Reprint
Daily Ramble
I’m reprinting my most popular Ramble: Constants, which will be new to many of my readers in the interest of time savings this evening.
Kent’s Corner has firmly wedged itself into my daily routine at this point. Directly after my morning routine that’s too complicated for a pithy one-liner, I sit down to write while my mind is still ungarbled by screens, charts, and other data. Once I’ve put the polishing touches on the Corner, I push send and go on with my day, not checking responses until the following morning. Imagine my surprise and delight when I saw yesterday’s Corner on Xennials was my most read piece to date — by a long shot. Cheers to all those who read, shared, and are coming back for more!
Now, time to ramble… On my morning coastal bike ride, I listened to what I’ve come to believe is the best podcast docuseries on Bitcoin, What is Money? The first nine episodes are an epic discussion between Robert Breedlove and Michael Saylor. Robert is arguably the most articulate, well-spoken evangelist for Bitcoin. Simultaneously, Michael Saylor is single-handedly responsible for driving corporate adoption of Bitcoin and holds more skin in the game than any other individual on the planet.
I’ve only made my way through the first five episodes, but after hearing each one, even after five years of following the philosophical trail of Bitcoin, I learn more. The podcast series starts with a background on money ranging from the first civilizations until today. It builds a mental framework for understanding money through the laws of physics, specifically the transfer of energy across time and space. If you want to get to brass tacks with reality, nothing gets closer than the study of physics.
Economists rarely include the study of energy and matter into their understanding of economics, which is one of the main reasons most have missed the Bitcoin revolution growing under their upturned noses. What they’re truly missing is how the laws of physics are colliding with economics through Bitcoin. In physics, a few constants are used in calculations: the speed of light, gravity, and plank’s constant, to name a few. Bitcoin is forcing a physics constant into the realm of money through its hard-capped supply of 21 million. The gravity, no pun intended, of this force is shaking society by the short hairs and has barely begun to register at large.
Just as the speed of light is 3x10^8 m/s which represents the limit of an object’s speed, 21M bitcoin represents the finite amount of units capable of storing all the world's monetary energy. This limit is hardened through Bitcoin mining that converts physical energy into Bitcoin. While we can add as many zeros as we like after the decimal point, physical constraints of energy prohibit more Bitcoin from being added to the network than 21M. Sure, it is theoretically possible that the speed of light or gravity can change at some point in the future, but we can’t see how through our current understanding of the law of physics. The same is true of Bitcoin’s 21M bitcoin hardened by the laws of physics.
The certainty that constants create in a world of constant change cannot be understated. If the constants of gravity and light’s speed were not constant, most of the devices we’ve engineered and built in our reality would suddenly cease to function properly. Bitcoin is doing the same in economics by providing a bedrock foundation of economic truth backed by the laws of physics for the first time in human history.
You may not understand a bloody thing I wrote, but if you made it this far, congrats on your dedication to trying to get it. You eventually will, and you’ll be blown away when you do.
Being Human Things on the Interweb
Bitcoin Price Prediction
Yesterday: $47.1k - $49.8k
Today: $46.3k - $48k
Tomorrow: $44.3k - $49k
After a sharp sell-off to start the session, Bitcoin has gone sideways as the bulls look to base for a pivot. The price action has reminded me of paint drying today, so there’s not much to report on, but my lean is more bearish than bullish in the short term. By short-term, I mean for as much as a week while the momentum resets for the bulls. Of course, if the bears manage to push the price below $44k during this momentum reset, then there are odds that this could turn into something more, but all in all, this looks like a healthy breather underneath the significant resistance of $49k.
Bitcoin Q & A
Q: Is Bitcoin an instrument of peace?
A: Yes.
The ability to print more money has allowed wars to perpetuate much longer than they otherwise could if the governments behind them were constrained by a gold-backed or Bitcoin-based currency. If Bitcoin were to become the global reserve currency, it would be tough for any war to last near as long as a result. Bitcoin offers mutually assured humility instead of mutually assured destruction since no nation could effectively back up its hubris.
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