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Bitcoin: The Gathering Storm

Bitcoin: The Gathering Storm

Dear Crypto Fans,

Excuse my absence. I’ve been reading all the news lately and it has made me slightly wary of things to come.

The crypto innovators are being hunted…again.

Prepare for more American regulation…again.

Followed by the UK.

And probably Australia…again.

Wendy McElroy called it the Pitbull assault, in the US. She’s being nice. She keeps tabs on this crap and I suggest keeping an eye on Wendy.

Uncle Sam is taking square aim at your stash of crypto now. Bitcoin et al.

Maybe Uncle Sam is tired of his missing tax loot. More than likely, he’s about ready to print a load of paper money to pay down the debt through inflation. It would be smarter just to e-print some crypto, but allegedly the US gov’t isn’t biting.

If there is one thing that could put a serious dent in cryptocurrency, internationally, this is it: S.1241. Or, perhaps more accurately, push crypto underground – in the US, UK and Australia. Okay, let’s add South Africa.

Did I miss anyone? Canada? Please.

Crypto Black-markets may be about to explode in the old free-world, as a result. But how long can they last?

Who controls ICANN?

Reactions from this news might push people into the privacy coins. Monero (XMR) is up of late, but some of that may be from news that you can now purchase discounted music with XMR’s. In other words, it’s marketing. No, Jethro, it’s privacy.

Privacy, privacy, privacy.

Let me harp on that. Get ready. It is possible that the Winklevoss Twins backed the wrong horse. It’s okay, but if they are smart, you should see a rising Monero now. Slowly at first. Then faster.

It is highly probable that governments will continue to attack cryptocurrency as a threat, as a bubble, as an unregulated investment vehicle, with no intrinsic value. They will hold out their own valueless fiat currencies as the one true god. Bitcoin will be beaten.

Don’t pray too hard. Diversify. If not Monero, any other privacy coin you think is good gumballs, buy them. You might live to regret it, if you don’t. I seriously doubt you will regret it, if you do.

S.1241 states, if you are a US subject (I am) – you must comply. They will cancel my passport, if I do not. This is my prison camp. How big is yours?

The United States must modernize. I’m serious, that’s the buzzword: modernize. But think of this word instead: confiscate. I mean, at least be honest, pud-winkles. Modernize what? The confiscatory tax laws?

And don’t think there is an out.

S.1241 covers all the bases. Ownership. Control. Cryptocurrency exchanges. Paper wallets. Brain Wallets. Hardware wallets. My dead grandma’s coffin stash. Hey, they even made it all-encompassing: funds stored in digital format are subject to reporting requirements, if the bill passes.

And you think it won’t pass? Do you remember why Jesus tipped over the money-changer’s tables?

By my estimation, there are over 30 million Americans holding (HODLing) crypto. I hope there are more. Eleven more disciples at least. No Judas.

S.1241 is attempting to amend a section of  Section 53412(a) of title 31, United States Code. And it appears as if our illustrious US law makers will do it on the sly. Middle of the night stuff. And soon.

Satoshi Nakamoto warned us. Bitcoin was only a temporary solution.

So, what is a more enduring solution?

Monero? Grin? Aeon? Electroneum? Bytecoin?

Any port in a storm.

And for the record, IOTA. I have a bad feeling about it. I hope I’m wrong.

 

Sincerely,

 

Jack Shorebird


The above is all opinion. If you think it’s off the mark, that’s okay.

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Where there is smoke there is Iota?

Where there is smoke there is Iota?

Updated: September 4, 2017


An open letter to Cryptocurrency fans, that is not investment advice.

Where there is smoke there is Iota?

For the crypto-enthusiast Iota is nothing new. It’s another cryptocurrency with great new tech, we are advised. Some call it the Bitcoin Killer. A new type of coin with a blockchain and a “tangle” and a new way of reaching consensus — to validate transactions.

It’ll reach a ten billion market cap in no time, some say.

Bitcointalk.org is a good place to do some research. Reddit is another, but understand that the coin’s actual website is often the best.

If the coin’s page was well thought out, clean, understandable, with a community of serious people, so much the better.  If it’s disorganized, errors are abundant or if the developer’s comments are abrasive, over the top and ridiculous, then question the coin.

And yes I know that many great minds are jerks on the outside. If so, then they’d best get a partner to smooth out the people wrinkles. That goes for broad based appeals to the general public and also getting the German government, for example, on board.

In a recent Iota video, such a process was discussed. Grants from Uncle Germany? Doesn’t make me feel good. When you obtain grants, you gather strings.

And then, after the sales pitch, citing the great tangled tech, a very detailed Reddit Page, new tests are announced. Tests? Yes, I said tests. More tests.

Why?

Well, things need fixing. But don’t worry, if you can download a large file, a new wallet, if the repository is not too busy, install it and follow basic instructions (not easily located) you will be just fine.

That’s what happened recently and has apparently happened on more than one occasion.

Why might you need to reinstall a wallet? Because of the upgrades. This happens with bitcoin as well. Everyone expects it.

They are making things better for you, of course. They are going to have the machines talk to each other and probably take over the world. Not really. It’s just to speed things up, like for paying automobile tolls in Germany. A new M2M — machine to machine — tech to speed up transactions and lower the costs of doing business.

The only consideration was if you had a web wallet, during these last tests. You need newer software. So you download, follow the instructions. You install a basic new wallet, pull over your funds from your old “seed” and get all sorted out. You get your new “seed.”

If you are a US citizen there’s another problem.

Bitfinex, the only major exchange offering Iota trading has decided that Americans are too risky. You read the Reddits. All is well they say. Others say get out of there. All, just after your wallet is upgraded.

Certainly, Iota needs more exchanges.

Iota did advance at a good clip, but after the Chinese ICO news, like all crypto’s, it’s drifting lower.

Due diligence. Researching Iota, you will find several experts who work for or with Iota.  You can listen to German youth talk about how they are now reformed gamers. Roof top talks with guys who sold game mods on the sly. Could be another Bill Gates. But not likely. I don’t think Bill was gamer as much as a thinker.

All that reading and research. Does it pay off?

All those audio broadcasts. Here’s one. You can listen to them from the Iota guy. That’s what I call him, the Iota guy.

What does it all mean?

Perhaps the Iota Reddit is the best of the worst, at times. So much chatter and occasionally a gem.

I wish Iota luck.

Sincerely,

Jack Shorebird

 

 

 

 

 

Bitcoin or Bitcoin Cash…Crash?

Bitcoin or Bitcoin Cash…Crash?

Updated: November 27, 2017


Just a few words before you jump ship…either way.

I’ve been holding back these last few weeks. Watching and waiting. But I can’t resist. No matter where I look it seems that few in the cryto-news arena are willing to take a serious “political” stab at the Bitcoin Civil War. But there is no war. It’s just money. And as the saying goes…

…the good money chases out the bad.

Okay, I know bitcoin isn’t money and in this cryptosphere, the shysters can defraud the noobs unseen. And yet, this thing is playing out in plain sight. The big miners are sucking all the air out of the the little guys. Little guys who can’t get it together.

Yes, I’m bad mouthing the bitcoin core team. And the Chinese miners supported by cheap power handed to them on electroplated silver platters are walking away with the cash — literally. Your cash. (Now we have word that China is clamping down on this cheap power grab.)

Even CNBC is in on the act. This article gives you their latest take. They talk about the Chinese Miners — how big they are.

I’m sure you cryptocurrency watchers have been, well, watching the coins, as it were. “Bitcoin Cash” debuted recently as the Bitcoin replacement. We’ve seen some explosive growth with a lot of newsflashes chiming in about how great it will be for commercial operations — think Communist China. Okay, that’s my opinion. I’m sure North Korea is fighting for a spot at the cash table as we speak. Maybe Venezuela and Greece too.

See a pattern?

It almost seems like the core team of all big cryptos are unable to see it. The world is helping to fund despotic regimes. Almost seems like a conspiracy, doesn’t it? But it isn’t. It is real.

So far, however, the high stakes gamble is gyrating. Bitcoin Cash, whether it’s BCC or BCH, is like crypto-rocket one moment, but the next it’s reentering the atmosphere. We saw over ten billion in market value plummet to just over five billion. That’s a lot of bread my friends. Especially in these markets.

Recently, Bitcoin Cash is hovering around the 30 billion cap mark. About $1700 per coin. So the fight isn’t over. Or is it just the old switch-a-roo? Getting you to switch to a lower fee system and to excited all over again? Bitcoin replay-pump?

If any of the world’s largest cryptocurrency exchanges played the risky side of that bet, I would expect some problems shortly — some margin calls. But we’ll see.

But then the rocket took off again. Perhaps it is because of the big names behind it.

Bitcoin Jesus himself supports Bitcoin Cash. Roger Ver thinks that China is sort of a big place with lots of differing opinions. Richard Heart (a kind of socialist in my opinion) recently debated that point with Ver. China’s Internet Firewall negates the idea that China has a free and fair economy, Heart mentioned. And Heart is right.

Gavin Andresen supports Bitcoin Cash. He’s one of the first Bitcoin core devs who was locked out of bitcoin when he met with alleged fake Satoshi Nakamoto, Craig Wright.

What’s even more curious and I would advise you to be careful, is that some of the websites that track the prices of cryptocurrencies are becoming less and less reliable.

You can bring up the prices on the actual exchange(s) you like — a more accurate representation of what is happening in the “street” — or you can rely on the slow and often mistaken websites that try to track all of the cryptos at once.

Don’t do it. Click around. Get the best picture before you buy or sell.

There are numerous opinions out there as to what will happen now that Bitcoin Cash launched. Well, has forked — whatever. The fact that bitcoin holders can receive the equivalent in the new currency is mentioned. In my mind that’s bad news. I would sell the crap out of it if you gave me free money. Cash it in to my local stable currency. Maybe some of that is going on now — and if so — it should be a few days as everyone who wants to cash-out, does so.

In the old days we saw new cryptocurrencies do this and you know what happened, almost invariably? They crashed — after a great spike. After the free giveaway of free money — I mean crypto — they went bye-bye. They languished in crypto-hell for years, vanished or stagnated. But don’t take my word for it. Try some Crave, Vcash (formerly Vanilla) or maybe some Auroracoin. Go ahead, make their day…again.

Of course, few look at bitcoin as a “junk” coin or a “pump” coin these days. It’s the “can-do no-wrong-coin” or the “first mover.” Say what you like, but remember, like I’ve been warning you, diversify if you are a crypto-enthusiast. Bitcoin has been copied before. In fact, many if not most of the coins out there are knock-offs — at least that’s what we read. Sure, some are new. Iota and a few others, but the clone universe is telling.

The confidence war begins now, if you will. The world’s biggest bitcoin miners, should, if they are smart, defect to Bitcoin Cash. They can do more with it and control it better — by centralizing it even more.

But wait, the people may not trust the big boys, even if Bitcoin Cash is faster and better than old plain bitcoin.

Are you certain? Would you continue to use a slow coin, outdated, outmoded, controlled by a few developers — who argue — who live all over the globe? Or would you like a strong, business-like model, run by Communist China?

Kind of a screwy decision huh?

What is the best decision? What are the two evils?

A proof-of-work coin? A mining centralized energy hog. Or a centralized proof-of stake system, where you immediately enrich the creators when you buy their coin? Aren’t all cryptos just variants of both systems anyway?

Seems like we need something better.

But for now, the choice is limited.

Is there something better in the cryptosphere?


Image: Flickr

Cryptocurrency Predictions From Experts?

Cryptocurrency Predictions From Experts?

Ball


Expertise

Is anyone really — I mean really, really, really — an expert when it comes to cryptocurrency? Even the experts don’t agree what cryptocurrency means. Is it a tool? A convenient form of functional money — like a check with drawing rights. But rights to what?

This aside, what are the latest prognostications from experts? Try these:

  • Balaji Srinivasan, CEO of 21.co
  • Peter Smith, CEO of Blockchain
  • Kathleen Breitman, CEO of Tezos

Bitcoin, the Master

Like all “experts” in this relatively new field, the implication is that bitcoin and Ethereum have staying power is common-speak. A five to ten year future window of opportunity seems to be the consensus — even given the current problems associated with bitcoin. That belief — almost a religion — is nothing new. It is going to make these experts look like digital noobs, if on July 31, 2017 or even down the road a piece,  bitcoin forks anyway. By then I’m sure they will have edited their theories.

There can be only one — or something like that…

New cryptocurrencies will come along and become successful. Some currently unheard of technology could dominate the market. Again, this seems obvious. That’s why we have a thing called progress. Can we be less obtuse here and stop pandering to noob-ville.

Rich Man, Poor Man, Fraud Man?

People will become rich and poor as new cryptocurrencies enter this space. As a result of the people who lose money due to fraudulent enterprises, more regulation seems to be in the offing.

No kidding?

In fact, Ripple may be implying that markets are heavily regulated for a reason. This is yet another eyebrow raiser. Ripple went to the dark side early in the game and is no doubt leveraging its position against the “free” cryptocurrencies as they themselves struggle to become a meaningful player in the cryptosphere. One wonders if they will soon apply for monopolistic benefits. Perhaps become one with “Fedcoin,” in the United States of America.

The Cashless Prison

Cryptocurrency must not be private? Regulation will eventually take over.

The critical component required by governments is ultimately, a cashless system whereby — allegedly — everyone can be more secure. The problem is, one has no privacy in this scenario, no right to life, liberty and, in the end, no private property — even digital property. How can one be even remotely free if every personal transaction is cataloged by the state, controlled by bureaucrats and dictated by the political wind?

Benevolent Big Brothers

Speculation in cryptocurrencies will lessen as certain altcoins become more stable. That bitcoins are not just for drugs.

Right. Got it.

This bit of speculation is a bit disingenuous. In fact, it’s just a set up. Stated to entice the under-educated. The noobs. To hint again, that appropriate rules to unmask the users of cryptocurrencies will magically enable a virtual world-utilization of cryptocurrencies, especially when new “killer apps” come online. All will be well, so long as we obey.

Conversely, it can be argued that the instability of cryptocurrencies are in part, caused by the states themselves. Take China for example. That bastion of corruption on one hand implies that bitcoin miners will be heavily regulated and on the other, they are allowed to profit. Do you hear “payoff?”

Since China purportedly manages most of the bitcoin blockchain, is it any wonder that it bitcoin is inherently unstable? And we all see what happens when bitcoin catches a cold — almost all other relevant cryptocurrencies nosedive.

In support of the move away from state controlled cryptocurrency, things like Bytecoin, Monero and Aeon were born — and many others — in an ongoing attempt to remind the minders that well, all of the people have not rolled over and played dead — just yet.

The Silly Con

Silicon Valley will become a direct competitor to Wall Street. This seems straightforward. As computer technology advances, its underlying information infrastructure will continue lubricate the wheels of finance. All of the major trading floors, worldwide are already supported by the latest Fintech. But the assumption here is much deeper. That the technology itself will make Wall Street, for all practical purposes, passé.

Imagine that for a moment. Not that all the brokers and lawyers would be replaced by smart contracts, but that the wheels of finance themselves are replaced with cryptocurrency. Where paper money, fiat currency, the Federal Reserve, are at once, relics of a bygone age.

Do you take VISA?

Competition will force the old guard — say MasterCard and Visa — to step up. In other words, if bitcoin or any cryptocurrency, can one day compete with the current regulated entities then and only then, would the need arise for the old guard to “improve.” That or be ushered out.

The only problem is, bitcoin is currently too slow to compete with the current credit based entities, except where it comes to moving large amounts of money across borders cheaply. A point that is often ignored. They don’t want to remind anyone that there are inexpensive ways to do big business.

Micro-transactions are all the rage today — supposedly — but when it comes down to the “golden” tacks, if one can move 200,000,000 dollars in ten minutes or less, across 50 borders, without taxes or banking fees, well, who needs bitcoin “micro?” We have Iota for that anyway and they are cheaper — better at the small stuff. Maybe better at all the crypto stuff.

Quantum Query

One should remember that technology is advancing. Governments worldwide are working on systems — quantum computers — which, if true, can crack cryptocurrency addresses — take your funds — in about a minute. It might therefore behoove one, if cryptocurrency seems a lucrative investment, to study the next generation of altcoins which are resistant or even immune to the quantum “state” hackers. Maybe Iota, but there are others.

This being said, if governments cannot get what they want, if they cannot control the newest generations of non-state currencies, they would need to make them irrelevant by installing a better form of money, perhaps by privatizing the banking industry altogether or by controlling the internet, radio waves, WiFi etc. At last resort, Big Brother would require draconian laws, like those in North Korea, and the dismantling of technology altogether.

Absent a total crackdown against cryptocurrency, there are other more curious ways to thwart the ever growing popularity of the expanding cryptosphere: government sponsored hacks, thefts, 51% attacks and so on.

It is interesting of late, how many cryptocurrency exchanges, wallets, etc., are being hacked. The newest one today? Veritaseum, to the tune of eight million dollars.


 

 

 

 

 

 

 

 

 

The Animals

The Animals

iota

The guys are discussing cryptocurrency today. Tom is traditional, Dick is confused and Harry always wants to be on the cutting edge.


 

 

Image: Wikipedia — By ravas51 (Flickr: IMG_3747) [CC BY-SA 2.0 (http://creativecommons.org/licenses/by-sa/2.0)], via Wikimedia Commons

Bitcoin to $2,000,000 in Three Years?

Bitcoin to $2,000,000 in Three Years?

 


How to make two million dollars in three years, by purchasing one bitcoin as soon as possible?

At that point you should only be required to pay long term capital gains taxes.

Why not 20 million — if the dollar devalues fast enough? In Venezuela, I estimate that bitcoins are are well over million Bolivares each. Let’s check that math.

The price of bitcoin this second, is about $2300 and dropping — again. This was expected. That is equivalent to 23,000 Venezuelan Bolivares (VEB) — at the official rate. Not bad you say, but wait, there’s less… The official rates are nonsense.

20 Million Boilvares per bitcoin?

The unofficial price you will pay for one bitcoin in Venezuela is about 19,555,000 VEB. Let’s just round that off. To buy a single bitcoin in that Socialist paradise will set you back about 20 million VEB. That’s a big stack of paper and the last I heard, the government there was having trouble obtaining enough paper to print money.

So already, in some countries, you are a rich. Not really. One US dollar is equivalent to about 8500 VEB — street value. (See here for realistic conversions rates.) So you would still have, realistically, about $2300 bucks US. That is if a Venezuelan could really afford to buy a single bitcoin. Bummer.

Maybe the Venezuelan dictator can ask the motorcycle gangs currently stealing sugar from moving trucks in broad daylight, Mad Max style, to swipe a few rolls of paper and pass it along to the printing office. You know, in order to print more money. Wait — bad idea — toilet paper is also at a premium there. Actually, I think they are fresh out — a year ago.

But talk about optimism. John McAfee tweeted that:

Bitcoin would reach $500,000 in value in three years.

…or he will eat his own privates on national TV. Sure he will.

But McAfee might stick to his 10 million dollar bet. Why? Because according to this piece, McAfee is betting on a bitcoin fork. Not bitcoin. Did you catch that? He’s betting on some new type of bitcoin.

I’d say McAfee is going to lose 10 mil and a part of his anatomy. Well, maybe the 10 mil, unless he’s insane. Come to think of it — not the insane part — I want to see that bet. Any evidence he actually made it? That anyone has excepted?

Whether it’s just a publicity stunt we might never know. McAfee does say some pretty relevant stuff though. Take his Google comments. He wants to take them out. Why? For very good reasons. The fact that Google tends to obtain too much information about us. Kind of a errant, business-like, “Big Brother.” One that shares information with Uncle Sam when politely asked.

Don’t worry, your smart phone, computer and talking toy robot are not really watching you…that much. They have no idea that you are a Crypto-Head. And I say this in all seriousness and sarcasm. (Did I mention that the FBI is now warning us about our children’s toy-spies?)

But back to the bitcoin news. Does McAfee have a point? Will he retain his privates? Let’s just take that first question, in general.

Will bitcoin continue to increase in value over the mid to long term — if it does fork?

McAfee — and this guy ain’t no dummy — says yes. In fact, McAfee puts his faith in Bitmain CEO Jihan Wu.

In case you are still confused about a fork or two, look over the graphic provided here. It’s a great way to understand the basic SegWit, SegWit2, and UASF issues is a visual way. Things are definitely confusing this time around. So let’s ditch the acronyms and get back to our $2,000,000 bitcoin. I’m salivating, aren’t you?

Back to Bitmain and Wu. McAfee says Wu is a sharp guy and that the market will follow him with his brand of “bictoin,” whatever flavor that happens to be. The old traditional bitcoin, the one that was developed by Satoshi Nakamoto and supposedly improved by the core teams over the years, will take a nose dive — back to 40 bucks each. At that point, would it even survive? Can you imagine the bag-holders?

But that’s not all. It’s why I brought up the Venezuelan comparisons. McAfee thinks that as a result of his research, this “new” bitcoin will reach prices north of one million dollars. Maybe more than two million each.

Jump Ship?

So how will we, as consumers, jump ship, if Wu forks bitcoin (original flavor)? I’m assuming, but please don’t hold me to this, that we would simply begin using his systems — his wallets —  with our old bitcoin. We’d sort of do a mini-fork.

I’m sure Wu will announce his fork plans and then us little people can then decide for ourselves, which way to go. With Big Daddy Wu or Old Bitcoin core. Maybe I’ll head over to Iota for spell anyway. I just like their style.

This brings up yet another question. Suppose we try Wu’s “New and Improved” Bitcoin (extra crispy flavor) and we don’t like it. Can we then switch our bitcoins back to original flavor? We’ll see.

In the meantime, keep your eyes on Crypto and maybe deal in Litecoin or Ethereum until this Wu thing settles down.

And one more thing — and this is where lowly little me differs with Master McAfee. I think he’s wrong. Why would anyone invest in Wu-Coin if the guy knowing exploited a flaw in bitcoin to speed up mining and make higher profits, at the expense of the community at large?

And one last thing. I hate McAfee’s Antivirus software. Always had trouble with it.

Until next my next post, have a Crypto day.


Image: Flickr

 

 

 

 

Bitcoin Billions at Risk

Bitcoin Billions at Risk

ball

If I had a tiny crystal ball, I could tell you if the 30 billion dollar bitcoin meltdown will continue. I could predict when to sell, when to buy and when to hold. But I don’t have even the tiniest of magical crystal balls — and neither does any other Bitcoin Jesus.

Bitcoin’s “potential” fork in the road is near. A few weeks, maybe sooner. Experts in the field are uncertain if bitcoin will survive in its current form — or any form. Traditional money-changers will shrug if it collapses. “We told you it was a bubble — it was funny-money.”

If bitcoin fails, billions of dollars could be forever locked away. Those who made their millions from the cryptocurrency will no doubt soldier on, creating new tech and innovating — all because bitcoin opened that door.

In the meantime, say in a few days, the large cryptocurrency exchanges might need to explain that all of their cryotocurrency accounts are okay, but they only have pre-SegWit bitcoins. Outfits like Bitfinex, Coinbase and Poloniex could freeze all bitcoin accounts until the storm blows over. Then the lawsuits would begin. If you think it won’t endanger your back-up crypto, think again. Think about saving your cryptocurrencies offline or in a wallet you completely control. Then hope. And wait. (I am.)

On the scale of things, bitcoin isn’t even a blip — when one focuses on the amount of money being flung around the world each day. It’s chump change compared to JPMorgan Chase or Barclays, but then they don’t get it do they? They don’t understand the idea behind bitcoin at all. The idea behind any cryptocurrency. If they do understand it and wish to keep their wealth, they are busily working to destroy it — or copy it. Thing is, they will always be behind. Innovators are even now working to improve fintech. In a few years the banking industry will again need to re-educate themselves or risk being heaped into the dust bin. Hundreds, if not thousands of years of traditional banking — the stuff that money is made of — is being rewritten.

At first glance, some might think that a back-up cryptocurrency is in order — another cryptocurrency to set aside, while bitcoin goes through its latest convulsions. Litecoin comes to mind. Maybe Ethereum. Perhaps instead, we should focus on the newest developments or what are called “Third Generation” crypto’s. Iota comes to mind. No doubt, the choices are difficult.

But the crypto-markets as a whole are deflating, suggesting that this isn’t over yet.

Colorful personalities such as Jeff Berwick have chimed it on the matter. Comedy seems to be the order of the day. Just another update. Don’t worry. Time to poke fun at the entire process. You can do that when you have loads of pre-halving bitcoin profits.

Berwick is apparently comfortable in the knowledge that all will be well — soon. That bitcoin is the “King of Crytocurrency” — period. At least for now. Oh, and if you do follow this “personality” you might want to check out his latest post about the Moon Landing having been faked. Great, comedy and conspiracies. Is he credible at all?

All joking aside, Bitcoin Magazine might be one of best sources of information. They delve into the specifics. Get in the weeds.

Here’s a recent article from Bitcoin Magazine that will fill you in:

Bitcoin miners at large have missed the first BIP 148 “deadline” to prevent a “split” in Bitcoin’s blockchain.

Source: Bitcoin Miners Miss the First BIP 148 “Deadline”

The article tells us that the first bitcoin deadline — when the miners should have taken action to show “solidarity” — has passed. “The miners at large” have not acted to install the recommended updates. This news helps us understand what is actually happening in the cryptosphere. Obtaining our news from CNBC, at the sound-bite level, can be annoying, if not misleading.

But the digital details may not matter to the “man on the street.” He just wants profits — stability — or a way to stick it to the real man. And that is just a side benefit, for now. Since bitcoin, for all intents and purposes is public and prying eyes are always a concern.

As a result of this apparent bitcoin “miner” inaction and other factors, the value of bitcoin is still dropping as of this posting. It is heading for the $1800 mark. The next psychological level — and you’ll hear about this soon — is the value of one ounce of gold. Once bitcoin touches that number, people will expect a reaction. Either a bounce of affirmation or the other thing. If the other thing occurs, then you will read about bubbles. About bitcoin diving to 30 dollars each, then pennies each, then you won’t hear about bitcoin any longer.

Right now, the 30 billion dollar question is, has the bitcoin community at large already signaled that Bitcoin Core is no longer in touch with the users themselves? If this is true, are we now staring at the “fork of failure?” Or are we reaffirming our trust in the backbone — the miners — of the bitcoin system?

If we follow the miners, where will they take us? Down commercial roads, where large corporations and their Nanny-State governments dictate policy? If we follow Bitcoin Core, will this latest software “patch” suffice until the next critical juncture? Still keeping the community safe from the ever growing centralization of control? It seems that we are damned either way.

What is curious about the article in Bitcoin Magazine is that if bitcoin does fork and the powers that be decide, belatedly, to go ahead and allow the updates to commence — they could reunite the blockchain. In other words, having bluffed and lost, the miners and Bitcoin Core could have a “coming to Jesus” moment after they look into their respective digital wallets and discover that they are holding worthless numbers. But they better not wait long to reunite, because every second they delay, trust is evaporating.

In the event of a temporary fork there will still be significant disruption for the users, of course. It would be like keeping two sets of books. Eventually, if the blockchain is mended, only one set of books would be accepted. And therein lies the problem. The other set of books — all of the transactions, purchases, trades and the like — would be nullified. Users could potentially lose millions. Maybe more. Again, trust would be seriously eroded.

I don’t even want to think what would happen if bitcoin permanently forks. The cascade effect would certainly push many other cryptocurrencies into an unrecoverable downward spiral. We couldn’t really say if both bitcoin blockchains would have value. In such a dual-bitcoin scenario, no doubt both bitcoins would attempt to retain the title of “bitcoin.”

And if bitcoin forks, would not every blockchain born cryptocurrency become immediately suspect? Risky.

The other side of that Crypto-Armageddon is that a new coin could be born. Meaning the old guard — Bitcoin Core — could be left behind as Bitcoin Unlimited, for example, moves on with all of the “customers.”

Eventually, blockchain tech will be replaced. All tech is updated. The question is when?

A prediction would be that bitcoin prices could be touching gold price territory within the week.

Thanks for stopping by.

 


Image: Flickr

 

 

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