Earth Day
Daily Ramble
Without realizing it until late in the afternoon yesterday, Earth Day came and went. It may not be apparent in much of my writing, but caring for and enjoying our “blue marble in space” has been a driving force in my life. Adventure, for me, is experiencing an unknown wild corner of our planet while work has been defined by divining a path for human harmony with our planet.
It’s this drive that led me to work in the Bitcoin industry. Specifically, Bitcoin mining, where I help Sazmining participate in securing the Bitcoin network through the conversion of energy. I joined Sazming a few months ago with the belief that solar energy would collide with Bitcoin mining. I was overjoyed to hear a podcast this morning by Nathaniel Whittemore discussing an initiative launched yesterday to reclaim the ridiculous debate that Bitcoin’s energy consumption is a threat to global warming instead of our best solution.
ARK Investments and Square’s Bitcoin Energy Initiative teamed up to create an incredible memo showing that Bitcoin mining is the key to shifting the electric grid to renewables. Why? Because wind and solar are the lowest costs of power on the market but have limitations due to intermittent power — wind and solar fuel sources are not available 100% of the time. The duo did a deep dive on solar to show that solar systems deployed with batteries and Bitcoin mining allow more solar energy to come to market. The reason? Bitcoin operates as a “consumer of last resort”. Instead of shutting down solar systems when more energy is produced than can be consumed by the grid, solar system operators can either store the excess power in batteries or use it to power Bitcoin mining for revenue.
Not only will Bitcoin’s fixed monetary supply lead to reduced consumption of resources (a separate topic), but mining Bitcoin will lead to the grid’s transition to renewables fuel sources. Sounds a lot like harmonizing humanity with our blue spaceship, no?
Favorite Things on the Interwebs Today
Cow shoes: how to leave cow tracks instead of footprints. Invented by bootleggers during Prohibition. I spent way too much time looking at historical photos on this site today.
Bitcoin Price Prediction
Yesterday: $52k - $57k
Today: $47.5k - $52k
Tomorrow: $45k - $52k
Welp, I was wrong. In the markets, it’s a good thing to admit and accept reality as quickly as possible. What was I wrong about? I was wrong that the buyers would be found in the $50k region. We’ve broken much lower to $47.6k, where the bulls have started putting up a fight. If we can close the day above $50.4k, and we're at $49.3k at the time of writing, then I would start to consider the potential of this being the bottom. But, more likely, is that we come down to $43k-$46k before finding the buyers who will spring price up.
So what’s changed? The market sell-off started over the weekend was driven by over-leveraged traders forced to close their positions in a cascading liquidation. The sell-off yesterday is a spot market breakdown, which means that weaker hands are selling actual Bitcoin, not derivative products. But why? There are many potential reasons, but the most likely is the Presidential threat to increase capital gains taxes in the US. That increases the risks of holding Bitcoin for many institutions. Realistically, it’s untenable to increase taxation on the wealthiest people in the US as these are the same folks most politically influential. I can imagine a slight bump in capital gains tax, but not the doubling that was proposed and spooked the markets, not just crypto.
Bitcoin Q & A
Q: Since $1 isn’t always $1, is 1 bitcoin always 1 bitcoin?
A: Yes.
If a time frame is introduced to the dollar, then $1 does not always equal $1. As more dollars are introduced into circulation, the value of a single dollar is not the same. To give the concept some meat, you would need $26 today to have the value of $1 from 1913, a little more than 100 years ago.
The same cannot be said of Bitcoin, though. The protocol defines the maximum number of Bitcoins as 21M, 1 BTC = 1 BTC in perpetuity. It isn't easy to understate the importance of this. It is the fundamental reason that in its 12 years of existence, Bitcoin has increased from $.06/BTC to $48k/BTC.
Thanks for reading,
Kent
Have you got questions or a “Favorite Thing on the Interwebs”? Comment below or reply and drop me a line!
If you’re not on the email list, subscribe now — just this newsletter, no advertising.
Me? I offer personal and corporate Bitcoin Implementation Strategies: setup, investing strategy, security, tax management, and inheritance. Contact me for a free initial consultation.