Everyone is scared of CDBCs.
They are already here.
We have digital money that is issued by central banks.
They can monitor anything that we do and stop us transacting whenever they want.
That includes governments and bank employees.
Be scared of is the disappearance of cash.
When cash payments are not an alternative, your bank account is a control system.
If they take your bank account away, then you can't buy food or water.
You would have to work for someone that does have a bank account who will provide you with food and accommodation for your work.
You would be a slave!
#BTC sets us free
This video is worth watching.
The brexiteers have come a long way since 2016.
Nigel Farage is now surrounded by civilized sensible sounding people.
This one is worth watching. The brexiteers have come a long way since 2016.
Nigel Farage is now surrounded by civilized sensible sounding people.
We had a great day at Bitcoin Racing at Silverstone yesterday. The racing was fantastic and the bitcoin talks were enlightening.
The day helped me to think about how to explain Bitcoin to people.
There are three key features to Bitcoin:
1. Transactions fees are less than 1% with bitcoin. Traditional card transactions are 3%, most of which is to cover fraud costs due to the fact that your expose your payment key whenever you transact.
2. Your Bitcoin can only be moved with a signature created from your private key. As long as you keep your private key private, thieves and governments can't take your Bitcoin from you.
3. There can never be more than 21m as the issuance of new Bitcoin is based on the consensus rules of the millions of computers that make up the network. The network would destroy the value of the work invested in Bitcoin if they colluded to break the rules. Bitcoin is a self-reinforcing incentive system.
Hyperinflation!
We all know that governments are hopelessly in debt and are printing money in order to fund their spending and interest payments on the debts.
If the world's currencies become debased at some point the future, then people will still need a medium of exchange in order that we can trade with each other.
Very few of us want to go back to being subsistence farmers, so trade is essential and can only exist with an accepted medium of exchange.
In the event that currencies fail, there will be a loss of trust in governments and financial institutions. People will not be willing to accept a new currency issued by them.
The only realistic choice of a currency to be used would be one that cannot be over issued or controlled by banks and governments.
The only currency in existence that has limited supply and governments can't control is Bitcoin.
The bond sell off is looking interesting.
Are we facing the possibility of a credit event this October?
Will we get to 1,000,000 block height or $1,000,000 first?
Will we get to 1m block height or $1m first?
The cost of producing one Bitcoin in dollars is, on average, about the price of one Bitcoin in dollars.
The difficulty adjustment is the Oracle that links the Bitcoin network security with the price of the coin.
Bitcoin has built a network with millions of financially committed participants. The structure of that network explicitly enforces a situation of no price premium over the cost of production. Those two things are what makes it the hardest money ever known in history.
Could that phenomenon ever be repeated when the natural members of a new network are already invested in Bitcoin?
I recently listened to the What Bitcoin Did podcast with George Gammon and Jeff Booth. George Gammon argues that if we move to a Bitcoin money system, then there will be more than 21m bitcoins as paper bitcoin is created in a fractional reserve banking system and this will lead to inflation. George is right in that Bitcoin on it's own, does not stop fractional reserve banking. There is already a lot of paper bitcoin in the system, but he is wrong about a future bitcoin system inevitably being fractional reserve. There is a way that we can stop it and I will explain that later. Firstly, let’s look at the current situation.
FTX were operating a fractional reserve bank, they were selling people numbers on the screen that they thought were bitcoin, but there was not sufficient on-chain Bitcoin to back them. The exchanges and the custodial wallets are where paper bitcoin currently exists. When you give your bitcoin to one of these entities it is no longer yours. You have an IOU from them and you are a creditor to that company. A Bitcoin custodian can issue as many IOUs as they like as long as they have some bitcoin to make good on withdrawals and maintain confidence. The problem comes, if they sell the bitcoin that they have been given and gamble with it or use it to fund an expansion of their business, then run the risk that they can’t make good on withdrawal requests. If a lot of customers try to exchange the IOUs for bitcoin at the same time, then the fraud will be exposed.
The paper Bitcoin that exists on exchanges and custodial wallets can’t be transacted on the Bitcoin blockchain, it can only be transferred on the internal ledger of that service. If you and I have the same brand of custodial wallet and I send you Bitcoin, then no Bitcoin transaction will take place, the company will simply update its internal database to move the value from my account to your account. A Bitcoin transaction will only take place if I send you Bitcoin to another brand of wallet.
There is currently fractional reserve banking and paper bitcoin in the bitcoin system, but the image of the future that George paints, where bitcoin adoption would lead to the same old fractional reserve banking system is not likely to come true. This is because a real use case of Bitcoin is self custody and an ever larger number of people are learning to self custody their bitcoin. It is estimated that only 1.7m bitcoin are currently on exchanges, that is about 10% of the bitcoin currently mined and that is down from approximately 20% a couple of years ago. As increasingly more people lose money with corrupt custodial wallets and exchanges, more and more people will move to self custody. The remaining float of 10% that is held by exchanges will get withdrawn into self custody wallets. As Warren Buffet once said, ‘when the tide goes out, we are going to be able to see who has been swimming naked’.
It is estimated that only 25% of people that buy Bitcoin withdraw it into a self custody wallet. That means that 75% of bitcoiners think that they own the 10% that exists on exchanges. There is a lot of paper Bitcoin out there right now and the custodians that are creating that paper Bitcoin are effectivley shorting the bitcoin price. As the 10% on exchanges slowly gets withdrawn by the hodlers who are dollar cost averaging their savings and as more people get their money off the exchanges and into self custody, there is going to be an almighty short squeeze. Those that are in self custody are going to get very rich and the people that didn’t do the work to learn how to be self sovereign are going to be very disappointed.
Exchanges that have been operating honestly and keeping customer assets on a 1 for 1 basis will be able to allow all their customers to withdraw if they want to. The operators that have been borrowing customer Bitcoin and using it to fund advertising campaigns to grow their business more quickly will be caught out. This event will be a form of singularity in the Bitcoin space, from that time forward, everyone will know that they can’t trust custodians and that Bitcoin must be verifiably on-chain to be real. This is very different future from the one that George Gammon suggests. The people will not tolerate fractional reserve banking, paper bitcoin or inflation. As each of us exercises our right to own our own money, we will be contributing to the integrity of a system that is better for all.
The Irony of what George suggests in the podcast is that, if Bitcoin stays a niche thing for P2P transfers, then it could avoid the fractional reserve printing of paper bitcoin. In reality, fractional reserve and paper bitcoin are already here at this stage of niche adoption. Wider adoption will in fact lead to more self custody that will squeeze out the counterfeiters at the custodial level.
Not your keys, not your Ponzi scheme!
I would put it in over a period of time that feels comfortable.
The key thing is to make sure that you have your 12 word seed very safe and stored in a number of places
‘At its core, money is a ledger. Commodity money serves as a ledger governed by nature. Bank money serves as a ledger governed by nation states. Open-source money serves as a ledger governed by users’
Broken Money 2023
nostr:npub1a2cww4kn9wqte4ry70vyfwqyqvpswksna27rtxd8vty6c74era8sdcw83a
The UK inflation number was a surprise. 6.7% vs 7% last month.
Personally, I think that we may well go into deflation over the next year. As the lagged effects of COVID work their way out of the system, prices may well turn negative on a year on year basis.
The one thing that the establishment doesn't want is deflation as that will increase the value of the debt owed. They will likely react with much more QE.
The road to surfdom many well be much longer than any of us expect. This could well be a good thing though as it would give us more time to build applications that make BTC easier to use.
A slow process of evolution would be far preferable to revolution.
Bitcoin is very difficult to stop. If I am running software on my computer that exchanges value with software on someone else's computer, then how can that be stopped? Would they come around to everyone's house and investigate what software we are running? Or would they shut down the internet in order to prevent us from trading with each other outside of the banks?
If they do shut down the internet, then we would have far bigger problems than there being no bitcoins!
Can’t make it Thursday Nathan, but I hope to attend sometime in the future
Ordinarily the spurt upwards come 6 months after the halving. If you are front running now, then you stop have some time to wait
The prime trust default is still writing its way through the system.
That started in June and has been hampering the price ever since.
Bitcoin halving…
Christmas is likely to come early this time as it seems like everyone and dog knows about the halving and the 4 year cycle. People will front run it. The top will come early and so with the crash. Over time, this will mitigate the cycle and lead to a much more stable asset.
Repost in order to make btc a stable coin!
We here have come through the force field. On this side we know about Bitcoin. We broke through by doing the work to understand Bitcoin. We all wish that we’d done the work sooner, but we should be glad that we got here when we did.
Some people we know are on the other side of the force field. They haven’t broken though yet because they haven’t done the work yet.
We can go back to the other side and given books to read and YouTube videos to watch.
The global economy is starting to follow the four year Bitcoin halving cycle.
ETH is credit.
I just boosted Blacks Club on @btcmap. Check them out! https://btcmap.org/merchant/node:4601420592 #bitcoin
Great to appear on the warrior minds podcast with Sam Greene
How did we end up in a situation where the people looking after our money for us decided that they can tell us how to behave??
It is possible that the algorithm that we currently use to decide what we are to consume in the digital space will eventually evolve into a conscious entity.
The relationship that we currently have with the algorithm is an abusive one where we expect it to work for free and in reality it is making slaves of us.
Bitcoin fixes this.
Let’s pay each other for content and build an algorithm that delivers to us based on the crowd sourced financial votes of the network of people.
Nostr fixes this
A credit card has your private key written on the outside of it.
No wonder the card companies have to charge back 2.5% of all transactions as fraud.
Bitcoin enables you to make a payment without exposing your private key.
Payment fees are virtually nothing.
What an upgrade!
Today I did my first air gapped signed transaction with my new coldcard
Having a good day at the startup day in nostr:npub1an84q6c03wml5lf0uwcqcr20ydwv0t0lvv0xktlcfs9seattef8sdhz6yg Austin 
Raising interest rates also causes inflation.
If you want to stop inflation, then stop doing what caused it in the first place.
Stop using savers money to pay people to do nothing!
Doing the Base58 Lightning dev course this week in nostr:npub1an84q6c03wml5lf0uwcqcr20ydwv0t0lvv0xktlcfs9seattef8sdhz6yg Austin.
I highly recommend it!
Just arrived in Austin, Texas.
Great podcast. I agree that deflation is the biggest risk in the near term. There will be more QE and more inflation. I really hope that the real crash takes as long as you think David!
