The Q Day

So, quantum computing can in the future break into lost wallets. A lot of Bitcoin from the early era is said to be lost like 4 million BTC, and if these wallets can be hacked and these Bitcoins released on the market, this would tank the price of BTC. 😆👌 I am actually not worried that the Bitcoin software and hardware will not be updated to withstand quantum attacks and the release of OG Bitcoins would just mean more BTC for all of us, and the price would eventually stabilize.

This is almost like a prophecy. And there shall come a Q-day when old wallets will open; and from them will pour ancient wealth, and your stacks shall suffer! 😆👌

Bitcoin Crashed

Read my post on Bitcoin that I am extremely proud of and that gets no traffic…

So, the price of Bitcoin in dollars has crashed by 50% from its all time high not so long ago and no sits around $70k, and all of a sudden out of nowhere an army of self-appointed Bitcoin experts crawled out of the woods and began offering their opinions. I personally love these two:

Bitcoin has no intrinsic value
Bitcoin is a scam/Ponzi scheme

Bitcoins has an intrinsic value because it has a perceived value to its holders. Bitcoin is decentralized, it has no master, and there is a limited supply of it. So with time, despite these drastic falls in price, the purchasing power of Bitcoin rises. Now look at US dollar:

Bitcoin is a currency that actually increase in cost, and with time can buy you more stuff. People are saying that you cannot use Bitcoin for anything. True, its use is rather limited, the adoption is slow but this is because it is relatively new. Already today there are vendors, businesses, online apps that accept payments in Bitcoin. I literally buy electronics with it, I bought champagne for New Years with it, you can pay Rumble subscription with it. I heard that restaurants use this app for Bitcoin payments but I barely go out and have no social life so I didn’t try it yet.

And Bitcoin might have characteristics of a Ponzi scheme and Satoshi holds like a million Bitcoins, so he can cash out when the price gets high enough. But who gives a flying fuck? Just buy some and see for yourself how you like it. I personally don’t have all my money in BTC. It is a risky asset, the volatility is one thing but its future is uncertain in my opinion. Although, Bitcoin has so far weathered many crises, and in my opinion it will manage.

Another bullshit take about Bitcoin is lumping it with other cryptocurrencies or associating it with variety of scams that happened in the crypto industry. I get it that when some exchange goes bust and people lose their money, it doesn’t shine a good light on crypto. Same with the variety of rug pull scams. But there isn’t anyone who can rug pull your Bitcoin if you hold it on a cold storage. These exchanges can go bust, this industry is new and it is a Wild West out there.

To close this rant, buy the dip, this is what I did. This is what I will do in few days. And I really hope the price stays low for few months so I buy again and again. I know it’s going to grow.

Czech Central Bank Buys Bitcoin

Reuters

The Czech Central bank bought $ 1 million in BTC and some stable coins (tokenized USD basically) for its testing lab. The governor, Aleš Michl earlier said that Czechia should establish a BTC reserve. But I guess then Christine Lagarde called and they all got spooked, and so they are now cautious like this. Better than nothing though, it might be expanded in the future.

I am Becoming an Anarchist

Guys, I am increasingly of the belief that the government doesn’t serve the people. The government prints our money that constantly loses its value. The government bailed out the banks because they were too big to fail. And you have very little control over it.

Why not 500 year mortgages?

Or maybe send some of that printed money to Ukraine?

The government should provide security for citizens and businesses?

And now imagine if people could create their own money (Bitcoin?) and provide security for themselves and their belongings without the government interfering?

Salability

I was reading Saifedean Ammous’ The Bitcoin Standard and would like to make a note of a definition. The key property of a good that leads to it being adopted as money is salability.

Ammous mentions several goods that were historically used as money…

“…gold and silver, most notably, but also copper, seashells, large stones, salt, cattle, government paper, precious stones, and even alcohol and cigarettes in certain conditions.” (The Bitcoin Standard, pp 4)

Salability across scales, space, and time. Scale means that the good can be conveniently divided into smaller units, salability across space is concerned with how easily the good is carried, and salability over time is concerned with how well does the good act as a storage of value over time. And these of course then play into each other. Can the good be divided to make for smaller purchases? Does it require some other instrument of division like silver coins to a gold coin? Does it require a special storage, does it depreciate under the elements and finally is there a risk of inflation of the good?

Marathon Fusion

This is why I think BTC is a much superior asset than gold…

Every time I mention my passion for BTC online, there is always some individual, who is skeptical about digital money and extols the virtues of gold and other precious metals, muh physical, muh precious.

But gold is not money. You cannot go to a shop and pay with your gold bars. You cannot store your gold bars in a purse even unless they are very small. You can sell them for fiat but there is a problem with storage. You can have them in a safe at home but safer storage would be with a custodian like a bank or a specialized company. But in the latter case you are entrusting your treasure to somebody else.

BTC allows for self-custody with a hardware wallet. And BTC is already money albeit not universally accepted. There are shops that accept BTC, usually online businesses selling electronics that are run by enlightened bitcoiners. I have already bought stuff with BTC. So far mostly Bitcoin infrastructure but also stuff for the garden. You can actually get a Visa or Master Card payment card that converts your crypto into fiat and can be used in most stores. I don’t know of any such scheme for gold.

I am not sure if it is even ethical in our technological age to use gold as a store of value. Gold is used in electronics, and it would in my opinion be better if gold served the electrical and by its virtue the bitcoin infrastructure rather than remaining in a vault somewhere. Silver is an even better electrical conductor.

Gold has an inflation, around two percent per year. This is all the gold brought into the system mostly through mining. I was imagining a gold inflation caused by asteroid mining. But would you look at this…

This is pure alchemy. Gold is said to originate from exploding supernovae, and the alchemical sign for gold is the same as the astrological sign for the Sun. The stars are massive fusion reactors.

One only wonders if they can pull this off and make it commercially viable. They could at first make electricity and create gold, after 17 years, they could have the first batch of gold ready to sell, and then every year another batch. They could flood the economy with gold thus reducing its price. It seems like science fiction now but so does asteroid mining or even the universal adoption of Bitcoin.

Run Knots!

Source

I have already written about running your own BTC node in the post titled “How to be a good Bitcoiner”. But recent developments require an addendum. Run not just any node but rather download and run Bitcoin Knots. Bitcoin Knots filters out spam and limits transactions to only monetary exchanges. Problem is that the dominant software provider for Bitcoin nodes, the Bitcoin Core plans to allow spam to go through their software. Unfortunately this could mean that child porn could be passed around the Bitcoin network. This could lead to governments trying to discredit Bitcoin.

By running Knots, you are making the relaying of spam much more expensive and therefore less feasible for malicious actors. At this moment, the adoption of Knots is somewhere around 30%. So we all should run Knots to prevent nefarious plans of forces that would like to use the network for something else than monetary transactions.

How to be a Good Bitcoiner 😆👌

Being a BTC head is not just about stacking sats, there is a whole philosophy that comes with it…

The fundamental belief surrounding BTC is that BTC is better money. Money that has limited supply, money that you have self custody of, money that you can pass to others without needing the banks to mediate your transaction. And you should make the best of what BTC has to offer.

Self Custody

Are you holding your BTC on an exchange? Buy a hardware wallet! A hardware wallet allows you to be a direct custodian of BTC. On an exchange the BTC is not really yours. If the exchange goes bust so goes your stack. You want to be in control of your money; and use your own devices to transfer your BTC. This way the currency is in control of an individual and not an institution. BTC is about defeating the institutional control of money.

HODLing or Spending

Many people treat BTC as an investment. They see how BTC is growing in price against fiat currencies and treat it like a storage of wealth akin to gold or stocks. But BTC is primarily a currency, currency is a medium of exchange, that is money, and money is here to be spent.

Now, stacking sats is nothing bad. You should have what is called a core stack, that is BTC that you will never sell and watch it grow in price. But at times you will see a vendor online that accepts BTC as a payment. He is a fellow Bitcoiner and you should always respect his choice of payment methods, and pay him from your stack if you feel that your core stack isn’t threatened. I am mostly HODLing but I do buy stuff with BTC.

Just yesterday I bought a mini computer with Bitcoin. I saw the price in fiat and was dissuaded from buying it but then I saw the option of buying it with BTC and I reached into my stack and made the purchase. Something I had to unlearn was checking the fiat price of BTC. It is not about how much BTC costs in fiat but rather how many sats you have on your account. I am always overjoyed when BTC falls in price relative to fiat. I am always buying the dip with any money that I have available.

Run Your own Bitcoin Node

I am not a very technical type. But I bought the mini computer with the intent to run a Bitcoin node. As far as I understand it, by running a Bitcoin node, you are keeping a piece of BTC infrastructure in your home. If you aren’t doing that you are basically using infrastructure of somebody else. BTC is all about being the master of your own money.

For better explanation of why you should run your own node, see the video below:

Weighing Assets

This is not a financial advice but let me share my experience with different investment assets…

Rental property: Most of my income comes from various living spaces. Two long term rentals, and a short term airBNB. The two long term rentals are in a metropolitan area, where many come to study and work, whereas short term airBNB is in a rural area. Property is a good investment but all depends on the location and type.

The government is very concerned about housing. And this can be good and bad. On one hand, you are viewed as an evil exploitative landlord, and the government will punish you with taxes and rent controls, but the government also supports tenants that struggle to pay the rent. This means that you will get money even in the darkest times like the Covid lockdown.

The Covid lockdowns have put a lot of people on home office, and many companies realized this is more profitable than maintaining an office in the downtown. Also home office workers take fewer sick days. They don’t care about that sneeze or cough, and will do some work. Naturally office space is struggling, commercial real estate is not experiencing its best days with all the online sales.

Real estate’s profitability is dependent on market forces. My airBNB is very seasonal, summer months bring the most revenue and winter months are rather poor. People come here for cycling and sightseeing. I opened the thing after Covid, Covid would have been shit. Governments are not keen on these short term rentals, I have to have a business licence and pay the municipality. Big cities might have even more regulations. But you can collect many times more money than from long term rentals.

I have mostly experience with residential. There are also things like agricultural land. Not all land is created equal, and the yields might vary. Real estate is a pretty stable form of income but it is prone to third party risk and cannot be moved to another jurisdiction. Population collapse, the die off of boomers, AI driven construction could cheapen properties, and this makes it an unstable storer of value. Inheritance tax is another thing that makes it impossible to build wealth over generations with property. Finally, selling a property might take months, it is highly illiquid.

Stocks: I was trying many jobs and for a time I was a financial advisor, that is a haughty title for a financial instrument peddler. I did not succeed but at least I learned about index funds, and later I learned on my own about ETFs, and I invest in both. I don’t know where this will take me. I want to have several millions of CZK worth of stocks. Stocks are very dependent on markets, they are prone to booms and busts. So when times are good, your portfolio grows, and when they suck, it falls.

Bonds: I keep very little money in bonds. In fact I have this index fund linked to this financial instrument that “invests spare change”. The fund is formed of mostly CZK denominated bonds and the yield is 6-8%. People consider government bonds to be a safe investment, after all the government prints the money. But safe does not mean profitable, the riskier the shit the greater the dividend usually. The dodgier the government, the higher the interest rate.

BTC: Around 2019, I watched this Czech YouTuber that explained Bitcoin. And I invested £100 into it. I am a messy person and lost my hardware wallet. But few years later I found it, and my investment of £100 was now £500. I decided this year to invest regularly into BTC. BTC has a fixed supply, and seems like a good storer of value. Some people say it is going to the moon. Some are afraid that it is prone to hacking with the help of AI. I don’t have the knowledge to judge any of these claims. I put money that I do not immediately need into it and let the fate work its way.

I am a BTC maximalist, all other cryptocurrencies are shit coins, so if you want to invest in whatever, only BTC. BTC does not have a known founder, nobody has ever seen Satoshi Nakamoto; everybody has seen Vitalik Buterin. The BTC protocol is fixed, nobody can temper with it. The supply is fixed, unlike with ETH or whatever other cryptocurrency. Besides, there is no need for another cryptocurrency.

Another thing is liquidity. This is the most liquid asset out there in my opinion. It is traded all the time. Stocks depend on the exchanges they are traded at, gold also needs to be sold to buyers in person. You can cash in your BTC in an instant. Also BTC can be used as payment method, and it can be used as collateral for fiat loans. There are also credit cards that facilitate payments using BTC, and other cryptocurrencies.

Gold: In my opinion gold is the only precious metal worth investing into. Gold is scarce, and it does not rust. Silver depreciates under the elements, and is much more abundant. Unlike silver, the government does not tax gold purchases here in Czechia. Gold has an inflation rate of 2% annually (in 1941 it was 4%, wonder why). And I am fearing that at one point, somebody might find an asteroid full of gold and knock the price down. Maybe at that point I would buy some gold bars. But I missed my chance and now gold is at all time high.

Because gold is tangible some think it is better than BTC. But its tangibility is a liability. My house got broken into once, and while I have a safe box downstairs deep in the basement to store things like that, I am still not very satisfied. The liquidity of gold is dependent on a service of gold vendors that would send a van and pick up your bars, otherwise you have to drive yourself to a vendor or exchange. If you are an institution, with facilities to store your treasure, go ahead but I am a small time retail investor. You can also keep your gold with a third party custodian, much like I do with stocks. Again, this is about a service, and what suits you. But they take a commission.

Ultimately, I invest in whatever I imagine is good at the moment, and I invest whatever money I imagine I can invest. I walk through this life and create different streams of income because my ass is Jupiter-Uranus conjunction in the second. And my opinion on them shifts all the time as my knowledge increases…

Russia to Build Crypto mining and AI Infrastructure in BRICS Nations

Not so long ago, Russia was dismissive of cryptocurrencies but has since been orange pilled and came full circle…

From Forbes:

Russia’s largest data center operator BitRiver has partnered with the Russian Direct Investment Fund to build mining and AI computing facilities across BRICS nations.

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“We will focus on creating a mining-based infrastructure – building data centers and connecting them to necessary power sources to enable AI project deployment and development across the country,” said BitRiver CEO Igor Runets according to the announcement.

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The companies cite a global shortage of energy-intensive data center capacity as a key driver for expansion. The initiative aligns with Russia’s push to strengthen its position as the world’s second-largest crypto mining market after the United States.