It’s my opinion that the most insidious institutions on the planet are banks, lenders, mortgage companies, and the governments that profit from them and allow them to prey on individuals and turn us into ‘consumers’ and other financial products. I can see a way out of this human caused mess – the way is called cryptocurrency.
Banks exist because of the need of humans to have a trusted third party confirm our financial and business transactions. (Personal as well, which is why there is a witness necessary at weddings). The trusted third party is witness to loans, transfers of property, etc.
The problem is that the trusted third party is not trustworthy. People cheat for profit. Simple as that. Maybe not all of us, but enough of us. It’s why government, finance, and other institutions are corrupt – that’s what corruption is.
Blockchain eliminates the need for trusting a third party. A blockchain is a ledger or record book which is immutable – that is, it cannot be changed. Transactions of any kind are encrypted using the most powerful encryption tools available and then encrypted with all previous transactions to form a chain of blocks that are distributed far and wide to every ‘node’ in a network. Bitcoin, for example, has tens of thousands of nodes (more on Nodes here from Jamison Lopp)
In short, blockchain and cryptocurrency create a decentralized immutable ledger that is distributed widely and cannot be changed. Cryptocurrency is the payment for the extremely costly math that creates the blockchain. It can be traded and has real value to create new blocks and to take away power from banks and governments.
There is much more to all of this and here are a few links to get you started buying, selling, and learning about blockchain and cryptocurrency.
Congratulations! You’ve bought some crypto! Maybe you bought a piece of a bitcoin, a whole bitcoin, a litecoin, some XRP, a Lumen, some Ethereum, or Digibyte…it doesn’t really matter. The good news is that you bought some crypto and you are asserting your currency independence.
Or are you?
Here’s something a lot of people don’t think about. When you buy cryptocurrency, what you are doing is claiming a piece of the blockchain. Your public key allows anyone to see that your crypto belongs to the address that you have parked it at. Your private key allows you to move it to a different address if you want to. Remember, blockchain is a permanent (immutable) ledger of transactions. Which brings up a good point – the only way your transaction is private is if you are using a privacy coin like Monero which tears up the transaction records or if there is no way to associate you with your public address. When people buy crypto – most people buy it on an exchange. Exchanges like Coinbase handle all of this for you and because of anti-money laundering laws (AML) and know your customer (KYC) rules…there is no such thing as privacy AND – and this is important, while you are the legal holder of your crypto – the private keys are actually held by the exchange – so you can request them to move your crypto to somewhere else (another wallet, a friend, etc) but they have the custody and if something happens (a big hack like Mt. Gox for instance) your coins and tokens can be lost and never recovered.
And that, my friends, is why the old timers in crypto advise you to never keep your cryptocurrency on the exchanges. You need to have control of your own keys and to do that, you have to have a way to account, move, track, send, and recieve. Welcome to the world of crypto-wallets. This will be a brief guide and in time, I will be adding individual reviews of the various solutions presented here.
There are many different wallets.
There are the aforementioned exchange wallets which allow the exchanges to control your currency. This is important if you are actively trading. Some exchanges guarantee that your holdings are protected. Binance is one of these. Advantages of exchange wallets are that you can buy, sell, and trade. Exchange wallets usually take care of airdrops, forks, and mainnet swaps for you. The disadvantage is that your every move is being monitored, your accounts are clearly tied to you, and you do not actually control your keys. So, if currency independence or privacy are one of your reasons for investing in crypto – keep your crypto somewhere else.
Browser wallets aka Web Wallets use an online interface to keep track of your crypto. Again, if privacy is an issue, you have to take some extra steps because your computers IP address and other factors are showing the world who has control of that wallet. Probably the most popular browser wallet is MEW aka MyEtherWallet.com
Since Ethereum has been used to build thousands of ERC-20 compliant tokens – a browser wallet like MEW is very useful because it can hold them all. Also, since the contents of the wallet are visible to anyone on the blockchain – if you hold your Ethereum in a MEW or similar wallet, you will get air drops of new ERC-20 tokens from time to time if you are holding any Ethereum.
Similar to MEW but downloaded onto your machine or device are software wallets. Software wallets are also known as desktop or mobile wallets. The main advantage to using a software wallet is that they are more secure because they are on your machine or device. Some examples are JAXX, Mycelium, Electrum, and Green Wallet. Generally, when you set these up, your private key is given to you and encrypted using a series of words which are also given to you. This means you can recover your wallet even if your computer or phone is stolen or broken. A similar system is used with browser wallets. The difference is that a browser wallet can be logged into from anywhere as long as you have your keys, the software wallet is only on your device.
There are a growing number of hardware wallets. Ledger, Trezor, Bitific, and more. I will offer reviews of some of these in the future. One wallet which I ordered and was excited to demo was the HooFoo wallet. The company has unfortunately proven to be a fly by night scam and has not shipped wallets to any of their backers or offered refunds. It’s a shame because it looked like a very good solution. In any event, hardware wallets are not dependent on your computer, the web, or exchanges. By storing your cryptocurrency on a hardware wallet, you are retaining full control of your crypto and retaining the maximum amount of currency independence.
Paper Wallets, Wallet Cards, etc
A paper wallet is little more than a bitcoin or crypto private key printed on a piece of paper. Nothing complex about it. Wallet cards are a way of digitally managing private keys offline but still loading and spending online. Paper wallets are as secure as you keep them – think of them as almost the same thing as dollar bills. If you leave them lying around, they will probably disappear.
So, in summary: cryptocurrency is moved around with numbers and math. The math is complex and for all intents and purposes impossible to counterfeit unless you have two sets of numbers – the public key and the private key. Wallets are a way of managing and keeping those keys safe. Many people call any wallet with an online component a soft or hot wallet and any wallet that is offline a cold or hard wallet. Cold wallets are safer than hot wallets.
A lot has been made int he past ten years about the 1%. The ultra-rich who control more wealth than the other 99% of us. I’m not going to get into all of that. Suffice to say that I’m not a member of that club but I wouldn’t turn down an invitation.
The 4% are something altogether different. It is estimated that with a maximum of 21 million bitcoin that will ever exist – ownership of a whole bitcon will become a bit of a status symbol. Currently trading at right around $8200, buying a bitcoin is not something that most people on the planet are capable of. Shelling out $8200 is a big commitment – in some markets that’s a down payment on a house, it will buy the very cheapest of brand new cars, or many other things. Now consider – some of the 1% have hundreds or even thousands of bitcoin in their wallets. It’s estimated that Satoshi Nakomoto, the creator of bitcoin has more than a million btc. The top cold wallet has nearly 200k and the other top 100 range from that down to 70k. What that means is that most of the existing bitcoin are already spoken for by those top wallets and Satoshi. The rest of them are split up into little pieces called Satoshis or Sats. The majority of bitcoin enthusiasts only own a piece of a bitcoin and then own a lot of alternative coins (aka ‘alts’) which add up to crypto holdings that can be in excess of 1 bitcoin – but usually don’t hold the bitcoin as such.
A recent estimate says that only half of one percent of the population on the planet owns any form of cryptocurrency. So, we are talking about the 1/2 percenters here, not the 1 percenters. Out of those 1/2 percenters – only 4% of them own 1 or more bitcoin. It’s tricky to do the math here because there are some (many actually) people with more than one bitcoin wallet. When we do some very rough calculations we come out with the fact that out of roughly 8,000,000,000 people on the planet – there are only 160,000 of them who own a whole bitcoin. So, my friends, if you stepped up or got lucky or were smart enough to invest early on when bitcoin were cheap and plentiful in relation to demand…congratulations…you are part of the .002% of humans that will probably be among the wealthiest human beings int he history of our species. Congratulations!
If you haven’t bought any bitcoin yet, what are you waiting for! Use the coinbase link to the right to get started…you can buy little bits at a time or many bitcoin, but don’t forget, if you leave them on the exchange…you don’t really own them. If you don’t know how to begin, check out my quick guide about How to Invest in Bitcoin to get started
Investing in Bitcoin is really very simple. The easiest way is to:
1)Setup up a Coinbase account using my affiliate link (We will both get $10 in Bitcoin when you make your first $100 purchase). To set up your coinbase account you will need a valid government issued ID, a bank account, and a phone number/address
2) Wait a couple of days for account approval
3) Buy Bitcoin (or other crypto)
After that, you hold it until you find a price you want to sell at or hold it forever or wait until you find something you want to buy with it. Bitcoin traditionally has a lot of up and down movement so you can either buy high and sell low (don’t do this, instead just give your money to charity or something) or have patience, avoid selling in panic or on market emotion, and wait for a return you are happy with.
My advice, and it’s worth what you paid for it, is to buy at least one Bitcoin either all at once or over a longer period of time – (you can do like $10 a week if you want to) and hold that thing for five to ten years. I firmly believe that in a decade, a single bitcoin will be worth $1 million dollars or more.
While it would have been great if all of you reading this had bought Bitcoin back in 2013 or even in early 2017 – that didn’t happen. Most of you still don’t own any Bitcoin. Now, you are faced with a choice…are you going to look back and wish that you had bought Bitcoin in July 2018? I believe that unless you buy it right now, the answer is yes.
The death of Bitcoin has been called out far too many times in the past. And it isn’t going to happen. The decentralized nature of bitcoin, the limitied supply, and the massive investment that has been made into developing the infrastructure for it have gone way too far. Over the past two days, I’ve watched while the long awaited institutional money has begun moving into the space. Don’t get me wrong, institutional investment in Bitcoin already dwarfs private investment.
However, for some time now, the institutional money has been quietly paving the way to protect and exploit their resources in bitcoin. The coming creation of an ETF (now with approval pushed back to mid-september) and the preparation of safe custody solutions by the likes of Coinbase have opened the door to investment on a scale that has never been seen. While it’s not likely that we will see the 20,000% growth that OG Bitcoin investors experienced…there will be fortunes made based on investments made today. Parabolic growth is coming soon.
It’s worth repeating. There will only ever be 21 million bitcoins. Ever. And yet, already there are more bitcoin being sold than exist because some exchanges and platforms like Abra are operating on a basis of fractional reserves – that means that unless you have the private keys to your bitcoin – you don’t actually have your bitcoin and you might lose your bitcoin if that institution fails for whatever reason. Fractional reserve is happening in bitcoin, but it’s not as widespread or pervasive as it is in fiat currencies and the normie banking world.
Want to see why I recommend that you buy Bitcoin right now? Look at this chart…as I write, from the time I took the sreenshot to now. The price of Bitcoin jumped from $8161 to $8185 – that’s in seconds.
Now, look at the blue horizontal line and trace it back to November 2017. Look what followed from the point we are at right now. A lot of that was driven by Korean money flooding in – well, guess what? Korean regulators have re-opened the floodgates of that Korean money over the past few days.
The ETF is coming. Chaos is ruling the financial systems of the world. The dollar is being weakened, the Yen is getting stronger. The supply of bitcoin is not getting larger. And volume is rising.
The U.S. Economy is on a tear – just one month away from being the longest running bull market in U.S. history. This bull run is longer than any in U.S. history with the exception of the 1990 to 2000 bull run which was one month longer. Records are made to be broken and to be honest, the careful work over the past ten years building a sustainable recovery from the ashes of the 2008 market crash has been yielding results – so why shouldn’t this break the record?
One reason. President Dumbfuck. He came into office with everything moving in the right direction. All he had to do to keep the economy going was maintain the economic policies of his predecessor or at worst just let things truck along. The economy was on auto-pilot and would have carried him through his term. Unfortunately, dismantling the other policies of his predecessor was not enough. It seems that he is being directed to actively sabotage the U.S. economy through maligning American juggernaut companies, creating a tariff war with largest lender, creating diplomatic rifts with our largest import and export partners, and most recently by encouraging a currency war.
So, as the U.S. economy gets bigger and bigger – the fundamentals that it is built on are becoming skinnier and skinnier. Think of it as a rapidly growing bearcub climging ever higher on a tree. The higher it goes, the bigger it gets, and the smaller the girth and holding capacity of the tree becomes. So, essentially, we’ve got a bloated bear on a skinny and increasingly brittle trunk. Let’s look at some of the fundamentals.
Inverted Yield Curve
Currently we are sitting on a yield curve where yields on long term bonds are close to dropping lower than yields on short term bonds – what this means is that institutional investors have lost faith in the strength of the economy. This is a reliable indicator of a coming recession and we are almost in the zone where certainty on that is 100%. Think of it this way – the number of people betting on the short term future is much higher than the number betting on the long term future. We are the closest to the point we reached in the last recession that we’ve been since…the last recession
It’s not just you and me that are getting record numbers of offers for loans, financing, new credit cards etc. It’s also big companies and while everyone loves to talk about the amount of cash in corporate coffers, there should also be balanced with that. There are record amounts of debt which means that hoarded cash is already spoken for. In addition, the U.S. government is at record levels of debt and spending. Turns out draining the swamp was a lie, go figure.
Notice how much an apple costs? It’s not because apples became more rare. It’s because the dollar doesn’t buy as much as it used to and this is happening very rapidly. It’s not just you- it’s everyone and everything and that includes the cost of doing business. It means that companies have to make more to earn the same amount…and so do you. And, it’s not sustainable. Just as Zimbabwe or Venezuela.
Trade War and Currency War
Now, what happens when you put tariffs on cheap products? They become more expensive right? So the cost of business goes up and inflation rises. What happens when you devalue your currency? Well, it means that inflation is accelerated and it costs more to do business and go about daily life, right? So, your money is worth less and goods cost more. Pulling both ends against the middle. And what happens when you do that far enough? The same thing that happens when you put a bloated bear on an ever more brittle and thin twig – it snaps.
Economists are looking for gradual signs of an economic collapse, but it’s my opinion that this time (even more so than last time) they are not going to get it. If you are looking for the warning signs that a collapse is imminent or for someone to call out that it’s about to happen – then here you are. This is it. We are on the edge. All it is going to take is one event – a terrorist attack, a bank failure, a disaster. The only thing that might possibly save us is the Obama-Era policy of raising the Federal Reserve lending rates. The reason is because if the rates are raised enough, then the Fed has the most powerful tool available to encourage more lending, more spending, and less panic. President Dumbfuck is now calling for this policy to be reversed and criticising it – even though it his his appointee, Jerome Powell, who is continuing it. This can end up being a disaster.
What can you do? Buy Bitcoin. Seriously. That’s all you can do.
In creating the Vagorithm, which is still a process I am tweaking and trying to get right – I have taken a number of known indicators and created a composite. What makes it different is that I have put together some things that aren’t usually meshed and incorporated them into my algorithm.
Here are a few of the factors that I have included.
First of all, I think that one of the most interesting indicators in our short attention span world is the short term volatility index. The main indicator I use is the $TVIX which charts day-to-day volatility. While long term volatility is a factor in long term price corrections, I feel that short term volatility reflects the mind and sentiment of the majority of investors likely to make buying decisions in real estate, cryptocurrency, or the stock markets.
I’ve also included several commodities and precious metals in various ranges. Silver, gold, coffee, and U.S. Wheat are all factors that figure into ‘societal mood’.
Another factor that I’ve been trying to find an accurate way to include in the vagorithm is the number of ‘animal stories’ being put out on mainstream media. These are a known distractor from the serious political and conflict stories that unsettle viewers and lead to chaotic i.e. non-controllable, non-programmed actions on the part of the public. Rather than tracking the political and conflict stories, I believe it makes more sense to track both animal and celebrity fluff stories in the mainstream media.
As strange as it may sound – I’ve also included the number of Tweets from U.S. sham President Trump – the number is based on an average monthly number. Drumpkoff’s twitter has become an important leading indicator of U.S. markets and consumer sentiment.
There are a couple of negative factors which I am having trouble incorporating – the first of which is Natural Disasters – the hard part here is discerning how the public actually feels about forthcoming disasters – so far I’ve experimented with using twitter hashtag mentions which has yielded some promising results, but what I’d like to find is a good way to incorporate Facebook data with that. So far, I am hitting a bit of a wall on this one. Another factor which I consider a negative indicator is U.S. government involvment in monetary policy – a strong hand works negatively even if only percieved.
So, these are some of the indicators that I am incorporating – there is much more, but as I am still in early development stages, I prefer to just tell you about the milk and not the cow’s diet. Still, here are two more indicators that I am leaning on heavily…the overall performance of the tech sector and here is an odd one to show you just how bizarre all of this is – the number of google searches for ramen vs. pho.
So, all of this begs the question…What is the Vagorithm good for? So far, I am using it for a couple of predictions at the moment – stock market, cryptocurrency, realty market, and political election predictions. Since things are still in progress – you will have to follow my results on Twitter at @vagobond
I am, without apology, a so-called Bitcoin Maximalist. I believe that within a few years Bitcoin will be the most used currency on planet earth. That being said – I don’t believe in putting all of my eggs in one basket. There are many places where you can put your money, if you choose – you can buy municipal bonds that have high risk but pay only moderate interest, US bonds that do the same, a high yield savings account – but none of these investments keep pace with inflation. The good old stock market is one place where you can beat the devaluation of your money – mainly because prices reflect the value of your dollars. Take for instance, shares of Amazon – they are far too overbought for my tastes and it seems likely that at some point they are going to plunge – Amazon is ripe for an anti-trust suit from the government – the only reason it isn’t happening right now is because it would plunge the US economy into a spiral of death from which the investment banks, the commercial banks, and the government would probably never recover.
Still, there are stocks worth buying out there. Traditionally there are three types of stocks that I prefer to look at.
1) Dividend stocks like IBM which pay you a quarterly dividend. Owning a share of IBM (currently at about $143) pays you about $3.50 per quarter so in a year you are earning $14 which means that over 10 years the stock has paid for itself and is pure profit. Good dividend stocks are hard to find and generally expensive. The P/E or price to earnings ratio gives you most of what you need to know.
2) Growth stocks. These are stocks like Amazon which ideally you buy when the company is young and fresh for $10 per share and which grow over time to be worth $1840 (like Amazon today). Obviously that growth is profitable. Good growth stocks (like Amazon) often also pay a dividend.
3) Value stocks. Someone once told me that the stock market is like a crazy uncle. Over time, he is just fine, but once in a while he wakes up and comes out of his bedroom in his underwear offering his gold coins for pennies. That’s a value stock – the stocks that are being beat up over news, events, or presidential tweets. Again, Amazon was a great value stock when President Dumbfuck was making empty threats at it because he drove the price down – the danger was that he might follow through.
Typically, I think a combination of the three stocks is a good way to go. You can go through a broker (and pay fees every time you buy and sell), you can have a 401k or IRA which manages your buying and selling for you but limits your ability to be involved in decisions, or you can download the RobinHood App and buy and sell without paying commission, have full control, and (like me) let the most obsessive parts of your personality go completely hog wild.
Get the Robinhood App here – and as a bonus for using my affiliate link, both of us will get a free stock out of the deal.
It was a good day to be in cryptocurrency today. Bitcoin took off this morning, for reasons that are not altogehter clear and it brought it’s hundred closest friends and nearly every other coin or token with it. My personal opinion is that the disgusting and shameful performance of the U.S. President in Europe with former U.S. allies and strongman Vladmir Putin shook the faith of big institutions in the USD and traditional currency markets. There could be a lot of other reasons – but essentially, money is moving to Bitcoin and crypto (as predicted) with loss of faith in the U.S. as a stable democracy promoting the interests of the ‘free’ world.
The long and short of it is that starting at about 8 am, BTC jumped from $6700 to $7300 and the movement upwards has not stopped – as I write, getting closer to $7500 – a jump of nearly 11% in less than 12 hours. Which is awesome. A post on Twitter earlier from Charlie Lee (founder of Litecoin) gave an interesting statistic along with Charlie’s recommendation that if you don’t own at least one bitcoin, you need to make that your focus – even before owning Litecoin. Charlie’s reasoning was thus – there will only ever be 21 million bitcoins – not enough for even each millionaire to own. Credit Suisse projects that there will be at least 53 million millionaires on the planet by 2019. Less than half of them can ever own a whole bitcoin. Bitcoin is not going to go away. I’m certain of that. The entire financial establishment is certain of that. John McAfee, the founder of McAfee anti-virus and notorious crypto bull has famously said that if a single bitcoin isn’t worth $1 million by 2020 that he will ‘eat his own dick on TV’. While I feel just as confident in the future of Bitcoin, I’m not willing to be quite that specific.
I do, however, think that the floodgates have opened and big money is already pouring in at rates that have never been seen. There will be some up and down – but mostly up for quite some time. My suggestion is that you do your own research and that you get into crypto right now.
If you are interested in my suggestions and are willing to do your own research and be responsible for your own buying decisions – here is what I recommend. Buy as much of a bitcoin as you can as soon as you can. In addition, I think that Ethereum, Litecoin, and Digibyte are all solid projects with long blockchains and proven records. They are not going away. Stellar, Cardano, Neo, 0x, Tron, Basic Attention Token, and Ethereum Classic are all projects that I expect will go up in the short term and the long term. If you want to get in on a couple of early projects that are still cheap and relatively unknown Docademic, Bitcoin Private, Bezop, and NoBS Crypto are all worth looking into – but as always – do your own research. For right now- my highest recommendation is to get as much Bitcoin as you can afford.
The Soviet Union ceased to be a major political force in the world and unraveled in large part due to two factors:
1) A long and economically exhausting war in Afghanistan that brought terrorism and poverty to the ‘homeland’
2) The fall of the Berlin Wall and the subsequent ‘People Power’ movement which chipped away at the edges of the USSR until there was no longer any semblance of control and the disparate states and territories began to secede.
Add to this the glamourous allure of capitalism to the masses, the power grabs of former Soviet oligarchs, and the shining beacon of democracy calling to the masses and what you have is a complete collapse in just a few years. So much for the USSR, right?
Well, so we thought. Unfortunately, the bright minds at the KGB had produced Vladmir Putin and while he isn’t even giving lip service to bringing back the brightest ideals of the Soviet Union (i.e. a workers paradise, economic equality, and a future egalitarian socialist liberator) – he has instead appealed to the destroyed ego of the former Soviets. His wrestling with lions, seizing territory, and bitchifying of the U.S. President have restored that old pride in the Russian people. And he has done it without forcing his friends and supporters to give up their massive oil and media fortunes.
It’s no coincidence that the American war in Afghanistan and the figurative building of a non-existant wall between the U.S. and Mexico are heralding the downfall of the United States. Putin is in control and he knows what he is doing. Russia has been and continues to fund the enemies of the U.S. in Afghanistan. Putin’s puppet U.S. President continues to do his master’s bidding and create the wall between Mexico and the U.S. – all so Putin can exact his ultimate revenge and say “Mr. Trump, TEAR DOWN THAT WALL”. In the meantime, Trump’s supporters become more and more militant and well armed and the Russian Hackerforce is working hard to enable California to break up into three peices and then to begin seceding from the U.S. – Estonia, Latvia, Lithouania – but on the West Coast of North America. In the meantime, the American oligarchs are seizing power on every front, and the divide between those who admire a strongman and those who see a buffoon continues to widen.
Will Putin succeed? So far, the odds seem to be in his favor but those who favor justice have been known to succeed in the face of failure before. Let us hope that things do not go as the oligarchs have planned.