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The Ghost of Crypto’s Future

The Ghost of Crypto’s Future

Dear Cryptocurrency Investors,

It’s about the money.

Lost in the lull and the bull, the chart readers and the screaming heads; and the comedians and the click beggars, the FUDsters and FOMO-kings, sock-puppets, trolls, you name it…is the truth.

And the hell if I know it, but neither does anyone else.

Two things that are influencing people deserve mention, however. Charlie Lee‘s revelation and Coinbase‘s inadequacy.

You can see bits of the potential future of cryptocurrency all over the net in real-time, but not necessarily in “past” time. The encapsulated version of why we are where we are. The rooting of the space, if you will.

Profits speak louder than purists, however and that answer lays ahead. Predictions that bitcoin will soar into the millions of dollars, seems to go beyond boundaries of common sense. We should not allow profiteers to reach into our collective pockets, as they sell into our greed.

Charlie Lee, who did not divulge the numbers of Litecoins he allegedy sold recently, did so for a reason and if you noticed, near the peak in price. That action speaks volumes, no matter the reasons he might give to the contrary. Even if Litecoin becomes the most popular cryptocurrency, the doubt will linger in the minds of investors.

And this doubt also injects its worry into bitcoin.

What is Charlie seeing that we do not?

If you haven’t made 25% to 50% returns this year (2017) then, I’d be surprised. Many have made far more than that…

What will happen in 2018?

In 2018, we could see a reversal trend. From bitcoin to Ripple. It seems to be on its way now, but this space is notorious for pumps and dumps and even I doubt Ripple XRP’s will climb to $10 each, as some have suggested, by mid-2018.

That bitcoin will drift lower, gradually, as it is polluted by the knock-off clones, Bitcoin Cash, Bitcoin Gold and others is another “theory.”

The cryptocurrencies we have come to rely upon are taking hit after hit and they have not recuperated as of this writing. Many investors are paying an emotional cost, having bought in late. The faith that bitcoin has always recovered, is currently being retested.

What are a few weeks of losses, you say, as bitcoin works out its kinks?

…gamble a little…

These last few weeks of 2017 will embitter some of the newest investors, that’s why. The ones who have been watching and trying to understand and who have, after a time, decided to gamble a little. These are the retirees as well as the professionals, but not necessarily expert investors. They are conservative types and once burned, they may never return. These last few weeks have burned them. And they have lots of money to invest.

After the Thanksgiving chats, they went in. Thousands, if not billions of dollars. And what happened? They were cut off at the knees. Profit takers swept in. Exchanges could not handle the inflow. Bitcoin showed its flaws.

Ripple held the doors open, but few of the newest investors knew how to buy Ripple XRP’s. So, the late comers served to enrich the first comers…not unlike any good Ponzi Scheme, with the exception that the bitcoin scheme seems perpetual. It still has billions left…for now.

Already, I have spoken to those who, in the last few weeks invested thousands in cryptocurrencies and have already cashed out, with losses. This was after I had shown them what they could have made had they listened to me over the last five years.

…Cheap wine…

They were astounded then, but not now? Now they shake their heads at me. Not only do they tell me that they think that bitcoin will crash, because they have seen this sort of thing before and names like Ripple, reminds them of cheap wine.

“Cheap wine?” I ask. “The name bothers you?”

They say it does.

Personally, I can understand that. “Ripple is not a great name, but look at the returns,” I tell them.

“Doesn’t matter,” they say. “We got burned on bitcoin, Ethereum and Litecoin, what the hell difference does it make? They are all the same.”

“Ripple has its pluses,” I tell them. “It’s doubled in value as others have sunk. Ethereum has a lot of pluses as well, but…”

“Just you wait,” they said. “The government is going to shut them all down.”

“Not Ripple,” I said. “It’s playing along with the regulators. It services the banks and now credit card companies and more good news is coming.”

“What about Dragoncoin,” one asked.

“Dragon what?” I replied.

“How about Raiblocks?” another asked.

“It’s too new — risky,” I replied.

“It’s got better tech than bitcoin,” came the rejoinder.

“Okay, but Iota said the same thing and they are struggling. Each coin argues with the other. The test for me has always been “use cases.” And bitcoin used to be used more, now Litecoin seems to be taking up some of the slack,” I said. “And Ripple…”

“Cheap wine?” one replied.

“Never mind,” I said.

Bought gold and silver…

So I wait, but for now, as these old investors have retraced their steps. Bought gold and silver and palladium. Dumped stocks and bonds, like they’re on fire. One was just ripped off when he failed to check out a gold dealer to see if they were legit.

And these conservative types, these investors who have accumulated wealth the hard way, do not like to lose a single dime. Time is far too precious now. I know, because I am one of them — we’ll almost.

This dip in bitcoin price, even if it recovers tomorrow, will, like Charlie Lee’s recent Litecoin cash-out, linger like rotten cheese. It’s like that fake gold dealer where one guy lost thousands dollars last month.

I asked that guy how he lost that money. He said he found the gold guy on the internet and sent him the money from his IRA and that was that. Didn’t check him out because he “trusted” the internet. Didn’t even tell his financial planner he was doing it, because he wanted to save on fees. He trusted that his internet service provider would not allow fake gold dealers to advertise via email. And it was easy to do, he said.

…knowledge gap…

It’s a knowledge gap. In years past, it was nearly impossible to send official looking mail to someone for free. If you received a chain letter of scam bank notice, you were not often fooled. Phone call scams were easier and they still are, but they are labor intensive. Since criminals are naturally lazy, they want the biggest bang for limited effort. Welcome to scam websites and emails. Welcome to webpage Monero miners.

…Coinbase…sucks…

There are legit cryptocurrency sites, however. Coinbase for one.

Now, here’s the thing. For these conservative money types, Coinbase’s newest web page look and feel sucks. Right there, they are losing millions of dollars in business. Why? Why would they intentionally allow their coders and website gurus make the site counterproductive? Counter-intuitive?

I recently sat down with several businessman, some retired folks, a Human Resources Specialist and a two company presidents. I showed them the Coinbase website, which has gone through several alterations over the years. This newest version, I’ll wager, has probably influenced the latest bitcoin losses. Why?

Navigation across the platform is slow and confusing, they said. For example, a lot of the web pages have various tabs you may click on, but no highlighting or help capsule to let you know they even exist. Bad business all the way around.

“And look at this,” one said. “Each tab on the left, Bitcoin, Bitcoin Cash etc., you click on them, the word, and then to the right you see all of your transactions. Why do the jam it all in like that, like those credit card websites now?”

I couldn’t understand why Coinbase would do that. “It was not like that before, but it was not great before either,” I said. I just got the glazed-eye look then.

“Can I just call them?” It was a elderly woman.

“I’m sure you can,” I said.

“Have you ever called them?” she asked then.

“No. I do everything online now.”

I hadn’t been on the Coinbase website for a while and it took me, without reading too many directions, about 30 minutes to see how they had changed it. How did I do this? I started clicking every damned word on the page and behold, it all came together. But newbies and oldies should not be turned off like this. It is clear that the age and knowledge gap is hurting their business.

But seriously, Coinbase, get your heads of out of the sky for a moment and hire some people who understand how to make things idiot-proof. Take a lesson from Amazon or Paypal, but get it together. That is, if you do not want to see competition scream right past you.

…Cryptocurrency Specialist…

But just another short look into future seems to show me that soon, you won’t be able to buy cryptocurrency without a broker. And those of us holding, in the US, will be required to report and then turn over those holdings to licensed crypto-managers. A Cryptocurrency Specialist at your local bank or money house.

Wouldn’t that be just peachy?

 

 

Sincerely,

Jack Shorebird


 

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Ripple (XRP): Potential Windfall?

News Gem: Not Advice


Household Names?

The rumors are still flying, but in case you haven’t seen this gem, it’s pretty important.

Joel Katz — Chief Cryptographer David Schwartz at Ripple, let this one slip on December 11, 2017:

“Katz” was asked if there were any high-profile partnerships pending.

His answer?

“There are two huge ones I wish I could release. Non-Banks, household names.”

And of course, that is why, given other hints lately, that speculation is flying.

Thanks, Joel, I mean David. We are excited — well, I am.

This month, right?

Non-banks? Got it.

Household names? Why is everyone thinking Coinbase? That is not a household name.

  • Google
  • Microsoft
  • Facebook
  • Amazon
  • UPS
  • Paypal? (Probably Not)

These are huge non-bank, household names. (All trademarked too.)

Of these, which ones are most techy? Youthful? Savvy?

Microsoft already accepts bitcoin, but it’s expensive to use, right? Seems a logical next step to roll in Ripple.

Amazon’s bitcoin rumor has been swirling for a while. If they accepted XRP’s, it would be a boon.

Paypal already accepts bitcoin, but news has it that this revenue stream has slowed. It would be nice, however, if I could buy XRP’s via Paypal.

Google…more rumors.

What do you think and does it matter…if you can profit anyway?


jgs

P.S. As of 12/28/2017 — after publishing this short notice on 12/18/2017 — Ripple has almost doubled in value. Very unusual for Ripple…

Electroneum to Overtake Bytecoin: Speculation


Taking the deep dive, you will find the black pearl?

This is a second look…

Finally, Electroneum (ETN) appears to have some action. It seems to be drifting off…again. It’s what you might call a long shot, in the semi-private cryptocurrency “industry.”

And it could easily overtake Bytecoin. Personally, and I know a lot of folks love Bytecoin, I think it will eventually shuffle off its mortal coil, however. In any event…diversify.

As you may recall, ETN’s are based on the CryptoNote/Monero protocols. But where Monero tends to stay completely private, leading to accusations of criminal, as well as having privacy and security benefits, Electroneum is gambling that it can eject the criminals — in my view.

How will Electroneum keep your funds private, if they are a known entity? Good question.

If all of your altcoins are stored in the ETN database and/or cell phones, it seems only obvious that investigators chasing drug dealers (and tax evaders) need only serve a search warrant and require Electronueum turn over records.

However, by comparison, that extra layer of protection also keeps everyone else from watching where and how you spend your cryptocurrency.

Bitcoins are far easier to trace. That’s why businesses have not adopted them on a large scale. They seem to be more partial to Ripple XRP. (Hint?)

ETN’s are by nature, untraceable. More cash-like. And people oriented.

Monero XMR’s are even more secure than Electroneum ETN’s. The trade off is customer service and known players. We know who runs the ETN business. And we hope it is easier to use than Monero or Bytecoin — and that it will be accepted by retailers.

So, with ETN’s, we actually have less privacy than XMR’s, but far more than Bitcoin and clan. That goes for Ethereum, Litecoin — you name it — as well.

“…security and privacy…”

It is only when you venture into the CryptoNote coins that you begin to think “security and privacy.” And there are a few other non-CryptoNote altcoins now that attempt to secure your altcoins, but they are not necessarily as time tested.

When they first debuted in November 2017 (when we could buy them on an exchange)  Electroneum came with a tad of hoopla. Starting out at about nine cents (US) each, they spiked to over 23 cents in short order. That seemed to say that they were on the right track.

But what happened? They were attacked.

Somebody hit them with a Denial of Service (DDoS) attack. Why? Was it jealously?

Now, this kind of DDoS attack is the chicken’s way of hitting back. It is a last resort blunt force action by those who simply overload the system. It is a criminal act. However, it can also be used to cover-up and hide the real hack. Hence, the Electroneum action to ensure that there was no long lasting damage by pausing services…in my opinion…was a good one.

“...two cents…”

By the end of November (2017) ETN’s were still trading, but down to two cents each. The attack did have consequences. (I hope that any big short-sellers were scrutinized.)

Then the weeks dragged on. Electroneum sent out news updates and advertisements. Apologies came. Momentum was lost. Dull.

And we waited. In the meantime, trading continued, and you could send or receive your ETN’s very easily — as far as we were aware. I mean, you could, and I did, but I was not sure if they arrived in my wallet. But they did and all was well.

“…40 million…”

A firm (Hackerone) was hired to check the ETN “books” (their code etc.) and they probably crossed their fingers. There was a lot of money riding on ETN’s continued  success. About 40 million, but I’ll wager there was a lot more.

It was a bold move to bring in a top company to essentially clear your name. It told the world that Electroneum was serious. They were not scammers. And that they were willing to stake their millions on it.

By the end of November, ETN trading began to pick up again. Even as the coin lay in a sort of limbo, and as the scam-coin accusations flew, the climb in price continued. Still, the promised web wallets were offline.

By mid-December 2017 ETN’s passed 13 cents and things were looking up. But the ETN’s cracked-up again. It is possible that many investors had had enough and dumped.

ETN was now in the nickel store. A whole five cents in value. It seemed that the DDoS attack had succeeded.

A few more days passed. ETN’s drifted.

The December 13 “relaunch” came and went. It did not look good.

Then yesterday happened, December 17, 2017. ETN’s began to climb again. To six cents, then seven, then nine, then…down…

Currently, you can only buy ETN’s at Cryptopia. And I’m not advising anyone to buy them.

And don’t knock Cryptopia too much, but I hope that other exchanges will soon offer ETN’s. If so, it will help to stabilize the coin as well as prevent it from becoming a captured product — like a monopoly.

As I have mentioned before, Bytecoin was the first privacy altcoin on the market, but it has some allegations against it. The stink of it has floated around the net for years. Clung to it, but it was not so much about the protocol.

In fact, the Bytecoin protocol was later investigated formally, by a Monero hired reviewer and it was generally positive. It was about the alleged 80% premine, that has stuck to Bytecoin like a thorn.

If the premine is true, and there have been alleged denials by Bytecoin Team members, it could be devastating for investors if the original anonymous developers decided to cash out. And that has always been the problem. No identifiable person has ever stepped forward, verified he/she developed the code, and proved otherwise.

And that’s not all the problems Bytecoin has had. There are concerns that the original team is a fraud — a fiction. Not one of them has ever be verified. That the altcoin was sold to other to developers, is another allegation. That Cryptocurrency Exchanges have had problems with it and de-listed it. Cryptopia, for one. Yet another problem.

But the new money is flowing in and Bytecoin has recently soared in value. I think this will be short lived, as investors will once again be fleeced, as BCN’s deflate.

Where will that money go next?

“…Bytecoin’s coming sell-off …”

Monero (XMR) developed from the “ashes” of Bytecoin and they have been very successful. Most of their developers, like those on the Bytecoin Team are unknown, however. So, will Bytecoin’s coming sell-off that I am predicting, go into Monero?

The next choice, in this venue, might be ETN’s. I think they will overtake Bytecoin.

It is not such a crazy idea. That is, after the initial ETN investors (not me) recoup their investment by selling.

This one looks like a HODL, to me.


Note: For the record, this writer does hold a small amount of Electroneum and all of the above words are personal observations, having little to do with fake news.


jgs

Bitcoin: The Immovable Object?

Bitcoin: The Immovable Object?

Here’s a thought, as I close out the day.

I’ve read and listened. Yes, it’s obvious that Bitcoin is becoming too expensive to use — to move — for the average investor.

For big investors, not such a big deal. Moving large amounts of digital fiats is also not cheap.

However, the vast majority are now trading to Litecoin (LTC) to move value. I know I do. Why pay a premium for slow service? But this does not convince me to buy Bitcoin Cash (BCH). This convinces me to look elsewhere.

It is rumored, as I and many have mentioned, that Ripple (XRP’s) could be slated to go on sale at Coinbase in the near future. And certainly, if this happened, it should boost prices.

Ripple XRP’s are also cheaper to move — to transfer. They would eat Bitcoin’s lunch in that department. Probably Litecoin and Ethereum (ETH) as well, with other benefits…except for one. You can’t, as of yet, hold XRP’s in your own wallet. They are slaved to the XRP servers.

Hey, does it really matter if XRP’s can earn you a tidy profit?

So, if Coinbase had XRP’s, they would allow you to buy them, right? I submit, in a sense, you will only “control” them. That is great for the supplier — for Ripple and Company — but not so great for the average citizen on other levels. No warm and fuzzy XRP’s to hold at night…in your “paper wallet?”

It will also be great for the regulators. You forget to pay any taxes and you will find out the hard way that you no longer own or control you favored altcoins…if you keep them on a regulated exchange.

Savvy? Why do you think bitcoins (altcoins) became so valuable? At least one good reason? Capital Controls.

Coinbase is on American soil. They must comply. So is Bittrex. So are others.

Bitcoin, in my opinion, is becoming immovable. Still very valuable, but figuratively heavier than gold, when you apply the fees.

What does this mean?

To me, it means bitcoins will sit. And as they sit, they will be found or at least become more vulnerable. More security will be required.

It also means that cryptocurrency exchanges will need to adopt newer cryptocurrencies in order to survive. And adapt to the changing regulatory environment in the U.S. and elsewhere, to carry on.

Maybe, as a result of these changes, if bitcoin remains the lumbering golden beast, we will be able to profit on the coming spikes in other cryptocurrencies. But in the long run, as these substitute altcoins attempt to bear the weight, won’t they also become overburdened?

Whether the privacy coins (Monero etc.) will win out, is a mystery to me, but I thought Vitalik Buterin’s (of Ethereum fame) hint about a Mesh based internet was curious. It could be a potential solution to the Net Neutrality issue and to ISP censorship in general. But a Mesh based internet would also lend itself to a more secure cryptocurrency network, even for the more public ones, designed like bitcoin.

At present, Mesh systems are in their infancy and any crypto running on them would need to be lean and mean…like Cardano (ADA)? Or Buterin’s new PoS idea that is pending for Ethereum? But bitcoin?

I’m waiting to buy my Mesh Device — that’s not app on my cell phone. But won’t they be illegal if Uncle Sam can’t spy on them?

Didn’t we see sci-fi shows about these devices decades ago? I know I did. A guy on the street paying a bill with his ‘device’ while holding it up to the other guy’s gizmo. I think they were mesh wallets!


jgs

 

 

Ripple (XRP) and Bitcoin (BTC) Speculation

Ripple (XRP) and Bitcoin (BTC) Speculation

Dear Cryptocurrency Investors,

Just a few more pieces of news and speculation. It’s dated information, but curious, in light of the the recent Cardano (ADA) run up.

Don’t take it too seriously.


First, the speculation:

Bitcoin might to pull back then rebound to about the $60,000 mark. Or crash to $1000. It’s all over the internet.

Here’s one source.


Secondly, Ripples could hit $9.00 each.

I can’t find the source on this one, but more conservative predictions indicate a $2.00 price range. (Source.)


Third, if you want a good (but a bit racy) bit of business education about cryptocurrency and some of the problems facing developers today, try this video.

It’s long, but speaks to liquidity, custody and regulatory issues.

It might also give you some insights into Ripple’s (XRP) direction.

Some apparently feel that XRP’s will be offered by Coinbase in January 2018. If so, this is big news.


jgs

Cryptocurrency: “…and Bitcoin Must Burn!”

Cryptocurrency: “…and Bitcoin Must Burn!”

Dear Crypto-fans,

The crypto-fake-fintech-news continues, but the tide is turning in some few lands. Slovenia maybe. Singapore, possibly. Nigeria? Yes. But I won’t be emigrating.

Google trends are showing an upswing of late.

But the battle against cryptocurrency is also gaining momentum. The reaction is fomenting. Like Cato the Elder’s call for Carthage to burn, so too are the princes of the day signaling their intent, through their mouthpieces on retainer, that non-princely crypto, must also be destroyed.

The most recent pretext to dump bitcoin and cryptocurrency, besides bubble fears, is that fiat currency is “backed” by the government or the Central Bank. That such a thing as cryptocurrency, which does not enjoy the toxic fruits of the government fiat monopoly, is intolerable and hopeless.

But this assertion is ominous, not glorious. Whether you believe Clif High, that Bitcoin will far outpace the value of gold or you want to take to the shadows with your secret Bytecoin, the princes are on the march. They care not if you chose Cardano (ADA), but might let up, if you wade into Ripple (XRP).

And we cannot reach into our television sets, our computer monitors, our tablets or cell phones, and shake these intellectual Lilliputians by the shoulders and yell, “Hey, Brainiacs, fiat money is also NOT backed – except by a gun.”

“How dare you think that, you finite fleshpots.”

That’s how they respond, in my translation. Shake their ponytails, peer side-long down red veined noses, lick their finely wine-soaked lips, point to the proper ends of their overcooked eggs, with bejeweled digits, and leer at us subjugated subjects – with the aplomb of the imagined royal birthright.

Two such peers of servitude deserve mention.

“Alan Greenspan…Jamie Dimon…”

Alan Greenspan? A former gold bug, now completely in tune with the Fed or is that the vampiric feeding of inflated monetary dogma?

Jamie Dimon? A bankster in the Morgan mold or is he a dollar-defender, through hell and devalue?

Here are a few more bitcoin bashers to peruse.

Deep thinkers of the bygone epoch, where it is said that monetary conscription is better than gold-backs. Where the song of sound money, as sublime and powerful as it is, cannot meet the rejoinder – the princely power of the purse, under guard.

What do these bashers of bitcoin really mean when they say that cryptocurrency is not “backed” by Johnny Law? They mean, dear readers, that the prince is not in charge of the peoples’ currency, i.e., cryptocurrency.

And that is the crux of it. THE PRINCE HAS NO CONTROL. Paupers must mind their prince.

The prince’s fiat money is “backed” by his soldiers. You must use it – or else.

Think on that, each time you pull that fiat from your wallet with that picture of the current or past princes. This currency is “backed” by the point of a gun, the threat of jail if you refuse to use it, or large fines if you dare to abuse it. It is called forced compliance.

The Federal Reserve Note, is your contract with the prince. Do no fail to abide by the terms.

Has not humankind outgrown such princely designs?

The religion of money…

Most currency, that plastic card, paper or digital noise stored at your bank or under that rock in your yard, is worthless-worth. It is backed by nothing and the power to “make it work.” A promise to pay zero and from that zero, substance. The religion of money, if you will. To make nothing buy something. Just believe, sayeth the Prince of Fiat.

Every school child should know this. Government fiat is “myth money.” Fantasy cash, you are compelled to use.

The soldier “backs” your princely fiat these days. Except, to him, you are the enemy. Harsh words, but relevant when comparisons must be made with cryptocurrency.

Fiat crypto, by comparison, is an all-volunteer army. In this scenario of sin, the prince of fiat is dead.

And about the noble metals. There are no gold bars at the bank – in most cases. Even the Swiss have denuded their banks of metal. But the Swiss people, being a lot more intelligent than their host of princes, have stored gold in private vaults – not banks. Unfortunately, the princes are aware of the locations of such vaults.

But who owns that gold? You think American and Japanese billionaires don’t have a dog in that fight? Sure, they do. Will a Swiss Army man care to back your Swiss stored gold, if his prince reclaims the bars, for the good of Switzerland?

And private vaults abound these days. Do you wonder why? And are these vaults safe from the princes’ soldiers?

…myth money…

Cryptocurrency is also a myth money, a fiat currency, but it is different too. The prince does not own the cryptocurrency fiat money machine. The people own crypto. It is a detached system of fiat currency that circumvents capital controls, i.e., the Prince’s Rules of Trade. And there are dozens of competing blockchain alternatives, not simply one princely fiat system.

The prince is fuming about this. How dare his subjects create their own fiat currency. Don’t they know that fiat money is backed by nothing – not even the princes’ soldiers?

You might wonder how a cryptocurrency system can invade and dislodge, peaceably, the Prince’s Bank and essentially rob him of his ability to conduct business. You might also wonder what the prince is going to do when his fiat currency begins to devalue so rapidly that he can no longer pay his castle employees the proper level of wages.

He will need to pay his soldiers some how and maintain his dominance.

Will the prince seek to control all the cryptocurrencies on earth? No, he does not have that power.

Could our Prince enlist the help of other princes abroad, hold a summit in a foreign land and gather the forces of many other princes and kings, to block this crypto-virus from spreading?

Maybe. He and his soldiers, who he pays in Bright Prince Fiats, must team up with other lands to thwart this growing threat, before it’s too late.

…a gold standard…

In the meantime, some gold-bug few of the Prince’s own citizens, wealthy masters in their own right, the ones who have decried his use of fiats for years, call for a gold standard once again – and for the abolition of crypto, henceforth.

The prince, seeing a way out of the crypto-crisis begins to devise his plan.

The renewed gold standard is enacted, sort of.

The prince has all the land gather their hoards of silver and gold, deposit them into the banks he controls and promises his subjects, that from this day forward, sound money will reign supreme in all his lands.

The prince’s subjects, save a few wary ones, deposit their golden hoards, which they have hidden from the princes of past and present, into the princely vaults. Record amounts of gold, silver and diamonds, flood in and the subjects are ecstatic.

Even the prince smiles, benevolently praising his lands. “For the good of my subjects!” he laments. He feigns emotions at just the right moments, as his advisors have advised.

The subjects of the lands, relieved of the dual threat of the crypto-virus and the prince’s own fiat money scourge, forgive the latter and bash the former with abandon.

Pronouncements echo and postings are posted all over the lands. Town criers cry. On every tree and jailhouse wall, flapping in the breezes, are the grand and memorable memoranda: sound money is the order of the new day.

Of course, our Prince, along with all the other princes and kings; and not a few queens of dubious nature, have simply activated their plan to cast a shadow of disrespect over the whole of crypto.

“You see,” the prince quips, as he lounges on great pillows, attended to by subjects knowledgeable in the ways of arcane finance, “crypto is fiat…and princely sums are sound money – backed by gold and silver! I have returned to the ways of old gold!”

But the plans these of princes is most certainly a mirage. They, the princes and kings, the dubious queens and tyrannical tricksters, have merely confiscated the gold and issued multitudes of fiat. They have also declined to report the exact amounts of gold and silver in their safe-haven bank vaults, under their control and properly guarded by soldiers of the crown, by and for the good of all subjects, of course.

“Security,” says the prince, “is of vast and secret importance! Therefore, for the good of all subjects, I will keep the location and amount of princely precious metals undisclosed.”

…gold and silver and jewels…

What’s more, the prince, seeing to the secret security of all this gold and silver and jewels, has it moved from the banks and consolidated at his Summer Palace. A palace which is really a fortress far from his subjects and heavily guarded by loyal soldiers, who are paid in actual gold.

Princely subjects, fighting for the flag, dying for honor and dust, must dine, once again, upon the quantitative ease. No more are they worth, no less should they breathe.

Do you see any parallels here? This is essentially the repeating history of money. The Classical Liberal societies start with gold/silver monies then they devolve into socialistic fiefdoms and fiat systems controlled by the prince. A prince, who requires all your private information, to keep you safe from the wanton criminals and be able to reallocate your accumulated wealth as you live; and upon your demise, absorb your gold – all for the good of the prince’s subjects – meaning us, whether we like it or not.

And you wonder why the subjects currently trust fiat cryptocurrency over gold – for now.

The subjects – paupersdo not trust the prince.

Perhaps one should look at this trend. Bitcoin is gathering more interest than silver or the dollar. That’s an eye opener.

When do you suppose the interest in bitcoin will surpass gold? And does it have staying power?


Sincerely,

 

Your Friend in Crypto…

Jack Shorebird


Disclaimer: Believe none of what you read herein, half of what you see, and bow to the prince every night, before your subject-slumber, if you think that I’m not serious…

Do You Own “S2S Compromised Cryptocurrencies?”

Do You Own “S2S Compromised Cryptocurrencies?”

It’s about peers versus subjects, is it not?

Are you a P2P or and S2S Person? That’s the gist of it, right?

P2P is what? Peer to peer, right? Person to person.

S2S is what? Subject to subject. Slave to slave, in some countries.

Pause. Think. Slave to slave = S2S?

So much is said in that P2P acronym. So much is lost in S2S. It matters.

If you are P2P, you are probably safe. But you can be safer. You can do one better.

As an S2S believer, you are in trouble. But don’t take my word for it. Ask Mr. History.

When observing the changing cryptocurrency landscape, we note capitulation and appeasement. Those who bring change; and those who want to stick to the old way of doing business. If not the old way, then bending the new way to the will of the old.

But P2P is not new. It has just been adapted to the blockchain.

S2S is the old way.

Why do we own certain cryptocurrencies, but not others? Why is the P2P idea the best thing to have hit cryptocurrency, let alone the human condition, in thousands of years?

But…there is P2P and there is private P2P, correct?

Many of the newest breeds of crypto-entrepreneurs have forgotten the words of Satoshi Nakamoto and have instead, chosen to use the blockchain technology for other reasons. And there is nothing wrong with that, save the lack of vision of such people. The automatic and almost tribal reductionism is inherent in the herd mentality.

In other words, the desire of many to belong to the herd at any cost. Spare no expense, they say. Trade your privacy and your freedom for a false sense of security.

Don’t rock the boat. Don’t go against the flow. You don’t really need or want P2P. You need S2S. We hear this so often.

So, let’s recall those words, just a few of them, purposely embedded within the Bitcoin Blockchain. “Satoshi’s Warning,” I will call it.

These words resonate today, and I submit that they will resound into the future — if we are still here. And these words will be taken more seriously in ten or twenty years, if world economies do finally collapse, and if cryptocurrencies save the day after that foreseen collapse.

The warning:

‘The Times 3 January 2009 Chancellor on brink of second bailout for banks’.

This statement gives one the clear sense that Satoshi had a problem with governments and bank bailouts. He did not agree with the current monetary system in general.

Why?

We can speculate about his motives, read his various quotes, but can we agree that he/she/they invented a well-functioning, but not private, peer-to-peer e-cash system? It seems to me that Satoshi, and I have stated this before, provided the outline – the foundation – upon which others could build.

And remember that: P2P. Let that echo over and over until it seems to lose meaning. Until the echo of it comes back after a time and reminds us what it really is. What its value really is.

P2P is that rock in the river, standing against the tide of financial tyranny. If that rock is hardened (privatized), all the better, but bitcoin’s P2P rock sits high in the rapids. It is “exposed” P2P and it is sandstone. Sandstone will not last. Even so, some want to convert bitcoin to S2S, now. They want to blast that sandstone apart.

If “exposed” P2P is the core value of the bitcoin service, how can it be improved? Satoshi warned that this P2P system was only temporary. That it probably would not last. Was he correct?

Satoshi showed the way.

Then Nicolas van Saberhagen came along and privatized the blockchain. It was the next step in the evolution of blockchains. Many other P2P models are “exposed” at some level.

Saberhagen (he/she/they) created CryptoNote and after a rocky start a new crypto pulled away from the pack: Monero (XMR).

Monero has one well known face: fluffypony (Riccardo Spagni). He came forward and I submit, took his freedom in his hands when he did so.

For all the rancor surrounding Monero and all the concerns I still have about its developers remaining behind the curtain of anonymity, I respect Mr. Spagni. And that is the point: trust. Not to mention that Monero was the first successful private crypto on earth. (Okay – that’s an assertion. Prove me wrong.)

There is another crypto that deserves mention here and I have cited it before. Aeon. “Smooth” is the developer of Aeon and works on Monero. Smooth is anonymous. This might be important in the future since Monero is slowly gaining acceptance on an international scale. Aeon would seem to be the logical partner in that effort.

And there are other private crypto’s out there, but I am only mentioning Monero and Aeon in this post as examples. Many of the other privacy based coins do not have the longevity, have changed hands, or have known developers – which is a risk.

There are arguments against the PoW (proof-of-work) based blockchains, such as Monero and Aeon, as well. Even bitcoin uses PoW, but Ethereum is apparently considering a PoS (proof-of-stake) blockchain addition or change-over. PoS is more energy efficient, certainly.

Obviously, these “proofs” will evolve over time, but getting hung-up in the debate may not be the best course of action.

In fact, allowing the salesmen, flush with crypto-cash, financed to the gills with venture capital, to present vivid images of Crypto 3.0, is a trip to S2S.

How so? These salesmen, often experts in the field of blockchain, are not experts in the field of privacy.

The war now is to destroy the very essence of bitcoin and any cryptocurrency attempting to remain private. It is an effort to undermine the best P2P out there. Usually, by means of overregulation and/or making such transactions illegal.

KYC. Know your customer. Papers please, comrade. You might be a communist-terrorist-tax-evading-immigrant. You might be a criminal. Just in case, we need to know you. Who is this we?

On the other hand, you are probably just an innocent citizensubject wanting to keep as much of your money as possible. And it is your currency, right? No, it is the State’s Currency. “But I have some XMR’s,” you answer, “not State Currency.” All the more reason to know you, comrade.

Privacy? You have no right to that; the herd tells you. What are you trying to hide? Nothing? Prove it. Show us all your currency and let us decide.

Welcome to America, land of the citizen-subjects. Hey, at least we can emigrate – so long as we have paid our taxes first. Even if you hand in your citizenship-subject papers, you must still pay your exit bills, before you may emigrate, right? And they dare call this freedom? (Hey, I’m American, but America is not a place – it was an idea – in the past.)

Is it any better in the UK, Australia, Canada, or Switzerland?

Because of government pressure, the cryptocurrency innovators are beginning to give in. Or maybe they never had the guts in the first place. They are creating what amounts to “S2S” or Subject-to-subject transactions. Weak sister versions of the almost true form. Compromised crypto’s, the lot of them.

But I’m sure they work just fine.

These new S2S innovators are the compromisers. They help support the current fiat monetary systems. The highly centralized, highly controlled, inflation pushing bureaucracies.

I labeled Cardano (ADA) as S2S compromisers. But they are not alone. Ripple (XRP) is S2S compromised as well. Even Ethereum (ETH)  advises that they will comply with governmental information requests. I’m certain there are many more S2S compromisers.

Few have the tenacity to protect privacy. Legitimate privacy. Many of the cryptocurrency exchanges bow to the might of “.gov” as well.

These S2S capitulators have good people working for them, however. They have children and dreams and I do not fault them for coloring within the lines. If they are to remain at liberty, to exercise their delimited freedoms, they must bow down. No blame can be placed upon subjects working within their enclosures.

It is odd that a fluffypony will not bow, however. It requires vision and nerve to stand, virtually alone. To back a crypto that will not comply.

The same can be said of Smooth and all the developers of both coins (Monero and Aeon). To believe that the “.govs” of the world have not discovered some of their identities, is foolish. And they know it.

And don’t give me that bull about sacrifice. These men and women working behind the curtain to privatize crypto are not doing so for free. Their trade, their gain, is profit. Their potential loss is their freedom. Is this a sacrifice or a trade? Are they, in a sense…

…mutually pledging to each other, their lives, their fortunes and their sacred honor?

Private P2P is a down payment on future value few can imagine. To buy the freedoms of their children. To refuse the current call for S2S, and see what happens.

I hope these private P2P men and women, keep at it.

Here’s the audioblog along the same lines: “The P2P Question.”

If you need to convince yourself that privacy is important, buy this: “For the New Intellectual”


 

Note: As usual, the above is only an opinion. I welcome any responses. In the meantime, do not base investment decisions upon any of it. Call your banker, broker, insurance salesman and/or financial advisor, if you must.

Bitcoin: Not a Value-Producing Asset?

Bitcoin: Not a Value-Producing Asset?

Dear Cryptocurrency Readers:

It’s good to keep tabs on the big picture while hoping for the good news. But don’t short change yourself if the time comes to make a choice between regulated or unregulated cryptocurrencies. It may be better to pay the tax, than pay the fine…or worse yet, be placed in a “political” prison cell.

Think long and hard about trying to hide your crypto stash and making your escape to some foreign island after you trade a chunk of it for some local fiat, gold or silver.

Things like crypto need to be won first in the courts, in countries where that is still possible. Political representatives must carry the banner and I feel that eventually, crypto needs an anchor. A hard currency. Only then will it be able to unhinge the fiat myth we have lived under for over half a century in these United States of America.

Is not that the ultimate dream of cryptocurrency?

It made many see, for the first time, that there is a way through this monetary nightmare we call government fiat currency. If it is only a pipe dream, that dream has had a lasting impact upon the minds of many – worldwide – I will posit. And dreams drive change.

Even if cryptocurrency dies, fifty years from now, people will remember, that for a brief time, the purse strings were almost given back to their rightful owners. The people. To you and me. We were almost back in control.

I write all of this in the hopes that I am dead wrong. That cryptocurrency, as it was meant to be, does not die, but evolves and helps to remake this decaying fiat world.

In short, this is not investment advice, it’s thinking advice. Education and speculation, is better than throwing the virtual darts at the virtual dart board.

For those who highlight cryptocurrency charts, citing all the technical reasons to “buy now,” know that the problem is a fundamental one. We need to look at the creators of these cryptocurrencies, why they make them, how they will work and so on.

Fundamental analysis is a must in the cryptosphere.

According to a MarketWatch article, Warren Buffet recently remarked that he thinks coin [cryptocurrency] offerings will end badly. “People get excited from big price movements, and Wall Street accommodates,” he said.

I don’t think Buffet gets it.

Buffet also advised that “You can’t value bitcoin because it’s not a value-producing asset.”

Now think on that a moment. “Not value producing.” That’s a fundamental issue, is it not?

So, it’s not a house or a farm or stocks. We know this. Buffet is not telling us anything new here, just couching it in investment terms. But remember, Buffet is also – if I can judge by his past statements – pro-big-government, pro-higher taxes for the wealthy…he’s a status quo kind of fellow. Rose colored glasses and all.

Guys like Buffet need what? They need the rules to remain “stable.” Capital gains taxes, income taxes, regulations, political support, all play into the scheme to use the system to earn more fiat money. Fiat money and other real assets, but all lubricated by a slowly crumbling (could be quickly) monetary system.

Bitcoin and company mucks up system, if they are seen as a currency replacement mechanism, say to the grand old investor types. So, they refuse to imagine the potential if such thinking requires them to start from ground zero. If it requires them to ask that burning question they refuse to hear: What is sound money? And the other one. Can we get along better without it if we pay off (buy) the bureaucrats and ask for special favors granted involuntarily, by the taxpayers?

But let’s compare.

Is digitized anything, say music, talk radio or even movies – are they value producing?

Yes, but they have an industry behind them. Singers, producers, directors, and labor unions. Companies with stock. Buildings, cars – the machinery of sight and sound.

Does bitcoin, specifically, have that same sort of structure? Or is it a bubble?

No. It has voluntary “assistance” right? Those who are willing and able to code and debug, right? There was no bitcoin creation company, as far as we know. Satoshi Nakamoto could be anyone or a group of communist sympathizers. We haven’t a clue.

Bitcoin is not an asset, in the traditional sense, only a service based upon secret codes, information exchange, shared data ledgers, miners, computers, internet use and so on. We know that bitcoin (currently) is very valuable, but subject to change, forks, political risk, clones, hackers and crowd sentiment.

Bitcoin is also subject to being replaced, at any time, by better technologies. Some new developer who can convince the world that this new bit of code is the cat’s meow.

Bitcoin is also subject to wide value fluctuations. Fluctuations, if you are risk tolerant, that can earn profits – or not.

So, bitcoin does not appear to fit any valuation model that I am aware of. Yes, it is anti-fiat, anti-capital controls, pro-personal banking, anti-inflation, anti-establishment, anti-tax, anti-status quo, and emotionally charged, probably a bit bubbly, but its asset value is, like Buffet contends – missing in action.

Is it just a numbers game?

Certainly, we are in new territory here.

Steve Wozniak of Apple fame thinks “cryptocurrency could become a better standard of financial value than gold or the U.S. dollar. Wozniak argued that Bitcoin is more stable and less prone to arbitrary supply changes.” This, according to a recent piece at Futurism.com.

If Wozniak does think, as the article suggests, that bitcoin is better than gold or the U.S. Dollar, he should qualify that statement.

Currently, the U.S. fiat dollar works, but into the future?

Gold? Well, it’s not used as legal tender in the United States in any huge way.

So, yes, right now, bitcoin appears to have a lot of advantages, except for what the article mentioned:  stability. You can’t depend on it.

Wozniak is a computer guy, not an economist. So, I would lean more toward the investor extraordinaire side – be a little Buffet-ish. But does not the truth land somewhere in the middle?

What seems to support Buffet’s words and may spell bad news for bitcoin and cryptocurrencies in general (maybe not Ripple or Stellar Lumens) is the recent news from AMD. AMD sells GPU’s which can be used for cryptocurrency mining. They are projecting losses now.

Does that mean cryptocurrency miners are no longer as interested as they once were? Or is it as this article explains, that the centralization of mining is requiring more than GPU’s? ASIC farms and other specialized processes, in China? Could it be a larger move away from mining altogether? A shift to Proof-of-Stake coins?

And then there’s the Russian angle to consider. Motherboard advises that the Russian Government is finally – if we can believe it – regulating these crowd funding mechanisms, i.e., cryptocurrencies. Taxation is coming to a miner near you – in Moscow. Wow, even America is past that part. Well, except for the registration part. “Papers please, Comrade!”

But what are the Russians really doing? Invading. It’s what aggressive regimes do. Take over other “countries.” This one is called “The Virtual Currency Country.” Dear Comrades, bend over and take it — be invaded.

Hey, don’t worry, America will probably join you soon. They will be a bit more coy about it, however. The bankers will hide behind the regulatory agencies, I’ll assert. Pushing them all the while to “register” all cryptocurrency related organizations, companies, and exchanges. Make them fall in line or suffer the fines, taxes and yes — Jail House Rock.

Just as Jamie Dimon hinted – arrests might be next. Oh, but they love the blockchain. Go figure. Wanna bet the bankers do not want a public blockchain — like bitcoin?

What does this tell you? That the banking industry will soon use the blockchain technology and then seek to outlaw all private cryptocurrencies? To monopolize cryptocurrency like they do fiat? With the blessing of the FED of course. Or maybe they will use a ready-made solution. Ripple? Hmmm.

Think again. Banking is about responsibility and control over the owned (official)  currency. They will want their own crypto’s. Crypto’s identified to their banks in some way. Ones that they control absolutely, if possible. If not, at least a Fedcoin, but then why would we need banks at all then?

Do you really think banks will outsource cash to Ripple? No, Ripple will be used to lubricate international transfers, until the banks figure out a cheaper system. A more profitable exchange mechanism.

If all this bad news continues, my concern is which non-establishment, unregulated cryptocurrency or system can survive and profit – long term – in such an environment? Will the ones which sought to comply with regulations early on survive in an anti-bitcoin world? Ones like Ripple? Ethereum? Stellar Lumens? How about Cardano?

And does this lack of backbone, a crypto’s desire to please the masters, only help to destroy a movement with the original intent to halt the devaluation of fiat currencies altogether? To replace the corrupt system, from the computer up?

Maybe so, but I still think that for now, one can profit if there are any major shifts from the dream – a private decentralized cryptocurrency – to the reality – soon to come “government regulated crypto.”

Not necessarily “state” created crypto, however. That wouldn’t be any different than the current fiat mess we are in now. In fact, it would be much worse. Every bit of your money could be tracked.

Welcome to a Brave New World.

That’s all for now.

In the meantime, you might want to store some coin on a Trezor.

Jack Shorebird


 

Ripple (XRP): Kill the ICO’s?

Ripple (XRP): Kill the ICO’s?

 “He has erected a Multitude of New Offices, and sent hither Swarms of Officers to harass our people, and eat out their Substance.”

Dear Cryptocurrency Folks,

The above is a line from the Declaration of Independence in the United States of America. Then and now, these states often differed in their opinions and laws — or lack of them — but for a time, men and women of courage dared to enrage a despot.

The declaration was addressed to King George III. And, as we know, it changed history.

I firmly believe that a certain Ripple (XRP) CEO needs to read the above words and attempt to comprehend their meaning, if he has the capacity. Read them, and if he has the guts, to step up and do what is right and not what is expedient.

But few men of this stature exist. Few men or women are willing to “do the right thing.”

You, the people of the Fintech Future, should know that cryptocurrency is a revolution in currency. A new way to both secure transactions, records, identity and the like — with modern technology.

Without interference.

Without “Swarms of Officers” to harass us.

Not so, according to some. We need to be whipped into shape, otherwise there would be mayhem in the streets, sayeth the crypto-banker kings.

But your rights to own crypto, to experiment, to invest, to see where this road takes you — is about to be attacked. It’s only a matter of time, before — if you allow it — they will eat our substance, yet again.

The lights are being snuffed out, one by one. And this is not only about the regulation of an airline or some new drug. This drills much deeper. This goes all the way down to the economic tool we use daily. A tool that, each day, is rotting away in your wallet. That tool, which was essentially stolen from you, decades ago, is itself under attack. But not in the sense that you think.

The tool is fiat money. It is weak and wobbly, but our governments require its use. Order its circulation. Decree its sanctity. Its religion. Its myth.

Its competition is cryptocurrency, yet another fiat, but with a primary advantage: inflation resistance.

Many of these crypto’s have a limited virtual supply. This is unlike fiat currency, which expands and contracts – inflates and deflates – at a bureaucrat’s whim.

Without exception, history reminds us that flexible fiat currencies of this nature, eventually fail. They die of inflation. Prices, indexed to the fiat, skyrocket. Black budgets devour the stock seed of wealth.

Is there an interim solution to fight this downward spiral? A way to slow the inflationary money drain, until systems of sound monies can be reinstalled, by law?

In other words, is there a way to let the people decide what is sound money, not a group of government bankers. Not a convoy of business gunships, mired in the Bay of Fiat, unable or unwilling to explore, fearing that the edge of world lay beyond the Pillars of Hercules.

Can this new revolution, transition us, without arms, without mobs in the streets — to a better financial reality? Or will pro-monopolistic, anti-capitalistic, pull peddling puds ground innovation under the wheels of corruption — once again?

I believe that cryptocurrencies offer the possibility of sound money. That, if governments are disallowed entry, crypto’s will innovate and help secure a better, sounder, more modern monetary reality. A bridge, if you will, to a better future.

But, this new technology will necessitate the changing-of-the-guard. The purse strings will need to be handed back to the people. Something, I fear that governments cannot and will not allow. Not in Communist China or in those lands beyond the oceans daring to fly that banner of freedom in the mean streets of controlled and planned economies.

From those who nurse from the udders of corruption, to those who devise the method of their eventual destruction, to admit their impotence, is heresy. Government fiat must survive, they implore. It is the only way for them to lead — to control.

However, the longer we hold the line. The longer we keep the regulators from mucking with the innovators, those geniuses of finance and math, the harder it will be for the bureaucrats to halt the process of monetary evolution.

Many governments, companies, professors, financial experts and so on, are leading the charge against the ever-growing popularity of this monetary/service revolution. A system that could replace money as we know it or fail completely.

And if the innovators fail in the current climate of monetary corruption of the highest order, it will be at the hands of those self-appointed representatives of our indefinable “common good.” Those muckrakers born of backroom shenanigans, fiat five-year plans, and a group disintegrative psychosis.

Let cryptocurrency fail or succeed on its own. Allow investors their mistakes. Arrest those who bilk and steal.

Some ICO’s will fail and some will succeed. We only know, that when killed-off with draconian regulations, they will never be. Never have the chance to grow at all, if buried by rules, red tape and bloated bureaucracies. Bureaucracies with feeding-tubes attached to each citizen, beholden to special interests who seek only to increase the size and number of such vile tubes. Tubes now becoming iron pipes, flowing faster. Draining the only value that might yet cure this diseased body politic.

I speak of cryptocurrencies, of course.

A Ripple CEO now supports regulations. Please show Ripple some tough love. Do what you think is best. Let them know that they are not a true crypto in the sense of that word. They are only a fiat conduit. A pump to help speed up the delivery of the poison that is killing the wealth of the world.

Who knows. Maybe these Ripple XRP’s will serve to undo the twisted monetary systems that it is attempting to lubricate. A quickening, of sorts, but not of the expected variety.

I can only hope.

Here is my commentary (audioblog) about the matter. I didn’t cuss too much and it’s a bit raw:

 

Your American Friend,

 

Jack Shorebird

 

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