Welcome, my friend, to your weekly dose of Crypto-Goodness!
Let’s start off with a quote from an old wise man:
“Smart people learn from everything and everyone, average people from their experiences, stupid people already have all the answers.” – Socrates.
Bitcoin
Kaboom! The big news this week.
Just when you think it couldn't get good enough, not one but two countries have announced they're adopting Bitcoin, as a matter of fact, El Salvador will on the 7th September — that’s next week!
Communist dictatorship? Of all countries to adopt crypto Cuba is one of the more surprising.
Maybe they have caught on that bitcoin is fully traceable: once you put somebody's name to the Bitcoin address you have a perfect account of all of the transactions forever.
No more income tax evasion!
No more tax loopholes!
As countries finally figure this out and their politicians wake up, they are going to really wake up and say “What? No more tax loopholes?! No more tax evasion?!”
Just watch how fast the fools in Washington D.C. implement it!
Gedankenspiel = Imagine this: if you got paid in Bitcoin, the government would know everything that you did with every single penny or satoshi (which is one-hundred-millionth of a bitcoin) = no more tax loopholes, no more tax evasion!
Why? Because your employer is going to report all those bitcoin addresses to the government, with YOUR name on ‘em!
Also, if you buy something in a store with bitcoin, the store owner MAY be required to report your name to the bitcoin address. This is like when you pay with a credit card — they have everything they need to connect you to the transaction.
This requirement has not been passed yet. But it is part of Biden’s “crypto clause” in the trillion$+ bill he is trying to pass through congress right now.
Lesson #2: Bitcoin is anonymous, UNTIL someone connects the name to the address. Then it’s the exact opposite of anonymous!
In the early days all of the anarcho-libertarians thought they could “hide their money” in bitcoin. How wrong they were, and how rudely they were awakened!
The Silk Road sting operation by the FBI opened everyone’s eyes. Not only did they get Pirate Roberts, but they got the crooked FBI agents who thought they would scrape some bitcoins off of the top too.
Because...bitcoin is perfectly traceable, that’s what the blockchain is all about!
What does Mitt Romney have to do with Bitcoin? If you are still one of those “the government is gonna ban bitcoin” people, please ask yourself the question — Is Mitt one of the biggest investors of all time?
Regulation
Even Steven Seagal cannot escape the Long Arm of the Law, especially the federal government's long arm!
Hard to Kill Steven is supposedly involved in a government sting operation against anyone who speaks nicely about crypto.
“...the actor owes the U.S. government for failing to disclose he was being paid to promote a digital token.”
Now, I agree, there are indeed pump-and-dumps out there, too many imho (see bitconnect below).
And if you are getting paid to promote something — that should be disclosed.
But there is a difference between talking about something in a good light, that you happen to own and like, and purposefully deceiving people to sell a product.
If you are a person of influence, be careful if you talk about crypto: The government might say you are promoting it and fine you!
Former director of Bitconnect pleads guilty.
Remember the flashy videos of a guy winning a BMW, cash falling out of his pockets, and a gold tooth to boot?
That was Bitconnect, and it was found out to be one big textbook pyramid SCAM.
They got the director, Glenn Arcaro of L.A. He has to pay back over 20 million USD.
But the founder Satish Kumbhani has disappeared — big surprise!
Hmm... “Satish”...is only one letter away from “Satoshi”!
NFTs/social tokens
They're getting younger! A 12-year old has reportedly earned $400,000 by coding his own nfts and get this... he doesn't have a bank.
Well, he doesn't need one! He has an Ethereum wallet! Well worth a read
And check out the video here with “Pomp” @APompliano.
Oops? — Check your denominations please. If your are going to sell nft’s will you do me a favor? Please check the denomination symbol!
The Bored Ape Yacht Club user minted the nft and put it on offer on the largest nft platform: opensea.
He set the price for “17”.
17 what? Well it was supposed to be 17 Ether, but his monkey brain got in the way and set it to USDC (that’s a crypto pegged to the dollar).
To make matters worse, the ape then hit the button (monkeys in a cage again?!) and finalized the transaction for 17 USDC — not 17 ETH!
That's a $54,000 difference and bring us to our next lesson:
LESSON #3: There is no customer service on the blockchain.
If you send somebody money like an anonymous user for an nft, and you want it back, guess what? — no customer service! It's gone!
Well… you can contact the guy if you know who he is, or -IF- there is a way to contact him, but there's no intermediary. That's it, game over.
In this case the new owner that paid the $17 for the mutant Apes sold them already for 5 Ether, so he made a nice little $15,000 profit there!
Coming this November — Tickets on the Blockchain!
Online ticketing on the blockchain! NFT’s = only one ticket possible, makes sense doesn’t it?
Gaming
Monkeys in a cage anyone? Back in the day there were these things called “Faucets” or “drips” and you could go get bitcoin for free. All you had to do was click a button one million times like a monkey in a cage, and you would get .000000000001 btc!
The amazing thing: People went for it.
The dopamine hit is NOT relative to the size of the reward.
That’s an important lesson.
If you train dogs, you will know that it doesn’t matter how big the snack is, your dog goes for it like it’s a giant T-bone steak.
Now there's a new twist; it's called “Coin Hunt World” and it’s just like Pokémon-GO.
I can see the car crashes and the death count building up in the newspapers right now as people go around with their cell phones in front of their faces trying to collect bitcoins.
And Hell yes — it's true! — in this game you actually can earn btc. Read here for the catch.
DeFi
Prisoner’s dilemma. This is a great article about the juxtaposition we are in. Holders of Bitcoin that put their BTC on platforms that offer interest might just be helping the short sellers!
There is a complicated relationship between the market price of Bitcoin and the buying and selling of PUTS and CALLS on the platforms. The article above explains it simply and clearly.
Bottom line: We are in a Prisoner's dilemma, and taking our BTC off of the exchanges that enable short selling might actually raise the price over the long run and speed up adoption of BTC!
VC investments
Unicorns, unicorns, everywhere!
What is a unicorn? It's a new company with an over 1 billion dollar estimate, or “first IPO.”
Basically Venture Capitalists put their money on a lot of start-ups, in the hope that one “pops up” — and makes enough money to pay for the losses of all the rest, AND make a nice fat ROI at the same time.
What does that have to do with crypto?
Over two-thirds of unicorns are crypto companies — “crypto-corns!”
Institutional adoption
Kaboom #2!
This is the best tutorial of the week.
Look how institutions like hedge funds invest in Bitcoin: it's massive, it's 10 times the amount of the little guys:
Bitcoin and crypto are obviously here to stay, but the graph in the video above really makes it clear: the luddites are losing!
Altcoins
Q: Is UNISWAP the next Unicorn?
A: Maybe
What does Uniswap do? It swaps tokens — a lot like those currency exchanges you see at airports.
Q: Why will it (maybe) be the next unicorn?
A: It’s gonna power the frikken’ METAVERSE!!!
Price action
All lights are green for GO!
How’s this for context?
Gold mining stocks vs S&P 500
REIT’s expressed in gold
World stocks expressed in gold (reversed)
Commodity index expressed in gold
Best Tweets of the Week:
Unroll “The Three Tribes” tweet by Raoul Paul here:
The Fat Tail tribe tend to worship on Real Vision
Their place of worship is CNBC.
Their place of worship is podcasts YT channels and newsletters.
Honorable Mention:
Best Podcasts
This is a great Daily podcast about bitcoin — check it out: the Decrypt Daily
That’s it for this week my friend.
What do you think?
Which country is going to adopt crypto next? (my prediction)