Tag Archives: Cryptocoins

Climbing the Bitcoin Volcano

“Yeah, we’re probably safe,” my Czech friend Voltech said in his soothing peace-filled voice as we hiked Volcan Tunguahua outside the town of Banos in Ecuador.

He had this almost sing-songy tone, smoothly undulating up and down as he talked.

His words reminded me of what a tour guide once told me, “We always say the Volcano is sleeping, not dormant, because she can always wake up.”

Hiking up a volcan, versus a regular mountain I’ve found can be more steep because of the way it was created. Instead of tectonic plates pushing against each other, tilting each up at angles, the internal combustion of the volcano creates a steep cone. And this one had that sand at the top from the volcanic dust that made for a one step forward, two steps back sliding.

And there’s always a chance, while slim, of the “dormant” volcano erupting and killing us where we stand.

And every time bitcoin erupts, whether that’s from .10 to 1.00, or $10 to $100, there are simultaneous shouts of “heading into bubble territory!” And: “This is how it all ends!” Comparing charts between the tech bubble and now bitcoin.

I understand the reasoning behind these comments and fears, and am conscious of the gambler mentality that says: this time it’s different – saying anything to justify the rise.

But really: this time it’s different.

Let me explain.

Bitcoin has been described mainly as two things:

  • A storage of value, like digital gold
  • A digital currency

But there are some differences inherent in Bitcoin that really say, “This time, it’s different.”

  • The only currency not backed by a Government. Decentralized.
  • Worldwide market. Koreans as well as South Americans, as well as Americans can buy and use the same bitcoin.
  • Acts both as a store of value (gold), as well as a currency (dollars).
  • The supply is fixed at 21 million. There are an estimated 4 million lost forever.
  • Currently it is not simple to purchase. Without a simple purchasing mechanism, like an ETF, many people cannot buy in yet.
  • Still relatively unknown
  • Institutional money has just started to enter in the form of futures.
  • ETFs will bring in huge sums of money from people with pent up interest (FOMO)
  • Other altcoins exist which build upon prior generations, moving the tech forward, as well as diversifying


Bubble What?

I want to explain something to you, and I want you to listen carefully:

The cryptocoin “bubble” is often compared to the tech bubble, because the tech prices were not based on the valuations of the companies that were inflated. The companies had fake, or to be more kind, “aspirational” valuations.

But the bitcoin price rise is not solely because of the value, or aspirational value it provides, rather it is rising in comparison to the value of the currency and stores of value it is replacing.

There is a wholesale replacement of value, where people are shifting from a devalued fiat currencies with fake “backed by the faith…” value, into a digital currency with real value.

It’s the realization of value away from something that has nearly none.

People believe in the value of crypto, while simultaneously disbelieving in the present and future value of their fiat currency, and even to the inflated valuations of their houses, mortgaging and second mortgaging the inflated value of their homes to buy into bitcoin.

Mania, right?


They’d rather hang their hats on the first fixed resource in existence, something that never increases supply, and that actually has already decreased by 4 million. A digital currency that decreases every day with stories of investors losing their bitcoin keys, or sending to incorrect addresses, or dying without disclosing their wallet passwords, never to be seen again.

A diminishing deflationary currency with actual utility.

People buy and sell things for bitcoin, from cars on craigslist, to clothing and furniture on overstock.com.

Mining bitcoin puts food on the table and keeps the lights on in Venuzuela, and is more real than Venuzuela’s own wheelbarrow money. Meaning you need a wheelbarrowful to buy even the most insignificant of things.

In Columbia, a 2,000 pesos note is worth about 0.69 USD. While the older currency has the full 2,000 listed on the side, the new version of the 2,000 pesos note I noticed deletes the three zeroes, instead showing just “2 Mil.”

But, the currency didn’t actually become disinflated. It’s purely cosmetic, and a mental game. Eventually, they’ll get rid of the “mil” and just leave the “2.”

Voila: magical disinflation!

More with less!

Dollars and pesos and other fiat money are the real “virtual” currencies, not bitcoin. Backed by “faith”, a spiritual money, ghost money if you will. It’s akin to magical thinking, not unlike a child saying “Mama, look, I’m an astronaut!” – while lacking all the training, education and work it takes to be an actual astronaut.

And, historically, the eventual value of every fiat currency is zero. For the first time in the history of the world we have money not backed by anything.

Except faith.

The 2,000 Columbian peso note barely exists at all, not even worth a coffee. And artificially disinflating it by gradually removing any reference to the zeros won’t actually allow you to buy more with less.

Only bitcoin will.


The Potential Transfer of Value

Here’s the potential: The total amount of money, or I should say monetary instruments collectively worldwide is around 75 Trillion dollars. Of that, only about $5 Trillion is in actual paper dollars and coins, the rest is in money market funds, long term deposits, other financial instruments, what have you.

The dollar has lost over the years 90% of it’s value – we’ve all been told this. And at 3% inflation, it sounds so low we don’t worry about it. What they don’t tell you is that at 3% inflation you’ll lose half your savings in 20 years.

Bitcoin with its fixed/diminishing supply is unnaturally disinflationary – by design.

With money like that, who wouldn’t exchange dollars for bitcoin?


What other way can I convince you?

There are a lot of smart people saying bitcoin is this, and bitcoin is that. If it looks like a bubble and quacks like a bubble, then?

Well, they sound right, they’ve sounded right, and prudent, and smart, and justifiably correct in their assessment every year they declare bitcoin dead.

You’d be silly to buy into this hype!

I can only say you could have bought bitcoin in June 2017 when it was only $2,500, and sold it in December at $18,000 .

Like the in/famous line in Market Wizards says: Would you rather be “right” or would you rather make money?

It took us two days to climb Volcan Tunguahua in Ecuador. One day got us to the refugio shelter, and we attempted the top the next day.

It was a tough hike, and I was completely knackered by the end of it. But it was real, and it added real experiential value to my life. And I look back and am glad I did it.

Funny, weeks before everyone told me that you couldn’t climb it on your own, that you needed a guide. Locals who should know better told us that even the trail was not clear, and if you didn’t know your way you could get lost, or worse. Another was robbed of everything, and it was not safe. Someone even told me a person lost their life on the Volcan last year. And that there was not a whole lot we could do if it suddenly exploded.

Well, we just knew the trail led up, and if we followed it we would get to a mindblowing view of the valley below. And while possible, it wasn’t likely that the volcano would decide to blow that day.

We knew that with just a little investment of our planning, effort, and knowledge of our abilities, we would make it to the top.

And we did.

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Bitcoin and Pablo Escobar

“I’m heading out to the Pablo Escobar tour this morning,” I said to my hostel host Faisal. I could see his struggle to continue smiling. I thought he’d be happy I’d be interested in his country’s history, but I forget that for many, until recently, this was not “history,” this was their reality.

Kidnappings, shootings, car bombings – once 82 bombings in a single month – he terrorized the city. How they were able to recover from this awful period is an amazing reminder of the resilience of the human spirit, as well as the power of public works to transform a city.

…but the memory is still strong.

Our guide said that for many proud Paisans (the name for the residents of Medellin), many would prefer that you forget Pablo, focus on the good that their city has done, and how far they have advanced from those dark times.

At one point, Pablo was so awash in drug money, he offered to pay off the national debt of Columbia – he was that fantastically rich.

This offer was refused. Columbia could not be known for having paid off their debts with drug money.

And, I thought, Pablo would have loved crypto currencies.

Putting the “Crypto” in Cryptocoins
Bitcoin’s blockchain, a kind of open ledger, is secured by miners solving cryptographic puzzles. Solving them validates and transmits the transactions, securing the chain.

Something like that.

But, even though Crypto coins like Bitcoin use cryptography, bitcoin itself is an open ledger, allowing anyone to check on any transaction, even if they were not the ones to initiate it.

Until recently.

Now we have Monero, Verge, ZEN, and ZCash, among others, that anonymize the transactions. It’s known that Monero is the cryptocoin of choice on the darkweb, contributing to its rise.

And Pablo would have exploited the hell out of Monero.

One of the problems for a Cartel was what to do with all the money it generated. The US, at one point, was reportedly running out of $100 bills, because they were all being used for the drug trade in various Central and South American countries.

Bitcoin, and the other altcoins don’t have that problem. A billion dollars and a single dollar use up a not dissimilar amount of bits on the blockchain.

And the new privacy coins mask transactions, both on initiation, and in the transmission.

But who, the critics ask, would need such privacy? Criminals?

My response is that drugs are not the problem. Criminalization of drugs is the problem. And that we should decriminalize all drugs, just like Portugal, and use the money saved on education and rehabilitation, not more guns, and not housing drug users who would benefit more from treatment.

Also, money laundering drug money is not the core issue, it’s the drug appetite of the purchasing users that’s at issue. Massive amounts of money needing to be laundered is a huge symptom of a disease caused by consumption, and the demand created by making it illegal.

Bring this round circle – just because criminals use Monero, doesn’t mean it doesn’t have legitimate uses for you and I.

The Right of Privacy
We all have the human right of privacy.

Take companies such as Equifax, a company we neither gave permission, nor bestowed the right to reveal our credit score and history. A company who’s major job was to keep our information secure, got hacked recently. And then they tried to charge us if we wanted to freeze our accounts.

And Facebook has trained us to accept that radical transparency is a fact, when it’s actually a choice.

The privacy cryptos solve for this problem – we control what we reveal.

Comuna 13, city neighborhood where the Medellin army and paramilitaries killed over 300 rebels/drug dealers. Now is a vibrant area full of colorful artistic grafitti, bringing hope back to an area that needed it so much.









Every new technology brings the dark side. They are even the innovators of a new space, being singularly focussed on exploiting its uses.

Take the internet – some of the first movers on pictures, and fast-streaming video on the web was for porn. One of the first renderings of pictures when all we had were characters were pictures of naked women rendered using different shading and sizes of text characters

And now we have criminals hacking home computers, demanding Cryptocoins to return your data, hiding their gains behind the untraceable Monero coin.

But what is the innovation in that?

Here it is: Absolute privacy, once solely within the purview of the rich and the Trumps is now available to all.

Driven by darkweb criminals, strange bedfellows accidentally championing the basic human right to keep our affairs private.

The Skeptics of Crypto
Looking back on any of the many periods of a huge percentage rise in crypto price brings out the naysayers, the skeptical, the FUD.

Talk of bubble this and tulip that get batted about on reddit et al. But look back a couple years, and see how folks said the same things when bitcoin was $13.30.

At the height of its popularity, Bitcoin was trumpeted as a viable alternative currency for the internet age, a monetary system engineered to prevent theft, gaming, and criminalization. Then came the malware, the black market, the legal ambiguities and The Man. Today, you can’t even use it to buy Facebook stock.

Read more: Wired, Tired, Expired for 2012: EXPIRED – Bitcoin | 99Bitcoins

You either slag Bitcoin, or suffer from irrational exuberance, no in-between allowed. And talk of the ‘only good use for cryptocoins is money-laundering’ is yet another round of FUD.

1st/3rd World Problems
Pablo’s problem wasn’t money, it was too much power. There’s a saying that when one gets power, evil follows soon after.

People during Pablo’s time would attest to that.

He was so powerful that when he needed shelter from his enemies, he built his own “prison” complete with pool tables, wide screen TVs, and whores.

He had tunnels when he needed to visit the outside world, and when he was surrounded by the Columbian army, to escape he simply walked out the front gates.

And the government, the most evil powerful entity would like to know who else is powerful/rich/evil in order to get their part.

It’s confounding to me that the US, a country founded on the rejection of taxation has such high rates. Okay, maybe not for the big corporations, but last I had a paycheck I always saw >30% gone to taxes, fees, et al.

And I am no Republican. Trump disavowed me of that.

Possibly Libertarian/Capitalist in bent, with Socialist leanings.

(What galls me is that, once Trump is out of office, we will likely have to assign a team of secret service agents to protect the sexual harasser in chief. But I digress.)

And, it’s not really the taxation, because I believe we need a safety net for the poor, and dollars for public works that benefit everyone. What I don’t agree with is the amount spent on defense and indefensible wars, enriching the military industrial complex at the expense of the people the defense purportedly serves.

And that’s where I think crypto shines.

If money is power, and cryptocoins through privacy restore the power back to the individual, then true democracy can exist.

And when everyone is a crypto-millionaire, then true change can exist.

‘Cause we will vote with our cryptocoins, and only consensus will rule.

Because wealth has been distributed, and the Geeks shall inherit the earth.

Grave of the criminal Pablo Escobar









Escobar – hero?

Escobar, our guide told us, was idolized by the poor. He was able to single-handedly get public projects done that benefitted the lower classes when the government had only excuses and delays.

These included 50 football pitches, housing for low income families, hospitals and schools.


He was loved by the poor, and hated by the middle class and the rich. But if we only invest Central Authorities, and Central Individuals with power, can we trust that evil will not follow?

Or, is it possible we get things done via combined individual efforts, and consensus defined mathematically on the blockchain? Is representative democracy the only way to get things done, or can true consensus governance exist.

Pablo, as an individual, chose to improve conditions for the downtrodden, and sliced through red tape as if it didn’t exist, because for him it didn’t. He took it to heart: he who has the money wields the power. And cryptocurrency puts the privacy, and the power, back in the hands of the individual.



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