New post on BSV fundamental and technical analysis.
Fundamental analysis is free. TA is behind $1 paywall.
New post on BSV fundamental and technical analysis.
Fundamental analysis is free. TA is behind $1 paywall.
As Q4 gains steam I looked back at my 2019 predictions. In hindsight, I could have been more specific with my targets but overall I’d grade myself a B-. S&P can still correct, real estate is getting soft, Gold pumped then retraced, Mueller was a nothing burger, Crypto is a still a mess.
The BSV CG conference last week in S Korea provided a lot of information to digest. There was over 14 hours of video to watch.
Day 1 content is aimed at developers. There is a table of contents in the vid description. I recommend watching Dr Craig Wright at the 6:37 mark. Dr Wright speaks about Payment Channels which is tech that can be applied to markets everywhere. Think decentralized, secure and publicly auditable NASDAQs and commodity markets with honest brokers. Schwab has commission free trading. BSV will have commission free everything.
Day 2 has more accessible content for the layman. Threshold signatures and the identity service by Pixel Wallet look VERY promising for providing unique and valuable use cases. Again, recommend watching Dr Wright’s keynote to close out day 2.
Something to note, a week after the conference, the day 2 video has less than 4,400 views. It’s still very early in Bitcoin.
As I noted in “Assessing my Next Move”:
BSV is under the $130 level I pointed to as important to watch. BSV is a buy here, but don’t shit your pantaloons if the downward trend accelerates and BSV sits at $80 for a few weeks. Crypto trading is a bad idea. You probably shouldn’t do it.
BSV visited the low 80’s as the market swooned. If you’re not in BSV now, I’d look for the $100 roll to enter on a trade. This one day pump above $90 could be wiped out quickly. If you are setting yourself up for a position before the fireworks in 2020 then any entry before January is likely good.
BSV Mayer Multiple has been in the BUY zone 14 of the past 16 days. pic.twitter.com/syUeToTVTZ
— Coinspeak (@coinspeak_io) October 10, 2019
The entire crypto market cap is ~230 billion. BSV market cap is 1.5B. BSV is less than 1% of the total market cap. I have never seen a more lopsided investment opportunity. The market is extremely irrational but starting to wake up. Only one coins is addressing scaling in a way that provides a path for mass adoption. Scale or die.
Here’s a simple example on scaling, an application called WeatherSV began posting weather data onchain to BSV a few months ago. WeatherSV was roundly dismissed as a gimmick to support a dying chain. Fast forward to today and Preev is now posting market data onchain. The result is BSV is reliably producing larger blocks with more transactions than BTC from two real world applications. What will the doubters say when there are dozens, hundreds or even thousands of apps storing data on BSV?
Given this oversimplified chart I created:
BitCoin economic model in one chart.
High transactions = low fees, competitive mining, secure chain.
Low transactions = high fees, weak miners, insecure chain. pic.twitter.com/avDKla4IMU
— Coinspeak (@coinspeak_io) October 6, 2019
Bitcoin is an economic system. High transaction volume and low fees equal secure and antifragile money with high utility.
Meanwhile in BTC, the Blockstream CSO was interviewed:
Translation: LN is how Blockstream will sell Liquid as Bitcoin 2.0. https://t.co/OoHPsnOH8l
— Coinspeak (@coinspeak_io) October 8, 2019
Blockstream is going full steam ahead betting the future of BTC on Lightning Network as they debate making the blocksize smaller and potentially inflating supply to pay the developers. You can’t make this stuff up.
While I leave open the possibility I could be wrong as each day passes it looks like BTC digs their hole deeper and deeper.
The debate rages on in Crypto. Frankly, I’m very tired of it. What is happening in reality is BSV is scaling while the others delay. Let the Twitter wars rage, I am looking at what matters.
Looking forward, the 30 day extension in the Kleiman v Wright court case to negotiate a settlement should be expiring soon. This could be a big event. And, in January 2020 allegedly Dr Wright will come into possession of up to 800,000 BTC which he has previously stated would be exchanged for BSV. Even if both of these events are a bust BSV continues to scale on chain.
Scaling is what matters. BSV is scaling.
BSV is an incredible (but not risk free) opportunity.
A few things I’m watching for Bitcoin this week and for Q4 2019.
Today, Sept 30, is BSV Stress Test Day. Several services and purpose built tools will be used to flood the BSV network with traffic. The goal is to test the limits of the network in number of transactions and block size hoping to exceed the last stress test which produced 210MB blocks. The test starts at 12:00 UTC and can be followed at https://testbitcoin.live/ and https://bitcoinblocks.live/.
October 1st is Day 1 of the BSV CG conference in Seoul, South Korea. Highlights from this article CoinGeek Seoul about to kick off with major announcements expected include nChain Technical Director Steve Shadders discussing progress towards BSV genesis (the restoration of BSV to original Bitcoin code), a fireside chat with Craig Wright and Jimmy Nguyen and another Hackathon. This conference has been a bullish event for BSV price in the past.
The 30 day extension in the Kleiman v. Wright court case should expire around mid October. Could this case be settled in October? This would remove a lot of market uncertainty and setup a potential movement of the Satoshi coins. I wrote more about this court case in Bitcoin Court Case Settlement.
According to statements made in the court case Craig Wright will have full access to a trust containing ~800k Bitcoins on January 1st. If true, Craig Wright has stated several different outcomes. Early in 2019 he stated he would create rolling iceberg orders to sell BTC while simultaneously shorting. More recently he’s pulled back from that and stated he would give the fortune to charity. Either way, the BTC coins could hit the market via court case settlement, Wright’s sell orders or charities selling gifted BTC for fiat. More important than the supply shock may be what this confirms for the market, the Tulip trust is real and Craig Wright had those Satoshi coins all along.
On the technical side we have another stunning project release from anonymous BSV developer _unwriter called Overpool.
Overpool enables a lot of functionality on BSV, including the ability to do a very high number of transactions between two parties then broadcast the end result to BSV blockchain. In many ways this is a simpler and superior solution compared to BTC’s Lightning Network. Overpool was also released for use on BTC and BCH which is a clever dig as these dev teams likely won’t won’t utilize this powerful tool because it signals issues with their currently selected development paths. Kudos _unwriter on the great work.
I am also keeping an eye on the BTC Lightning Network. In early September a bug was discovered but wasn’t disclosed until this week. The recent news for LN is not looking good. While BSV is stress testing and striving for unlimited scale the BTC scaling plan seems to be sputtering.
First, LN is a fragile centralized system.
Second, LN operators keep coins at risk for loss for VERY minimal gains.
Lastly I’m watching the charts. As I wrote about in Bitcoin Trading Signals the Mayer Multiple indicator on BSV is flashing a buy signal six days in a row (including today) ahead of the stress test and CG conference.
If you’ve been following this blog for a while you may see that many of the things I’ve been writing about are coming together in Q4 and Q1 2020. However, there are many obstacles remaining. BTC still dominates the market and a continued downward slide may pull BSV with it. Can BSV get out from under the shadow of BTC?
While BSV traffic has steadily increased BSV transactions need a hockey stick chart to be ready for the halvening in mid 2020. Also, governments continue to look at Bitcoin from a legal perspective. Any attempts to outlaw Bitcoin, while likely detrimental to the legislating country, will also hurt adoption short term during a time when rate of adoption is key. BSV is designed to work within the law but it may not matter if a country outlaws all cryptocurrency.
The next six months in BSV should be the most memorable yet. From a portfolio perspective, I remain irresponsibly allocated.
I use several Technical Analysis indicators including Ichimoku Cloud, Renko charts, MA crosses, trendlines etc.
One indicator many people reference specifically in trading BTC is called the Mayer Multiple. The Mayer Multiple is explained here.
Here is a chart of the Mayer Multiple for Bitcoin SV compiled from daily closing price on coinmarketcap.com. MM in blue, 21MA of the MM in red, Price in yellow.
(caveat: plot points before June contain less than 200 days of historical data)
We are looking for extreme deviations from the mean for trading signals.
There have been 9 days in 2019 the MM was below .7 with prices in the low $50 range. When MM approaches .7 in the future this would indicate time to buy as price is severely depressed compared to the past 200 days.
With the overnight swoon in crypto prices BSV Mayer Multiple is now at .67 which is a BUY signal.
There have been 8 days the MM was above 2.6 with prices above $200. A Mayer Multiple this high is a sell signal. Those sales would have been very near the recent top when correlating with price.
Compare these MM numbers against stocks and you’ll note stocks are rarely below .9 or above 1.3. Crypto is volatile on a daily basis. By charting the magnitude of deviation from a slow moving long term average we are able to evaluate objective data about when is a good time to buy or sell.
Hindsight being 20/20 we wouldn’t have known looking at a price chart these were the bottoms and tops at that time. Looking at price can stir emotions and we know emotions are the death of good trading. However, looking at Mayer Multiple it’s clear that the MM was very far from the mean and should be treated as a trading signal.
The current MM is ~.67. The past 200 days the MM has been higher 80% of the time. Keep in mind the Mayer Multiple is not a fast moving signal and as always balance any trading signals with your own research and fundamentals.
On a personal note, I’m back in Thailand till late October. Here’s a song remix from Thailand’s most popular Reggae band.
There is a court document circulating online that indicates there may soon be a settlement in the Ira Kleiman v Craig S Wright court case.
Ira Kleiman is suing Craig S Wright for 500k Bitcoins claiming his deceased brother Dave was part of the creation of Bitcoin and that Craig S Wright owes Ira half of a Bitcoin trust established prior to Dave’s death. Document below.
What are the implications of a settlement?
First, in a settlement Craig Wright would deliver up to 500k Bitcoins valued at ~$5B. Upon receipt Ira would owe estate taxes on the value received. This would force a sale from Ira of at least 100k Bitcoins and upwards of 250k on the market to cover taxes. Even if completed over the counter this would impact price of BTC quite heavily.
Secondly, many BTC holders have claimed Craig Wright is not Satoshi and does not have access to the coins. If Craig settles and agrees to pay Ira from the Satoshi stash of coins then the BTC narrative about Bitcoin takes a big hit. While BTC has been screaming for Craig to provide proof they may finally get it when he moves those coins. Be careful what you wish for. I don’t see this as a net positive for BTC yet many people are cheering the settlement because it’s a judgement against Craig Wright. They are cutting off their own nose to spite their face. Craig Wright settling and moving the Satoshi coins provides credibility regarding everything he’s said over the years including how to scale Bitcoin, which is in contradiction with BTC.
In reality there was no way for Craig Wright to get the full value of his alleged 1.1M BTC holdings. To sell that many coins would crash the market, so losing a portion may not be so tragic for him.
Third, settling the case puts a lot of drama and stress behind Craig Wright and BSV. It clears the way to continue developing BSV. The drama will continue but the fact Craig Wright moved the coins cannot be taken away.
As mentioned, moving the Satoshi coins as part of settlement is one way a person can prove their identity (or at least possession of coins attached to an identity). If Craig moves the Satoshi coins watch the BTC narrative change overnight. There will be claims that moving the coins is no longer proof Craig is the creator of Bitcoin. The existence of Blockstream and BTC hinges on discrediting Craig Wright and his vision on how to scale Bitcoin. Watch the space for new propaganda campaigns. The propaganda shows the level of fear present for those who took BTC in such a drastic direction that Bitcoin forked twice. This is all coming home to roost now and in 2020.
Settling a court case for a $5 billion judgement is usually bad news. In this case I think this will end up being a positive. The drama fades away, the proof is made public, the markets are free to digest the pending movements of massive amounts of BTC and we can know move forward with new information about who’s who in Bitcoin.
When you hear the term Smart Money what comes to mind? For many, it’s institutional investors with privileged information pulling the strings on market movements. Smart Money consists of the insiders, the mythical perfect traders, that group of people that is always two steps ahead of the average Joe and one step ahead of you.
When I talk about Smart Money that’s not what I’m talking about.
When I talk about Smart Money I’m talking about Bitcoin. No, I’m not saying that Bitcoin is a group of people that is smarter than you. I’m saying that Bitcoin IS Smart Money.
What does that mean?
Human civilization has gone from a barter system to trading seashells, shiny rocks, tulip bulbs, precious metals and now, pieces of paper as money.
Future generations will look back at this time and think trading pieces of paper in exchange for goods is as silly as our ancestors trading seashells.
Our money today is dumb. Really dumb. The Pentagon lost over $1 trillion because they couldn’t keep track of where it went. Enron happens because the money is so dumb no one can verify if audited financials are reliable. Madoff was successful for so long because his clients had to rely on his fabricated statements about their investments. Financial crises in 2009 happen because Lehman and AIG can play fast and loose with financial regulations when using dumb money. Hurricane Maria funds for Puerto Rico were mostly squandered because local government had a windfall of relief money and little oversight. Terrorism happens because any organization can be funded anonymously with a few palettes of paper shipped across borders.
These events caused by the abuse of dumb money impact billions of people. Those who control money with little oversight act with impunity causing massive losses for the public, and they often get away with it.
What doesn’t get measured doesn’t get managed.
The US government prints dumb money every day to cover a multitude of poor decisions. There is no limit. They just print it. PRESTO! More money. An Econ 101 student understands Supply and Demand, so how dumb is that?!?
Every fraction of a Bitcoin that has and ever will come into existence is publicly verifiable. I can buy a coffee with Bitcoin with more privacy than if I use a credit card but I can’t transact in Bitcoin illegally with anonymity. This is very important to understand. Bitcoin is private, but not anonymous. Bitcoin is Smart Money.
So what is Smart Money? Bitcoin is programmable. Here’s a basic example in money terms. When you dine at a restaurant you are presented with a check to pay. That check has a breakdown of your meal plus taxes and usually an optional tip. With our current dumb money this puts a burden on the owner to account for taxes, tips etc. Small business owners spend thousands to be compliant with taxes. With Bitcoin your check can be a Bitcoin invoice where taxes (sales tax, municipal, alcohol tax etc) are their own Bitcoin payments separate from food and tips. Send your Bitcoin transaction and every tax, tip and payment gets paid instantly to the final destination. This relieves a huge burden for the owners and governments. This changes the game. Dumb money can’t do this.
Here’s another example. Many countries have lax or difficult to enforce clean air laws. Why spend money to ensure your car runs cleanly if you can externalize the costs to the environment and other humans? Why would chemical plants handle chemicals cleanly if they can dump it in the river? With programmable money clean behavior can be incentivized. Smart contracts on Bitcoin can meter and enforce compliance and/or fees. Dumb money can’t do this.
Many of the ills in society are because individuals or corporations can externalize costs with very little risk. Banks are routinely fined for different reasons yet they continue the unlawful behavior because in the long run dumb money covers their tracks enough times the occasional fine is not a deterrent. Bitcoin, as a distributed ledger, can keep all transactions in compliance. Dumb money can’t do this.
This works because every fraction of a Bitcoin can be instantly verified anytime. There is no “fake” Bitcoin and there is no way to move a Bitcoin that doesn’t leave a public record. Bitcoin is private, but not anonymous. Bitcoin is a global ledger.
Now imagine Bitcoin everywhere. Gas station, groceries, international shipping and trade. Smart Money that is programmable and instant. Tax relief that is immediate and automatic. Accountability that is public and global. The opportunity to commit fraud disappears. Honest Money means Honest Government. Smart Money means Smart(er) Government. Who doesn’t want to live in a country where the Government is just as accountable as the tax payers?
This is what mass adoption looks like as a world currency. Now, which coins fit this criteria? Scalable, honest, on chain.
Once you understand this capability and the impact you can see this system is inevitable. I can’t say exactly how this will look, and realistically this may take a decade or more, but there’s no going back.
Governments will love Bitcoin because it enables immediate and honest tax collection. Citizens will love Bitcoin because their governments will also be subject to immediate and honest reconciliation of tax spending. No more secret funding or government waste. Now, imagine that! This can change humanity.
A global ledger of value (and information) transfer is the next (r)evolution of human transactions.
Bitcoins is Smart Money.
For those interested in a clear headed summary of the Kleiman vs Wright lawsuit.
Good Thursday to you all, even the haters.
As a follow up to Allow Myself to Defend Myself….
This is another BSV focused Op-Ed. Please direct all complaints to flybroker AT gmail dot com
Today I have been introduced to yet another peak at the future running exclusively on BSV. It’s called baemail and it’s a BSV web email client that inscribes emails on the BSV blockchain for a fee.
I’m not going to describe the screenshot, should be self explanatory. A few years ago a company called 21co attempted a similar project and was blessed immediately with a huge valuation. Their promise was to protect your email inbox from spam by requiring others to pay small fees to email you. Less than a year later they completely changed their business plan to be earn.com and sold their user’s emails database to the highest bidder (That last part may not be true, just my assumption based on their about face and money problems). But I digress.
What do I think of baemail? I think it’s basic. Has no chance of massive adoption. Likely to fail. That’s not what’s important here. Follow along.
Another interesting project: weiblock.app This is the Chinese clone of twetch.app. Basically a Twitter clone where every action is a microtransaction on BSV. A BSV powered social media platform focused on Chinese market is pretty huge. In all likelihood it will fail but the lessons here are important.
You have to have perspective. These are exciting times.
Over time the more of these projects the better. Iterations are key. Look at how many dotcoms failed. Most of them.
The dotcoms that succeeded have made the Internet the behemoth that it is today.
BSV is the future. Weiblock, Twetch, Paymail, Moneybutton etc are all in the infancy stage of the next generation Internet.
It’s called MetaNet and within a few years businesses will be adapting to run on top of MetaNet. MetaNet runs on top of BSV.
Also, FYI, I am from the fucking future.
Let the hatemail flow.
Simply put, time is limited for Crypto. I expect another bear swoon maybe as soon as this Summer. The counter to this is Bitfinex and Tether will pump BTC in one last glorious exit pump, dumping at a peak on retail noobs conditioned to HODL. This will be the last hurrah.
Regardless of timing, there will be a massive cleansing of Crypto.
I called this BTC ponzi pump as it happened:
I wasn’t the only one:
This tweet was near the current BTC top:
This call on BSV paid off well if you took it at $57. Within weeks it hit $240+ and is now sitting around $160.
So how does this end? All the shitcoins, including BTC, with their broken economic models, experimental blockchains and “second layer” solutions will fail. This may take a year or more but it will happen.
Only one coin will survive.
Technology has transformed the human experience over the past 150 years. Medicine can now prevent and treat many previously incurable diseases. We can traverse the planet in hours instead of years. One farmer can feed a small town. Cars did not exist when my Great Grandmother was born.
Technology moves fast.
One area that we have not transformed is breaking our reliance on centrally managed fiat currencies. Our boom bust cycle that has existed since money was invented continues to this day. Every fiat currency in history has failed.
As the saying goes, “On a long enough timeline….”
We are now entering a new phase. Similar to how advances in medicine, transportation and technology altered our day to day life we are about to see a shift in how we value information and exchange goods.
Information is the new money.
Money has these characteristics:
The characteristics of money are durability, portability, divisibility, uniformity, limited supply, and acceptability.
When comparing the USD (the world’s reserve currency) to Bitcoin the USD is inferior in all areas except for acceptability (at this time). The world just hasn’t caught on yet. When it does, Bitcoin will beat the USD there too.
We are on the verge of a new era, distinct from every currency of the past.
No currency in history has been backed by Proof of Work. This makes Bitcoin the most reliable, resilient and fair money mankind has produced.
Very simply, Proof of Work creates honest money. We know for the next 100+ years how Bitcoin, via POW, will be issued and secured. This process is set in stone.
Proof of Work is fundamentally different than Fiat. Proof of Work is competitive. Miners are rewarded for securing the Bitcoin network. No work, no reward. Every Bitcoin is a product of Proof of Work providing cryptographic proof of it’s validity.
Fiat money is a currency without intrinsic value that has been established as money, often by government regulation. Fiat money does not have use value, and has value only because a government maintains its value, or because parties engaging in exchange agree on its value. – Wikipedia
Stablecoins, eg Libra, are pegged to fiat. Fiat is a promise. Therefore, Libra is a promise about a promise! The world has been built on promises created by governments proclaiming their currency as means of exchange. Throughout history governments have broken their promises around Fiat. Fiat can be manipulated. It is subject to the presiding government’s challenges. Never in history has fiat survived the waxing and waning of the politicians. Example: as of the 70’s the US dollar is not backed by gold. Only more promises. Fiat is inferior to POW. Fiat, as a promise and as history has shown, is eventually broken.
POW is a fair playing field. No politician can manipulate Bitcoin. Money has always been power. In Bitcoin, information is power. This enables competition without boundaries. Even with unreliable internet anyone can compete in the Bitcoin Economy. I can sell my goods online for pennies from anywhere in a Bitcoin Economy.
The Bitcoin Economy will revolutionize information sharing and exchange of value.
Proof of Work is a breakthrough in how money is created. There is no promise, no peg to break in PoW. There is no dilution via centralized policy. Proof of Work replaces fiat with honest money. POW does not care about politics. POW is truth.
Bitcoin enables commerce at a microtransaction level. The Long Tail theory shows that microtransactions can generate a larger impact on the world economy than the Internet. Microtransactions in volume will dwarf current economic numbers.
Fiat currencies ultimately settle in USD, the king of Fiat, as USD is the world’s reserve currency. The problem is the USD is not honest money. There’s no peg to anything, only an empty promise. Bankers print with the Fed’s approval. Pegging the world’s currencies to the US Dollar is tying your lifeboat to the Titanic.
The world’s economies are living on borrowed time.
Stablecoins are lipstick on a pig (USD).We must dig deep. We can do better. This is a critical turning point for the world economy.
Bitcoin is truth.
Bitcoin is honest money. Every satoshi is always accounted for at all times. When Bitcoin is the standard
slush funds, mismanagement and crony capitalism will die.
Triple ledger accounting is another Satoshi breakthrough.https://t.co/v46wq2uIyQ
— Coinspeak (@coinspeak_io) July 5, 2019
Stablecoins perpetuate a fiat system built on a promise. Bitcoin is a NOT a promise. Stablecoins are the gateway to a new century of serfdom.
The Bitcoin Whitepaper is a masterpiece. Maybe the greatest human achievement in the past 100 years.You don’t mess with a masterpiece. If that sounds like hyperbole you haven’t seen what Bitcon enables yet.
The Bitcoin Economy exposes corruption, lies and crime. Anyone who champions against Bitcoin has a stake in hiding something. To be clear, Bitcoin does not care what you do, but if you do something illegal Bitcoin is not your friend.
We are in the very earliest stages of Bitcoin. 10 years is nothing. It’s important to begin researching Bitcoin now. I’ve been at this for years and I have startling revelations almost daily.
This will take time. Start now.