A Peek into the Bitcoin Rabbit Hole

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  • Sun, Feb 21, 2021 - 04:38am

    #1
    VTGothic

    VTGothic

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    A Peek into the Bitcoin Rabbit Hole

Over here, in comment #2, Mohammed Mast wrote:

 it’s real value lies in the btc ethos. it is the most sound money ever created. it is democratic. it cannot be inflated to zero. it is bringing banking and financial security to people all over the world. it is not owned by any government or central bank. it is the base monetary layer of an entirely new financial system. … there is nothing in human history to compare

He is exactly right. His comment is the take-off spot for this post, in which I want to join with him in underscoring the deeper point of bitcoin.

The Bitcoin community is incorrectly repeatedly lambasted with some version or other of some critic or other’s favorite narrative of money-grubbing villany. That comes from failing to distinguish “revolution” from “revolutionize.” Bitcoin is revolution. Alt-coins and stable coins revolutionize. The latter strive to prevent the former. (Who was it that quipped that the difference between the two is the difference between Che Guevara and a Che T-shirt worn by a hipster in a coffee shop?)

There are, of course, people and institutions in the bitcoin space who are primarily interested in acquiring some quick riches. Anytime, anywhere “money go up,” grifters come grifting. Just look at the US stock market – in recent particular, at the GameStop gambit, especially the institutional grifter response to the mixed-motive insurgency of the upstart hoi polloi: notice who is being assigned the blame and getting punished. Your government is Grifter Central. But we here on PP know that.

Now consider how Bitcoin addresses that. Consider how Bitcoin changes people…

That’s from yesterday. It is not at all an unusual personal revelation. Such sentiments are frequently expressed in the Bitcoin community. Bitcoin changes people whose curiosity gets the better of them. Quickly, they tumble down the rabbit hole and unexpectedly discover a new universe.

In that parallel universe Bitcoin produces hope. More importantly, such emergent real hope for personal financial stability – juxtaposed (as it must be in every convert’s mind) to the penurious sentence imposed by the global government-enforced monetary system that is slowly driving citizens across the planet into hopeless servitude – produces revolutionary consciousness.

Bitcoin, alone in the crypto space, is fundamentally revolutionary. The community’s meme about eventually replacing the existing worldwide fiat currency system is not hyperbolic, it is programmatic. Bitcoin captures the mind and, more significantly, the heart, and produces willing advocates and, when necessary, martyrs. This is the Vietcong peasantry engaged against the US military and coalition redux. The ground-level colonialist conditions are the same, only this war is being digitally fought. We already know who wins because we’ve seen this movie: we know who wins the hearts and minds of the populace in the long run.

Nic Carter wrote about the revolution in September, 2019. In his essay, he characterized the soul of the Bitcoin ethos; indicating why against all odds it has survived and continues to expand; why it is claiming new territory and making strange allies where the monetary establishment didn’t expect.

The piece strikes me as even more prophetic and germane today than it was 17 months ago.

A Most Peaceful Revolution

So what are these values that Bitcoiners hold dear? Bitcoinism is an emergent political and economic philosophy combining strains of Austrian economics, libertarianism, an appreciation for strong property rights, contractarianism, and a philosophy of individual self-reliance. Some libertarians will recoil at social contract theory, understanding it to be coercive (since one is not actually offered a political contract to sign at birth or at maturity). Not so with Bitcoin. No one is defaulted in: it offers a fairly explicit contract to would-be users. You have the right but not the obligation to participate in the most transparent, auditable, debasement-free, and and well-defined monetary system the world has ever known.

Thus Bitcoiners strike a profound contrast to the opportunists who envision success as a financial exit from their token project. For Bitcoiners, success consists of a day when no exit is required. Their admittedly eschatological philosophy anticipates a time when they will be able to participate in a closed loop Bitcoin economy, free from the vicissitudes of the legacy financial system. They do not dream of a financial exit, at least not in the venture sense. They crave instead a system built on a monetary standard which does not arbitrarily debase savings because monetary discretion of any sort is completely absent.

And they are serious about retaining these foundational qualities.

Negative interest rates are now orthodoxy at virtually all central banks in developed countries. The IMF openly speculates about how to impose ever-deeper negative rates, including the forced depreciation of physical cash. Regardless of whether you believe savers have a divine right to a positive yield, they certainly start to bristle when you propose confiscating their savings. If arbitrarily negative rates are permissible to achieve policy outcomes, at what point do central banks pause for breath and give savers a reprieve? Already in untrammeled territory, it seems unlikely any restraint will materialize this ends-justify-the-means approach to monetary policy.

Savers may not panic at negative 1%, reasoning that the bank is providing a useful service, after all. They may grumble at -3% and start to wonder if their monetary overlords really have it all figured out. At -5% — they pile into gold and start to wonder about that Bitcoin thing.

Thus are converts made. And eventually the war won.

Bitcoin doesn’t care about the time frame. Bitcoiners have a much lower time preference than non-coiners. They already see the eschatological end-point: It is already here, just not yet. But that’s a mere detail.

  • Sun, Feb 21, 2021 - 06:22am

    #2

    sand_puppy

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    BTC’s effects on freedom

SP–This comment is added with the greatest respect for VTGothic, bitcoin enthusiasts (including myself) and the viewpoint he articulates in the post above this one.  Can we hold both sides of a controversial topic in mind at the same time?

One of the most powerful levers of social control is the banking system.   It can enslave the average citizen with debt, confiscate savings with negative rates and inflation and monitor activity via electronic surveillance.

The oligarchy will not simply let the power to control this system slip from their grips quietly.

A question posed to us BTC enthusiasts:

What will the oligarchy do to attempt to regain control of the financial network before Bitcoin destroys their power?

  • Sun, Feb 21, 2021 - 06:59am

    #3

    sand_puppy

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    Can you please elaborate

VTGothic wrote:

The Bitcoin community is incorrectly repeatedly lambasted with some version or other of some critic or other’s favorite narrative of money-grubbing villany. That comes from failing to distinguish “revolution” from “revolutionize.” Bitcoin is revolution. Alt-coins and stable coins revolutionize. The latter strive to prevent the former.

Can you please elaborate on these terms, revolution and revolutionize, and explain how BTC and the alt-coins/stable coins enable this difference?

  • Sun, Feb 21, 2021 - 10:17am

    #4
    ao

    ao

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    question for VT Gothic, Mohammed, and other BTC experts

Let’s suppose I have $250K in BTC in a cold wallet and now I want to buy a house for cash. What is the best way to do it? Who do I go through and what percent commission can I expect to pay for converting BTC back to FRNs? Thanks for your help.

  • Sun, Feb 21, 2021 - 11:05am   (Reply to #4)

    #5
    Mohammed Mast

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    A Peek into the Bitcoin Rabbit Hole

fees vary from exchange to exchange

Gemini Review: Secure Cryptocurrency Exchange With Advanced Tools

 

  • Sun, Feb 21, 2021 - 11:12am

    #6

    sand_puppy

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    1 BTC same price as a Kg of Gold

A rise in BTC price to (yet another) all time high of $58,000 this morning puts 1 BTC at the same price as a Kg of gold.

So we start thinking in terms of the more useful unit of measure, the Satoshi, or Sat, which is 1 / 100,000,000 of a BTC.

A Sat is still a fraction of a penny (1 sat = $o.0006)

  • Sun, Feb 21, 2021 - 12:13pm

    #7

    Jim H

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    Bitcoin is the only canary-in-the-monetary coal mine that is functioning for now

I am thankful that Bitcoin has been emergent on the scene as a new form of deflationary money – to those with eyes to see, it’s incessant rise is telling a story.  Gold and Silver are/were supposed to perform this signaling function but as most of us know, they are captured in their price discovery paper prisons.  They will emerge from their price controls, violently, at some point, but not before much damage is done.  Silver is on the edge of emerging… we will see if they can reel it back in or not.. I think not, but it’s day-to-day for now.

The majority of people are still zombified when it comes to their normalcy bias.  I’ll tell you a story to illustrate this;

A friend of my wife.. she and her husband owned outright several rental houses.  Their kids are getting toward college age and the couple felt they would be disadvantaged in terms of getting their kids aid/scholarships if they looked so wealthy on paper.  Their answer?  Sell the houses and place all the money in some kind of Life Insurance product.  I kid you not.  In a time when we are facing almost certain inflation, they sold their real assets, the houses, and instead gave the money to a firm that promises them a certain interest rate, in today dollars.  Let me say that again, with emphasis, in TODAY DOLLARS.

I think what they did was unbelievably dumb.  I was told about it after the fact, so I had no opportunity to debate the move.

Back to Bitcoin… Copper, Oil, Rhodium, the size of the ice cream containers in the supermarket.. these are all signaling inflation.  The money printing has gone exponential, the debt/GDP ratio in the US (130%) now far beyond the tipping point of no return defined in the historical review of monetary defaults, “This time is Different” by economists Reinhart and Rogoff.  There is no fix… interest rates cannot be normalized or used to stop inflation once the fire starts.  The Comex says Silver should cost around $28, but you won’t be able to buy any for less than about $34.  The Silver canary is sick… we shall see if it dies or not.  The BTC canary has died on a now $1 Trillion dollar pile of rotting debt-based fiat currency.  Go ahead and comfort yourself that this is a speculative bubble… another tulip of sorts.  Go ahead and display confidence in your today dollars.

 

 

  • Sun, Feb 21, 2021 - 12:21pm   (Reply to #7)

    #8
    VTGothic

    VTGothic

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    A Peek into the Bitcoin Rabbit Hole

Man, Jim H, that’s a helluva story. Things like that just keep us shaking our heads. And preparing. Neighbors gonna need a hand.

  • Sun, Feb 21, 2021 - 12:57pm   (Reply to #3)

    #9
    VTGothic

    VTGothic

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    Revolution or Revolutionize

@sand_puppy wrote:

Can you please elaborate on these terms, revolution and revolutionize, and explain how BTC and the alt-coins/stable coins enable this difference?

First, I’m not the author if this distinction; I just can’t remember where I read it.

The revolution changes the base layer of society, culture, politics, and/or economics.

To revolutionize is to adopt characteristics of the revolutionary spirit within the existing social, cultural, political, and/or economic system; to coopt it and make it serve the system.

We saw an attempt to revolutionize the bitcoin threat when the rallying cry was “blockchain, not bitcoin.” The argument was that bitcoin is too volatile, too small, too amorphous, too energy-intensive, too niche to be useful, but the blockchain shows real promise to help make the money system and supply chain run more efficiently. Woo hoo. We can throw out the dirty bathwater but keep the baby.

States are now pre-marketing their stablecoins as approved versions of bitcoin that, because they’ll be approved, offer greater security, maybe even FDIC protection, and seamless integration into the existing banking system. See? It has all the good things offered by Bitcoin, plus it doesn’t disrupt your banking relationships; it will be accepted everywhere your paper money is. Surely that’s a practical revolution?

Bitcoin is the revolution. It is decentralized, global, censorship resistant, etc., and so cannot be stopped. It threatens to change how we do business in very many ways. There’s no founder and no controlling organization to threaten or persecute. Thus, no way to keep Bitcoin under state authority. Bitcoin is an existential threat to the status quo.

Mind you: various states can and will create complications and choke points at the exchanges. And if Bitcoin reaches the point of becoming a payment rail, also at the cash register. But the coin cannot be touched. It’s virtues cannot be changed. (Personal nodes are subversive instruments of parallel economics.)

Alt-coins adopt the Bitcoin ethos and “improve” on it in some way or another. Those improvements all intend to remove friction (or change the kind of friction found) in the existing system. Unlike Bitcoin, they all have choke points, therefore can only continue to exist as long as they don’t threaten the status quo powers.

Alt-coins revolutionize, but don’t revolt. They perhaps marginally improve the status quo, but as much as anything they’re just cosmetic changes that leave the underlying power structure intact. They’re the revolution reduced to a marketing scheme. Thus: Che Guevara T-shirts on chic hipsters drinking lattes in 6-figure tuition college towns, not Che. The hipsters don’t know the difference. Banks and state actors hope you won’t either.

  • Sun, Feb 21, 2021 - 01:11pm   (Reply to #4)

    #10
    VTGothic

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    A Peek into the Bitcoin Rabbit Hole

@ao,

What Mohammed said.

I’ll add: if such a person were to wait just a little longer, Jack Mallers’ Strike app will likely allow the transfer for free, or close to it, and it’ll be instant. Then it’s only a question of the cap gains tax.

Revolutionary.

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