Bitcoin

justincredible Honorable Admin
37,969 posts 203 reps Joined Nov 2009
Wed, May 5, 2021 9:44 AM

I can dumb it down to three simple words: number go up.

"Number go up" is a stupid meme within the bitcoin community (NgU Technology), but it hasn't been wrong yet.

See how it kinda peaks every 4 years? This is due to the pre-programmed adjustment in monetary policy, when the amount of bitcoin mined in each new block is halved. 


Looking at a chart (it's kinda old, from last Feb) that shows the actual halvings, you can see what the price does within each epoch (4 year halving period). Number go up.


This doesn't mean something can't happen that would cause a shock to the price, but the monetary policy is set in stone (code) and will not change. But, for all intents and purposes, the price is essentially programmed to go up forever as each new cycle brings new eyes to it, while the available new supply is slashed in half. Increase in demand + decrease in supply = number go up.

People often ask, "what's stopping them from changing the monetary policy? What if they just doubled the number to 42million?" To that I say, I'm stopping them. I run a full node in my house (it means I'm verifying every block mined is valid) and would not run bitcoin software that changed anything about the monetary policy. That would lead to a fork of bitcoin, similar to how it forked into Bitcoin Cash, Bitcoin SV, etc. It would eventually be left in the dustbin of society while 21m bitcoin rolls on.

So, to your question. If you bought $500 today (we're at the early stages of an epic bull run, IMO) I think in a year the usd denominated price would very likely be higher, but I do expect a "crash" from whatever the peak is in this cycle (we haven't hit that peak yet, it'll be 6-figures). In 5 years the usd denominated price would almost certainly be higher. While it's not a guarantee, I wouldn't bet against it being higher.

My recommendation is always to DCA (see previous posts) a small amount each day/week, and always only with money you're okay losing. A $500-1000 instant buy to start out is also a great way to get exposure. I only ask that you put in the time to do a deeper dive into why it matters once you do have skin in the game. I think the book Boogie mentioned earlier, The Bitcoin Standard, is a great place to start.

justincredible Honorable Admin
37,969 posts 203 reps Joined Nov 2009
Wed, May 5, 2021 10:12 AM

A big concern I get when trying to talk to people about bitcoin is, what if the government just bans it? Sure. They could. And some have tried. But, Satoshi being the genius that they were, whoever they were, programmed in game theory that makes it highly unlikely at this point. The time to kill bitcoin was 10 years ago. It's essentially too late at this point.

https://danheld.substack.com/p/can-governments-kill-bitcoin

justincredible Honorable Admin
37,969 posts 203 reps Joined Nov 2009
Wed, May 5, 2021 10:18 AM

My personal opinion is that bitcoin is inevitable (it will be the world reserve currency) and governments realize this. Some nation states are already accumulating. I've hear rumor that a lot of individuals (low-level, at least) within the federal reserve are already stacking sats. Cities and states in the US are starting to get on board (see Miami, Jackson, TN, Wyoming, Kentucky). Eventually there will be cities/states with their own sovereign wealth funds, i.e. a fat stack of sats. 

Governments are going to stop trying to ban it, and start trying to accumulate it. My plan is to front-run them as much as I possibly can.

ernest_t_bass 12th Son of the Lama
26,698 posts 199 reps Joined Nov 2009
Wed, May 5, 2021 10:38 AM

Will Ohio Chatter be it's own governing body?

justincredible Honorable Admin
37,969 posts 203 reps Joined Nov 2009
Wed, May 5, 2021 11:17 AM
posted by ernest_t_bass

Will Ohio Chatter be it's own governing body?

Yes, and I will rule with an iron fist.

justincredible Honorable Admin
37,969 posts 203 reps Joined Nov 2009
Wed, May 5, 2021 11:17 AM

justincredible Honorable Admin
37,969 posts 203 reps Joined Nov 2009
Fri, May 7, 2021 9:14 AM

justincredible Honorable Admin
37,969 posts 203 reps Joined Nov 2009
Fri, May 7, 2021 12:54 PM

Good essay here on Bitcoin being a mechanism for time in and of itself. Little known fact, the "blockchain" was initially called the "time chain."

https://dergigi.com/2021/01/14/bitcoin-is-time/

I actually listened to it here: https://bitcoinaudible.com/bitcoin-is-time/

It's worth the time to listen/read if you have any interest in bitcoin. 

Automatik Senior Member
15,737 posts 94 reps Joined Nov 2009
Fri, May 7, 2021 1:13 PM

I've been finding myself in Youtube blackholes involving mining. Large and small scale operations. Super interesting.

justincredible Honorable Admin
37,969 posts 203 reps Joined Nov 2009
Fri, May 7, 2021 1:19 PM
posted by Automatik

I've been finding myself in Youtube blackholes involving mining. Large and small scale operations. Super interesting.

Yeah, I love learning more about mining.

Check out Great American Mining and Upstream Data. Two US based operations, I believe both are turning flared natural gas into bitcoin. Fucking fascinating.

ernest_t_bass 12th Son of the Lama
26,698 posts 199 reps Joined Nov 2009
Fri, May 7, 2021 1:45 PM

What is the most dumbed down version of "mining" you can give, Justin?

justincredible Honorable Admin
37,969 posts 203 reps Joined Nov 2009
Fri, May 7, 2021 1:55 PM

Mining is the process of turning energy into bitcoin.

It's essentially a lottery, all miners are competing to find an astronomically large random number. Once a miner has found it, and can prove it (through cryptography), it is rewarded with all transaction fees (from users "spending" their bitcoin that get added to this specific block) as well as the coinbase. The coinbase is the newly minted bitcoin (currently 6.25 per newly mined block, will split to 3.25 at the next halving in 2024). The miner now has the option to sell the bitcoin they just earned to cover energy costs or keep it. The percentages of miners keeping their bitcoin is increasing, meaning a lot of the new bitcoin being added to the supply aren't actually for sale.

This is called proof-of-work, which just means you can prove you expended energy in finding the block. This is what secures the bitcoin network. The more energy there is being used by the network, the more secure and harder to "hack" it is, because the cost to try to take over the network would be unaffordable. Your best bet would be to join in and start accumulating. Game theory.


This helpful?

ernest_t_bass 12th Son of the Lama
26,698 posts 199 reps Joined Nov 2009
Fri, May 7, 2021 2:09 PM

Automatik Senior Member
15,737 posts 94 reps Joined Nov 2009
Fri, May 7, 2021 2:12 PM
posted by justincredible

Yeah, I love learning more about mining.

Check out Great American Mining and Upstream Data. Two US based operations, I believe both are turning flared natural gas into bitcoin. Fucking fascinating.

I'll check it.

Assuming you've seen the lunatic nerds with setups in their houses/apartments?

justincredible Honorable Admin
37,969 posts 203 reps Joined Nov 2009
Fri, May 7, 2021 2:20 PM
posted by Automatik

I'll check it.

Assuming you've seen the lunatic nerds with setups in their houses/apartments?

I'd love to start mining myself, but finding an affordable ASIC is impossible. The noise/heat is another issue, but I've seen some cool innovations in that front.

You can literally turn bitcoin mining into heat and hot water for your house.

https://heatminer.io/de/beispielseite/

justincredible Honorable Admin
37,969 posts 203 reps Joined Nov 2009
Fri, May 7, 2021 2:23 PM
posted by ernest_t_bass

I feel like I could interpret this response in several ways.

justincredible Honorable Admin
37,969 posts 203 reps Joined Nov 2009
Fri, May 7, 2021 2:36 PM

Bitcoin mining is also the bitcoin monetary policy in action. No one actor can change the monetary policy without it being rejected by everyone else. Say a miner finds a solution to the lottery and creates their block. They get greedy and decide to add 50 btc to their coinbase. Every node on the network is going to reject it as an invalid block, and the miner just lost out on actually getting the 6.25 btc they were entitled to. Bitcoin incentivizes honesty and cooperation.

justincredible Honorable Admin
37,969 posts 203 reps Joined Nov 2009
Fri, May 7, 2021 2:37 PM

Meanwhile, at the Federal Reserve...

justincredible Honorable Admin
37,969 posts 203 reps Joined Nov 2009
Fri, May 7, 2021 2:41 PM

justincredible Honorable Admin
37,969 posts 203 reps Joined Nov 2009
Wed, May 12, 2021 11:20 AM

This is pretty cool.

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