Daily Ramble
If you’re not here at least partially for the Bitcoin content, you may want to skip today’s Ramble. I woke up to the Bitcoin market in disarray, and I barely had to lift the edge of the crypto Twitter blanket to be blown back by stinky, Elon-hating screams. Elon had sent a tweet stating that Tesla would no longer take Bitcoin for vehicle payments, and immediately the Bitcoin market had one of the sharpest sell-offs since March 2020.
It’s a good thing. Yes, you heard that right. It’s a good thing. Why? Because Bitcoin is doing its Bitcoin thing and in the midst of proving to the world that the most influential influencer is about to be defrocked of his Bitcoin influence. A recovery, which will inevitably occur, will show the world that the Bitcoin network is antifragile — even to the whims of the harnesser of internet memedom, Elon.
But why will it recover? Because Bitcoin has introduced the constraints of physics back into the realm of economics. For more than 100 years, the United States dollar, the world’s reserve asset, has become increasingly untethered from physical reality as it was severed from its gold backing. Bitcoin’s 21M bitcoin brought into reality by alchemizing energy into bitcoin has introduced the hardest form of money known to man. Its unalterable supply provably generated from the laws of physics is the exact thing that will unfailingly lead to adoption around the globe.
Why? Because the human species has proven that it coalesces around the strongest form of money it can find. From an evolutionary standpoint, isolated geographies used different scarce objects as money: salt, beads, shells, stones, and precious metals. As isolated economies cross-pollinated, the world settled on precious metals being the hardest form of money. The others forms of money were not as scarce, energy-dense, or portable. The hardest form of money is that which stores the most energy across time and space. With Bitcoin, a stronger form of money has emerged — all the properties of precious metals with the advantage of being digitally native. And humanity will coalesce around it, despite Elon's tweets.
Favorite Things on the Interwebs Today
Willy Woo, a Bitcoin analyst, does a great job summarizing the contradiction in Elon’s decision to stop taking Bitcoin for Tesla vehicle payment.
Bitcoin Price Prediction
Yesterday: $52k - $58k
Today: $45.5k - $54k
Tomorrow: $45.5k - $54k
Bitcoin got Elon’d yesterday. Right after I’d turned in for the night, Elon Musk sent out a tweet saying that Tesla would no longer take Bitcoin transactions for Tesla vehicles. The Bitcoin market immediately tanked, dropping over $9k from $54k to $45.4k in a 20% drop. Buyers immediately stepped in, pushing the price back up to $50k, where it is now treading water. The trading adage “stair steps up, elevator down” has never applied better.
Where does that leave price? In a volatile period. While not likely to see a drop below $45k, the door is open. Closing the week below $46k would mark a significant shift in the market. I don’t see that happening. In fact, I suspect this is about as good a risk-to-reward opportunity here as we’ll see for quite some time. On the upside, I’d be impressed if we push over $54k today. That’s quite a large range, but larger ranges happen in high volatility.
Bitcoin Q & A
Q: Why are second-layer technologies for Bitcoin important?
A: Because increasing fees will make small transactions impractical on the Bitcoin blockchain.
Fees are paid to Bitcoin miners for securing the Bitcoin network. Fees prices are decided by market participants seeking access to Bitcoin’s limited block space. Transaction sizes are defined in bytes, not bitcoin. That means that 1000s of bitcoin can be sent for the same value as .01 bitcoin. As demand for blockchain space increases, so do fees. With a limited amount of space available for transactions, eventually, small transactions will be priced out — no one wants to pay more in fees than the value of the transaction they’re sending. Eventually, the increasing fee sizes will naturally lead market participants to second-layer technologies, like Lightning or Liquid, to transact smaller amounts. Increasing fee prices is part of Bitcoin’s design, not a failure.
Thanks for reading,
Kent
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Kent, I’m a 74 yr. old expat from California now living in Costa Rica. I left the US in 2007 and prior to Covid I traveled each year in Europe for 3 to 4 months in the Spring and Summer. 2020 and 2021 I have restricted from traveling. I learned a little about BTC in Malta in 2017 while staying with friends and overhearing conversations that inspired my interest. When I returned to Costa Rica in August of 2017 I was anxious to buy some BTC and get started, but I ran into obstacles like proving my residence because I rent with utilities included instead of own with utility bills verification. Despite obstacles I managed to begin accumulating BTC and ADA with my son in San Diego as custodian of my hardware wallet. He registered with Binance and Kraken and I sent funds to his bank that he used to make purchases and then stored on my wallet and in the case of ADA has staked to a staking pool.
It has worked to this point, but he has told me that managing my wallet even with pay and my offer of % rewards isn’t really how he wants to spend his time. He’s a sailor and a yacht captain whose is not interested in the space and staying current with new developments and opportunities. And in fact, he is often offshore without internet access for a week at a time.
So, I am looking for a person that is interested and involved in the space that I can trust with the custody and management of my wallet(s) and staking positions. Relatively, speaking I am not a whale, but my holdings of BTC and ADA are in excess of 7 figures.
I am not alone, because I know others that would pay handsomely for a reliable person to take over the management of their wallets.
As I have thought about this, I have imagined this to be an opportunity for a person that Is into it and would like to earn a decent income including % rewards for increases in value.
I’m reaching out to you thinking it might be something you would be interested in or maybe you know of people that might have some interest. If you do, we can connect on Signal or Telegram at 506-8385-7135