovered that to use the only Bitcoin exchange in existance, I’d have to wire money to Japan. I waited until the exchange rate was over $50 before actually doing that.
Anyway, I don’t have as much as I could (should) have. I sold quite a bit of what I had for earlier entrepreneurial endeavors, but I do have some.
I’ve spoken about Bitcoin at many conferences and occasionally still get invited to do here in Ukraine. Here is the last powerpoint presentation I used. The slides about Bitcoin’s history is pretty cool.
Here is me debating Bitcoin vs Gold with famous goldbug James Rickards.
I build a Bitcoin Lottery website, and then shut it down because it was loosing money. I’ve consulted a few Bitcoin companies. But most importantly for you, I’m just in the scene, I speak the language, consume lots of news, and I want to share it with you because I think it’s important.
Beginner Breadcrumbs #1 What and why blockchain?
What is Bitcoin?
– Decentralized digital money.
– The first and most popular use of a blockchain (as money).
What is a Blockchain?
My favorites definition comes from Etherum founder Vitalik Buterin:
– A distributed accounting system of digital tokens so secure that not even state actors can interfere with it.
Bitcoin represents 55% of the value of all crypto currencies (ie blockchain based digital tokens). The % is dropping, though the price keeps increasing — which tells you how quickly some of the others are gaining steam.
What can a Blockchain do?
Well, Blockchain technology is only nine years old. We’re still experimenting.
By far the biggest use case is money, and if you break the definition of money down into it’s tree components: unit of account / medium of exchange, store of value, then it seems like store of value is the focus of Bitcoin.
It isn’t clear whether Bitcoin is leaving behind the “medium of exchange” value proposition, but many other crypto currencies are competing to fill the niche. (More on this in future newsletters.)
There is a now-obscure blockchain based email system called Bit Message. I used to use it.
The other big one is smart contracts, and smart property. Imagine the laws governing the issuing and trading of shares being governed by code instead of by laws.
Is it new?
No, but only in the sense that there were earlier electronic moneys, most notably Liberty Reserve (2006 – 2013) and EGold (1996 – 2009). Both have a volume of between one and two billion dollars a years. Both were centralized systems, and both were shut down for money laundering. My some accounts, the EGold seizure was the largest ever government seizure of privately owned gold.
Really, yes. Blockchain technology solves (or, more conservatively, seems to have solved) a problem that mathematics and computer science scholars believed to be impossible. The decentralized consensus problem. Here’s an example of how we thought it was impossible:
The now-famous nine-page white paper written under the pseudonym Satoshi was published in October 2008 in a cryptography newsletter. The first block, ie “genesis block”, of the Bitcoin blockchain was released in January 2009.
There’s a newspaper headline embedded in the genesis block as a sort of informal time stamp: Chancellor Alistair Darling on the brink of second bailout for banks.
One of the reasons I was confident in Bitcoin earlier is because it is open source. A good programmer or team of programmers can read the code. We know exactly how it works. We can also spin off modified versions, which people have been doing. The crypto space is a Cambrian Explosion of Innovation.
Another reason is the theory of money shared by those of you who are students of the Austrian School of Economics. Government control of money is a relatively new phenomenon. It is done by force. The market wants innovation. The market wants choices. In 1860, there were over 8000 currencies in the US.
And now it is difficult to even conceive that money might be independent of government.
Is it too late?
I don’t think so. I think it’s still early. There’s an enormous technical hurdle, which I think most people cannot climb without assistance. There’s a psychological hurdle — imagining what money could be. There’s the fear of losing it all the way all of us have at one time or another lost a Microsoft Office document. So I think it’s still early, though I do bias toward optimism.
if you’re going to hold me responsible for your decisions, then let me know so that I can remove you from this newsletter. 🙂
Billionaire investor and Shark Tank celebrity Mark Cuban went from ridiculing bitcoin to investing in a crypto fund.
IMF chief Christine Lagarde cautioned banks not to dismiss Bitcoin in September, and to even raising the specter of bank with dramatically weakening powers.
I do want to end on a prudent note. This heartbreaking article details many of the hacks and crashes that have resulted in losses of tens of thousands, and in a few cases, hundreds of thousands of Bitcoin. Be careful.
I’ll give some best practices and other great information in future newsletters.