Addiction
Sunday Ramble
There’s a calm wind blowing through the air here as the fall season pushes on in the high jungle of the eastern Andes. It’s enough to make me hesitate to share how great the weather’s been, but I'm doing it since my readers are a cozy community who deserve to know. The last few days have found us gifted with the light air of the upper Andes, the cool rains of the higher jungle, and the ideal sunny weather to make leaf-dappled sunlight glitter on the azure pools of the river. I know it’s likely just a brief respite as we move back towards hotter weather, but I’m pinching myself at how much I’m enjoying the high jungle the last couple of weeks.
The temperate weather has my time horizon stretching out into the distance as I consider my favorite topic: Bitcoin. If you’re intellectually curious and honest, trying to “see” Bitcoin becomes an every-revealing process. The elusive critter reveals a new aspect before tucking its tail, leaving you to ponder. It’s akin to a room full of blindfolded people trying to describe an elephant. Unless you’ve spent countless hours pondering the subject, which seems a ridiculous waste of time to most, what I’m spilling ink about likely makes little sense.
Regardless, let’s peek at one of the angles that has just surfaced for me. To get there, we first need to acknowledge that Bitcoin is the first form of money to tie both money and energy together inextricably. Of course, I’ve known that tidbit for more than a few years now. Still, it wasn’t until I was at the Bitcoin 2022 conference in Miami that it struck me how the question of “how does Bitcoin change our energy systems?” is beginning to be explored with the same dedication as the question “what is money?”. If you’ve not been around Bitcoin long, then asking “what is money?” is the first thread to tug on the Bitcoin tapestry. Eventually, most everyone arrives at the inescapable conclusion that Bitcoin is a better form of money than fiat. Full stop.
And that realization is enough to keep most people wrapped up in the second and third-order impacts of Bitcoin adoption. But what appears to be the bottom of that “money” exploration turns out to be a trapdoor that gives way as folks realize that Proof of Work forces a reckoning with Bitcoin’s impact on our energy grid. Amongst Bitcoiners, it’s common knowledge that Bitcoin mining consumes the lowest cost power it can find. So when more than 2/3rds of the energy we produce goes to waste, there’s a lot of cheap power lying around the grid for Bitcoin miners to use. Can you imagine the societal change that will occur when 2/3rds of the human-generated power on the planet turns into revenue? It’s waste turned into money—a market-driven efficiency machine.
As I gain new insights, I have to pull myself back from the blazed trail and look back at where I started. It’s utterly clear that I’ve crossed an event horizon, a term used to describe what occurs at the center of a black hole. The other side of the event horizon is theorized to be a different reality. Bitcoin seems to be an intellectual blackhole — stare at it for too long, and gradually you realize that you’re no longer staring at it from the outside in but are beginning to see the world from the Bitcoin perspective looking back out over the event horizon. I’m going to even step out on a limb and suggest that the word “money” may not capture Bitcoin since it’s transforming humanity’s relationship with both money and energy. Money and energy are merging into flip sides of the same coin — monergy.
Whatever may be the case, I’m personally glad to have been warped through Bitcoin’s event horizon. It’s a place of hope where an incredible community is self-organizing to clean up the fiat-rot plaguing humanity. However, it’s not an easy place to be, as the community has the pole position to sober society from its fiat addiction. It’s been more than 50 years since our money has been severed from the laws of physics, allowing society to unmoor itself from reality on a fiat bender. But what comes up must come down. Thankfully, Bitcoin and its community are here to soften the landing…but, like curing any addiction, the first step is to admit there’s a problem and have the desire to change.
Rad Things on the Interwebs
Bitcoin Price Prediction
Weekly Range: $34.3k - $46k
The range-bound price behavior with Bitcoin has become a bore-fest as it holds $38.5k on the weekly close. Potentially, we are forming another bullish pivot this next week, but bulls are not in control now. It’s hard to say that either side is in control, frankly. That means a solid chance of more chop for the next week. Specifically, like last week, if we see a weekly close below $38.5k, lower prices are on the table. Likewise, it would take a closer over $46k to open the door to higher prices for the bulls. That gives us our most likely range this next week. One slight bullish tint to the situation is that Bitcoin’s price has held up admirably compared to the macro markets. Should the two continue to diverge, it’s a sign that the price action between the two is decoupling, meaning that institutional investors see Bitcoin as a safer bet than equities.
Bitcoin Q & A
Q: What’s your favorite description of Bitcoin?
A: Digital antlers
There are many ways that Bitcoin has been described: digital gold, internet-native currency, etc., but my favorite is digital antlers, a term coined by Jason Lowery. Jason is a US National Defense Fellow at MIT and previously had been with US Space Force. He argues that Bitcoin is a weapon of digital defense since it represents an incorruptible store of digitally encrypted energy. Much like antlers on deer and elk act as an ossified defense against bodily harm, Bitcoin operates as a defense against theft of value. For this reason, Jason makes a compelling argument that it’s in the US’s best interest to adopt Bitcoin as a defense strategy for the nation’s wealth.
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