I know I'm supposed to be all cheerful today, given Bitcoin's entered a new epoch. As the Halving is now behind us.

But there are a bunch of things about this epoch that make me quite uncomfortable.

First of all, what we are seeing today, fees north of $100 USD to get a transaction on chain, isn't a fad. It is the future of a successful Bitcoin.

While it may be a jpeg craze that's bringing that future to us today, any real adoption of Bitcoin would deliver us there anyway. There is a rare gift in this jpeg and ponzi insanity, with eth noobs burning millions of dollars on crap that will go to zero in a few months.

And I for one, thank them for their sacrifice.

But will we take this gift and use it, or let it go to waste?

What consequences do high fees have on Bitcoin's user base and utility today and in the future?

Well, most normal people are priced out of Bitcoin as we speak. $100 tx fees are more expensive than pretty much all other ways to transfer money online today. Layer 2 protocols like the lightning network have to work and carry that burden, but as it stands, the LN network can't carry it either.

LN's security model depends on being able to settle disputes on chain, if the on chain fees are too high, the cost of justice becomes the same as the cost of theft. And thus there is no justice.

The solutions being thrown around are not great.

The big blockers think more on chain capacity will solve it, but that's questionable.
Ethereum has 12 second blocks 2mb thick, with variable block size, and still can't move ETH for less than $16 dollars on a Tuesday. Let alone a future where the world's economy depends on it.

Further more, degens are clearly willing to spend insane amounts of money to degen. Gambling is a usecase and is probably as old as prostitution. The history of this industry is littered with shtcoins, and I see no evidence that that will change any time soon. While the colors and names of the xeetcoins change, their form and end continue to be the same and continue to manifest.

If 100 million people are using crypto today, then there's still another 8 billion to go, whom have to gamble their way out of stupidity and into a recognition of the value of hard money.

If most maximalists came here after getting burned with shtcoins, then we still have 100 years of shtcoins to go, before the world gets a little wiser.

So, even with big blocks, degens will still fill them up with garbage, and gamble their money away, for the chance to make it big. Not all people, but enough of them.
The blocks will get full no matter how big. Look at solana, a chaos of MEV and meme coins. Impossible to sync.

So if we increase the blocks, syncing and verifying the integrity of Bitcoin becomes a luxury, and if we don't find a way to scale self custody, then all we have left is the ability to verify the integrity of Bitcoin used by Bitcoin Banks who will get regulated and KYCed.

If we can't have cost effective self custody, then what's the point syncing a full node? To verify the supply of a Bitcoin that can be fractionally reserved by Bitcoin banks anyway?

The threads become somewhat undone. Maybe Hal is right that a free market of banks can find equilibrium. Maybe a world where Bitcoin ownership scales through Bitcoin banks, would be better than fiat.

I believe it would.

But losing self custody would be disappointing anyway, wouldn't it.

So let's filter the chain right? what does that even mean?

There are no soft forks or even hard fork upgrades to Bitcoin that I'm aware of that can keep the shtcoiners away. Bitcoin is a digital environment, a data base at the end of the day, you could put completely legit transactions on it and have a second layer of interpretation distort their 'legal' value. As demonstrated by rare sats.

You can call rare sats a scam all you want, but collectors DGAF. The first sat of this new epoch is special and as long as enough people agree on which sat that is, it will have more value than other sats. Collector's value.

The history of money is also littered with collector's pieces. From special gold jewelry to silver coins, to historical bills that are no longer in circulation. I see no reason to think Bitcoin will be different in this regard, if it really is a form of money.

But let's filter everything we can anyway, let's build a filtering engine that can update it's self to the innovations of the gamblers, they say.

Let's enforce it at the mempool layer, so that gamblers can not easily share their transactions. That sounds like a great idea.

Is it enough? maybe the gamblers will run out of money before they build out private mempools that actually centralize mining further. Maybe they wont.

Is that a risk we are willing to take? If the public mempool loses it's dominance over transaction relaying today, where will solo miners get transactions to add to blocks?

Even solo miners with warehouses of asics will have to join some apex private mining pool to get transactions to mine at all. Playing at a disadvantage against them. Specially as the mining reward thins out.

The death and weakening of the public mempool is a victory for private, corporate mining pools. A middleman layer hardening.

Call me crazy, but private mining pools dominating the market in a scenario where Bitcoin is hostile to the gamblers, seems like a centralizing force. Doesn't seem to me like a good thing.

And all of that assumes that Bitcoin's core developer ecosystem is functional enough to change Bitcoin in the first place. Half of the space thinks ossification is a good thing for Bitcoin. Ossification means no consensus changes, and in some cases no non-consensus changes either. So a free for all as we see today, and a hacker's market.

I actually quite like the hacker spirit within the wizards and other gamblers. At least they are getting shit done.

But where does that leave Bitcoin as a money?

The last solution being explored is an upgrade to Bitcoin's scripting languages, in the form of LNHANCE, among other aligned proposals. These attempt among other things to open the door for sharing UTXO's.

Shared UTXO's would let us keep cost effective 'unilateral exit' from one side chain for example, to another. Or from any side chain to the main chain.

Maybe. In theory. As far as I understand.

It would also make Lightning a lot more efficient, over time. But that requires change.

Can Bitcoin still change?

I write this not to scare you, nor to demoralize you. But to energize you.

I don't know what the solution is. But I believe in the fundamental ingenuity and goodness of humanity. Despite it's general greed and casual foolishness. I believe that the source of all wealth in this world is actually within us. It is within out ingenuity and willingness to make it a reality.

Wealth as safety, wealth as beauty, wealth as peace.

I believe that if we really try, we can find the right solution to these challenges to Bitcoin. And bring the world cost effective liberty and the highest quality money the world has never seen.

It's on us to figure it out.

Cheers and on to the new epoch!

It's gonna be wild.

Late last week during the Easter holy days, metaphorical shots were fired over at Twitter HQ. The target? Substack, the successful start-up blogging platform which has made possible the crowdfunding of top journalist talent like Matt Taibbi, away from legacy media.

The bullet came in the form of censorship, of course. A move that would backfire quickly. Twitter de-ranked Substack article links as untrusted, resulting in content warnings over Substack essays like my own, as well as feature restrictions. Birds were not allowed to like or retweet Substack links for days!

Being confronted by hundreds if not thousands of Substack writers, many of whom have large personalities on Twitter such as Bret Weinstein, Elon responded with an explanation of the censorship which frankly, doesn’t pass muster.

In fact, it was quickly fact-checked by his own community notes. lol.

Here’s why Musk was either misinformed on this tweet, or straight-up lying.

1: On the count of link censorship, Twitter’s own Community notes fact-checked him. Substack links were without a doubt blocked from being liked and retweeted. In some cases even throwing up ‘dangerous content’ warnings. I experienced this with my recent article about why Banks are dinosaurs. Though I failed to get visual evidence, you simply could not click the buttons. The likes and retweets were disabled for Substack link on Twitter.

You were even blocked from Twitting about Substack, or rather commenting on tweets about Substack? Very odd and apparently frantic behavior, as seen below.

2: On the count of Substack ‘illegally’ downloading tons of Twitter content to the benefit of their Notes feature - which allows Twitter-like public posts and feeds on Substack - well his accusation doesn’t really make sense.

Why would Substack need to download Twitter content, if their goal was to enable a new kind of public post which can be liked, commented on or shared to Substack user feeds? The logic doesn’t follow. Substack doesn’t need Twitter data to turn these features on.

In its defense, CEO of Substack Chris Best said that the data was going to embedded tweets on Substack essays, a feature which I certainly used widely. I personally embed tweets all the time on my articles, though not anymore. Given this controversy and the fact that Twitter can retroactively remove embedding access, I’m going to stick to screenshots from now on.

So while on this front, both CEOs might be obfuscating the truth, as there certainly is alternative value to Twitter’s data chests. Musk’s accusation doesn’t really make sense. But we likely don’t have the whole story here.

3: Finally in regards to Matt Taibbi working for Substack, that’s clearly a sleight of hand. Matt certainly earns revenue from his subscribers on Substack, but that doesn’t mean he is employed by Substack directly. Though Matt does have loyalty to Substack that is even greater than his loyalty to Twitter, who gave him the biggest story of his career, The Twitter Files.

Both Matt and Chris Best have denied that Matt is employed by Substack. Musk seems to be trying to discredit Matt with that statement, given that Matt was at the heart of this Twitter-Substack drama.

In fact, it appears Musk wanted Taibbi to publish his articles on Twitter directly, and Matt refused, of course. Twitter doesn’t pay for people’s content and doesn’t really have a way for its users to monetize their content. Substack instead allows people to pay writers directly and predictably via monthly subscriptions. So Matt’s decision was simple. Fuck Twitter.

The Seeds Of Dissent

Of course, I was personally affected by this as I recently migrated my blog to Substack in an attempt to grow an independent income from my essays. Twitter’s actions directly affected my business here. And I’m not gonna lie, I was shaken.

Up until this point, and despite the various sketchy moves by Musk I was nevertheless a fan.

Sketchy moves like the Twitter logo stunt, being replaced by a Doge image, which immediately pumped the cryptocurrency like 30%. A cryptocurrency created by a now famous Twitter influence who Musk engages with publicly regularly. They were even working on funding upgrades to the cryptocurrency not long ago and rumors of Musk wanting to make it Twitter’s currency, spread. It doesn’t look good. Especially with a class action lawsuit against him for manipulation of the cryptocurrency in the recent past.

Or remember that time Musk said he would never sell Bitcoin and then sold 10% of his stack within days? Later defending the move as a test of Bitcoin’s liquidity?

There’s a long list of question marks about Musk and cutthroat corporate behaviors. In fact, there’s a full fandom of Musk haters that think he is the devil incarnate. I myself am not that boat, despite his public PR games, and amateur attempts to play the crypto market like a flute.

Musks’s commentary on how to scale Bitcoin, and support for the absolute shitcoin that is dogecoin, made me pause on his greatness. Despite how lovely that dog is.

Despite all this I have been a supporter of his, overall. Even now I believe Tesla is effectively the next Apple and I am very bullish on it.

Nevertheless, he really fucked up with Substack, and just a few days later, Twitter walked back its blanket censorship of the blogging platform, allowing links to flow freely. Still, this event has fueled a sense of urgency for writers to bring their audiences off Twitter and over to Substack’s Notes. A platform that allows writers to monetize their content without the need for ads, while also keeping their email lists and thus a direct connection to their fans. Enabling true freedom of speech.

Something Musk paid lip service to in his acquisition of Twitter and now has used the platform to suppress. Wrong move Musk.

So anyway, download the Substack app and give Notes a try? I’ll be posting a lot more there now.

All the best.

Juan Galt.

Wow, what a month it’s been. Bank runs all over the US. The biggest German bank wobbling. The FED taking on solvency risk for National and international banks. A lot has happened and it’s hardly summer yet!

Today’s topic is banks and why they are dinosaurs. Many Bitcoiner would like to think that BTC is the meteor in this case, but not quite. The meteor is the digital age.

First, let’s do a little recap of banks and crypto custodial exchanges or otherwise bank-like services that collapsed in recent months.

• Celsius - $1.2 billion - uninsured

• Blockfi - $1-$10 Billion - uninsured

• UST stablecoin - $18 Billion market cap before the flash crash - REKT

• FTX - $9 Billion rough estimates - RIP

• Silvergate - $13 Billion at ATH Q3 2022 - FDIC insured

• Silicon Valley Bank - $200 billion - FDIC full bailout

• First Republic - $200 billion - wobbling but standing

• Signature Bank - $90 billion - suspicious shut down by NY regulators

• Credit Swiss - $530 billion by the end of 2022 - wobbling - bailed out so far

• Deutsche Bank - $1.4 trillion - wobbling but still standing…
  

In total, crypto-related custodians and other shitcoins lost as much as $38.2 billion for customers and depositors. While the tradfi could have lost depositors up to $1 trillion USD had regulators and Federal banks not stepped in.

Spooky numbers ey.

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Bank Runs At The Speed Of Light

There’s something all of these bank-like services had in common. The same thing that all banks have in common in the modern age of fractional reserve banking. They use customer funds to invest and make a profit. This practice and business model limits their available reserves, exposing them to bank run risk.

This model might have worked in the age of paper and bank tellers. But alas, that age is long gone. Like many things today, banks are being digitized. Like electricity and gasoline engines did to the age of wooden stoves and horse and buggies. Silicon is eating the world. And so, the threat model to a bank’s balance sheet in the age of Twitter is much bigger than that of the 1930s.

This fact is best illustrated by the speed of the bank run of Silicon Valley Bank, breaking historical records at $40 billion withdrawn within a day. A fifth of the bank’s alleged balance sheet disappeared.

“Customers withdrew $40bn – one-fifth of SVB’s deposits – in just a few hours.”

Consider what that means. It means that given bad enough rumors and influential enough FUD, pretty much any bank could be in very serious trouble overnight. In the digital age rumors are not the only things that fly at the speed of light, bank deposits do as well. Slushing through the fastest payment rails available, Silicon Valley Bank was emptied of its reserves in hours, moving through the US banking system, searching for safety.

But there is no safety, not really. Not unless you are willing to bank with the FED.

And that’s exactly where all of this is going. The FEDNOW system being rolled out in the US right now is touted as a 24/7 365 instant payments system for civilians, businesses, and banks alike. If $40 billion can move overnight out of a bank today, how fast will they be able to move in a year or two?

The FDIC doesn’t have the bullets.

There are something like 8 Trillion dollars of uninsured deposits in US banks. Even if they were ‘insured’ what does that even mean? the FDIC doesn’t even have a trillion USD in its reserves for a bank run. The FED had to step in to help them rescue the US banking system and quell the panic in the market this month.

So the banks have a flank wide open and in my opinion, the FED is positioning for a pincer attack.

The Ultimate Counterparty

The FED’s solution to this crisis was brilliant in a disturbing way.

They took on the bank-run risk off of banks by allowing them to pledge their troubled investments as collateral. Specifically, long-term US bonds issued at near 0% interest rates which they bought before the FED decided to aggressively raise rates. The FED lends them the full face value of these bonds, rather than the spot price which was trading at double-digit discounts, resulting in billions of dollars in temporary losses for banks. This emergency liquidity comes at much higher interest rates of course. So banks are just pushing the can down the road.

All of this was done through the FED’s new facility known as the Bank Term Funding Program (BTFP).

While BTFP dampened the panic in the markets by reassuring depositors, it also further eats into the profit margins of banks. The result appears to be even further risk intolerance for banks, which means their willingness to offer credit and take risk of default on loans and credit cards will continue to decrease.

Banks hardly offer any returns to depositors as is. With FEDNOW being rolled out, what is the point of having a bank at all?

Eventually, there’ll hardly be a reason to use a bank at all, beyond branding and user interfaces perhaps. The FED could even open up an API to software developers, so that a boom in banking apps emerges, completely destroying the custody and transactional aspects of the banking model. Since you might as well just bank with a counterparty that can’t go bankrupt because they print all the money anyway, the FED.

I don’t like this future. I don’t want the FED as my counterparty, but they already are everyone’s counterparty, regardless. This is the groundwork for CBDCs.

And the primary reason we are in a situation like this is a mismatch of incentives at the core of the banking business model. A model which is now threatened by the speed of the digital age.

The Bank’s Business Model Is Broken

The mismatch is simple when seen. Depositors go to banks not to get returns on their savings, that age is long gone. Instead, they are looking for secure storage and ease of transacting, to pay their bills.

Banks, on the other hand, see every deposit as a loan, which they can use to invest and speculate with. These ‘loans’ when above the $250,000 FDIC maximum end up being uninsured and probably uninsurable.

A $250k FDIC-insured maximum means big companies have to take counterparty risk when they put their cash flow in banks. That or start managing their own investment and risk themselves, adding to their overhead. Many of the companies in SVB seemed to be unaware of the risks they were taking.

That illusion of safety has now been shattered.

Another aspect of banking that has drastically changed thanks to the digital age is that of custody. Banks evolved to solve the limitations of gold. You had a shiny rock but, you could be easily shaken down by some highwaymen. So what do you do? put it in that big vault in town, pay some kind of fee, and authenticate with your face. Also, paying for milk and eggs with gold is kinda difficult. Not trivial to divide this rare metal. So paper cash IOUs emerged as the solution, originally backed by gold in banks.

Well, in the digital age of fiat money, the need for all this infrastructure becomes less obvious.

If money no longer has to be backed by anything but the faith and credit of your local government -as the fiat world suggests- then you don’t even need a vault. There’s nothing to secure anyway! It’s all just a balance sheet. The collateral to your money are tanks and politicians. lol.

The advent of cryptographic money has also dematerialized vaults. If something like USDC or Tether was integrated into the financial system for example, custody could be solved by non-custodial wallets, allowing users to authenticate into the FED’s balance sheet using 12 magic words and some private keys, rather than face authentication by a bank teller.

Software is eating the world.

Bank heists are no longer done with guns and face masks. But by falsifying the authentication methods to bank’s balance sheets, in what’s known as identity theft. Another issue that cryptographic, privacy-preserving money like Bitcoin solves.

You don’t even need a blockchain when you are issuing digital fiat. The FED could release a pseudonymous digital cash system like any of the stablecoin out there and take over the market if they were not so hell-bent on knowing what you and your grandma do with your coins. They of course don’t want cash, they want full control, but that’s beside the point.

The bottom line is, the FED is getting into the banking business, eventually, they will be the only counterparty people will need to deal with, and with the power to print money you’ll be ‘safer’ than with any bank. Of course, inflation will continue to be an issue, but that’s an entirely different problem.

Bank tellers are already increasingly digitized, AI will take customer service everywhere to a whole new level, further dematerializing the world.

Let’s talk about fraud a little more because this problem fascinates me.

Authentication and Fraud Security

There’s one more problem for banks, and this one is huge.

I’ve written about it before but no one seems to care, lol. It is identity theft and fraud. Bank in the day, before computers and so on, to prove who you were to a bank, you’d show up with your face and your ID.

A bank teller would do a facial recognition authentication of you against your ID and their records, and if you passed you’d get access to your bank account. That was secure enough for most things since it was kinda hard to fake a face. There were other checks in place too, but this was the primary one.

Well, not only do we live in the age of social media, where everyone’s face is publicly available from multiple angles. But artificial intelligence is shredding such security at alarming speeds. It is now trivial for any script kiddy to use a picture or two from anyone to generate a realistic video of you, using what is known as deep fakes.

As banks become further digitized, deep fakes will become an open attack vector.

They already are.

Even people’s voices can be faked quite effectively, destroying a recently popularized authentication technology for banking apps around a user’s voice.

To top it off, regulators can’t get enough of your data. They’ve forced every financial service of any sort to ask you for KYC selfies, which include most of what you need to authenticate into a bank account into one simple picture. These pictures are sent to someone’s servers and who knows who else gets access to them. Hacks happen regularly at these data counterparties and the identity information ends up in the dark web, being bought up by organized crime who then use it to try to scam anyone they can, with your name.

• 45% of US companies have experienced a data breach

• In 2019 a hacker alleged to have hacked 10k pictures of KYC selfies from Binance, related to  the 40 million USD ( in BTC) hacked from the exchange

• 14 billion data records have been lost or stolen since 2013

• In 2018, $15 billion USD were stolen in the US via identity theft, challenging the totals for all other forms of theft combined

• In 2021 total identity fraud impact, combining traditional identity fraud and identity fraud scam statistics, resulted in $52 billion of loss affecting 42 million U.S. consumer victims

Every time one of these scams succeeds at a bank or any other related service, the banks have to take a loss, trying to manage their balance sheet in a way that at the end of the day, they can cover costs and deposits. They can get insurance against these threats of course, but that further eats into their profit margins and thus your ability to earn a return on your savings.

The solutions are not trivial, but this is one area where Bitcoin has had massive innovation. Using cryptography to authenticate users without the need for private, personal information. Millions of people have managed to access the financial world in a more secure way. Of course, there’s a steep learning curve here and a generational gap, both of which will only be closed with time, education, and improving technology.

But good luck getting regulators to recognize that zero-knowledge financial systems are more secure.

Inflation - Destroyer Of Banks

Cherry on top? Even if you still preferred bank branding on your fiat money app vs something like FEDNOW, inflation will continue to eat your savings. 6% per year means you have to work 6% harder every year, and become 6% more efficient to break even. And that’s the official inflation rate, we all know it’s a lot higher than that.

Have you seen what eggs cost these days??

And that’s in the US alone, many other fiat currencies are doing far, far worse. To protect your savings you have a few options.

But options do exist, just not in banks lol.

So what is the solution? 

There are 5 paths that I am aware of, laid forward for people, or sophisticated enough investors anyway. The following is most certainly not investment advice.

Good old fashion cash under the mattress, plus some risk on bets

Go to physical cash and eat the inflation. Keep only what you need for cash flow and payments in the banks. Put the rest under your mattress, reinvest it into your business, or invest it in lowering your ongoing costs. Finally, grab that alleged 6% and yolo some risk on investments that may be double or triple. That might let you break even at least.

Shiny rocks

Buy gold, and eat the entry and exit commissions relevant when you want to make a payment. Since sending rocks over the mail is hardly a payment system. Rocks are pretty useless, especially in the digital age, though at least you have some potential upside as the world divests from fiat banking. 

Brokrages and the S&P

Turns out stock brokers have even better insurance and risk management practices than banks! With Interactive Brokers touting up to 2.5 Million in depositor insurance, plus the 250k offered by the FDIC. So there’s a solid argument for yoloing the S&P 500 with money you don’t intend to use or expect to need any time soon.

Money Market Funds

Money market funds, are hedge funds of sorts that manage short-term bond portfolios and other cash-like assets, earning reasonable interest rates in today’s age. Can you imagine your bank offering you 4.5% back on a 7-day turnaround? I can’t. There are other risks associated with MMFs but they offer strong cash-out liquidity and you don’t have to micromanage them. Here are some examples.

Bitcoin

You knew it was coming. Bitcoin is a trustless, full reserve bank in cyberspace. Yes, Bitcoin is volatile, more than any of the above options. So there’s downside potential you have to consider, however, the upside is much better than - 6% per year. And while it is a developing market, even 13 years into it’s invention, it never the less has some very interesting properties.

Bitcoin can be held in self-custody, be it a single 12-word phrase that Bitcoin wallets aid you in creating. Or multi-signature wallets which can have access keys distributed across various locations, and which require say 2 of 3 or 3 of 5 keys to authorize a transfer. There is a ton more to be talked about here, and you can expect this newsletter to teach out about it. But the bottom line is, bank-grade security can be achieved by civilians thanks to Bitcoin, with relatively little effort.

Bitcoin’s lightning network is a transactional layer that allows for the asset to move at the speed of light, across the world. Fees are near zero and a whole industry of lightning-powered financial services is growing, in part thanks to the adoption of Bitcoin as a national currency in El Salvador. Like FEDNOW, Bitcoin’s Lightning Network allows 24/7 365 instant payments, but globally. And the ability to denominate the value sent and received in USD and other fiat currencies is already being deployed and developed.

Dollar-cost averaging, a very popular investment strategy in the Bitcoin world, allows buyers to establish a position over time, automagically, by allowing your bank account to make weekly payments of a fixed amount to services like Swan, who buy BTC with your deposits and send the Bitcoin to your cold storage wallet. The result is that on a downturn, your average buy price is continuously lowered, resulting in powerful positions when the bull market returns. For example, if you had DCA’d into Bitcoin starting at the all-time high of $69,000 USD, today you would be over 8% in profit. And that’s the worst-case scenario after a 60% correction form the ATH til now.

(Results will vary depending on intervals of DCA, a topic I will explore in closer detail in a future article.)

Wild right? it’s a whole new way of saving, with zero counterparty risk.

The best company in the US for dollar cost averaging into Bitcoin is without a doubt Swan, which automates everything and withdraws to your cold storage, check it out. There are others, depending on where you live.

Finally, Bitcoin’s scarce supply and resistance to monetary policy changes make it a very interesting financial product, which tends to go up in times of massive money printing, in correlation with the S&P but also seems to react well to a banking crisis as we’ve seen recently and in events like the Cyprus bail-in. It also reacts well to currency crises as seen in Argentina, Venezuela, and other nations with hyperinflating currencies.

If you want to learn Bitcoin's best practices, how to secure it, and use it like a Samurai. Subscribe to my newsletter. A series of premium articles on Bitcoin security that are easy to use, as well as how to surf the waves of the markets are incoming. And by signing up for emails, you’ll be the first to know. 

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Ah, Love. That fateful dream that lights the heart of man through the darkness of time.

That morning sun that summons us awake or in its absence leaves us bedridden.

Love, the intuition of any hopeful, perpetually within our reach and yet so easy to let slip.

Love, that water we swim in, the air we breathe.
So intoxicating we often don’t even know its in us,
that it moves us.
Until it does.

Love, so healing yet so turbulent,
so creative, so destructive.
‌‌
‌Love. Nature’s spell to keep life living.

The essential commandment of Christ. ‌
‌Love for others, love for everyone, love for God.

Love, God’s gift and his curse so we be fruitful and multiply.

Love, that distant cure for loneliness.‌
‌The harshest judge of our inadequacies.

The love of a child for his parents,
despite their vices and shortcomings.

That love of a young romance,
that knows no dangers and no limits.

That love of a parent for his offspring,
with the fury of a thousand lions,
and the tenderness of an early winter's fall.

Love, that spell that gives us strength to kill and die for.
The will to put up with it all.

What is love? 

Can love be reached?

Is it a journey or a destination?

Are we fools to chase it?

Are we doomed by the impossibility of its beauty and perfection?

Can it be nurtured and cultivated,
a golden rose in a garden of virtue?

Love is life!

Today we talk about perhaps the most powerful human motivation, love. And in particular romantic love, the most mysterious of the lot. After all, this dream of deep companionship is in every heart -I believe- despite how guarded and buried it may seem.

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A BRIEF HISTORY OF LOVE

Love, a word so powerful, that it is the envy of magicians. Old as the known world. Poetizied by the Sumerians, studied and practiced by the ancient Greeks. Consolidated by Christ into the highest virtue. Love transformed literature and art throughout the renaissance. The mysteries of life contained within one syllable.

If love could be a verb and have an era, it would be called ‘Romanticism’. Popularised throughout the enlightenment period, in particular, during of the industrial revolution. Romantic poets intoxicated the world with their imagination. While the world was increasingly hollowed out by the rise of the machines, this poetic movement sprung in its opposition. Filling the void for centuries.

‌The idealization of nature’s virginity, untrampled by man’s ambition and the cold-hearted extraction of its elements by industry. A revolution of the heart against the hard social norms and class structure, that may have once served us throughout the dark ages. Romantic poets unleashed an old ideal wrapped up in the naivety of secularism. Love for love’s sake. Nothing it’s superior. No boundary it's keeper.

Thousands of paintings, books, and songs unfolded into the collective subconscious.

The bounty? A peak in birth rates from which we would soon depart.

‌Fast forward a couple of hundred years and we have the sexual revolution of the 60’s and 70’s. Sex, the most obvious manifestation of love, breaks free from the ball and chains of tradition and monogamy. A Cambrian explosion of sexual exploration pours through mainstream America and then much of the world. Technology its jailbreaker freeing women -and thus men- from the heaviest consequence of sex, pregnancy.

The contract with nature is finally broken, seeds now rarely planted, the crops begin to thin.

Fast forward to today and the game is digitized and enumerated. Commoditized to the highest bidder. Entirely hallowed of its purpose.

Marriage and family are increasingly a luxury, a burden too heavy for those trapped in concrete jungles.‌

“Demographics are destiny” they say. If so, we need a pivot. As the world is aging toward the edge.

But… why was Marriage a thing in the first place?

What have we forgotten?

Marriage, what is it good for?

Ahh, the old ball and chain! The dream of little girls and the dread of young men…

The holy union with which the secular world seems to struggle so much.

Marriage, a challenge of fitness at this point, as divorce rates and children born out of wedlock have long become normalized.

Sometimes you gotta split up, I get it. Sometimes the personal hell created, is simply too much to bare. But even then, the sadness of a failing marriage, ´can be long lasting and deep. I see it among family members of mine, peace of mind about what went wrong is … elusive.

How could you end up hating someone you loved so much?

I am a child of divorce, a product of this confused world. The feminist revolution was in its second vogue when my parents were getting married. To their parents, divorce was a huge red flag, a clear danger. If your boyfriend’s parents had split up, that was not a good sign of what was to come. Nevertheless, the world changed around them. Around everyone.

The norms and standards of the pre war periods were all but forgotten by the end of the century. Gender roles were shattered throughout much of the western world. No fault divorces became legal in response to dissatisfaction and of course … domestic abuse. The result? Lots and lots of divorces. Eventually, petty issues, such as ‘lack of satisfaction’ became enough reason to break up a home.

Funny how that works eh? Dissatisfaction. Suggesting that marriage is an optional endeavor, like going to watch a movie for example, don’t like it? Walk out, no problem. The fruit of our wealth and technological advancements betray us.

Throughout most of history, this was not the environment. There were no washing machines for clothes or plates, there were no cars, just horse and buggy. Farming took up large portions of the population's time. Having children to help with the labor was actually a huge asset.

War was not a distant, highly specialized or technological matter. No, these were the dark ages and beyond. Raiders were a serious possibility. All men had to have some competence in the art of war. Though most were peasants, the gender roles were clear and preferred. Better to be a warrior in a garden, than to be a gardener surprised by war.

The reality of violence is that the strongest, biggest person wins. If you look at the UFC, the modern pinnacle of combat sports, there are weight classes. Why? Even when Mighty Mouse, a short and lightweight man -by any measure- is believed by many to be the best fighter in the world. He can only do so much against a literal “heavyweight”. From resistance to power, size matters.

And let’s face it, on average, men are bigger than women, heavier, stronger and often their reflexes are far sharper when it comes to the art of war.

Not only that, but consider this math. Consider a tribe after it has gone to war. There are one hundred women left after the scrap, and one man. That one man -if they will have him- he would be enough to impregnate all the fertile women in this horrific numbers thought experiment. But their tribe would have a chance to survive, doubling its numbers in a generation.‌
‌‌
‌What if instead, all the women fought the war and the men stayed behind?

What if after the scrap you were left with 100 men and one woman? What’s going to happen to that tribe? That small town? It is game over folks.

Women are endowed with a superpower, they have the sacred gift -and burden- of the vessel of life. They are the queen bees, and at some level people understood this, they respected it and protected women from foreign dangers. They cherished their gift, even if internally there was abuse. That abuse should not be brought back from the dark ages. Let me make that clear.‌
‌‌
‌But perhaps we do not have to throw out the baby with the bath water. Perhaps there’s something we can learn from our ancestors who survived the collapse of the Roman Empire and built the foundations of our modern world. Perhaps the chaos and apparent collapse of modernity have to do with us forgetting what it stands on.

I believe something about gender roles, that applies to heterosexual men and women. If this does not describe you, that is fine, go do your thing, it is a free world. But as far as mating, pair bonding and marriage goes, the genders do have some affinities.

I believe men are optimized by nature to deal with politics and the macro world. To contend with other men, horn to horn like elk and hold the line which they are duty bound to protect. To bring back the loot from conquest, financial or otherwise and to build a nest. It is the male among humans who ought to bring the branches and the leaves. Women can then choose from the lot to turn a house into a home.

I believe women are optimized to rule the local and the familial. I believe their social intuitions are keen for fairness among peers. One does not give less food to a baby because he is less competent than their older brother, no. Equal distribution of resources makes perfect sense in the home.

I’ve also seen the beauty women are attuned to. Men, they can live in a cave and be satisfied, not knowing what they are missing. Women however seem to simply know how make life pleasant, how to brighten up to the world. This, makes men’s struggles and battles worth fighting and worth winning.

The most comfort, joy and beauty I’ve experienced has come from the fairer gender. Bringing forth quality-of-life improvements that men, simply do not think about.

Now, this is not to say that any other configuration is wrong, there are highly competitive women, and men who do a fine job maintaining a home. There’s also a long history of artists and cultural pioneers who had little of these traditional values within them. Nobody is going to stop you or them from doing what they wish. Some people have a unique mission in life and should be free to choose that journey and those trade-offs., in my opinion.
‌‌
‌But when it comes to long-lasting love, that commitment of old. To join forces in the creation of an endless union. To create a nest and beautify it. To hold space for children to grow, and contribute to society. To unite in a partnership for the venture of family, that is the structure and infrastructure of long-lasting love. The frame and the painting. The walls and the garden.‌
‌‌
‌There’s also more than just walls and commitment. More than caging ourselves in a relationship, there are a set of virtues that developed out of hardship which allowed for such a lifestyle to work. The topic of those virtues are an essay on it’s own, but I believe we need to become a lot more conscious about what virtues those might be, if we are to find our way into the new golden age.‌

‌‌‌The problem today is that the societal and economic pressures that forged the marriage model and mindsets are on hiatus. Technology has freed up women’s time massively so they get bored at home and naturally desire more from life, such as working a corporate job, lol.

Meanwhile, contraception has taken the repercussions and edge off of sex. With no risk, sport fucking is the norm now among the young. Men on the other hand are increasingly domesticated, those that go to war are few and far between, masculinity is actively demonized and so, weakened. Pathetic men are far too common.

Meanwhile, those that resist society’s onslaught to their masculine intuitions end up cynical, they become players and develop a callous exterior in this zero sum game.

Hard to fall in love with either of them.

There is one more thing I believe about love, having had some experience with the matter. Not only is the venture of family making where long-lasting love can flourish, but without fruit this tree withers. Children I believe are an essential ingredient in nature’s spell. They are the bonding agent that can hold love together, once the flame of passion tempers. Children transform romantic love from shared enjoyment of life, to a larger-than-us vocation. Though a commitment to virtue remains as the foundation.

Nature’s Spell And The Sexual Rite

‌Now, you might be thinking “oh boy, Juan Galt is about to argue that the only purpose of sex is baby making, or something along those lines” and uhhh, close but not quite. I’m too secular and naively romantic to believe that. Sometimes you just have to go with the flow and live life as it comes, you know?‌ Can’t predict everything nor can we control where everything goes.
‌‌
‌However, I have to concede one point to this stereotypical hyper conservative viewpoint. That is, nature’s spell over the flesh.

Why oh why would it feel soo damn good otherwise to make love? It’s obvious when you think about it for a moment. Evolving out of the primordial goo, without the strongest of rewards, sex and thus procreation - the continuation of life - would not have occurred. It is almost too obvious to state so plainly but then I look at my generation. Most of my friends are all childless, myself included. Many of my peers spend much of their intimate lives wrapped up in latex or drugged with contraception, into complacency.

Pregnancy has become a potential tragedy, rather than a miracle. Sex has become but a toy to pass the time. Women are no longer perceived as sacred creatures, the default torch bearers of the flame of consciousness. Ferocious in their willingness to defend it. Rather, they are drowning in the shallow waters of modern sexuality. Swiping from tinder date to tinder date, losing their glow as time goes on. Tic tok next block. Time does not forgive, not sure if it forgets. And then, their ‘peak sexual market’ value is lost to time.

No one seems to tell women how valuable their twenties are. How their whole lives might depend on how they play their cards. How a corporate job will be profoundly boring when they realize they could be creating and nurturing life itself. That there is no more valuable and important job to the world than shaping the next generation, literally the future of the world, our offspring. They seem to only realize it in their 30’s when the pressure is on.

‌Am I supposed to say that it is fine for the average woman to spend her whole life working for some faceless borg of a corporation, and then age and die alone?‌
‌‌
‌Have you thought about what life will be like for you or your friends? Male or female for that matter when they are old and childless? Who will visit them, who will care for them? At the rate we are going, probably some Tesla bot, with Nurse AI ™ , will be our care taker. Her cold embrace a daily reminder of the warmth we have lost.‌

Men, living full lives of increasing cynicism, their callus pragmatism ossifying their heart, one day at a time as they grow old. Distracted by yet another notch on the belt, another tinder trophee who decided to play along. Men, growing in wealth and competence, hardened by the world. Their body and mind a castle, fortified against all threats. Inside the lights are off. No one is home. No one to protect, no one to love.

Hardly a life well lived.

Seriously, what will we do when we are retired and old? How boring will it be to play bingo every night?

No youth around us. No spark of life to remind us of the beauty of the world, the joys of the sun, the colours of the flowers, the beauty of the sunset, the strangeness of the clouds? All which we have seen a thousand times and now consider normal, in fact - to be expected.

Nothing quite reminds us of the beauty and marvel of the world, like a child seeing that unbelievable thing for the first time.‌

But no, oh no, having kids is hard, who wants it anyway, "there are too many of us as is!" Just wrap it up in that rubber and take your drugs, your hormone blockers, your anti-fertilizers, just continue chugging along, soon enough you will not even notice and we will be in free fall, falling off of a demographic cliff.‌
‌‌
‌Thank God for the truly religious, those who go by The Book, and the migrants too I guess, who ignorant of our cultural “progress” shall inherit the earth, filling the gap of our low replacement rates. Tsk tsk.

We have cheated nature. Wrapped her up in a latex bubble and drugged her silly with hormone pills that make her sterile. All to get our rocks off, but to what end? Not much. For a mutual jerk between friends, I guess. Among strangers of the night.‌

‌‌‌No, it is way past time to reverse this pendulum, I believe it has swung too far.

In fact I truly believe that no sex is better than loving making without cheats.
The future guarded by a commitment to see things through to the end.
The foundations set for prosperity as best we can, with space to grow old and fruitful. Peace of mind flows when there is no need for latex and drugs to keep nature contained.
Let her be free! and let her flow through you in this most holy and mysterious of acts. An act which creates life itself and rewards us with a pure, holistic, third-eye-opened explosions of joy.

Let nature’s spell flow through you, and cherish her flame.

Juan Galt.

( Oh yeah! We are on Substack now, please consider subscribing to the monthly equivalent cop of coffee or beer. Only if you can and would like me to continue this work. All the best. ❤️)

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Hello everyone!

Regulation can be a difficult topic, but it is the cloud that holds down this industry today and we need to shine light upon it to clear it.

Here's a quick table of contents for you all.

• The Libertarian Argument

• The Shitcoin smell test

• On Bitcoin’s “Immaculate Conception”

• Bitcoin and Crypto Commodities

• Ethereum & Crypto Securities

• Ponzi Schemes And Financial Literacy

• Actual “Crypto Currencies” & Stablecoins

The Libertarian Perspective & Its Biases

As a lifelong libertarian, the topic of regulation is one I have a natural aversion to. My intuition is to resist it, and my preference for a long time has been to keep the state’s grubby hands off “crypto”. Sadly, as the years go by, I’ve seen such a proliferation of fraud and ridiculousness in this industry, that today I have to hesitate and re-evaluate.

From dumb Ponzi schemes using the Bitcoin brand to scam retail via centralized, low-tech websites. To tens of thousands of straight scams, be they Ethereum tokens, or blockchain forks whose nature intentionally or not is that of concentrating wealth in the hands of 'founders' from later 'investors'. Often with few if any products, services, or solutions to back up that value.

This article explores the topic of crypto regulation. The more relevant proposed frameworks, what I think would make sense, and what impact they might have if any at all.

As a matter of principle, I have to remind my fellow Anarcho Capitalists and libertarians that fraud is a violation of the non-aggression principle. And while the state has a monopoly on violence, its processes are the lowest risk path to any kind of justice or retribution, despite being as dysfunctional, corrupt, or inefficient as they often are.

I point this out not because libertarians do not know this, but because as an intellectual movement, we seem to have neglected the issue of fraud. While the greats have talked about fraud AFAIK, they did not have shitcoins and the internet to contend with. We do.

Years ago I warned that if crypto failed to regulate its excesses, the feds would come and do it for us. Bitcoin advocates warned endlessly about the risks of crypto Ponzinomic schemes for well over a decade, to no avail.

Well, the US government now has a very clear path to regulate crypto, given the tens of billions of dollars wasted and stolen by the likes of FTX and other CEFI. People are pissed off, they want blood. That blood lust is a red carpet for politicians and they are waltzing on in. The question is, what regulatory structure will they erect? And which should they - if any? And, will it make any difference, given that fraud is already illegal?

We shall see if the SEC and these laws have any real weight to them with FTX and 'Scam' BANKman Fraud. If the US government will prosecute SBF on what looks like very obvious fraud, despite being part of their elite. If SBF does not do hard time. Then we will (again) get confirmation that the regulatory and legal systems are totally pay-to-play.

My mentor Ugly Old Goat sure seems to think the whole government is pay-to-play and corrupt to the core, starting with the FBI and the SEC. He actually served a decade in prison for wire fraud after his gold backed financial venture went under with the help of the feds decades ago. So it may very well be the case that all this regulatory talk is doomed to fail anyway.

Nevertheless, this article explores the topic from a good faith perspective, addressing the empirical realities and attempting to establish a reasonable moral framework, which a functional government that is not entirely doomed, should be able to approach.

For the sake of brevity we are going to ignore the KYC and Surveillance layer of regulatory capture, which I wrote about earlier this month.

Bitcoin and Crypto Commodities

Ok, let’s differentiate Bitcoin from 'crapto' for a moment… I mean, crypto. This is essential from the perspective of risk management, investment analysis and regulation.

Too many noobs have bought the idea that Bitcoin is crypto and this could not be further from the truth.

Crypto is to Bitcoin like Cain is to Able. They may have been brothers, both children of God, but they are hardly the same in moral terms or in their design choices. They share a common humanity, and common cryptographic building blocks, but their intents, and moral structure are fundamentally different.

This is not to say that all crypto is evil, or that all crypto enthusiasts and entrepreneurs are walking the path of the dark side, so to speak. But rather that the structure of crypto financial assets is very unlikely to recreate Bitcoin, even if all the same design choices were made, anonymous benevolent founder included.

Even the most easy to defend altcoins, like Monero which is actively used and privacy defending - something I value highly - still hard fork too often to be considered decentralized. Though with time, if the incentives of any crypto ecosystem are well structured, decentralization is at least theoretically possible.

And just to be clear, I’m not a bitcoin Maximalist, I’m a shitcoin minimalist.

I’ve long parted ways with that straw man, invented by Vitalik Buterin to keep Bitcoiners in a symbolic straitjacket.

Bitcoin is the king of crypto, and one day may be the king of money, not because of its flag or a tribe, but because of its fundamental qualities and features, because of its nature, history, purity and its economic incentives. Bitcoin is king because it's whole structure is designed to defend the fundamental innovation - immutability.

However, while its seat at the throne of this industry may last forever, that is not actually a given. Bitcoin's qualities need to be maintained and those qualities need to be valued by the market over time, for the crown at least price wise to be maintained.

In fact, there's probably a price at which if Bitcoin hit and stayed at for too long, would kill the network. Hashing rigs would become non profitable and sold for pennies on the dollar, drastically lowering the cost of 51% attacking Bitcoin, as economically incentivized miners flee the network due to zero profitability.

But that's another topic. My point is. Bitcoin is not a given, it is a system.

Also money is not the only financial asset in the world.

To quote Max Keiser;

“capitalism requires capital”

And as such, equity is a fundamental financial tool of our advanced societies.

It might be even more accurate to say that you can't have capitalism without equity.

Because of this economic reality, with Bitcoin's defensive hyperfocus on sound money, various experimental financial applications, and attempts at bringing cryptographic innovation to equities markets improvement has been pushed out to other networks.

Few of them passing the scam sniff test of course. And most, in particular those raising funds for various projects, try to avoid coming off as outright equities, despite desperately seeking to inhabit said properties.

In other words, crypto as a fundraising vehicle for startups and companies, has pretty much always sought regulatory avoidance and arbitrage around US securities laws.  

There are clear exceptions to this rule, and niches that are not attempts at creating equities, again like Monero. Anon nerds who like to buy drugs online regularly use Monero, as well as other useful applications for anonymous digital currencies.

The utility of XMR is proven when federal agencies actively attack it and even try to find people to help them break it, via bounties like two contracts for $625,000 offered by the IRS for anyone that can hack Monero to make it traceable. Monero is proof of a crypto niche that stands on its own merit, even if temporarily. Even if unable to scale or take the Bitcoin throne. Even if unable to surpass it as sound money. Monero, never the less stands in the market, despite best attempts by Bitcoin maximalists to shun it.

So what’s this sniff test?

Well, back in my day, during the great shitcoin boom - lol - we had one particular heuristic. The bigger the premine, the more likely the scam. Usually anything above 15% premine was way too much, far too sketchy. Why? The asymmetry of knowledge from founders and their dumping power.

While the public had to buy the token to introduce market forces to it, founders had a bag from the start, that they could dump on retail, while also having the best vantage point to gather information about the market and the product.

Turns out, 15% was too generous. Any percentage above zero premine means the thing is at the very least not a commodity, it cannot be. God did not keep a portion of the gold he created on earth after all, it was all there for the mining. If you get my point.

God has no bags of gold to dump on Peter Shift’s twitter followers - Unlike Peter who mainly invests in mining companies, while shilling their product -Gold- to his fellowship of gold bugs, lol.

If a crypto asset is created with no premine, and people are being educated about the project as soon as possible, then those who earn its emissions are true believers taking calculated risks and making real contributions to the network with equal opportunity among all holders and users. Without a premine, coins must be earned and they are often earned through 'proof of work' processes which require at least some technical knowledge on the part of the public which is investing in this crypto asset. The investment is in the form of electricity, talent and hardware resources. The good produced is the altcoin.

Finally, having benevolent anonymous founders might also be an essential quality of crypto commodities. This is (un)fortunately a very high bar. Anonymity is incredibly hard to maintain over a long period of time and the more successful the actions of an anon, the more scrutiny they call upon their print left on the world. More often than not leading to the discovery of the individuals and thus, the elevation of authority and responsibility of one or a few individuals over their creations.

Turns out, one of the most important things Satoshi ever did, was disappear.

These are all essential qualities of a crypto commodity, as fundamentally different than a crypto security. But they are alone, not sufficient.

Decentralization has to be reached, and there are likely more variables at play including luck, to reach the soon to be coveted 'crypto commodity' legal status.

On Bitcoin’s “Immaculate Conception”

Why is Bitcoin a 'crypto commodity'? Well, let's get into that.

Did Bitcoin have a premine? The short answer is no.

Satoshi announced Bitcoin among those most likely to understand and appreciate its nature, in the cypherpunk mailing lists on October 31st 2008. He then continued to engage the topic until launch on January 3rd, 2009. The Bitcoin Talk Forum was founded shortly after.

Satoshi stayed for two more years during which he communicated actively and answered all kinds of questions.

He is believed to have mined Bitcoin during that era at a slower pace than he actually could have, apparently with the aim of growing the mining difficulty to healthy levels. Another example of his 'benevolence' as a leader.

He could have blown up the supply, concentrating it in his own hands, but instead he slow mined it and kept the block time close below 10 minutes to raise the difficulty of the network and thus increase Bitcoin's defense capabilities.

Never the less, it is estimated that Satoshi mined one million bitcoins.

What happened to these coins? Well, they have literally never been moved. We can still see them on the Bitcoin blockchain, on the addresses they were mined to.

It is unclear what Satoshi Nakamoto’s intentions with these coins were, or if he still holds the private keys. It is possible that the coins were mined to a burn address, a public address without a private key. Though you think he would have mentioned it, to appease future concerns.

It seems Bitcoin had so little value back in those years of 2009 - 2010, that no one actually asked Satoshi what he intended to do with those coins. Nobody cared, and so as far as I know, the topic was never really discussed - publicly at least.

(I’m starting to look into this question however, I’ll let you know if I find any expressions of Satoshi’s intent for them. And no CSW is definitely not Satoshi.)

Even Michael Goldstein, former president of the Nakamoto Institute a website that archives and studies Satoshi’s writings, cannot recall the the topic coming up in those days.

So anyway, even if Satoshi came back and took profits on those 1  million BTC, they were still slow mined after launch and after a strong, good faith effort to invite others to participate.

This means that Bitcoin had no primine. No coins were minted before the network was public after all. Those who had the best chance to understand the project were told about it months in advance. Satoshi's coins were mined slowly and fairly, in accordance with the spirit of the protocol. As people understood Bitcoin, they too started to mine, until Satoshi was no longer relevant.

He then parted in 2010, and has never moved those coins.

For all we know Satoshi is dead, or may have even lost his keys, given few could have imagined how valuable Bitcoin would get a decade later.  I'm frankly amazed anyone in the world has the integrity and resolve to not cash out and become a multi-billionaire. So he is either a Saint, or he is dead.

Finally, Bitcoin has been practicing backwards compatible upgrades throughout most of its history. This means that all upgrades to Bitcoin are opt-in and do not change the nature of the Bitcoin, as used by those who refuse to upgrade. Segwit is opt-in, Lightning is opt-in, Taproot is opt-in. Legacy Bitcoin addresses still work, just fine.  

The only hard forks that have occurred in bitcoin have been around extreme security concerns, such as a couple inflation bugs that would have broken the Bitcoin social contract as outlined in the white paper, and further Bitcoin Talk Forum conversations. And those happened years ago. Nothing is perfect.

The ability of regularly hard fork a coin, and change its nature is a sign of centralization, after all, if not outright proof of it. Backward compatibility becomes, I believe another necessary feature of a crypto commodity.

In short, these are some of the qualities that make Bitcoin different from other crypto assets and establish the category.

• Fair distribution with no premine or founder share

• Immaculate conception, created for the sake of innovation, not profit expectations as there was no precedent of massive gainz in 'crypto' before Bitcoin.

• Decentralization achieved quickly, around 3 years in, after Satoshi left

• Anonymous founder, who’s name and influence is not believed, relevant or even welcome by later generations

• Backwards compatibility and opt-in only upgrades

• Sufficient network stability that emergency hard forks are rare and ideally never needed

Ethereum and Crypto Securities

In contrast, we can look at Ethereum.

“The mother ass hole from which all shitcoins spring” - Seifadean.

Ethereum had a 70% premine, with founders issuing the vast majority of the coins on the market before anyone could mine them. Many of these were sold to insiders and other backers, with rumors suggesting even JP Morgan players were in on that premine. Everything else was mined much later, over a year after the ICO fund raise, when the network finally went live.

Ever since then, the network has had multiple hard forks, some far more controversial than others. Many of them changing the supply emissions for marketing purposes.

They rolled back the blockchain to undue a massive hack in the early days by the infamous DAO. And just recently they even removed the Proof of Work layer of Ethereum and replaced it with a Proof of Stake scheme that is going hilariously poorly, as OFAC compliance staking pools have dominated the scheme. Leading to long block times for transactions that use the privacy preserving tornado cash contract. And giving non competitive oligarchical power to the founders, who still hold a lion’s share of ETH, and can thus command the consensus rules of the network that are no longer guarded by proof of work.

While its a testament to how resilient crypto economic systems are to censorship, that even a coin that seems designed to be captured retains some censorship resistance, as demonstrated by the censored Tornado Cash ETH mixer continuing to process transactions albeit with multiple minutes of wait time before they are mined.

Ethereum never the less carries very different risk for users and investors compared to something like Bitcoin. It has a fundamentally different structure and ethos, even if they are made of the same building blocks. To recap:

• ETH founder' share was created before coins could be mined, giving them asymmetric power over the price and the rules of the coin

• Hard forks every few months that change the social contract and nature of the coin

• Public founder with massive influence over the network and price

• Hard fork into Proof Of Stake consensus protocol after the coin was founded on a 70% premine ICO.

• A failure to decentralize as demonstrated by active consensus changing hard forks

This last point is important. Decentralization should breed resistance to change. As various interests invest in the technology they have adopted, changes to that technology should become increasingly unpopular. It is evidence of Etheruem’s failure to decentralize that they can change the proof of work layer, or other parameters like the emission rate even half a decade after its genesis.  

But this is the nature of most crypto coins. Founders can dump on retail at any point and can change the nature of the asset nearly at will. If those are the qualities of the coin you like, then sorry. That’s not gold, that’s Apple stock, at best. It is a security with counter party risk and likely very little transparency, not a new element that has been discovered and can be externally verified by anyone.

Crypto is equity, not money. And equity is ok, essential to capitalism, really. But risks should be properly disclosed and understood by investors. Rather than just stand on fluffy marketing, memetic propaganda, and shiny websites.

And this is what regulators seem to be converging towards.

It isn’t some globalist attempt to capture the DeFi industry, even though that is certainly happening. No, it may also be an attempt to reign in the asymmetric risk and power created by crypto Ponzi coins, most of which are far worse than Ethereum, and provide even less real value to consumers. Ponzis actually cause net harm on local economies as financially illiterate retail ''investors' gets swindled by sociopathic nerds.

How can that be a good thing?

At least Ethereum has network effects and works as a settlement layer, with a live ecosystem on top, even if it is mostly an ecosystem of Ponzicoins.

Those who wish to create true decentralization, need to think of their creations as commodities. Those networks need to mimic Bitcoin as much as possible in their qualities - in my opinion - maintaining backwards compatibility, making them Proof of Work rather than Proof of Stake, and doing zero premines. They also need to be different enough from Bitcoin in their value propositions to consumers that they are relevant and can compete for a niche.  

Finally if the founders can stay anonymous as Satoshi did, even better, though the fact we still don’t know who he is, remains a miracle of modernity that even Edward Snowden marvels at. This is impressively difficult to do, and a reason Bitcoin is so unique.

As an example, the fact that Vitalik is public as the founder of Ethereum, provides a very clear target for all kinds of coercion and attacks, many of which are likely to remain undisclosed, as I explored on my article about Ethereum and Proof Of Stake.

Everything with a premine and active hardforks, that has failed to be decentralized - however that is measured -  could become regulated as an equity, requiring registration with the SEC. While crypto commodities would ideally have to pass some test by CFTC to be legally categorized as such. This is particularly important because of tax requirements.

So we are left with two categories, crypto commodities and crypto securities. We also have stablecoins and NFTs but we’ll get into those later.

Let’s talk about accredited investor laws and Ponzi schemes a bit though.

Ponzi Schemes And Financial Literacy

One of the best arguments I find myself wrestling with, is the existence and persistence of Ponzi schemes in free financial markets. Not the fact that they are created and run all the time, but that so many people keep falling for them.

Like a bad weed or a plague on the fertile soil of society’s future, these Ponzi schemes fool the financially illiterate and co-opt their greed, turning decent people into sales agents of parasitical financial schemes.

Ponzi schemes have no products, service or infrastructure to show for it, though like a virus, they evolve and often mask their nature well. Sometimes using the schemes to subsidize underlying businesses that eventually fail as they cannot otherwise stand on their own merit.

“If a financial asset produces no products, offers no services, solves no problems or builds no useful  infrastructure, then it is a Ponzi scheme.”  - Juan Galt

Even when backed by Bitcoin mining, ponzi schemes fail, over and over again. As in the case of Bitclub Network, a near Billion Dollar bitcoin branded Ponzi scheme that eventually collapsed, albeit with some help from the feds. I knew many ‘ancaps’ who threw real money at this and regretted it. If self proclaimed Anarcho Capitalists fall for Ponzi schemes, what hope do the economically illiterate have?

You see my concern.

Most of the normal people I know do not study finance - most people today - and they can’t seem to tell the difference between a Ponzi scheme and an equity, or a legitimate company with product market fit.

This is a fundamental issue. How can anyone make any investments at all, if they can’t tell the difference between Apple and Bitconnect?

How many people around you can? It is a failure of the modern education system, no doubt, but that doesn’t really solve the problem.

New Ponzi schemes arise in Latin America every other week. I can’t count the amount of Ponzi schemes using the Bitcoin brand I’ve seen, and they continue to come, with no end on sight. Exploiting the public's ignorance about self custody and tarnishing the Bitcoin brand, through centralized websites and private ledgers.

The fact that they continue, proves that they are profitable. Someone is losing money to them, someone is getting rich off them.

Most ETH tokens, altcoins and DeFi assets are fundamentally Ponzi schemes. At least equities in theory have a product underneath that is finding product market fit. If they have an equity trading on the public markets, they are also required to make public disclosures of risk and there are some consequences for corruption, insider trading and other forms of fraud.

On the private side of equity investing we have accredited investor laws - in the USA anyway - which back when I got into Bitcoin were 200k USD a year minimum that had to be proven to be able to play.

Today, new investment paths are opening up as demonstrated by Lightning Ventures, where small investors can contribute as little as 1000 USD to various companies coming together as a syndicate of sorts.

While I’m no expert in this area of investment, it is blatantly obvious to me that 200k a year to make investments at all, is a non starter and prices out 99% of the world from private markets.

So on the upper end, further reform of these standards is a very good thing.

On the lower end however, perhaps education is the only path to counter the Ponzi schemes and other frauds.

If the SEC and FBI are too incompetent and corrupt to stop the proliferation of these financial viruses. This pandemic of Ponzi schemes, then only hard earned lessons might do that job.

Ponzi schemes and fraud is already illegal, after all. The laws simply are not or cannot be effectively enforced. This begs the question as to whether we even need regulation at all. Rather than just regulatory clarity.  

From this perspective, the only way scam coins will die is after they have burned through the population of financial illiterate, so to speak.

And multiple generations of them, to boot.

In the absence of a real watch dog with political power, all shitcoins that can be made, will be made, pumped, dumped, exit scammed and rug pulled. Until our children’s children look back at the history of crypto with the same horror Cubans look at Castro and Eastern Europeans look at communism. A horror show to stay the fuck away from.

Actual “Crypto Currencies” and Stablecoins

Ah stablecoins and other marks of the beast. :)

As long as there are fiat currencies, and as long as something like Bitcoin isn’t considered a currency by local states, then currencies and stablecoins will be fiat in nature. Be it USDT, USDC or even BUSD, the only real “crypto currencies” are stablecoins and this category is relevant because taxation and legacy accounting continues to exist.

These stablecoins will become regulated as they already are, with KYC requirements to whatever degree possible, as well as active on-chain and IP tracking. They will carry zero censorship resistance, or very little, and are highly likely to become the de facto CBDCs that the elite lust for, and the public rightfully fear.

Economic policy will increasingly influence stablecoins and they will become increasingly integrated with the states that issue the underlying fiat. If they don’t play ball they can and likely will be attacked out of existence.

Algorithmic stablecoins are and should be dead now. They have proven fundamentally unstable with a long list of implosions with increasing magnitudes of loss. Even DAI which was for a long time touted as a great example of a decentralized stablecoin, it is now owned by Coinbase and mostly backed by USDC.  

These never the less deliver new qualities to currency allowing them to reach much further than the banking system, with much lower KYC requirements, as they ride on cryptographic authentication systems instead of biometric authentication. Allowing the unbanked, yet digitized people throughout the world to access better money than their local fiat and thus benefit from the jurisdiction of better governments than their own,  regardless of who they are or where they live - sanctions aside.

They also settle much faster than legacy finance which provides massive efficiencies to markets globally.

Alright, I think that’s all. NFTs are a beast of their own and do carry a risk of being categorized as equities as well. But that's a topic for another time, as they follow the same backwards compatibility rules as anything else in crypto. I'll leave it at that for now.

Cheers!

Juan Galt.

(Special thanks to Phneep, for all the Bitcoin memes!

Juan Galt.

The following is the first installment of a series about regulation in the Bitcoin and crypto markets.

Subscribe now

Part 1:

• The Libertarian Perspective & Its Biases

• “Know Your Customer Laws” and Identity Theft

Future installments include:

• Bitcoin and Crypto Commodities

• On Bitcoin’s “Immaculate Conception”

• Ethereum and Crypto Securities

• Ponzi Schemes And Financial Literacy

• Actual “Crypto Currencies” and Stablecoins

Enjoy and tell your frens!

The Libertarian Perspective & Its Biases

As a lifelong libertarian, the topic of regulation is one I have a natural aversion to. My intuition is to resist it, and my preference for a long time has been to keep the state’s grubby hands off “crypto”. Sadly, as the years go by, I’ve seen such a proliferation of fraud and ridiculousness in this industry, that today I have to hesitate and re-evaluate.

From dumb ponzi schemes using the Bitcoin brand to scam retail via centralized, low-tech websites. To tens of thousands of straight scams, be they Ethereum tokens or blockchain forks whose nature intentionally or not is that of concentrating wealth in the hands of founders from later investors. With few if any products, services, or solutions to back up that value.

This article explores the topic of crypto regulation. The more relevant proposed frameworks, what I think would make sense, and what impact they might have if any at all.

As a matter of principle, I have to remind my fellow ancaps and libertarians that fraud is a violation of the non-aggression principle. And while the state has a monopoly on violence, its processes are the lowest risk path to any kind of justice or retribution. As dysfunctional, corrupt, or inefficient as they often are.

I point this out not because libertarians don’t know this, but because as an intellectual movement, we seem to have neglected it. While the greats talked about fraud AFAIK, they did not have shitcoins and the internet to contend with. We do.

Years ago I warned that if crypto failed to regulate its excesses, then the feds would come and do it for us. Bitcoin advocates warned endlessly about the risks of crypto ponzinomic schemes for well over a decade, to no avail.

Well, the US government now has a very clear path to regulate crypto, given the 10’s of billions of dollars wasted and stolen by the likes of FTX and other CEFI. People are pissed off, they want blood. That blood lust is a red carpet for politicians and they are waltzing in. The question is, what regulatory structure will they erect? And which should they - if any? And, will it make any difference, given that fraud is already illegal?

We’ll see if the SEC and these laws have any real weight to them with FTX and Scam Bankman Fraud. If the US government will not prosecute SBF on what looks like very clear fraud, despite being part of their elite. If SBF doesn’t get hard time. Then we will get confirmation that the regulatory and legal systems are totally pay-to-play.

My mentor Ugly Old Goat sure seems to think the whole government is pay-to-play and corrupt to the core, starting with the FBI and the SEC. He actually served a decade in prison for wire fraud after his gold backed financial venture went under with the help of the feds decades ago. So it may very well be the case that all this regulatory talk is doomed to fail anyway.

Nevertheless, this article explores the topic from a good faith perspective, addressing the empirical realities and attempting to establish reasonable moral frameworks, which a functional government that is not entirely doomed should be able to approach.

“Know Your Customer Laws” and Identity Theft

First let’s address the most obvious and insidious form of ‘regulation’ that has been plaguing this industry for a decade - know your customer laws (KYC). Every efficient business in the world is going to want to know its customers, of course, if you don’t know who you work for, you are very unlikely to be able to deliver to them what they want.

That’s not what KYC is about though, it's about telling the government who your customers are. It is about forcing businesses to act as spies on their customers, without any warrants coming from law enforcement or probable cause being established in court.

KYC laws are a clear violation and deviation from the US constitution and nevertheless, they are pervasive. They have been implemented across almost most custodial exchanges, increasingly removing all environments for trade that do not require users to dox themselves to exchanges and thus, the government.

What is a "dox" you ask? According to the internet:

“Dox is a term used to describe the malicious release of private information, such as a person's name, address, phone number, or financial information.  It is typically done without the victim's consent, with the malicious intent of humiliating or damaging their reputation. Doxing can be done through various means, including searching public databases, using social media, or obtaining information through criminal means.“

While KYC compliance can be considered opt-in, given that no one is being forced to trade shitcoins or buy Bitcoin for that matter. It is funny how this fence of surveillance has been erected around the asset class that many consider an escape hatch from the sinking ship of fiat currency. What is the goal of this surveillance grid?

The expressed goal is to stop “money laundering” the act of concealing the origin and or destination of money that comes from illicit activities. In other words, in order to try and catch criminals *after* they have committed various crimes, globalist regulatory bodies like FATF want to force everyone - billions of people - to send pictures of their passports to financial institutions. Exposing innocent people to the risk of identity theft.

Who cares about these KYC pics you ask? Well criminals care, actually, especially organized crime that focuses on identity theft. See the stupidly frustrating consequences of KYC laws are gigantic hacks resulting in mass doxing of innocent people - people who are just trying to save for their future and their family’s.

• 45% of US companies have experienced a data breach

• In 2019 a hacker alleged to have hacked 10k pictures of KYC selfies from Binance, related to  the 40 million USD ( in BTC) hacked from the exchange

• 14,717,618,286 data records have been lost or stolen since 2013

"According to statistics from Surfshark, the United States experiences the most data breaches of any country. In 2021, 212.4 million users were affected (compared to 174.4 million in 2020). In second place was Iran, with 156.1 million breached users in 2021 (up from 1.4 million in 2020)."

The result of this regulatory pressure to centralize and distribute KYC data is - I’m convinced - a major source of identity theft, one of the biggest forms of theft in the world, and it results from the digitization of legacy finance.

You see, the financial system was built on verifying access to accounts and credit via analog ID authentication processes such as asking for your name, social security number, address, phone number etc. They are thus regulated as such.

Credit cards work this way as well. Broadcasting the information you need to make payments through various internet networks, creating many points of possible exploitation and fraud. This may have worked in an era where records were kept in paper, at physical banks with serious security, But in the digital age? It's hard to imagine a worse way to do finance.

These processes are far inferior to those used in Bitcoin. Every time you show your ID to your bank teller, you are essentially showing them the password to your bank account.

But the cryptographic technologies popularized by Bitcoin solve this with elegance.

By signing a cryptographic contract -so to speak- with your private key, the 12-word seed and its derivative secret stored on your device, you are providing undeniable consent of your will to transact.

The authenticity of the private key can be verified by third parties using the public key associated with your BTC balance as it is itself derived from your private key.

This way, anyone can authenticate your ownership of the bitcoins on that public address or transferred from it, without needing to know anything else about you, be it your name, race, age, gender or nationality.

Is there anything more American than that?

Instead of embracing this technology, however, Senators like Elizabeth Warren want to force surveillance of all financial transactions by anyone they can catch with this umbrella, the whole world ideally. Meanwhile, they are trying to hire tens of thousands of IRS agents to go after your 600-dollar plus payments. As if they couldn't just print more money to fund their pet projects, as they usually do.

The result is tens of billions of dollars in identity theft in the USA alone, every year.

• In 2021 total identity fraud impact, by combining traditional identity fraud and identity fraud scam statistics, resulted in $52 billion of loss affecting 42 million U.S. consumer victims

That is like an FTX blowing every year worth of losses to the US economy alone.

KYC-less authentication of financial balances as demonstrated by Bitocin can reach much further than the banking system and provide financial opportunity and access to people with little more than cheap mobile phones. Really lifting up minorities and the poor, which progressives like Senator Elizabeth Warren claim to care so much about it.

But what does she do instead? Propose a bill that would force all crypto wallets to demand KYC information from their users and authenticate it against databases. Likely resulting in more people leaving their coins in the hands of exchanges like FTX, as the benefits of private wallets would drastically diminish and many wallets would go offshore or simply close shop. Warren’s timing, in the shadow of the FTX blow-up, is really absurd.

The bill she is proposing is far worse than just KYC wallets, it is truly draconian, demanding licensing for Bitcoin and crypto open-source developers. Thank God it is unlikely to pass, as 99% of her bills have failed.

However, it is legislative attacks like these that we need to be aware of. While many in Bitcoin believe that political action is futile or against the cypherpunk ethos, I have to strongly disagree.

The early cypherpunks were political activists, yes they wrote code rather than become politicians, but when push came to shove, they took political action by traveling across the pond with cryptographic algorithms printed on their t-shirts and changed law as a result. These are political acts.

Today, we need to support Bitcoin and crypto defense DC groups like Coincenter who, even though they may be crypto agnostic, stand in defense of the cypherpunk principles and clear benefits of these technologies. Defending it ignorant or malicious political attacks like those from Elizabeth Warren.

Finally, It must be said that KYC is not about money laundering, as the vast majority of money laundering is done in dollars, through major banks, by the dark money pools of the intelligence agencies and the military-industrial complex.

That’s where the real money laundering happens. That AML is their biggest concern about Bitcoin is ridiculous. What they want is for the plebs, you and me - to not escape their financial panopticon. The open-air prison of surveillance and technocratic manipulation that they so salivate to raise around our every move.

Power tends to corrupt and absolute power tends to corrupt absolutely. Elizabeth Warren should be more worried about the money laundering happening via FTX, Ukraine, the military-industrial complex, and her own political party, than innocent civilians trying to escape the financial calamities of the socialism her party continues to push.

Finally, I'll mention that technological solutions to the identity theft problem are being explored. Some with far more dystopian designs than others. It may be that this is the only real path to solving this massive problem, aside from regulatory reform of KYC requirements. But that is certainly a topic for another time.

That's it for now. I was going to publish the whole article in one go, but it was over 5000 words and the editing process is overwhelming. Best break it up in two parts.

Expect part 2 soon. Cheers!

Juan Galt.

A first-hand account of the new Bitcoin Society emerging in El Salvador. We look at of the top Bitcoin companies working on the needs of Salvadorians, the public opinion of Bitcoin in El Salvador, national politics, regulation, and naturalization.

I write this as I sit in an Airbnb in San Salvador, the capital city of El Salvador. The Airbnb owners accept Bitcoin for the rental of a beautiful property, lush in green spaces.

The cigarette I’m smoking can also be bought with Bitcoin alongside a good portion of the activities I’ve taken part in this month. From making friends with an Uber driver for long trips, paid in Bitcoin. To orange pilling, a Jujutsu gym in under 10 minutes, and even a lifeguard turned surf coach who gave me the best surf session of my life.

El Salvador really is Bitcoin country.

Of course, nothing is perfect and adoption in El Salvador is far from complete. Many stores still don't accept Bitcoin payments, often out of a lack of know-how or past bad experiences with Chivo, the government Bitcoin and lightning wallet.

While it is great to have the government get out of the way of Bitcoin companies and even facilitate integration with legacy institutions, it is also interesting that the country is Dollarized, leading to a direct comparison between Bitcoin and the most stable and wanted currency in the world, the US Dollar.

A small but significant percentage of the population are skeptical of Bitcoin’s utility, quoting the price volatility and depreciation of BTC over the past year as well as skepticism towards Bukele’s government.

In particular, some corporate interests are rumoured to be concerned about losing access to the banking system, which would be a massive blow to their business operations, leading to resistance and concern about the Bitcoin laws and adoption.

For the most part, however, the Salvadorians I’ve interacted with are open and even eager to understand Bitcoin and how it can help them in their personal and professional lives.

The challenge however is precisely in that. How can Bitcoin help the average Salvadorian?

Many start-ups, VCs and entrepreneurs are here trying to answer that question. If Bitcoin can succeed in El Salvador, while competing directly with the Dollar, then what ever start-ups facilitate that I believe will be able to spread like wildfire in other countries. Especially when competing with other failing ‘pesos’ rather than the mighty greenback.

The following newsletter will give you an overview of some of the top companies working to address the needs of Salvadorians and in doing so, unlock the next level of Bitcoin technology. It will also give you an overview of the national politics, and public opinion towards Bitcoin in El Salvador as best as I could gather during my trip here.

So, without further adieu.

Table Of Contents

• Banking in El Salvador

• Public opinion of Bitcoin in El Salvador

• Start-ups, Exchanges, and VCs

• Final Thoughts: What Is At Stake In El Salvador

Banking In El Salvador

Let us begin with the legacy institutions, as they illuminate the gaps in the market that Bitcoin can address and give us a lay of the land when it comes to financial access.

El Salvador has a population of about 6 million people, with many more abroad. As we have talked about before in my previous newsletter about El Salvador, remittances are a major source of income for the country. So we will not focus on that area as much today. Of those 6 million only about 1 million Salvadorians are reported to have bank accounts. This is a rather wide gap that Bitcoin has already begun to fill.

With the launch of Chivo wallet, the lightning app supported by the ES government, 4 million people were onboarded to the financial system. The Chivo wallet is the most viral success story of Bitcoin adoption in recent memory and perhaps in Bitcoin history, though the follow-through from Chivo has been spotty at best.

With government backing, Chivo offered $30 USD worth of BTC to all Salvadorians, which fueled its massive spike in downloads. Many sold that BTC which represents 2 days of the average salary in the country. Some kept it and rode it down from the early year highs of 50k or more. Leading to some upset about Bitcoin’s stability as a currency.

The launch and continuous service were spotty, its not easy to onboard 4 million users in days and their infrastructure was hardly ready, never the less the Chivo team has continued to develop the platform such that I’ve personally made payments to Chivo wallets from various vendors here without much issue.

One of the key advantages of Chivo is its access to banking. Salvadorian people are used to US Dollars and in particular cash. Thus the first question that needs to be answered for Salvadorians in the process of building trust and confidence in Bitcoin infrastructure is - How do they cash out?

El Banco Hipotecario, a publicly owned bank started over 100 years ago was Chivo’s answer. Lead by the executive branch of the ES government, El Banco Hipotecario has provided the main rails into the banking system for Chivo users. It is likely responsible for cash-flowing ATMs and even allowing the purchase of Bitcoin from Chivo.

I had the pleasure of talking with the lead of ‘crypto’ within El Banco Hipotecario and he told us that getting a bank account with them was actually quite easy. As an exchange, all you need is a Salvadorian corporation and a compliance officer. I suspect not many exchanges actually know this, but if true, it should lead to fast banking adoption for exchanges that set up shop in El Salvador.

Other banks however seem a lot more cautious, as they are private and likely don’t have as much negotiation leverage with the international banking and settlement system. With the IMF breathing down El Salvador’s neck, their hesitation is understandable.

Part of the process of becoming a legal Bitcoin operator in ES is getting incorporated and getting a Bitcoin Service Provider license. Which should let exchanges operate in the country legally and get banking, we are told by Daniel Fortin, a local lawyer who focuses on this market.

Of the wallets I got to test in the country, only Chivo had access to Banking, although Athena, a well-known Bitcoin ATM company is also a major player in the country and probably has banking. Daniel tells me over 60 companies have gotten licenses in the country since the Bitcoin law, so many apps with banking access are likely to follow.

It is important to note that Chivo showed about 2.2% commission or spread during a cash-out test from BTC, while Athena is rumored to have upwards of 5-7% spread. 2% is tolerable for businesses if done at a certain scale. 5-7% is a net loss and likely to eat up much of a restaurant or small business’s profits. So there’s significant work to be done here in terms of liquidity and ease of exchange into USD, for El Salvador.

Public Opinion of Bitcoin in El Salvador

Before we get into the many cool and promising startups in the country, I want to go into more depth about public opinion of Bitcoin in El Salvador. This information comes primarily from my conversation with Salvadorians in El Zonte, the famous Bitcoin Beach, as well vendors, small business owners and uber drivers in San Salvador.

Let’s begin with those who already accept Bitcoin as payment

Seen among small and large businesses, they tend to treat it as simply another payment method. In El Zonte in particular many restaurants have it well integrated into their payment flows. The Lightning Network has been working well enough down here that payments are instant and often painless, with a transaction fail rate in my experience of maybe 1 out of 8.

These businesses are most likely converting to USD immediately with a smaller portion of them may be stacking sats, though given the dramatic fall in Bitcoin’s price this year, my sense is that most are a bit weary of holding BTC value.

Next, we have individuals who serve the tourism industry or who are not used to getting Bitcoin clients but are willing to accept payment. Such as my surf coach in El Zonte who helped me grab more waves than I’ve ever gotten. Or the Jiujitsu master who gladly took our bitcoin after just a few minutes of guidance with the wallets.

These types of users seemed more flexible and open to holding BTC value, curious and cautiously interested, though also interested in the off-ramps. Vendors of this sort in particular need to be able to cash out. Or at least hold value in Dollars, as bills are still denominated in USD despite the possibility of paying them in Bitcoin.
Banked or not Chivo is a cornerstone of adoption as it provides ATMs and banking access throughout the country, vendors often moving coins from other wallets to Chivo to cash out, or going to Athena or Chivo ATMs.

The circular economy is not robust enough yet, it seems. And you have to keep in mind that during a bear market, it can be hard to sell people on hodling BTC, especially when they’ve never really seen a bull market.

Next, you have the portion of the population that is aware of Bitcoin but has not integrated it into their payments

These tend to be medium size chains or restaurants that simply have not gotten around to it. Perhaps their owners are stalling, or they have not seen sufficient demand. Either way, they have not been nudged to accept it, and often can be paid with credit cards, thus their need for Bitcoin is not particularly strong.

As the country’s Lightning wallets develop and gather greater market share, I expect them to become more interested in USD value being received through lightning rails, since they’ll be able to save on hefty credit card fees. Sometimes as much as 3 USD per transaction, pricing out a whole portion of the market.

In fact, it is in this niche, the of purchase sub 5 Dollars items that I’ve seen lightning shine. El Salvador is a relatively poor country, yet it is Dollarised. That means even a Dollar or two is quite a meaningful amount of money, often equivalent to half an hour of work.

With a couple of bucks here you can cross the city in an uber or get some groceries for the next morning’s breakfast. These transactions are priced out of the credit card networks, however. An excellent niche for lightning that is waiting to be popularized.

Le Resistance

Finally, you have those that are passively or actively resistant to Bitcoin. I only really met one person who seemed to have a political resistance to Bitcoin, more related to Bukele’s politics and concerns about his strongman leadership. Their argument focused on the volatility of BTC which is understandable.

Another member of this group seems to be the big business class. Some exporters of agricultural products were rumored to be afraid of retaliation by the IMF and international banking system, such as sanctions, or limits of money transfers through the banks.

They are afraid of getting cut off from their clients abroad. This concern is likely the same for banks, as well as any other exporters and importers. While this was only a rumor I heard in a meetup and I have no source to back it up, it seemed important enough to mention.

No one really benefits from sanctions in an interconnected world after all. The good news is that other nearby neighbors with tight economic bonds to El Salvador are also expressing interest in Bitcoin, such as Nicaragua where most of ES’s beef seems to come from. If such banking limits came, unlikely as I think they are, then Bitcoin would likely take the blame, but would also become the only option for international trade in El Salvador. I have no reason to think this scenario will come, but some appear to be considering it.

My conclusion in terms of public opinion is that a viral payments app, that allowed USD value to move freely in the country with robust on and off ramps to cash, could probably take over the payments market in El Salvador. Integrating the hesitant, and resolving concerns about volatility, while using the Lightning Network as a settlement layer and transmission rail.

The question is, which lightning wallets and companies will build the infrastructure and feature list needed to get product market fit?

Start-ups, Exchanges, and VCs

CHIVO

We have already talked about Chivo Wallet, the ES government’s Bitcoin payments wallet and infrastructure. It includes ATMs fairly spread out throughout the capital and other sizable demographic areas. They have banking with the country’s public bank, Banco Hipotecario.  

Chivo achieved a great milestone in terms of adoption, allegedly peaking at roughly 4 million installs within the first few days, though use is likely way down, a decent portion of that infrastructure is never the less laid out, many people in the country have Chivo wallet installed, or had it at one point. They just need a good reason to use it.

The main issues with Chivo have been around proper support of Lightning as well as reliability of service.

LN invoices are not always available, including at Chivo ATMs, and payments can sometimes be delayed hours, given their infrastructure is centralized and I suppose their team is struggling. There’s a very interesting interview with some of the early developers of Chivo where they talk about the inside baseball of the launch of Chivo if you are interested.

Chivo’s feature list I think is exactly what is needed to go viral in El Salvador and bring much of El Salvador into the 21st century of finance. The devil however, is in the implementation details and here I believe there is plenty of room for competition, in particular, reliability and branding as separate from Bukele’s rule.

Galoy

Enter Galoy, a Bitcoin and Lightning infrastructure company building banking grade open source technology for wallets and organizations. Galoy is the rising giant behind Bitcoin Beach, Stablesats, as well as the Adopting Bitcoin conference which brough to El Salvador incredible talent and signal this 2022.

Bitcoin Beach

Next in line has to be the Bitcoin Beach Wallet.

Like Chivo, Bitcoin Beach is a custodial wallet, although it has a beautiful and feature-rich user interface. Developed by Galoy a software developing firm positioning itself as the red hat of Bitcoin, Bitcoin Beach supports USD-denominated value storage and transfers through a protocol called Stablesats.

Bitcoin Beach does not currently have banking integration, however, they likely have the second or third largest adoption in the country - counting Strike - and are well positioned to be the killer app that brings financial inclusion to the country.

Stablesats also referred to as synthetic USD, allows Lightning wallets to hedge any amount of value in Dollars, through the use of centralized hedging contracts. Bitcoin Beach  Co-founder Chris Hunter told me during a Q&A session that they used OKX as their exchange for their liquidity and derivatives markets.

Stablesats splits all value placed in the USD account into two portions, leaving 50% in BTC off-exchange and depositing the other 50% on OKX with which they use to short at 2x leverage.

The result of this strategy is an interesting amount of stability. If the BTC price went to down any amount, the Dollar value saved by Bitcoin Beach users would be whole. If the price of BTC went up 100% however, the shorts would likely get liquidated, but the 50% of that value left in Bitcoin off-exchange would also double, resulting in the USD equivalent value of users remaining whole.

Liquidation seems avoidable as well since you could lock in the gainz of the BTC cold storage portion of the USD liabilities and use it to add the corresponding collateral to the hedge short.

This hedging strategy is pretty cool and as a trader, I have to express some respect for its balance and design. There might be other scenarios that carry risk to stable sats, in particular liquidity crises or thin order books, but in general, they do seem reasonably stable.

The major risk is that, compared to USDT or USDC, Stablesats have two counterparties involved instead of one, the derivatives exchange, and the wallet custodian. Perhaps the custodian relationship could be controlled further by multisig arrangements or other ‘smart contract’ solutions on top of Bitcoin. We’ll see.

The major benefit of Stablesats right now is that any wallet can implement it, and since there’s no stablecoin involved, really, then USD value can be moved at the speed of Lightning across wallets that support Stablesats, without the fees usually involved in onchain USDT/USDC transfers.

One observed downside however is that, when sending USD value over LN rails across Bitcoin Beach wallets, sometimes the sent and received amounts are different by a penny or two. Likely because of variations in price between the moment the receive wallet locks in USD value, and when the send wallet locks it in. If the price moves 0.1% in those 30 seconds, that will result in tiny variations on USD value received. At the end of the day, users are just sending Bitcoin after all, and not US Dollars.

DitoBanx

Another startup mentioned multiple times but which I did not consciously experience was DitoBanx. They seem to offer payments infrastructure for retail as well as corporate credit. Such as Bitcoin-backed loans.

I’m not sure if I ever payed for food into a DitoBanx terminal, however, they are developing a wallet which I saw a demo of, and it looks very promising. It includes a slick black-and-white interface with a digital credit card and NFC support.

It will be interesting to see how they develop, given that, unlike many countries, Bitcoin startups can actually get licenses and banking in El Salvador.

Mi Primer Bitcoin

I’ve long maintained that meetups are the primordial institution of the Bitcoin community.

Mi Primer Bitcoin however is taking this to a whole new level. The education events they are hosting all over the country are teaching normal, everyday people how to get, backup and restore bitcoin wallets by the hundreds.

They are also teaching Salvadorians the fundamentals of money and Bitcoin in a 10 week course which is very impressive. I got a chance to go over their workbook and waw, solid foundations. The Salvadorians that get past this course are going to come out on the end as very strong Bitcoiners and could have a solid jump-off point into deeper development courses such as that taught by Jimmy Song.

Bitcoiners can come and join any of these meetups and graduations and personally ‘verify’ the knowledge of students, which is a great model. As far as nonprofits go, I think Mi Primer Bitcoin is really showing their proof of work.

Bolt.Fun

Another cool project which seemed to have a prominent presence at Adopting Bitcoin was Bolt.fun, an organization and website that ranks lightning projects and provides a gamified environment to share Lightning innovation and connect with other developers and entrepreneurs. This is a great plate to explore the lightning ecosystem, in particular as it grows into developing and unbanked markets.

Lightning Ventures

One of the most interesting crews at Adopting Bitcoin were Muzz and the team at Lightning Ventures. LV is a Venture Capitalist syndicate that invests in Bitcoin-only startups, often lightning oriented.

If you look at their investment portfolio, it includes heavy hitters and innovators such as Strike, Galoy, Scarce.city, Azteco, Breez, Start9, Swan and so on.

One of the cooler things about LV is that pretty much anyone can join their syndicate, allowing plebs like myself to invest a minimum of $1000 into start-ups that may one day become Bitcoin unicorns. Swan is a great example of a company that continues to grow even during a bear market, as demonstrated by their recent acquisition of the multisig wallet Specter.

LV also brings in capital from bigger players and ‘liquidity providers’ though I’m only starting to understand what that actually means. LV has a great podcast where Muzz and the crew interview various startups in the BTC/LN space, check that out to learn more and if you are interested in investing, go push the button!

Other Venture Capitalists

Lightning Ventures were not the only VCs in attendance at Adopting Bitcoin or investing in El Salvador Bitcoin adoption, I had the pleasure of meeting a lady called Sharon, who’s contact info I failed to get but who is doing deeper, long-term investments in this market as well.

I also met a gentleman who leads an investment fund on cyber security companies, given Bitcoin and Lightning is a security-heavy software movement, it made perfect sense to see him here, connecting with entrepreneurs.

Bitfinex

Finally, we have Bitfinex, who sponsored Adopting Bitcoin alongside Galoy and had a very active presence throughout the event. They are building payments infrastructure using the cutting edge of Bitcoin and cryptographic innovation. I’m very interested in one of their projects in particular called Pear Credit, a P2P wallet and transaction platform for credit and other fundamentally centralized assets.

The main question that Pear answers is, why settle something like USDT ontop of a blockchain, which already requires trust in the underlying banking institution when you can just transfer it using cryptographic proofs?

If you understand blockchain at all, you understand that Proof Of Work’s goal is to secure the consensus rules of Bitcoin, and the ‘blockchain’ is little more than an accounting system that can be cryptographically verified by users. If you are already trusting a corporation with the rules of the money, in this case USDT, then do you really need proof of work?

Perhaps all you need is cryptographic keys with which people can sign transactions proving ownership and consent as well as some kind of distributed accounting system. A blockchain without a utility token so to speak. This would mean free or USDT-denominated fees for transfer and no more middleman shitcoins to move fiat value! I honestly think that’s pretty cool and a far more honest software stack for fiat coins, equity and credit.

Final Thoughts: What Is At Stake In El Salvador

The fascinating thing about El Salvador is that it is both a Bitcoin-friendly country and a Dollarized country.

On the one hand, the government is not only out of the way of Bitcoin entrepreneurs, it is actually supportive and actively attentive. It’s a small country, a very different beast than the United States.

On the other hand, it is a Dollarized country. You know what I think about the Dollar, it is the best shitcoin in the game. The strongest currency in the world. Likely the last one to collapse.

So on the one hand we have a clear runway, on the other hand we are competing with the top dog directly.

Finally, we are competing for the hearts, minds and confidence of the Salvadorian people, whom have been getting hit in the face by all intents and purposes for decades and are just now starting to really flourish.

At least that’s the dream and vision.

If this Bitcoin experiment succeeds, whatever innovations come out of this country as victors, could be strong enough to lead the hyper-bitcoinization of the world! The game would be proven here after all, so other governments could simply open the doors and Dollarized or not, everyone would win.

If Bitcoin fails here however, well. Let’s just say it could be a very long bear market.

El Salvador is the cutting edge. Africa is pushing the envelope too, but ES has the attention of the world. If you think you can help move the needle forward here, if you think you can help deliver victory to Bitcoin and the Salvadorian people. Then maybe you should come. This moment, this place and these people need us.

And its not that hard a sell. From a lifestyle perspective, it is a solid country. Beautiful scenery, perfect tropical climate, solid beaches and restaurants. High talent arriving at the country and more than a few beautiful women living their best lives. It also feels quite safe, I have not had any issue, though crossing the highways can be a bit tricky at times..

From a tax and legal perspective, this country is kind of a home run for many Bitcoiners. Latino Americans can get ES citizenship within a year and save themselves all Bitcoin capital gains taxes. Taxes in general in the country are incredibly low as well.

It’s a bit more complicated for US citizens as you might expect but there’s still solid options available. Including the 100k purchase option, citizenship through marriage to a Latino American which shortens it to 3 years, or simply a 5 year temporary residency path.

I’m far from an expert on this topic of course, so just giving you the TLDR. But I had a chance to have dinner with “Escape To El Salvador”, one of the top companies helping Bitcoiners migrate to ES, and waw, I was blown away by the benefits of spending a year or two here at least, especially now.

There’s a lot more to be said for El Salvador’s legal advantages, especially for corporations and businesses. There’s some solid life-hacking potential here at a time when very fruitful seeds could be planted. But I’ll let them tell you about it, since that’s their expertise. Reach out to them on Twitter or at their website for more info.

So there you have it folks, a full report on El Salvador from a boots-on-the-ground perspective. Not exactly hard-hitting journalism, but I hope enough to give you a solid lay of the land. There’s a lot more to say but I’m already pushing the length of this newsletter lol, so maybe for the next one.

For now I’m going to go back home and reflect on what’s next for me these coming months, but needless to say, multiple doors have opened and I’m very much looking at the paths they might lead me and the world to.

All the best.

Juan Galt.

Over the past few weeks, Ethereum went through a major transformation. A ‘merge’ as they call it into a new consensus protocol called Proof Of Stake, which fundamentally changes the nature of Ethereum.

This change has been a long time coming, in fact, it has been planned since Ethereum’s very inception well over 7 years ago. However, it wasn’t until now that they had the confidence to pull the trigger so to speak, and leave Satoshi Nakamoto’s Proof Of Work, to venture into their own way of reaching settlement and consensus.

While Proof Of Stake algorithms (POS) are not new per se, Ethereum’s implementation marks the largest transition of consensus protocol of any cryptocurrency, changing the foundation on which billions of dollars of wealth stand, alongside thousands of developers, and hundreds of companies.

Indeed Ethereum has grown into a large enough financial platform that it can not be ignored, nor waved away, be it by the powers that be - who in my opinion have been its stewards - nor by Bitcoin believers, to whom I believe Ethereum poses a meaningful threat.

In fact, in this installation of the WTF Newsletter, I’m going to present my conspiracy theory about Ethereum, as not only a platform for future CBDCs launched and controlled by state & banking & corporate elites. But also as a political, market, and propaganda attack on Bitcoin, through the use of the globalist bureaucratic structure of Environmental & Social Governance or ESG.

Capitalism at its best is money without enshrined political power.

The state is a monopoly over the use of violence in a geographic area.

Oligarchy is direct control of the state by those with the most money.

Proof Of Stake is direct control over the consensus laws of a blockchain, based on money held.

Thus, Proof Of Stake is Oligarchy.

Here's a quick table of contents:

• WTF Is Proof Of Work?

• Why Is Proof Of Work Good?

• WTF is Proof Of Stake?

• POW VS POS

• Satoshi Nakamoto VS Vitalik Buterin

• Compounding Interest Stake & Oligarchy

• The Environment

• Hedging Your Bets - Final Thoughts

Now, before we can get into Ethereum and Proof Of Stake, we need to define what Proof Of Work is, as it is in its comparison that this debate and contest will be had for the foreseeable future.

WTF Is Proof Of Work?

Proof Of Work is the protocol that was invented to secure the Bitcoin blockchain. It is the part of Bitcoin that miners are primarily focused on. Proof Of Work (POW) like many things in life is a game, a great contest, a challenge.

In this contest, miners try to randomly find a number they can run through a cryptographic equation, the result of which has to match a target defined by the Bitcoin blockchain.

Kind of like throwing a pair of dice in order to get snake eyes.

This game’s natural economic incentives lead to a kind of technological race, where miners try to get faster and faster computers in order to guess the winning ticket before their competitors do.

The POW game can also be joined by anyone, from anywhere, at any time. It is egalitarian in this sense, even if your odds of success are low. You don’t have to be a bank, you don’t even have to have any Bitcoin. Fundamentally Proof Of Work is open to all.

You could even try to play this game with pen and paper and try your luck.

If you get lucky and ‘hit snake eyes’ you earn some bitcoin! You can then grab all bitcoin transactions that have been broadcast recently, validate that they have integrity in relation to the balances of the accounts they come from, and add them to the blockchain, claiming their transaction fees. Once this is done, miners seal the block and broadcast it to the network, earning their reward and restarting the mining game.

At first, miners could win 50 BTC every time they won. As time has gone on, the protocol was designed to lower this amount, cutting the reward in half every four years. This is what is known among bitcoiners as the halvening. This rule about mining rewards was decided before the project was launched by Satoshi Nakamoto, and has happened automatically since the genesis block. It is as set in stone as anything can be in the blockchain world.

As I’m sure you have heard. This POW game can be very energy intensive. This is because miners have taken it very seriously, and of course, they do, the reward per block even today is equivalent to over 120 Thousand USD for what could be as little as 10 minutes of work!

As a result, the mining industry has grown and become very competitive, with chip manufacturers developing computers called ASICS designed only and specifically to play this game. Hundreds of these computers can be found in farms across the world, submerged in weird goo that keeps them from overheating as they guess over and over the magic number.

Throwing those bitcoin dice, trying to get snake eyes.

The more efficient players get at POW, the harder the game gets, essentially adding more dice per roll. If enough miners stop playing the game, bitcoin makes the game easier, removing the appropriate amount of dice. This is known as the difficulty adjustment algorithm of Bitcoin, one of its most fascinating features.

If anyone wants to revert transactions made on Bitcoin, block other people’s transactions from going through, or try to force a change of consensus rules, they have to consistently win more times at this cryptographic dice game than all other honest Bitcoin miners combined. Not only do they have to win once, but multiple times in a row, as they are essentially trying to change history in a way that is incompatible with the Bitcoin consensus rules.

It is from this computing race that Bitcoin gains its censorship resistance and security. A defense that has so far held for over 13 years.

But why go through all that work??

Why Is Proof Of Work Good?

This is the fundamental question isn’t it? As you might imagine, the answer is both simple and complex.

In a few words, POW allows for Bitcoin which is first of all money, to stand tall thanks to a game of skill. And games of skill are good, because all other alternatives corrupt society.

What are the other alternatives?

Well, you could have one unelected centralized authority decide what money is, how much of it there is, and who gets to get free money if at all. We already have that, it is called the FED. A hierarchical, politically enabled monetary system. The FED has a legal monopoly to control interest rates across banks, while in general governments have a legal monopoly to create new money. If you and I do it, we go to jail, but for them, it is business as usual.

This is what the left likes to call capitalism. I call it crapitalism. Because how can you claim to have a free market when the government has such profound control over the money supply? The money the world uses to trade and value almost everything?

Another option of course is to let banks and corporations control the money supply. The difference between the FED doing it or some bank or corporation is hardly relevant. At the end of the day it is a handful of people with control of a fundamental resource of society, one which millions of people use to store their life’s work, save for a rainy day or invest in their children’s future.

Bitcoin changes the game. With Bitcoin, no one has such power, all money is equal, all players are equal.

And we need money if we like civilization. Without money, we would be hunter-gatherers, with a population hardly larger than that of chimps. If you like comfort, safety, and the joys of art and the human experiment and modern infrastructure, then money unfortunately is an essential tool.

However, how money is created and transferred becomes a power vacuum.

Those who are closer to the source of money get to drink first, getting fatter and leaving us the scraps.

This is often referred to as the Cantillon effect, also similar to nepotism, where the powerful give favor to their friends and family, and you and I are left in the dust, taking on the risk and cost of their decisions over time.

They get to invest with the fruit of our labor as we all use the same money, but they get to create it instead of earn it. A system that is fundamentally unjust, separating human beings into two kinds, those who can legally and morally create money, and those who can not. Guess which ones rule the world?

Bitcoin and proof of work is a roundabout way to fill and destroy once and for all this power vacuum, this ring of power. And even if it succeeds it will take time.

By turning the issuance and transfer of money into a game of skill that can be played from anywhere, by anyone in the world, it is no longer just the powerful and the wealthy who can create new money or decide who gets to make transactions by edict.

The supply of money gets capped at 21 million coins. And transactions get settled by a constant and fluid game of miners from all over the world competing for transaction fees and block rewards. Allowing you the freedom to send value from anywhere in the world, to anyone in the world, for relatively cheap.

Proof of work is fair and just, fundamentally anyone can play, and we all play by the same rules.  

But Juan, Bitcoin transactions are very energy expensive when you consider the respective energy cost of miners! How can that be worth it? What about the environment???

Are they expensive though? How valuable is it to society that money not be the play toy of political factions or be distributed to consolidate monopolies?

What is the price of freedom? :)

Bitcoin is backed by energy bringing security to the network in this game of Proof Of Work. What is fiat backed by?

Have you studied the history of fiat currencies? How many nations have been invaded, who tried to challenge the US Dollar? How many bombs detonated, lives extinguished and oil fields burned?

If the world really is capitalist, how much of that brutal machine of military might do you think exists simply to defend its money and the almighty golden crown of the FED?

You might benefit from the privilege of the US financial system, what about the victims of Venezuelan communism, or Iranian Islamic dictatorship? They, cut off from the US financial system through sanctions are total slaves to the boot of their local state. Except for Bitcoin which for years has been providing them an escape hatch.

A mini-documentary by yours truly.

Better yet, how valuable is it that the FED and its surrounding political establishment can not simply print money and take over Bitcoin mining? The FED can print neither computers nor energy after all.

They would have to buy uncountable amounts of ASIC computers, which don’t necessarily exist yet. They would then have to find talent to manage these computers without destroying them, acquiring human talent and good judgment which is harder to find than you might imagine.

Finally, the FED would have to source the electricity, enough of it to play the game and dominate all other miners, then they could regain their golden crown with Bitcoin.

(And then we would fork Bitcoin and fork over the FED lol.)

Of course, they’d have to sustain that power over time, while competing with Russia and China and every other nation with miners out there, also playing this great game. A game designed to maintain fairness and justice in money. A game that resists censorship, nepotism and oligarchy.

Or they could just print a bunch of fiat and buy up Ethereum.  

WTF is Proof Of Stake?

Unlike POW which spends energy and computing cycles to throw those dice and try to get snake eyes, Proof Of Stake (POS) considers one ETH, one vote. Stakers as they are called have to lock up whatever ETH they stake for the foreseeable future until the next upgrade™. In return they get to throw those dice and try their luck at an otherwise similar game.

If you are solo staking, you’ll need 32 ETH minimum to unlock a ‘validator node’, this lets you participate in the block production process and make choices about what transactions get mined. Similar to solo mining, the odds of winning the round are lower, but the reward is higher.

When you stake your ETH with a staking pool, you are joining forces with other ETH stakers, and handing over your ETH either to a smart contract or a third party, who should lock up your ETH in a validator node, reaching the minimum of 32 ETH.

This ETH is also locked up as per the nature of Ethereum’s current staking protocol. A staking pool might give you a ‘Liquidity token’ which you can go and trade in DeFI markets, but your ETH will not be directly redeemable until the next upgrade™.

POW VS POS

The inability to withdraw your staking consent from a particular Ethereum validator is actually very important. You’ll often hear that Bitcoin is centralized because of mining pools. You’ll see charts like these, which show you coalitions of miners trying to maximize their returns.

What those critics often don’t clarify is that not all of these are solo miners, the majority of them are pools of miners of various sizes. Foundry USA for example is one such pool that offers a variety of services to various miners who in general control their own hardware.

Unlike Ethereum Stakers, POW miners can remove consent and support for any mining pool at any time. If a mining pool gets too big, or there are reasonable concerns of collusion (as has happened before during the BCH fork wars), then solo miners quickly remove consent and mining power from the relevant pools, and grow their competitors.

With Bitcoin’s POW there’s also an aspect of geopolitics. Foundry USA is in the United States, obviously while F2Pool and AntPool are based out of China. This geographic and jurisdictional decentralization is significant and can mitigate the possibility of collusion or state interference.

Currently with Ethereum’s POS, if staking pools colluded, there’d be nothing you could do to remove your consent from these pools, other than selling your ‘Liquidity token’ at a loss.

You’ll also notice the third biggest staking pool in Ethereum as of the time of writing is Coinbase. Coinbase of course is staking with user funds, likely with their consent. Nevertheless, it is Coinbase that now has the decision-making power about what transactions go into those blocks, and which blocks get integrated into the blockchain.

When it comes to Bitcoin, Coinbase may have a significant portion of BTC in custody for their clients, but they can not affect the fundamental consensus decisions, they have no Proof Of Work.

This is a fundamental difference and one I believe makes POW a superior protocol.

Proof Of Work creates a separation of powers. The wealthy, the banks, the exchanges, the whales in Bitcoin don’t have direct influence over the consensus protocol. They Can Not Change The Rules. Ethereum whales, banks and exchanges can.

Satoshi Nakamoto VS Vitalik Buterin

Even if Satoshi Nakamoto himself came back from the dead or whatever private island he’s been chilling at for the past decade, and decided to throw his weight around. He would have the same problem anyone else has influencing Bitcoin’s fundamental protocol. Even with his alleged million BTC wallet, he’d have to compete in the mining game, get on the queue for mining hardware and find enough electricity to power them. He’d have to hire talent, likely incorporate his mining operation which carries a serious risk of revealing his identity, and finally try and push his weight around.

All of that to gain the power to censor transactions and reject his enemy's blocks. The worst he could do would be to try and change consensus rules but if history is any guide he would be met with fierce opposition, as demonstrated with the BCH fork wars. Not even Bitcoin Jesus - Roger Ver, a prolific seed investor in the early days of Bitcoin, responsible for the likes of Blockchain.com could survive such ambition.  

Vitalik Buterin on the other hand. How much ETH does he own?

Well, thanks to the wonders of Ethereum’s absurdly transparent blockchain, we can know this with decent accuracy, (if you think Bitcoin has privacy problems, wait til I tell you about Ethereum). According to some analysis including Vitalik doxxing his own address during a Shiba Inu incident last year, Vitalik holds around 330 Thousand ETH.

There’s a total of 14.8 million ETH staked right now, about 12% of the total supply. Assuming Vitalik staked all this ETH, he would control around 2.2% of all of ETH’s staking power today. Not a large amount all things considered, but not insignificant either. Of course, Vitalik’s influence is much greater than how much ETH he actually controls.

This brings us to another aspect of Ethereum’s centralization forces. With Satoshi Nakamoto gone, Bitcoin has had to navigate its own fate for well over a decade. Many political games have played out in Bitcoin and so far have arguably failed (though you may be in the minority that disagrees). With Ethereum they are only getting started. And unlike Satoshi, Vitalik is not anonymous. We know who he is, we know he is Russian - Canadian, we know he is a nerd.

Can he leave his role as soft power emperor of Ethereum? Even if he wanted to? Will he not be called upon if a consensus crisis occurs? Will he not be compelled to answer? Do you really believe he’ll resist the temptations to put his weight on the scale?

Worse yet, how do you know that Vitalik is not compromised? He may be a math wizard, I think we can give him that. But does he have the political cunning to avoid falling for some blackmail trap? I personally have an anecdotal experience which I can provide no evidence for that nevertheless has convinced me Vitalik is profoundly compromised. He is not a bad dude, but I believe someone has blackmail on him that would destroy his name forever.

The reality is, Vitalik is a huge target, with grand influence. Whatever direction he errs in, will carry great weight, and he probably can not escape it. Especially if someone has leverage over him.

How much influence does he have over the Ethereum Foundation? And how much stake do they have? Looks like the answer is 341k ETH. That’s 2.3% of all ETH staked, although most of it is likely not staked today, it could be on a crunch.

How about Consensys? How much ETH do they control? Or its founder and ETH ICO investor Joseph Lubin? These numbers surprisingly were not easy to find. While there is speculation about what they are, I could not find an ETH address, suggesting they are held in custody, likely at Coinbase or another such exchange.

Compounding Interest Stake & Oligarchy

How do the laws of compounding interest not apply to POS staking?

If you control a majority of ETH beig staked, and someone does. Someone out there has one ETH address that has more ETH being staked than anyone else, even if it's in the single digits. How fast will their average rewards stack relative to the rest of stakers?

If they controlled say 10% of ETH staked, and earn 5% as staking reward per year. How fast will they be able to gain 51% of ETH staked?

All else being equal of course, according to this compounding interest rate calculator, it would take about 33 years. In 33 years they would have enough ETH to dominate all other stakers today. Granted, this assumes a staker does nothing but reinvest their rewards. It also assumes that the share of ETH stake does not grow beyond 12%, but for the patient and long minded this game could lead to multi-generational wealth.

That biggest single share of ETH is fixed, if it is 2 million ETH, it can remain as such and only grow, one reward at a time. Every unit of ETH is not just a unit of account now, but a unit of power in the Ethereum blockchain. Their power in Ethereum as such is entrenched. There’s nothing anyone can do about that, short of hacking the owner, or somehow coercing them to sell, if they are not willing.

There is no space to compete with an ETH whale, no ability for the young to replace the old. No capacity for the competent to rise above the incompetent who will age out of touch with the average human experience. You could be born into this fortune and milk it for the rest of time. Eventually, it would take over enough total ETH to control Ethereum’s consensus protocol directly on a whim. Even if everyone else was also reinvesting all their staking rewards.

On a long enough time frame he who has the most ETH wins.

If the consensus protocol of a blockchain is akin to the constitution and laws of a country, then one party controlling the consensus directly with how much money they have is nothing short of an oligarchy.

Capitalism at its best is money without enshrined political power.

The state is a monopoly over the use of violence in a geographic area.

Oligarchy is direct control of the state by those with the most money.

Proof Of Stake is direct control over the consensus laws of a blockchain, based on money held.

Thus, Proof Of Stake is Oligarchy.

The Environment

As you know, I’m not a believer in man-made global warming, as I’ve seen enough bullshit from these types come and go over my lifetime and in recent history. But at the end of the day it is a decision and judgment call you have to make, and invest your time and coin accordingly.

Speaking of oligarchy, let’s talk about ESG. This bureaucratic globalist superstructure that tries to price the costs of CO2 emissions of industry by edict, is the blood and nervous system of the international government being erected.

This structure is not based on market pricing, but on a manipulable laundry list of checkboxes and the judgment of rating agencies that can make any argument they wish.

The weather after all has as many variables as anything possibly could have.

So while the intentions of the environmentalists might be pure, the machine they are defending is controlled by a small unelected elite. And it is being used as a political weapon, aimed at the very foundations of our civilization.  

The WEF, the biggest cheerleader of the end-of-the-world environmentalist narrative, is the most visible head of this international hydra. And just as they have used the ‘end of the world’ climate change narrative to bash the gas industry into submission, making Germany for example dependent on foreign energy, so are they planting the seeds now to do the same against Bitcoin mining.

Funny how quiet they are, now that the Russian pipelines got mysteriously blown up, releasing uncountable amounts of gas into the atmosphere and ending the immediate possibility of peace with Russia. But that’s a story for another time.

The lines on the sand have long ago been drawn and the line of attack is clear. Bitcoin, no matter how renewable its sources of energy might be compared to other industries, will be attacked and smeared consistently as a waste of energy that can only destroy the environment.

This is repeated mindlessly by ‘journalists’ daily and twats proclaim it self-evident without the slightest consideration to the value Bitcoin provides them and the world, or the evidence for that matter. Or the realities of Bitcoin’s energy use.

Ethereum’s elite knows this, they’ve known it from day one. This environmental FUD after all has been plaguing Bitcoin for well over a decade. Even Hal Finney was concerned with Bitcoin’s potential CO2 footprint, which goes to show how deeply rooted this narrative is, in our era.

And thus, Ethereum is aligning itself with the World Economic Forum, alongside the corporate and anti-national elite who brought us greatest hits such as the Covid lockdowns, and every farmer revolt in recent memory.

It is thanks to them after all that Europe is seeing giant leaps in gas prices, as their efforts to destroy the energy industries of Europe have been quite effective, while ‘sustainable energy’ sources barely scratch the surface of the energy needed to maintain our civilization.

Last but not least, JP Morgan is being reported to have basically purchased a major stake in Metamask -the biggest Ethereum wallet - and Infura the biggest Ethereum archival node from Consensys, in exchange for 39 Million USD back in the summer of 2020. This gives JP Morgan, another great head of the hydra, a powerful position in the Ethereum ecosystem.

Add to that the knocking down a peg of Tornado Cash - the privacy mixing service smart contract - by OFAC a few weeks ago who put the smart contract address on the US government’s biggest shit list, and we have a very clear setup for where Ethereum is going.

Major staking pools are already blocking Tornado Cash transactions in compliance with OFAC, what other laws are they willing to enforce in the future at a consensus level?

A similar tactic was tried against Bitcoin, with a mining pool becoming explicitly OFAC compliant, this stunt lasted days and was mocked out of existence.

At the end of the day, the FED and other banking interests can not print energy or ASICs, they can only print money, that is the source of their power. Leaving Ethereum as a much easier target. After all, what is the ability to print money at will - a kind of counterfeiting -  but the fundamental problem that cryptocurrencies are trying to solve? The fundamental power they challenge?

Making yourself more vulnerable to the printing press is to surrender to ‘the powers that be’, rather than take a stance against them.

As such I believe Ethereum is set to become a market, propaganda and regulatory-based attack on Bitcoin. Its Proof Of Stake consensus will be used as an example of why Bitcoin is so ‘wasteful’ and this argument will be brought to every relevant politician and regulator.

WEF types might even see their ability to control Ethereum’s consensus layer via soft and hard economic power as a fertile ground on which to grow their CBDC monstrosities. Central Bank Digital Currencies, the final form of the fiat system, a digital currency with Chinese-style surveillance powers and controls.

Bitcoin in turn will continue to be pushed to the fringes. Adopted as a sign of rebellion against the technocracy. How the dust settles will only be known in time.

Hedging Your Bets - Final Thoughts

The choice is simple. A bet on Bitcoin is a bet on a game of skill that is resistant to censorship and oligarchy.

A bet on Ethereum is a bet on the globalist, international government superstructure being erected by the likes of the WEF.

I don’t know if I made a compelling enough case for that reality in this article, but that much is clear to me.

Not long from now, Ethereum people will realize this and a fork war will be waged, if we are lucky. This new consensus game will be tested, and someone will come up on top.

My political and moral preference is clear, I want Bitcoin to win. I see little come out of Ethereum other than ponzi schemes by other names. Ponzi schemes fleece the financially illiterate retail buyers, and concentrate gains on the hands of the shrewd and the cunning.

If it doesn’t have a product, does not offer a useful service, or does not build needed infrastructure, then it is a ponzi scheme.

But as a betting man, even despite 4000 words on the issues with Ethereum, I have to recognize that it makes sense to hold some ETH. I just want you to understand what you are betting on.

The fact that Ethereum is aligned with the oligarchs and global elite is hardly bearish.

We are in for a wild ride.

All the best.

Juan Galt.

A favorite strategy of the wealthy and ambitious of our era is voting with their feet. The idea of the perpetual traveler, the perpetual tourist has been popularized and polished for well over a decade. The dream of working off your laptop out of a Caribbean beach while you pick shrimp off a “Vuelve a la Vida” is rooted deep within our generation. I’ve lived it, it has its perks. ‌‌‌‌But deep in this outlook on life and politics is a dilemma. We know ‘they’ are coming for ‘us’. I hate to use such paranoid and conspiratorial language, so let me clarify. ‘Us’ is everyone middle class or under throughout the world. ‘They’ at the very least are the WEF whose agenda is public and unambiguous. ‘They’ are not a creed, a race, or a religion. They are a political and economic class, an oligarchical cult of power. And they don’t like the competition. We are the competition. ‌‌

‌So the WEF wants eco & bio marxism, installed and activated throughout the world. And the trick is, they can’t just start with one country at a time. They have to activate their new world order in as many countries as possible. Because you see, any city and state that rejects their eco-marxism will become a shining beacon of freedom. Casting their machinations into the shadows of suffering. ‌‌‌‌We saw this play out with the Covid lockdowns, actually. While the world was imprisoned in their homes over a virus with a 99.9% survival rate - for most - the seeds of his economic recession and possible depression were being planted, sowed, and watered. Texas and Florida in particular stood out. They were among the first in America to free their people from medical tyranny and the baton-wielding Karens of the world. And soon the covid & economic statistics began to shine in the free-er states.

That light, shining from Texas and Florida cracked the lockdown regime in the US. It provided an escape hatch, as we saw a massive internal migration of Americans, escaping the bleak, depressive outlook of the lockdown states.

The same can happen with eco-marxism aka the climate change agenda. The WEF’s intentions and the consequences that follow are explicit. Energy prices will go up as a result of the over-regulation of energy. It is our ‘duty’ after all, to starve and become impoverished so that “the world doesn't end in 12 years” - they tell us.

Food prices will increase - they admit - as Dutch farmers, the second largest food exporters in the world get punished for using fertilizers that have fed the world for 100 years. Farmers struggle to source diesel, raising the costs of production for them and thus for us. ‌

So what do we do? Where do we run? Is there any place to hide? Maybe, but hiding is for losers. The question is not ‘where will you be safe’ - but, where are you willing to take a stand? ‌‌‌‌Sun Tzu's The Art of War teaches readers to fight, only when they have the advantage. To retreat when trapped. To seek the high ground. What high ground will you pick? At some point, we all have to be willing to draw a line on the sand and say NO MORE. Where do you want to be when that day comes?

El Salvador - Bitcoin country

I don’t know if El Salvador is the mecca or not. But as a believer in Bitcoin and its promise, I have to take it seriously. ‌

‌What’s there to take seriously, you ask? Here’s the recap.

• Bukele’s War on MS13 has brought homicide rates to historic lows, and peace is on the horizon.

• Tourism booms as Salvadorians report feeling safe in their country, returning near pre-covid levels.

• International capital investment into the country is booming, with talent entering the country in the hopes of riding the Bitcoin wave.

• New securities laws are being developed to fit the digital age, which if done right could turn El Salvador into a Latino American Hong Kong.

• No shitcoins policy means that the financial ignorance of many won’t be exploited by fly-by-night shitcoin hustlers and ‘DEFI’ marketers, opening the doors of real capital investment into infrastructure, products, and services.

• Bitcoin being regulated as legal tender means there are no capital gains taxes for Bitcoin hodlers. That is bound to attract Bitcoin owners from across the globe.

On the 7th of September of 2021, El Salvador approved the Bitcoin Law, regulating BTC as Legal Tender in the country. This announcement means a lot of things to a lot of people. What I see is a huge opportunity for Bitcoin and the ideas of many of its proponents to be put to the test.

The Bitcoin law is also a consequence of good leadership - in my opinion - on behalf of President Nayib Bukele, alongside a population that seems ready for growth, peace, and good change. ‌

‌Now I could jump into statistics and numbers. But, do you see the promise?‌‌‌‌If El Salvador can continue on this trend, and separate itself from the IMF’s questionable loans and policies. Secure its country from the gang violence that has plagued it for decades. Reform its securities laws to be agile for the crypto era. Open itself up to software entrepreneurship as Silicon Valley did decades ago. Mine Bitcoin at an industrial scale. Become a global tourist destination. And on top of that modernize its infrastructure and expand its exports.‌‌‌‌Well, I see a bright future for El Salvador.

Imagine being on the ground floor of Hong Kong, or Dubai. Imagine having the chance to invest in Venice during the first few years of its inception!

I don’t know. I’m excited. However, it's not all sunshine and rainbows. There are serious risks and hurdles for El Salvador to overcome if it is to fulfill this promise. Risks which I touch on in this issue of the WTF Newsletter. Risks that not everyone has the stomach for, and that’s ok. ‌‌‌‌However, It is to assess those risks and get a real sense of where the country is going, that I will be attending a Bitcoin conference in El Salvador this November 2022. ‌‌‌

‌The conference is called Adopting Bitcoin, and it is start-studded with Bitcoin OGs, Twitter celebrities, and entrepreneurs. The cost of renting and having a good time in El Salvador is what you would expect for a Latino American nation - cheap. ‌‌‌‌And the price to attend is very low! at 300 USD equivalent payable only in Bitcoin.

Better yet, with coupon code WTF2022, you get $50 dollars off! ( Coupon expires mid-September)

I can’t even. I’m sold, and maybe I’ll see you there! I have to see what’s really going on in El Salvador!‌‌‌‌Anyway, in the meanwhile, here are economic facts about the country since their announcement of the Bitcoin Law, as well as my thoughts on the promise of El Salvador and its challenges ahead.

Macro & Opportunities for El Salvador

Since the announcement of the Bitcoin Law, the country has since received a great deal of attention, both positive and negative. ‌

‌The IMF has refused to give loans to El Salvador thanks to the Bitcoin Law, while Bitcoin millionaires, entrepreneurs, and companies from all over the world have entered the country, seeing investment opportunities.‌

OG Bitcoin Investor meets with El Salvacor President Nayib Bukele.

Tourism as a result has flourished, reaching near pre-covid highs.

“The report by the WTO states that some “Central American destinations have the best results compared to 2019,” including El Salvador at +81% compared with 2019, or pre-pandemic levels.

Contrary to reports from the Wall Street Journal that El Salvador’s bet on Bitcoin to attract tourists “hasn’t worked,” visits for the first half of this year almost outpace total visits in 2019: 1.1 million people visited the country in six months, compared to last year’s total of 1.2 million.”

Tourism of course brings money to the local economy, boosting GDP.

In fact, despite the stagnant collapse in the price of Bitcoin and markets in general over the past year, El Salvador’s GDP grew over 10% in 2021 with a strong bounce from 2020, and that trend is on track to continue.  ‌

‌Remittances are flowing into the country with a reported 1.6% being in Bitcoin, with a high of 3 Million USD in one day late in 2021. These numbers may not sound like much in the context of 6 Billion in remittances received by El Salvador each year, but is a big jump from what was probably much closer to zero before the Bitcoin Law.‌‌‌‌If Bitcoin and The Lightning Network can truly provide cheaper rails for remittances, then this number should continue as Bitcoin understanding and adoption grows among Salvadorians at home and abroad. ‌

‌As Legal Tender in El Salvador, Bitcoin transactions are not in eternal conflict with the state. There are no potential capital gains taxes on every coffee you purchase, eliminating a large disincentive to use the coin as currency, by normal people.

Better yet, if Bitcoin can actually function as a currency anywhere, then El Salvador should be a place to figure out how to make that happen. With the state, for all intents and purposes out of our way. ‌‌‌‌In this sense, El Salvador is a real test case environment for Bitcoin as a currency. Can people overcome the volatility? Is the comparison to the greenback which Salvadorians are used to, too tough a competition?‌

‌Is it possible to create Bitcoin bank-like institutions in El Salvador that minimize custodial risk and use Bitcoin to improve money in real ways? ‌‌‌‌What happens when a small nation becomes an industrial-scale Bitcoin miner? ‌‌‌‌Can we bring financial education to the Salvadorian people and help raise them out of the same goop of industrial era education the whole world is stuck in?

There’s a lot more going on in El Salvador in terms of macroeconomics. More than I personally care to get into, but if you are interested, dig! Bukele’s Twitter account is a solid place to start, ´providing a long list of claims about the growth of the country which you can go ahead and fact-check yourself.

Don’t trust but verify!

Speaking of El Presidente. Let’s talk about his war on MS13.

MS13 - The Mara Salvatrucha

‌‌El Salvador’s new president Bukele appears to have had a positive impact on the peace of the country since he was elected earlier in 2019. The homicide rates have been plummeting rapidly, elevating El Salvador from a nation once seen as too dangerous to get close to, to a touristy tropical paradise.‌

‌While talking about homicide rates at all is nothing short of alarming. You may find some comfort in my experience living in Acapulco, a city with 104 homicides per 100k inhabitants. As with any other country not involved in a large-scale war, if you play it safe and don’t overexpose yourself, you’ll most likely be fine. ‌‌‌‌Anyway, everything seemed to be trending in the right direction for El Salvador, until earlier this year in March when 62 people were killed in a single day by what was reported as random gang violence.

Immediately all fingers were pointed at MS13, the infamous international gang born out of Los Angeles. Many founding members of MS13 were refugee immigrants from El Salvador’s brutal civil war in the 80’s.

MS13 is widely known as one of the most violent and powerful gangs in the world. Spreading throughout the Americas in particular with the qualities of both a mafia and perhaps even a religion. Its structure is fairly decentralized, with strong in-group preferences, bloody initiation rituals, and tattoos. Lots and lots of tattoos. ‌

‌Various waves of mass deportation of MS13 from the US took place since their inception, flooding a then war-torn El Salvador with a powerful new ideology and mafia-like structure, resulting in decades of gang conflict and organized crime until recent years. ‌‌‌‌While homicides and other crimes in El Salvador were trending downwards in recent years. The massive spike in homicides in early 2022 shook the country. It was immediately taken as a political message, triggering Bukele and the Legislature to enact a state of emergency. ‌‌‌‌The next few weeks resulted in a military sweep of the country, likely focused on areas known to be MS13 territory, leading to mass incarcerations. Accusing the gangs of the worst kinds of organized and petty crimes. As of earlier this month, 50,000 arrests are being reported. Those are big numbers. It will take some time for the country to digest these changes and process those cases.

“We have strongly impacted the terrorist structures,” Security Minister Gustavo Villatoro said in presenting the extension request to lawmakers. “We have witnessed how Salvadorans were able to enjoy the safest vacations in history”, he added, referring to recent national holidays.

As of the time of writing, El Salvador has been in a state of emergency for 5 months, following 5 extensions of 30 days periods, all supported by Bukele’s coalition in the legislature, with 66 or so votes to 84 elected officials. The country really is at war with MS13. The public in general remains in strong support of these emergency actions. It is the innocent people after all that have suffered at the hand of these gangs for decades. ‌‌‌‌Homicide rates appear to have returned to their trend towards zero after a bloody March of 2022. The fact that tourism has remained strong despite this conflict is certainly a good sign. Other reports also corroborate the effectiveness of Bukele’s crackdown.

“An association of bus companies said that gang extorsion of their members has decreased 95%. “It’s a respite,” they said in a statement.”‌

War, Peace, Victory & Comparisons to Colombia‌

I’ve seen what security can do for a country and its economy. Real security, from real violence and crime, not the fake security we had to suffer through during the covid lockdowns. A real sense that you are not gonna get mugged on the streets. That kind of safety is beautifully important for humans to flourish. ‌

‌Colombia was at war with narco guerrillas for 60 years. I grew up during the tale end of this conflict. My family was impacted by that conflict for generations. We’ve also experienced the breath of fresh air that comes with peace. It is most notable for tourism and the safety of highways, as the government won the war and secured the country, opening up Colombia to travelers from across the world.

From this perspective, I sympathize with the people of El Salvador and their wish to end the gang violence, which like Colombian narco-terrorism, seems to have affected Salvadorians for decades.

I also sympathize with the difficulty of maintaining high standards of due process and justice when engulfed in the fog of war. In fact, I believe it is impossible to apply due process and respect the rights of a civilized society when at war, almost by definition.‌‌‌‌While Colombia has enjoyed relative peace ever since the end of Uribe’s war on the guerrillas, the political backlash to corruption revealed during his presidency was also swift and memorable - Casting then Colombian president Uribe into political exile. In particular the murder of thousands of innocents who were being counted and falsely reported as guerrillas, also known as the “Falsos Positivos”.‌

‌To what degree something like this could happen in El Salvador remains to be seen and I’m personally not making any such accusations. El Salvador’s conflict with MS13 is on a much lower scale than Colombia’s 60-year hot war with the narco-guerrillas. ‌‌‌‌However, truth and justice take time and can only be discovered as the war ends and the rule of law is re-established, beginning a likely long process of delivering judicial process to those arrested.

Much of the arrests are likely happening based on MS-13 tattoos and other profiling or associations. Given the nature of war it is inevitable that some innocents will get caught up in the machine. It will be up to Bukele and his party to end emergency powers when appropriate and deliver proper justice and amends to all harmed and arrested, rightfully or not - as is due.

Also in their defense, It would be great if one could wage a war and uphold the highest democratic and constitutional standards. Sadly, I think if you do the math, you soon realize that justice doesn’t scale. It only really works when there is peace and people have the civility and wisdom to work out most of their issues without the state.‌

‌Anyway, Bukele has what is called a super-majority government today. Massive popularity among its people, by most estimates. If he can continue to wield his power wisely and can win this war against MS13 with minimal innocent casualties, deliver justice, and reinstate the constitutional and natural rights of his people, then he will achieve a truly great deed.

A deed, which I have faith is within their power and can bring long-lasting peace and prosperity to the country.

There is a path here to deliver El Salvador 21st century as a forward-looking, safe, and educated Cristian nation with strong roots in sound money and technology. A beacon of freedom and innovation in Latino America.

That to me is a beautiful vision and ambition, one that I am personally inspired by. I commend Buleke and his people and wish them the wisdom and tact they will need to succeed.

Juan Galt. ‌

“Bitcoin: A Peer-to-Peer Electronic Cash System” read the title of a white paper that would 9 years later become a half a trillion dollar economy.

Published by the so called Satoshi Nakamoto, a name without a face.

Vis vision was grand, ambitious, dangerous, game-changing.

But also obscure. Few could really understand what Bitcoin was, even 9 years later, few do.

A solution to the 2009 financial crisis, to all financial crises. The corruption of accounting on Wall Street. And the perversion of currency by the federal reserve’s arbitrary and likely infinite inflationary ‘quantitative easing’.

No more politically granted bailouts.

No more 'too big to fail'.

A distortion of the free market had taken deep root. Like a parasite around societies all over the world, governments galore inflated at will their currency supply, over and over, forever and ever, at the expense of the individual's great efforts to save for a rainy, rainy day.

A seemingly endless, epic game of financial tightrope played by nation states. Swing too far to the left and your economy collapses under hyperinflation in slow and agonizing suffering. Tilt too far to the right and you might pop the bubble, revealing the emperor’s lack of clothes and resulting in creditors with nuclear power wanting their pound of flesh.

A financial game of chicken for supremacy over the master chess board, historic in it’s proportions.

Bitcoin, the antidote to this parasite, the vaccine, the cure.

The architecture of this cure, a magnificent symphony of cryptography, economics, distributed network science, game theory and theological intrigue - in the form of its anonymous creator.

One word, so powerful in its spirit that it seeped into culture and up to the highest levels of society.

‘Decentralization’ the state of being without a central point of failure. Or so the urban dictionary would echo. (Technically it should be distributed, but oh well. Marketing messes with the Matrix sometimes).

For those with the eyes to see, Bitcoin was amazing, small, yes and facing a great test of coming to adulthood in its capacity to scale for the whole world. But nevertheless remarkable in its potential.

A distributed public accounting system, fractal in its essence, since anyone could download a copy of the ledger, verify the accounting integrity with cryptographic proofs and from there, reproduce and spread. Each piece being self-similar to every other piece, independently carrying the ‘DNA’ of Bitcoin, known as Nakamoto Consensus.

It’s integrity from double spends, guarded by a computing power arms race, echoing the gold rush. A game so profitable for the winners of each ‘mining round’ that 9 years later, Bitcoin’s Sha256 hashing power would collectively be more than 100 times greater than all other supercomputers on earth combined, and consuming more energy than many countries and rising, delivering the world geopolitical stable money.

It’s inherently peaceful computing arms race incentivized by a predictable inflation schedule. Built into and guarded by its consensus rules, locked away behind as powerful a wall of hashing power as economically possible. Its coin issuance slowly but steadily funding its own defenses and thus guarding it’s growth and spread.

21 million coins, no more, no less. Divisible down to a Satoshi or 0.00000001 BTC.

A pseudonymous cash like financial system requiring no biometric human data, in fact, allergic to biometric data, capable of functioning better in the shadows of anonymity (and thus maintaining its fungibility), than it does under the light.

Sub Umbra Floreo.

Under the shade, we flourish.

A simple, ruthless old testament Godly judgment.

You either control the secret keys to your bitcoins or you don’t really own any.

You either send the bitcoins or you hodl them.

No chargebacks.

No password resets.

The cornerstone of its power, resting wholly on the individual and vis willingness to take responsibility for their own wealth.

A gift of monetary sovereignty for those who dare take it.

It’s slogan. “Be your own Bank.”

Juan Galt.

Hello everyone, welcome to the first edition of the WTF Newsletter. If you want to get access to my private telegram group with the next newsletter, sign up for a free subscription.

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‌‌‌‌(This newsletter represents the opinion of the writer only and does not constitute financial advice.)

‌‌‌‌This edition will be focused on macroeconomics. There is so much to talk about, too much in fact. So the goal of this letter will be to paint a picture of the macro trends we are caught up in over the next decade. Hopefully, if we can identify these trends well enough, we can swim downstream whenever possible and harness our energies so that when it's time to go against the curve we can score some big wins.

To paraphrase my friend and mentor Ugly Old Goat…

“If you don’t play, you can’t win. So the only way to win is to stay in the game.”

I suppose we should start with the most obvious question.

WTF is going on with the markets?

You probably noticed the crypto markets had a serious crash in recent months.

Bitcoin is down 64% from the all-time high for a total correction of -74% at the low so far. Ethereum went down as much as 81%, currently standing at a -64% from its all-time high. Multiple major liquidations of ‘DEFI’ lending platforms, specifically referred to as CEFI, because of their explicitly centralized nature. Not everything is dead in Ethereum, some ‘DEFI’ protocols that were over-collateralized survived, and believe it or not there are still people buying and selling NFTs. ‌‌‌

‌‌Nevertheless, we’ve seen a massive amount of capital leave the crypto markets or be outright destroyed. Celsius, Voyager, Blockfi and even a sketchy but very large crypto hedge fund called Three Arrows Capital all went bankrupt. Blockfi among a few others is currently being bailed out by the FTX exchange. Last but not least, the algorithmic and “decentralized” “stablecoin” USDT blew up entirely, taking down much of the aforementioned with it. Heck, even Elon Musk sold 75% of Tesla’s Bitcoin during this downturn. Needless to say, it has been epic.‌

‌The crash is however not contained to crypto.

The S&P 500 went as low as -24% from its ATH, along with the Dow Jones (-19%) and Nasdaq losing as much as 34% from the high. Those are big numbers for the cream of the economic crop. ‌‌‌

Of course, none of this can be looked at in isolation. Russia’s invasion of Ukraine has had a fundamental impact on global economics in my estimation. I firmly believe it will be considered a historical landmark for economics this century, as it marked a formal departure of a major power from the “Liberal world order” that had ruled for almost a century.

‌‌In fact, Russia’s invasion of Ukraine might just mark the official end of “The Petrodollar '' and the United States’s economic dominance on the world stage. But… I’m getting ahead of myself.

Russia, Russia, Russia‌

‌Let's talk about Russia for a moment. You might recall the past ten years of media coverage from the west. The “Russia collusion” narrative that we had to put up with during the late 2020s every day on the news? The rising vilification of Putin (who is no dove obviously).

The attempt to bring back a cold-war-style panic of the Ruskies. As if Russia was still under Soviet communist control. As if the whole thing had not collapsed in the early 90s.  As if Russia didn’t have Starbucks stores and Mcdonald’s franchises for the past 20 years. ‌‌‌‌

As if their people were not actively becoming westernized to whatever degree that is possible. ‌‌‌‌

Needless to say much of that momentum towards Russia joining the big happy family of western globalism seems behind us now and for the foreseeable future. After Russia invaded Ukraine - which has done untold damage to Ukrainians, the only real victims in this giant geopolitical chess match - the US sanctioned and attempted to isolate Russia from the world economy.‌‌‌‌

Do you want to do business with Russia? Nope, not happening. People think sanctions are an attack on an enemy nation. In reality, they are an attack on your own population’s economic freedoms. It is Americans and Europeans that are under threat from western powers if they dare do business with the Russians. And Russia seems relatively unfazed by it. While their economy has taken damage, the Rubble is stronger than ever. The strongest performing currencies this year, actually.‌

‌“Oh, but their markets are manipulated!”

Yeah, so are ours. The FED is in full-on damage control doing shadow QE while “fighting inflation”  and raising rates, as the European Central Bank announces they are willing to do “Unlimited buying” of the bond markets to keep them stable. ‌‌‌‌We are in an economic war with Russia my frens, and what’s left of the dollarized economy is the vessel that they have to keep steady. Whether they can or for how long is a different question. ‌‌‌‌Back to Russia, the US didn’t just use the power of the SWIFT international settlement system to cut off Russia and threaten western companies to boycott. No, they went a step further. The US confiscated Russian treasury reserves held within western reach, limiting Russia’s ability to make payments to those holding Russian sovereign debt. ‌

‌This is a big deal. It’s a big deal not only because it lead to a Russian “default” on sovereign debt denominated in US dollars, cutting off a major power from the dollar system. But also because it sends a message to other nations. If you cross American foreign policy, you could have your reserves confiscated as well, and face default. This is a breach of the neutrality of global markets which was probably a bridge too far. ‌

‌Now any nation that wants to retain its sovereignty and not be essentially integrated into US foreign policy will have to consider avoiding treasury reserve exposure to US powers. In other words, the global economic order is becoming undone.

We all know what the west thinks of Putin’s intentions, they think Russia wants to invade all of Europe, or something akin to that. But what does Putin claim is his motive for invading? Over the past decade at least he has drawn a line on the sand around Ukraine, making it very clear that if NATO the European military alliance expanded into Ukraine, it would cause conflict.

Well, they delivered. Just imagine what the US would do if Russia set up military bases in Cuba, let alone bioweapon research facilities or nuclear launch pads. ‌‌‌‌

It’s not clear to me that NATO had nuclear capabilities in Ukraine, but if Ukraine was added to NATO, it would be a green light for such a program. For the Ruskies, that’s a hard no. ‌‌‌‌But there’s more, the PetroDollar is now at risk.

Energy & The PetroDollar‌

‌I’ve been going deep into the energy rabbit hole over the past year or so. Not gonna lie, Michael Saylor’s podcast appearances and thoughts on the topic really lit a lightbulb for me. Energy, it appears is the lifeblood of the economy - it really is. That’s more obvious than ever now, isn't it? ‌‌‌‌Gas goes up? Everything gets more expensive. Gas goes down, everything gets cheaper! It’s a fairly simple equation. The energy narrative in the west these days is thus, not progressive but regressive. The more energy we consume and in turn produce, the more our civilization is growing. The outputs of these processes should be observed for sure, even managed - but the apocalyptic fears being pushed by the liberal establishment, scaring the pants off a whole generation of millennials, is frankly criminal.

I’m not gonna get into the science of climate change -not today anyway- other than to say that margins of error in projections of trends tend to go exponential over time. This might explain the doomsday FUD around climate change and the infamous hockey stick chart.

Instead, however, I’m gonna empower you with some meme facts :).‌

‌‌

‌

Why is this relevant? Because Russia did not buy this energy FUD and neither did China which is in the middle of building 6 nuclear power plants throughout the country. Russia is allegedly one of the 6 largest producers of oil in the world while being the second largest producer of natural gas. Meanwhile, Saudi Arabia is the second largest producer of oil in the world. And they are making bank with this economic war. Buying cheap Russian oil and selling their own at much higher prices to the west. ‌‌‌‌Europe did however drink their own ESG kool-aid and the side effects are being felt. Nuclear power throughout the west has been actively discouraged. The oil and gas industry in the west has been under attack from its own governments for more than a decade resulting in little investment into the future of oil production. ‌‌‌

‌

Germany shut down coal miners and allowed their dependency on Russian gas to grow, now they are facing energy costs so high that it has neutered their manufacturing industry. On top of that, the winter is coming threatening to punish its citizenry with energy shortages and little heating during the winter. There are literal shortages in dry wood and fire stoves now as the German population panics, going back to the iron age to try and survive the winter.

‌‌‌‌Trump warned them too. Famously said, “Germany will become dependent on Russian gas” at the UN years ago and was mocked by the joke of a western elite we suffer under. ‌‌‌

‌

And that’s the trend change. Energy independence thanks to Russia’s invasion of Ukraine is now a matter of national security and Europe is leading the way.

Germany is now forced to re-activate coal power plants in a rush, separating themselves from the top-down fascist ESG goals of civilization seppuku that western elites are so fond of. And let’s face it, Germany is the engine and economic leader of the European Union.

Elon Musk, the global industry leader in the production of sustainable energy technology has somehow been de-ranked from ESG standards, right around the time he decided to try and buy Twitter and announced he would be voting Republican. He in turn heavily criticized the ESG structure and movement, pointing out how inconsistent and selectively its standards can be applied.

ESG, weaponized vs Elon Musk

France has postponed their goals to reduce its Nuclear power capabilities by 50% from 2025 to 2035. How is nuclear power dirty btw? Seems like it’s the only real path forward. Nuclear energy technology has come a long way since Chernobyl, we could probably shoot whatever waste there is into space and never see it again.

‌‌These are all good things, in the grand scheme of things. ESG is increasingly looking like the top heavy communist pile of selective dogshit that it is, and energy independence is now unequivocally a national security concern for all nations of the world.

The Saudis, The Petrodollar, And The BRICS‌

‌As I mentioned above, the Saudis are playing this like geniuses. Buying up cheap Russian oil and selling their own at high prices to the west, in a kind of sanction arbitrage. Meanwhile, the Petrodollar, the cornerstone of the US Dollar’s leverage over the world economy is increasingly weakened.

The petrodollar, in case you aren't familiar, is an old alliance between the US and Saudi Arabia. The Saudis sell all their oil only for dollars and in exchange, the US sells them weapons of war and protects them and their interests in the middle east. This alliance is more than 50 years old now and it marked the official departure of the Dollar from a gold standard in 1970.

This alliance has come under pressure in recent years as diplomatic relations between the US and Saudi Arabia are strained. There’s a long list of drama that has harmed this relationship, but the most recent sign of a trend change in regards to the petrodollar came early this year, as the Saudis were reportedly considering selling oil for Yuan.‌

‌(Compare that fist bump to this handshake lol -and then come right back! :D)

The situation is becoming so precarious that Biden was recently seen fist bumping the Saudi Crown Prince, Muhammed bin Salaman, visiting Saudi Arabia to negotiate down gas prices from a very weak position. Gas prices in the US have risen to levels not seen since the 2008 financial crisis as the sanctions on Russia cut off a major supply source from the west, while Biden’s approval ratings also make records, but to the downside.

Biden and the democrats need some victories as midterm elections get closer and gas prices are likely the most important issue on the ballot box. ‌‌‌

‌While crude oil has indeed begun to retreat below 100 USD a barrel and this attempt to reinvigorate the US-Saudi alliance might lower gas prices for a few months. It might not be enough to reverse the trend away from the dollar as a global reserve currency data.‌

‌The confiscation of Russia’s treasury reserves might just be the catalyst that will accelerate this trend. Certainly, the argument towards being dependent and exposed to US foreign policy interests seems to be weaker than ever, as the US wobbles with rising cultural and political instability. No empire lasts forever and, while the principles that founded the United States might last forever, its current top-heavy government structure and bureaucracy are long due for large-scale reform. ‌

‌We will see how this plays out in the future, but I’m expecting more systemic implosion in the US as states challenge federal edicts and the country further separates itself along political lines.

Despite all of the above, the dollar remains the strongest currency in the world, in particular when compared to all the others, but there is blood in the water, and the BRICS nations are organizing. Russia recently announced a competing system to SWIFT, claiming that it is ready to be used. The System for Transfer of Financial Messages (SPFS) allows the routing of fiat payments between the 5 allied nations and was developed to mirror SWIFT after sanctions against Russia were first imposed during their invasion of Crimea.

However, this is much larger than just a competitor to SWIFT among a third of the world’s population & GDP. It is the foundation on top of which a competing reserve currency can be developed.

"The matter of creating the international reserve currency based on the basket of currencies of our countries is under review," Said the Russian leader at the BRICS Summit earlier this summer.

So the trend here is toward a multi-polar world, where Western power is increasingly challenged and sanctions no longer hold the weight they once did. It will be curious to see how Venezuela and Cuba adapt to these tectonic changes as well as the rest of Latino America. ‌

That said, it’s not like it’s all sunshine and rainbows in the east. China’s economy is currently under some serious stress as they continue to screw their own economies with the zero covid nonsense. A situation partly to blame for the inflation experienced in the west, as the Chinese supply of goods shrinks making prices go up. This brings us to the FED.

Bitcoin, Inflation, and the FED‌

‌

The past few months have been wild. We already talked about the correction of the markets throughout this year. But when can we expect Bitcoin at least to recover? ‌‌‌‌This year has brought a lot of revelations for me in terms of the markets. Many narratives that grew throughout the bull market are being tested hard, some of them have been completely destroyed. Like the Stock To Flow model as applied to Bitcoin which foresaw prices as high as 250k during this recent cycle. Or questions about Bitcoin as an inflation hedge.‌

‌When inflation is at an official 9.1% (likely closer to 20% in the US) per year. A 70% correction on your inflation hedge comes off a little suspect. Is Bitcoin thus not a good inflation hedge? And if not then what the hell is it good for? ‌‌‌‌These are fair questions, and everyone that is seriously investing in Bitcoin seriously is probably considering them.‌‌‌‌The last big article of this sort that I wrote expected Bitcoin to continue to compete with gold (might have gotten a bit ahead of myself there). I mentioned that 30k USD a Bitcoin was possible and that 20k was a bargain for BTC. I didn’t however expect us to come down to 20k and stay here for this long. As I write this, the markets are slowly recovering. It is not clear to me that the bottom is in. It might be, I’d say I have 65% confidence that the bottom is in, but we could just as easily continue to test 20k. ‌‌‌‌And sadly, at least for now, that depends on the FED.

You see, most of the speculative money out there seems to think of Bitcoin as a high-tech risk-on asset. It means they don’t look at it as a store of value, as a hedge against inflation, or as a hedge against confiscation risk. They go on centralized exchanges and YOLO long it when it’s on a bull market. Then GTFO when things get a little weird. Most speculators don’t see Bitcoin for what it actually is, a hedge against the credit-based dollar-denominated system.

Bitcoin is fundamentally a settlement layer for value. It doesn’t require credit or debt in order to move balances across space. Bitcoin is always a bearer asset (when not in exchanges) and so it eliminates counterparty risk when you hold it in your portfolio and control your own keys. ‌

‌

As we have seen with all these ‘CEFI’ platforms that blew up in recent months, counterparty risk remains a real thing in the crypto industry. Meanwhile, counterparty risk has entered the big league treasury reserves market, with the US’s confiscation of Russian reserves. The developing world and the BRICS, are starting to understand the reality of counterparty risk at the deepest levels of the global economy. US speculators are likely to be the last to recognize it.‌‌‌‌As long as the dollar credit-based system continues to function, Bitcoin will likely continue to trade as a risk-on asset, and as a hedge for those that understand it as such. ‌‌‌‌So what does the FED have to do with this? Well, the FED is pretending to care about inflation by raising interest rates and thus making credit more expensive - shrinking demand for goods, which should lower prices. But they are also buying the markets. In particular, they are manipulating the bond markets right now, and this is what I call stealth QE.

It’s not clear exactly what they are doing, likely the ECB is buying US bonds as the US buying EU bonds. Possibly even Japanese bonds. This fact has yet to enter the mainstream economic discussion. How do I know this? Well, look at this chart. ‌‌‌

‌‌This is the 10-year US Bond market. On February 24th, Russia invaded Ukraine, followed by a collapse in the US10Y bonds of about 12% over a few weeks. ‌‌‌‌See that May 22nd recovery? That was literally overnight. How many hundreds of billions of dollars would need to be moved to raise the price of US bonds by 11% overnight? Were these mom-and-pop buyers? It wasn’t China that bought them, nor Russia. ‌

‌Literally, overnight the price went back up to baseline. That’s manipulation folks. Only Federal banks can do that. That’s Shadow QE. While the FED tells you with one hand that they really care about inflation and are willing to crash the economy to get it back down to 2%. With the other hand they are printing dollars by the hundreds of billions, likely trillions to stabilize both the US economy and the EU’s. That shadow QE will eventually return home.‌‌‌‌Then, if the economy isn’t moving fast enough, inflation will return with a vengeance. ‌

‌

Then Gold will pump and finally break out of $2000, and Bitcoin will follow, finally establishing its place in the global markets as a risk-off asset.

Meanwhile, however, given the mid-terms in the US are near, and given the massive correction the markets just experienced, I’m expecting the Fed to keep low-key buying the dip in an attempt to rebuild confidence from all parties. This will likely pump the stock market for a few months, maybe a year. Or at least slow down the collapse. We’ll see how long it lasts.

Final Thoughts

Alright, everybody. That’s more than 3000 words on the big picture, with some dips into short-term volatility. Right now, I think it makes sense to have physical cash and non-perishable food just in case. Doesn’t hurt to have it and it helps a lot if you need it. ‌‌‌‌Bitcoin is way oversold by all metrics and thus, it seems to me very safe to begin buying here and dollar cost averaging in. Same for Gold. But cash will continue to be useful, especially in a short-term crisis.

When this bizarro scheme finally comes undone, those that have the ability to buy, those with cash on hand will make fortunes. Hopefully, as we continue to have this conversation, we’ll figure out how to position ourselves to not just survive the great reset, but convert it into a more stable world, and thrive. ‌‌‌‌

All the best.‌‌‌‌

Juan Galt. ‌

The next ten years are going to be an endless string of WTF moments.

It's not going to be easy to grow and thrive through the volatility of the markets or the cultural tensions mounting.

However, what else can we do but try? In fact, how could we not try and give it everything? After all, we have the collective knowledge of the human race at our fingertips, and technology that would arouse the envy of the gods.

There’s also a new dream emerging. A child of the American dream. A dream of owning our land, of eating real food that comes from the earth. Real food, not synthetic food, not fake food. A dream of being in harmony with animals as they serve us, and we cherish them. A dream of using technology for prosperity and to lower the cost of living, not increase them. A dream of money that grows in value over time making us wealthier, rather than shrink endlessly into nothingness.

We are also returning to the wisdom of our ancestors, who told us tales with deep meaning. Meaning that we often failed to grasp or, in our ignorance, turned into hardened ideologies of conquest.

Atheists have failed our spirit for too long now—but so have the religious literalists failed to answer the doubts of scientific rigor. A new mindset is emerging through the cracks in these great forces, who have been in conflict now for centuries.

A new great synthesis is likely upon us, even as the world teeters on the edge of war and calamity, so are we seeing an intellectual and spiritual renaissance that can not be silenced. A renaissance made possible by the information age and its bounty.

I could go on about this, and I want to. But that is beyond the scope of this post.

That’s why I'm going to start writing a monthly newsletter, exploring WTF is going on with the world and how to grow through it. Figuring out how to turn the great reset into a great synthesis.

Expect it on the first of every month. I hope you will join me and bring your thoughtful feedback with you. A podcast is likely to follow this newsletter as well, but let's start one step at a time. A link to a private telegram group will be mailed out to all subscribers with every newsletter.

Subscribe now

Thank you for reading and all the best to you. And if the HBO show brought you here, welcome, great to have you. : )

Juan Galt.

The ones you actually needed to read, to learn how to adult like a baws.

Now you might be thinking. 'Juan, don't you sell pictures of frogs or something? what do you know about adulting like a baws', and hey fair enough. But just because I make it look easy, doesn't mean there's no magic to it. :)Real talk though. While I'm no hard-hitting CEO. I know what books they've read. And I know which books - if you are reading this- probably have not.  And let me tell you, they are a major upgrade. The world is different on the other side of this rabbit hole.

I'll add more books to this article as I remember them, so check back on it sometime.

Now, without further ado.

HOW TO WIN FRIENDS AND INFLUENCE PEOPLE

This one is a classic. Easily found in the 'must read' lists of many. Any businessy people you know will probably have read this at some point in their lives.The key takeaway for me - having read it over 10 years ago - is about how to ... well, make friends and influence people. : )  The book really does teach this. It teaches you charm when you might otherwise be defensive. It teaches you grace when you might otherwise be cold. It reveals the opportunities available to all of us if we only learn to access each other's brighter side.Perhaps best of all, it teaches you how to influence people in positive ways that serve you and serve the world. This book is a master class in social skills and it is probably timeless. Also a very easy read, you'll enjoy it.

THE GOSPEL OF WEALTH

You might have heard of this OG industrialist guy called Andrew Carnegie. He was probably like a Jeff Bezos of his era, the industrial age. The funny thing is, you probably heard of him because of his alleged biographer, Napoleon Hill and his famous "Think and grow rich". Turns out, Napoleon Hill was a bit of a scammer who never meet Andrew Carnegie and mostly just taught self-help off of this myth he spun. An early-day social media influencer Guru, if you will. The guy who Hill grifted his fame off of tho, Mr. Andrew Carnegie did however write an excellent book on wealth. The Gospel of wealth. This book is very short and beautifully to the point, unlike the verbose and endless piece by Hill. The book focuses on wealth creation principles of economics that are probably timeless. I think makes for essential reading for anyone really interested in money and prosperity. It also focuses on the moral dilemmas of inheritance and family heritage. Very interesting insight into the mind of one of the OG industrialists that helped create the modern world.

THE RICHEST MAN IN BABYLON

Here's another fantastic piece. To me this is one of the most beautiful books out there. Perhaps the most memorable book when it comes to money and prosperity. This book is a short and sweet history of the birth of money, based on ancient tablets found in the ruins of Babylon. It follows the life of various people who lived 5000 years ago in what was the then New York or London of the Middle east. The capital of finance, fashion, and luxury in an era seemingly before time. The striking thing is, you would not believe how much of life was exactly the same then as it is today. You had to work. You were wise to save. There were risky sketchy investment opportunities all over the place. And those who could sift through the risk and the scams and find the gold, well those survived and thrived. Really fascinatingly similar, I'm telling you.Last but not least, this book is so epic in its storytelling, it reads like a biblical classic. Like you are reading Homer's Odyssey or Troy. However, it's very very short and it is written in modern English for normal people like you and me. Not the priestly class of an ancient era. In case you can't tell already, I love this book.

EMYTH

Here's another classic. This book turns out is like the bible of entrepreneurship. Somehow I managed to hustle my way through the world for almost a decade without running into this book. And when I read it, oh man. So many silly mistakes. So many hard lessons learned. So much this book could have taught me the easy way. This book is a master class on American-style business. It follows the development of the franchise as popularized by McDonald's, halfway through the 20th century. Then it teaches you how to build a business in a way that can function without you. And yet pays you. It's magic. It's also hard work. But it's all hard work. isn't it. Somehow, however, knowing this book exists grounds me in the knowledge that, if I really want to build a business one day. I already have the blueprint.

Special thanks to my friend Scott for pointing this one out, as well as the next. :)

STORYBRAND

In the information age, everything is a brand. If you want to be seen. If you want to be known. If you want to be recognized at the level you are at. Branding becomes fundamental. Storybrand takes you from random acts of marketing to intentional and psychologically influential messaging. A key insight of Storybrand is that as a businessman you are not the hero of the story. You are the guide. Your client, your customer. They are the hero of the story. They are looking for Yoda.

Yoda, you are.

This book is reasonably short and serves as bait for a full series of workshops and training you can do to master the art of branding. A good portion of which you can find online for free or simply pay and learn it from the pros.

Jordan Peterson's Understand Myself and Future Authoring Suite

Ok, ok. So these aren't books exactly but trust me. You are going to want to do them.First off, take Peterson's big 5 personality test. The test asks you a series of questions. It then compares your results anonymously to that of everyone else that takes the test and tells you where your personality is compared to theirs. It measures various dimensions like enthusiasm, disagreeableness, neuroticism, creativity, and so on. It is, as far as I know, legit psychology well-grounded in science. And boy oh boy does it expand your insight into yourself and others.When you understand that personality structures are more or less set in childhood. And you understand more or less what those personality traits are, man. It's amazing. You end up knowing more about people than they know about themselves, within hours, even minutes of meeting them. That personality test will show you your rough edges, and your superpowers. And will help you use that knowledge for good. Then, there's the future authoring workbook. This short writing exercise builds very well off of the personality test and makes you think about your future. What you want to accomplish? What can get in your way? and how are you going to deal with those challenges so that you succeed?

Both of these are essential reading on my book. That's all for now.

Good luck. Go get em. Arrivederci! or, w.e. :D

Juan Galt.

Are you sick of this government overreach? Did you get three shots of the vax and they still want you to wear a mask? Do you fear the encroachment of an outright totalitarian surveillance state? Concerned that the unvaxxed will be wearing a golden star soon?

Ay ay, welcome to the crew. This authoritarian bureaucracy being installed around the world has gone too far. It needs to be stopped and I think it can be done. Peacefully. Civically. And no, this is not an anti-vax post.

You want to get the vax? get it. You are safe now. Good.

Leave those of us who opt out, the fuck alone.

Let businesses choose who they serve. Get the government out of personal medical choice. This is a pro-freedom post. This is an anti-lockdown, anti-mandate effort.

Freedom-loving pro vaxers, welcome. Want to return to normal? to the normal of not having to carry papers like we are living in the rise of Hitler? same. Let's return to normal.

HOW?

The madness around this virus is sustained by the corporate media. Their bottom line is dependant on views, and fear gets attention. They have been selling big pharma ads to the public for decades and this time is no different.  Do you really think the corporate news are going to bite the hand that feeds them? Why should we expect any truth, specially about big pharma from them?

The corporate media are professional liars, that is the bottom line. And this is the truth all over the world.

The corporate news networks are basically dark magicians casting a spell on the public, through the constant and relentless repetition of spooky words.

Well, two can play that game. We have meme magic.

What do I propose? An internet society of medical freedom evangelism. Memes that dispel the fear and point out the holes in this global policy of medical fascism.

• We need to liberate people from these masks. They are unconscious programing. Comfort blankets, not unlike those held by children as they separate from mommy.

• We need to pull the curtain covering the hand of the pharma cartel. A multinational corporate alliance making tens of billions of dollars from the government granted immunity to lawsuits. And government contracts for vaccines.

• We need to defend medical freedom with the most powerful imagery and persuasion available.

• We need to stop falling for their trap, and arguing about the merit of vaccines. Getting lost in medical mumbo jumbo.  This isn't about the science of vaccines. This is about the immorality of enforcing them at the point of a gun.

• We need to teach people how to evaluate basic statistics. Like the relative risk of death of covid and how for most people it is very, very low. Especially compared to other risks.

• We need to illuminate that those with real risk of death of covid are those already suffering from serious diseases, like diabetes, heart disease, long diseases, and obesity, etc.

• We need to defend and spread the facts around natural immunity, which is known to be more robust than that granted by these vaccines.

In other words. We need to focus our efforts on "steelmanning" aka,  constructing the highest caliber of arguments for medical freedom.

But what about censorship?

Censorship is effective because we are not focused.

Forget Twitter, Facebook, and Youtube. These are global platforms that dilute our effectiveness. Yeah, the pros can navigate the land mines and they are allies in this duty we have to defend our society and it's freedoms. But trying to reach anonymous people online is the wrong tactic. Rather than going global in our memetic efforts, we need to go local.

• Where ever you live, there's going to be people like you. Find them. Ask friends. Begin growing through word of mouth.

• Build a group focused on your town or city. Use Telegram or signal. If everyone is on Whatsapp, start there and link to a backup group in a better platform not owned by Facebook. Get to know the members, and get organized.

• Refuse, reject and ban all calls for violence. Only FEDs call for violence.

• Refuse, reject and ban repeated efforts to turn this conversation into an anti vax movement. That's a trap. This is about medical freedom. For some people, the vaccine makes sense.

This last point is really important, as it is the main line of attack against an effort like this that we can expect. You can be anti-vax but that's not what this is about. It is about medical freedom. You want to get the jab? get it. I don't care and neither should you. You can talk about the risks and benefits all day. But this is bigger, this is deeper. This is about our natural, God-given, fundamental human rights. This is about saving our civilization from a profound corruption.

Use your civic power

Once you establish a local community of like-minded people supportive of returning to our normal state of freedom. Then begin to study your local politics.

• Who in your town or city runs the show? who has the power to change or stall the mandates?

• Are there small business organizations that might join our cause?

• Are there politicians that might carry our flag?

• Are there entertainers that might sing our tune?

• Are there town halls we can attend to spread our memes?

• Who are the major proponents of this pharma fascism near you?

• Identify your friends and your foes and spread the memes.

You might think that this won't work. But as long as we live in anything resembling a democracy, something along these lines will carry power. If peaceful, civic action fails, despite concentrated efforts. Then God saves us all.

Make the best arguments

Let's not underestimate the power of the propaganda we are knees deep in. Even those who share our sentiment, struggle to mount a defense. The powers that be are very effective. We need to meet their challenge.

We may not have the same megaphones, but a small focused group of people with the strongest, most persuasive message can change the world. Especially from the bottom up. We would not be the first to do so and we won't be the last.

• Hold meetings among members of your local community. Discuss their concerns and what pro lockdown, anti-freedom arguments they hear.

• Brainstorm how to counter them. Do mock debates and take notes. Remember, our goal is to demonstrate the tyranny behind these mandates and lockdowns.

• Our goal is to free people to choose. That may mean engaging with the propaganda and talking about the nature of this virus. But avoid getting caught up in science mumbo jumbo.

• Even though the science is actually with us, many are miss informed about what the science actually is. If you are going to engage in scientific debate, be well prepared.

• When in doubt retreat to where we are strong. Human rights, freedom, privacy, dignity.

• Point out the brutal and bloody threats posed by a medical apartheid system run amok.

• Enhance and elevate the most valid exceptions to vaccines mandates, like those with medical conditions that put them at outsized risk.

• Point out the discrimination and invasion of privacy inherent in asking someone their medical status.

• When appropriate use personal arguments, such as " I have a family history of heart attacks, I should not be coerced to increase my own risk of Myocarditis"

• Aim to arm people with simple, memorable arguments they can easily summon in their conversations throughout their daily life.

Etc. I think you get the picture.

Share your work.

While your focus should be local. Share your process and experiences with the world. Make a telegram channel for your community so that others can learn from your collective efforts. If we do this right. We can turn this tide.

While this article illuminates my general vision for how we can return to normal. This is only a seed of what we can probably achieve. If you'd like to discuss this idea further. I've made a Telegram group where we can plan and brainstorm further and begin to take civic action.

I'll leave it open for now, if it gets too big, then we'll make a public channel for it and you can take action on your own locally. Comments are enabled below, let me know what you think.

Happy new year everyone! 2021 was... bizarre. And yet, I can't complain. Bitcoin made new all-time highs and continues to consolidate, giving me growing confidence that the era of multi-year bear markets might actually be behind us. El Salvador's Bitcoin adoption while complex and messy remains one of the biggest stories of 2021. A source of fascination for anyone interested in Bitcoin, finance, politics, geopolitics and culture for that matter.

The American political system continued to spiral out of control and Latino America suffered the consequences of the globalist world economy, getting choked by the new covidian pharma-fascistic order. Supply chain shocks, too much fiat demand, fear by the pound on every news channel and rising prices marked 2021. The Afghanistan ordeal was... such a disaster it clearly marks an end to the US's global hegemony. America is currently a descending power and the lost confidence in US competence will enable new freedoms and opportunities for those open to them, as well as dangers that were previously kept at bay.

(Btw, if you are getting this newsletter via email, yey! I'll be mailing out my blog posts from now on, check out what you missed since you signed up, at JuanGalt.com. Also share my work if you appreciate it! Thanks!).

So what should we expect for Bitcoin in 2022?

Bitcoin will likely continue to consolidate well into Q1, possibly Q2 of this year. I like to avoid making price predictions but when I do I err on the side of conservatism. Let's have a quick look at the Bitcoin price chart on a weekly scale to see what it says.

The red line is the 52-week moving average. The green line is the 200-week moving average. Both of these give us a sense of where the price trends are going and where hard support may be.

Many people are bearish during corrections and bullish when the price goes up. I tend to avoid that mentality. This to me looks like consolidation.  I doubt we will cross below 30k USD this year, if we do cross it, we probably won't stay below it for long. In part because Bitcoin sub 30k would be such a good deal in the context of a 68k all-time high, that FOMO would kick in.

Gold is not what it used to be. We are the new gold now. :)

Bitcoin is also no longer the low liquidity, high speculation asset it once was, it is growing up into its adult stage and the big money is accumulating and splashing around. Volatility will continue but will also soften, as time frames become greater and movements slower than they were in its previous 10 years.

My expectation for Bitcoin is consolidation well into spring, with a possible run-up and attempt at the all-time high towards the summer.

My confidence in Bitcoin in these times of chaos and the flood of fiat that continues to come have not changed. Bitcoin is a safe haven asset and anyone that knows anything about investment and economics should at least have some.

We are impossible to ignore now.

More on how to play the Bitcoin game in the foreseeable future towards the end of this article.

The only real danger to Bitcoin's price continuing to do what it has always done would be a return to sanity by our political elite, a sane rise in interest rates, and the emergence of sound political leadership.

All of which frankly seem laughable and far-fetched. If they happened, they would be good for the world but probably hard to maintain in the short to mid-term. Too much of the world has to change for such a status quo to be formed for now, in my opinion.

What should we expect for the world in 2022?

There's some good news here, though tentative. The covidian hysteria is losing steam. I see it among my normie friends and family. I see it when I talk to uber drivers. I see it in the analysis of other thinkers I follow and what they report.

The general public took two vaccines, for the most part, the third smells funny and the rubber band of political compliance might finally snap, after two long years of madness. The authoritarian power lust of the political classes in Australia, Canada and Europe is on full display and if democracy has any influence left in our societies, these politicians will be punished at the ballot box in the coming years. Mid-term elections are next for the US and despite its chaos, the United States continues to lead culture and policy worldwide throughout the western world.

What the US does, most political hacks, bureaucrats and corporate media propagandists parrot, it is fascinating to watch. And my sense of this neurotic government response to covid is that it has clearly been overplayed.

The economic consequences are visible to most people that don't travel via helicopter and thus their narratives are now on the defensive. Let's hope this continues and let's hope a return to normal follows. A return to normal, either way, is what we must pursue. Hope for the best, plan for the worst.The intentions of the technocrats are clear. They want full control over society's infrastructure and norms. They want to become gatekeepers to culture and the fruits of society. They succeeded to a disturbing degree over the past two years, but I suspect their power is unstable. These mandates and lockdowns are simply too absurd, their narrative is collapsing. Vaccines are not delivering the normies back to the normal they remember and the normies are getting pissed off. Finally some good news.

Yet the price distortions that this command and control economic order have created will continue. You can't just shut down the economy while everyone cowards in fear in their homes, and expect things to be fine. We will be dealing with the consequences of this global madness for years to come. And there is great hope for those that recognize the change in trends.

So how do we survive and thrive in the 2020's?

A return to normal is in order. But it will have to be different in various fundamental ways. A return to normal will have to be a return to independence. A return to peace among our neighbors and localist culture and politics.  

Many Bitcoiners seem to think that land is a scam. If you are among this group let me tell you, my friend, you are a lost metropolitan child. You can not eat a Bitcoin.

Unless you fear imminent capture of real estate and a full collapse of your society, then land remains a source of power and sovereignty. It will give your family the freedom to grow, and you the freedom to eat and drink regardless of the madness of politicians miles away.

First, we must develop water independence. If you can pull it out of the ground, or collect it from the clouds, do that. Filter it. Own it. Whatever it takes to do so, it will give you and your family the strength to push back on the overreaches of the world.

Then we must work towards household energy independence. This is not easy or cheap of course. But if you play your cards right, it can probably be done. Solar power is advancing and we might as well take advantage of it while we have access to it.

Whatever we can do to move towards that ideal, the better.  If this kind of independence is something you value and crave, then you probably have noticed we are not alone. Home sovereignty is a major trend that you won't hear about on the news. This is how we return to normal.

Communications independence would be next and here, there's great potential, and a lot of work to be done. We can have our own servers, our own blogs. We can proxy all our search queries, build out our own newsletters and download our contacts. We must keep the directory of our networks in our own hands.

I recently got put in twatter jail for talking about medicine known to treat the covaids. Fuckers have lost the thread. That platform is no longer a place for truth to power or discourse. To whatever degree it ever was, that era is gone.

I will not let them ban me, I will simply disengage, to keep my account as long as I can and retain my network and digitized reputation as is. The same for Facebook. We must pull our network out and build outside of the reach of the technocrats.
I don't know a whole lo
That's the new wave.

Finally food independence. This is the final battleground. They want you malnourished, so you can't think clearly, so you can't compete. So you will do as you are told. Do not grant them this power. It might well be the last one they need to take. I don't know how, it is easier said than done. But I see the ideal.

We need to defend the meat industry, especially locally to us. We need to walk the talk and support natural foods and organic markets. We need to stop eating the crap they produce and get strong. The only way to return to normal now is to survive the madness and thrive through it. To rebuild the foundations of freedom that brought us the fruits of prosperity, luxury and the arts. The sooner we get that done, the sooner we return.

As for society, a new idea is emerging. The networked state. That of an internet-era society, networked among individuals worldwide. While the idea is still raw, its value proposition is simple. Don't lose connection with your peers, but leverage them. Strengthen those connections and build locally.

Many people think " I'll just move where I'm treated best", this works in some contexts. But migration is a mixed bag. I have lived it all my life. Its consequences are so disruptive that I would have to write a whole article about it. Even if you can do it, most people can't and won't. And even if you can, building locally with a global network will still be the best way to manifest the life and world you want to live in. Fuck the metaverse, it's a massive circle jerk and mind control play. Let's return to our humanity. And use technology to our ends, instead of letting it use us.

So how are we supposed to fund all this sovereignty?

Well, Bitcoin of course. Here's the trick. Selling your Bitcoin to buy things is looking like a thing of the past. A new strategy is emerging a ...  Macro strategy if you will.

The path that Michael Saylor is laying out I have to admit has blown my mind. While I'm still wrapping my head around it and figuring out how to integrate it into my life, I am now firmly gripped by this idea. The idea is simple. As long as governments can exist, money will be divided into two things, fiat currency and Bitcoin. Bitcoin a savings account that can not be inflated and thus preserves the true value of your money over time. Currency, the fiat accounting rails of the modern world and the blood of the state.

We are probably 30 to 50 years away from Bitcoin becoming a truly mainstream unit of account. Or so it seems if you believe Saylor when he says it's near impossible to upgrade the world economy's accounting standards to Bitcoin. He says you could offer Cocacola 10 trillion dollars or a bullet to the head to change their accounting system and they would probably prefer death, lol.

I don't know a whole lot about the accounting of corporations but I do know that governments are not gonna let go of their fiat powers without a fight. He is also quite right about that.

We never the less must continue to build towards a Bitcoin monetary standard. I do believe we can achieve it, I have lived it. However, in the coming decade or two, it's just not realistic. El Salvador is a very unique example without a local currency. Most of the world's fiat currencies would have to lose total confidence before Bitcoin can really become their new norm. It will happen gradually yes. And yes we should continue to develop Bitcoin's lightning network and scaling technologies. But it is foolish to ignore the power and interests of the state, especially over the economically wealthy and productive. Saylor points out a powerful path forward in the meanwhile. Keep in mind, this is definitely not investment advice, I'm just grasping this whole thing, but I'm becoming a believer. Keep all your Bitcoin and instead acquire fiat debt. Fiat will continue to lose purchasing power, thus your fiat debt (if it's not predatory) will simply continue to shrink. Meanwhile, your Bitcoin will continue to grow in purchasing power. And the cherry on top? You don't have to pay capital gains on your BTC cuz you won't be selling it! Ideally, for this to work, you can collateralize some of your Bitcoin and get fiat credit with BTC as its base. Like what UnchainedCapital does in the USA. And use that to pay the interest rates of your loans.

This is a brilliant strategy, it is breathtaking. I finally feel like I have an answer to the taxation problem without naive science fiction-grade dreams of massive cultural and societal change.

Let's recap.

• You never sell your Bitcoin

• You get long term fiat loans

• Bitcoin grows faster than the interest on your loans

• You find a way to collateralize your Bitcoin and get fiat credit, especially during consolidation like right now.  You use that to pay the interest on your loans.

• If you have a house, maybe you take out a long-term mortgage on it and buy Bitcoin with it. Why not? Bitcoin grows like 30% a year on average. Much more than most interest rates.

• Worst case scenario, you sell some Bitcoin to pay off the interest rates.

Now let me make this clear, this is advanced stuff, that requires very conservative risk management. You should probably not get loans greater than 40% of your Bitcoin hold's fiat value. You should also avoid Bitcoin collateralized loans that have a hard liquidation clause. Like doing a leveraged long trade on an exchange. Because bugs and glitches can take you out. Finally, you should take out Bitcoin-backed fiat loans during consolidation and dips. Not during all-time highs. Because corrections will make it hurt, while bull runs will be all sunshine and rainbows. You should also not attempt this with shitcoins. Bitcoin is volatile enough as it is.

But think about it. If you can get fiat credit at an interest rate lower than Bitcoin's average growth. Then. well. You are kind of getting free money. Just keep rolling the debt. There's an incredible future and potential here. Even lightning wallets can adopt this model. Using Bitcoin as a savings account that can be collateralized to get fiat stable coins. Those fiat stable coins moving a light speed through the lightning network. Keeping the taxman at bay.

I love it, if you find this fascinating, go check out Michael Saylor's conversation with Peter Mccormack. It's a whole new level. I think. What do you think? I have comments enabled below, you can log in with your twatter account.So let me know how wrong I am or w,e, :)

As usual, this blog post is gigantic, so I'll leave it at that. Cheers!

Juan Galt.

(A polished and edited version of an original piece I published some time in 2017)

Jordan Peterson has been blowing my mind lately, and I'm not alone. I think the reason he is going viral is because he is healing the divide between the nihilistic atheists and the dogmatic moralists.

The scientific revolution was an amazing thing. It gave humans the power to command nature as you'd think a magician would. It was a light so bright, nothing seemed out of it's reach. Not even god.

The accuracy of the scientific method pulled the carpet from underneath the beliefs of the religious. The physics on top of which their moral sensibilities stood were suddenly reframed from the 'word of god', to something like bias-based illusions.

This is about the time Nietzsche famously proclaimed that 'God is dead'. He said that God was dead and we had killed him. And there wouldn't be enough water to wash away the blood.

A few generations later. We saw the rise of communism. And with it, the most bloody, and horrendous mass murders the world has ever seen. Like gigantic meat grinders with scientific precision, upwards of a hundred million people were killed at the altar of communism. All by atheists. Those that did not die in war, starved to death in famine, as farmers got routinely murdered and hung. The dreaded bourgeoisie, turns out were the middle class.

Lenin was an atheist, Mao was an atheist, Stalin was an atheist.

Their deeds make the Hitler (a pantheist?) look like an amateur.

Coincidence? I don't think so. Morality up to that point rested on the shoulders of the biblical God. On the literal interpretations of the biblical works.

On the ten commandments.

The stories in these old books served as lessons that survived millennia, captured in stories and distilled by memory.

Bare in mind, many of the stories in these old books are far older than their written form and were at one point passed down through oral tradition.

And so, morality went away and the scientific machine was unleashed without a moral compass.

At least the theocrats didn't have the technology to kill millions.

On the flip side. The more morally inclined were left neutered. Without solid ground on which to build the ethics they saw as self-evident. Weakened by the embarrassment that the literal interpretations of the old books had been shattered.

What Jordan Peterson is doing - in my opinion - is trying to rebuild the foundations of ethics. Not from literal interpretations of the Bible, nor from utopian, detached idealization.

But from logic and evolutionary psychology as applied to the biblical works of the great religions and other ancient myths.  

Turns out, that if you look at these old stories as powerful dreams, as art that arose from free market-ish storytelling... As pre-scientific anthropomorphized thought, as a kind of fiction that spoke of our own nature and the nature of the world, well, a lot of things start to make more sense.

People are hungry for meaning. Hungry for responsibility. Hungry for a light with which to walk through this dark forest we call life.

And Peterson is doing amazing work by extracting ideas from these old and popular tales, the archetypes of which are seen all over the world across cultures and time.

I expect his phychological analysis of the Bible will start a new generation of thought and leave a mark in history.

To not take this work seriously. Or at the least, to not recognize this existential challenge, is to ignore the epic conflict that engulfs our world.

Now, perhaps you are busy, or perhaps you are fighting the good fight within your own realm and niche. That's fine. Do your thing. We need people to do their thing. We need people to do what they are best at.

But please. Don't get in the way.

Here's a good place to start if you are interested in these ideas. And let’s talk. :)

https://www.youtube.com/playlist?list=PL22J3VaeABQD_IZs7y60I3lUrrFTzkpat

Juan Galt.

(Originally published some time in 2017)

Bitcoin Metaphysics: The Genesis

“Bitcoin: A Peer-to-Peer Electronic Cash System” read the title of a white paper that would 9 years later become a half a trillion dollar economy.

Published by the so called Satoshi Nakamoto, a name without a face.

Vis vision was grand, ambitious, dangerous, game-changing.

But also obscure. Few could really understand what Bitcoin was, even 9 years later, few do.

A solution to the 2009 financial crisis, to all financial crises. The corruption of accounting on Wall Street. And the perversion of currency by the federal reserve’s arbitrary and likely infinite inflationary ‘quantitative easing’.

No more politically granted bailouts.

No more 'too big to fail'.

A distortion of the free market had taken deep root. Like a parasite around societies all over the world, governments galore inflated at will their currency supply, over and over, forever and ever, at the expense of the individual's great efforts to save for a rainy, rainy day.

A seemingly endless, epic game of financial tightrope played by nation states. Swing too far to the left and your economy collapses under hyperinflation in slow and agonizing suffering. Tilt too far to the right and you might pop the bubble, revealing the emperor’s lack of clothes and resulting in creditors with nuclear power wanting their pound of flesh.

A financial game of chicken for supremacy over the master chess board, historic in it’s proportions.

Bitcoin, the antidote to this parasite, the vaccine, the cure.

The architecture of this cure, a magnificent symphony of cryptography, economics, distributed network science, game theory and theological intrigue - in the form of its anonymous creator.

One word, so powerful in its spirit that it seeped into culture and up to the highest levels of society.

‘Decentralization’ the state of being without a central point of failure. Or so the urban dictionary would echo. (Technically it should be distributed, but oh well. Marketing messes with the Matrix sometimes).

For those with the eyes to see, Bitcoin was amazing, small, yes and facing a great test of coming to adulthood in its capacity to scale for the whole world. But nevertheless remarkable in its potential.

A distributed public accounting system, fractal in its essence, since anyone could download a copy of the ledger, verify the accounting integrity with cryptographic proofs and from there, reproduce and spread. Each piece being self-similar to every other piece, independently carrying the ‘DNA’ of Bitcoin, known as Nakamoto Consensus.

It’s integrity from double spends, guarded by a computing power arms race, echoing the gold rush. A game so profitable for the winners of each ‘mining round’ that 9 years later, Bitcoin’s Sha256 hashing power would collectively be more than 100 times greater than all other supercomputers on earth combined, and consuming more energy than many countries and rising, delivering the world geopolitical stable money.

It’s inherently peaceful computing arms race incentivized by a predictable inflation schedule. Built into and guarded by its consensus rules, locked away behind as powerful a wall of hashing power as economically possible. Its coin issuance slowly but steadily funding its own defenses and thus guarding it’s growth and spread.

21 million coins, no more, no less. Divisible down to a Satoshi or 0.00000001 BTC.

A pseudonymous cash like financial system requiring no biometric human data, in fact, allergic to biometric data, capable of functioning better in the shadows of anonymity (and thus maintaining its fungibility), than it does under the light.

Sub Umbra Floreo.

Under the shade, we flourish.

A simple, ruthless old testament Godly judgment.

You either control the secret keys to your bitcoins or you don’t really own any.

You either send the bitcoins or you hodl them.

No chargebacks.

No password resets.

The cornerstone of its power, resting wholly on the individual and vis willingness to take responsibility for their own wealth.

A gift of monetary sovereignty for those who dare take it.

It’s slogan. “Be your own Bank.”

Juan Galt.

Technology advances at an exponential rate. From the first stone lances and hammers thousands of years before us. To the agricultural revolution, gun powder, the scientific method, modern medicine, the industrial revolution, the internet, cell phones, Bitcoin and, perhaps within our life time, general AI.

General AI presents the possibility of creating beings smarter than us which in turn can create beings that are smarted than them. Launching technological acceleration beyond the gravity well of human comprehension.

This is "the singularity". Soon -many believe- we will begin to merge with technology as part human part robotic androids, our bodies and capabilities will be fully customizable. In many ways our codependence with smart phones has already transformed us. But there's a lot further we could go.

This potential synthesis of man and machine raises some fascinating questions and paints some moving pictures. Some very disturbing.

What if with the click of a button, you could install an app on your brain that allowed you to see with 10, 100, or a thousand times more detail? You could observe the details of the moon's craters without telescopes and visit distant planets without space ships.

What if with the snap of your fingers or the click of a thought, you could expand your auditory capacity to listen to a water drop slide off a stalactite and splash upon a pond in a cave never seen before?

What if you could toggle x-ray vision, or better yet see sound, and hear colors? You might walk into a room and hear a symphony composed by room designers or go for a walk at the park and have nature’s chaotic beauty sing to you!

A kaleidoscope of greens, yellows and blues as an orchestra playing in your ear.

And all of it within your full control.

What if you could turn it all off? ‘Snap’ there goes your sight, ‘snap’ no more lullabies, ‘snap’ you can no longer feel the music, like a lover underneath your skin.

‘Snap’ your imagination is gone.

But it is all still within your control.

Tell me, if you cannot hear, see, feel, remember or imagine. If you cannot think, what is left? Is there a you? An I?

Is our capacity to experience sensations and stimuli not dependent on stimuli it self? Can we truly say that there’s an ever-observing eye when nothing can be seen, when there is nothing but darkness?

‘Snap’ wake up.

You are your experience of the world, you are your feelings and your thoughts, your memories and giggles, your fears and your ambitions. You are what you feel, hear, see and imagine. You are what you have experienced, expect to experience and will experience. And so am I.

What if I share my experiences with you, and you share yours with me?

Yes that’s right, as experiential beings, we are not limited to our own senses. As you read this you are seeing what I’ve seen, you and I are connected through experience… in that sense and in this moment, we are one.

Our friends, our family, our neighbors, our co-workers, that old lady down the street. Anyone that shares their experience with you, and you with them, opens a channel for our consciousness and is a window to the sensual soul.

However, just like a mirage in the desert, people can lie and we can misinterpret.

This means that the honesty and transparency in our relationships is just as important as the health of our eyes and ears.

Just as you are weary of shiny welding lights, loud sounds and ghastly smells, be also weary of those that bore you, those that kill your creativity, those that shake your relaxation with unease, those that seem invested in your distress.

Those who get in the way of your enjoyment and fulfillment in life are like viruses affecting your eyes: they might leave you blind.

Thus, let us see each other as portals to longevity, and embrace our connective potential. Two honest, open and connected people might as well double our life spans, as we can live through each other’s eyes.

Let us realize that robotic androids or not, we have the potential to see the whole world and all it has to offer by living and connecting with those who have also live, because we are connection.

Juan Galt.
(Originally written in 2013, re-edited in 2023.)

Why we are toxic

A debate is raging lately (on crypto twatter) about "Bitcoin maximalist toxicity".

Kind of a lame topic, I know. But there's some important questions being raised.

As an active contributor to this class of Bitcoin shitposters, I can tell you my reactive defensiveness does indeed come from experience.

It comes from hearing the same old ignorant critiques of Bitcoin I've heard since the media discovered Bitcoin.

It comes from an endless stream of new crypto 'currencies' and their premine funded marketing teams claiming they 'are better than Bitcoin' because they changed some parameters that have no fundamental impact. Or because they are 'faster' when their settlement finality and security is actually much weaker.

It comes from the ten-thousandth Bitcoin obituary written with glee. It comes from the retail facing investment shows, pumping and dumping coins on retail, probably backed by Wallstreet whales.

It comes from a profound propaganda level attack on Bitcoin about Satoshi's true intentions, that tried to split the community and lead to multiple forks. Most of which were blatant scams.

It comes (often enough) from actually having been burned by shitcoins. By techno bureaucratic blockchain processes, by exist scams, rug pulls, hacks, forks, and shitty virus laden wallets.

It comes from the "blockchain not Bitcoin" bullshit that bankers came up with to divert attention from the real innovation.

It comes from the thousandth pump and dump that turns out our friend from highschool is really into. Or that random family member that got 'into crypto' and won't stop asking "What do you think about [Insert shitcoin here]?".

It comes from the recognition that maybe soon, on average, our frens, fam and noobs worldwide will get burned. Even if that's the only way they are going to learn their lesson. Even if they have a sense of the risks that they are taking.

It comes from actually knowing people that believed in Bitconnect and lost too much.

We, the toxic maximalists, are the byproduct of the crypto industry's misaligned incentives.

We are the product of their unchecked greed.

We are those who remember crypto's dark side.

Is it a wonder we shit post?

Our confidence also comes from believing that Bitcoin would thrive, and being damn right. Despite all the 'experts' and talking heads telling us it would fail.

Without political power and without centralized control, our voices and personal influence collectively are what has pushed back on that establishment.

A nepotist establishment that naturally seeks to protect its own power, as they drink deep from the titty of the FED.

An establishment that understands enough economics to do damage and refuses to acknowledge freedom technology or thought.

We are those who remember fiat's dark side.

That said.

While we have become quite good at expressing our contempt & disbelief for the political elitists and the academic idiots. For the corporate crypto money grabs and the most obvious of all scammers.

A question does remain...

The Dark Side Of Toxicity & The Blind King?

Victory and experience do not come without risks, dangers or temptations, no matter the endeavor.

Success is a blessing, and it naturally feeds our confidence. But too much confidence can become arrogance. And arrogance is a kind of blindness.

I'm not saying Bitcoin isn't king for good reasons. Or that it's reign won't last a thousand years. I think it will, it could, it just might. I am a believer.

What it does mean is that it might be arrogant of us to think that Bitcoin is the only asset class to be born from this invention. From this discovery.

Or that "everything but Bitcoin is a scam" is more than just a meme, some kind of  principle of nature.

You want examples? fine, Namecoin, Monero. Idk, someone mentioned Siacoin and Grin. Have you looked at everything invented by the shitcoiners? I have not.

And I've looked at a lot.

Maybe NFTs? who knows. That's the point.

Unless our attention combs through everything. Or unless we categorically determine that certain things can only be scams, then our knee jerk reaction to condemn other crypto things can actually be inaccurate, even if it's statistically on point.

In other words, while most things in crypto probably won't last. While too many things in crypto are indeed scams. Some are not. And the blind king can not tell the difference.

Indeed the blind king sorta doesn't care. The blind king assumes he knows what is in front of him, based on the outline, the sound, the smell. But can't really give it his full attention as he believes he's seen it all, and has no time to dig deep into every little thing.

The king is blind by bitter experience and a thousand examples of disappointment.

The blind king assumes this 'new thing' is just more of the same.

That's why the establishment doesn't get us. That's why the academic idiots misunderstand us. That's both our strength and their blindness. And our potential future weakness.

Does that makes sense? Do you see the edge case I'm pointing out? It may be that 'Bitcoin fixes everything' including this. But of that I'm not convinced.

While I do not want to demolish maximalist confidence, nor could I if I tried. Here's some questions that will make us better leaders as we transform into the new economic elite.

Are we succumbing to group think? Out of a desire to be accepted by our peers?

Has "everything but Bitcoin is a scam" become more than a meme? A totality ideology that crushes nuance and innovation?

Are we losing the intellectual curiosity, diversity of thought and integrity of speech that probably brought us here?

Have we trained the new generation of Bitcoiners to simply close their eyes to what the rest of the industry is doing, because "they are trying to scam you for your bitcoin" or something like that, that's probably but not always true?

Have we trained a new generation of Bitcoiners to not shitcoin in part through social enforcement instilling in them a fear of ostracism?

I understand I'm using the 'we' and 'us' very liberally here. These are not accusations but questions that no one else probably ever asked themselves in any movement or in any ascension to 'power'.

But that is why we are better. Why we should be better. It is being better that is the point after all, is it not?

Is Toxicity Effective?

Now we do have to ask the obvious question. Has our scorn towards the various obvious excesses of the 'crypto industry' actually been effective? Who benefits from our silence?

I'd say there's actually quite a bit of evidence that progress has been made. And maybe we had an important role in that.

Altcoins Are Ded

Altcoins and competing 'crypto currencies' for the most part died in the bear market of 2014. While many of them are still on coinmarket cap, what is their relevance? As a whole, they simply continue to lose value or have stagnated.

Even worse, probably 10 thousand shitcoins have straight up disappeared, deleted from coinmarketcap.com. If there is such a thing as death in shitcoin land it is probably being considered not worth listing by CMC.

ICOs Are Way Too Scammy

ICOs were next and boy did they stoop a lot of people. 2017 was the season of ICO scams, with a thousand projects being funded and none bearing fruit? Did anything actually become a useful product thanks to an ICO? Did anything come to market?

I think I might have seen a few examples. a handful perhaps, whose names I can not remember.

Yeah sure, 90%+ of start ups fail (or more). But no failed start ups in history have ever been so successful either!

The amount of money made by fly-by projects with shiny websites in 2017 is probably too absurd to even guess.

I think we can all agree that  flooding a bunch of ambitious kids with tons of money  kills motivation. In particular before they've built anything or developed their discipline and habits of production and creation.

Maybe some ICOs produced something useful. I can probably come up with some examples if I try hard, but they would certainly be the exception.

Now it's the 2021 bull run and this time around we got 'DeFi' and NFTs going nuts.

How decentralized is 'DeFi' really?

How many defi projects will last? how many have already been hacked? how many will go under? how many will become something long lasting?

How many have admin keys. held by their developers. Making them more CeFi than DeFi?

I'll be honest, I've yet to give enough fucks about defi to give it a proper test. As far as I can tell it's ponzi schemes all the way down.

They don't even pretend to have a product. I've not heard much ambition or aim to change the world from them. They call it decentralized but how often is this just in name?

It seems most of DeFi is just an attempt at improving 'number go up technology' even if just for a little while.

Maybe I'm wrong about that, maybe there's some exceptions. Maybe some will develop actually useful lending markets that can do what banks once did, provide capital to capitalism. Again I have not looked carefully, or seen such a thing yet. And I think I'll let time be the judge.

Right-click-save that shit bro.

NFTs? Well, to be quite honest. I've been doing a lot of thinking about NFTs the past few months, and I've known about them for a long time. I actually created one of the first NFTs years ago back when they were worthless and we were just fucking around.

So I have a lot to say about NFTs and if I got into it right now it would take over this article. So for now I'll say that, I do not believe NFTs are a scam as an asset class, but there's gonna be a lot of shitty art and money grab NFTs coming our way in the coming months and years.

Progress

My point with this whole tirade is that, we've actually made progress. The scams of the past have transformed and have shed their cringy narratives of great ambition, potential and societal transformation. They are down from 'decentralize all the things' to something like 'hard to regulate gambling' and collectibles.

And that, ladies and gentlemen, is progress. While our condemnation of many of these excesses of crypto's past has probably had an impact, at least in defending Bitcoin's name. Their own economic fate settled the deal. And perhaps we helped, by calling out the bullshit as it came and letting time do its thing.

We can probably expect that to continue.

Where the market remains irrational for long, like BSV, or Bitconnect. There we should continue to righteously condemn the scams and shitcoins. Though perhaps we can take it as an opportunity to educate the huddled masses about why Ponzi schemes are doomed to fail.

And that is really what I'm trying to get at. Can we be more effective? Are we wasting opportunities to educate the noobs?

The Asymmetries Of Truth And Lies

Ahh, there's the rub.

Lies that are convenient to your narrative are a lot cheaper to create than it is cheap to dispel them with truth.

The truth takes time, it takes thoughtfulness, it takes context and comparative analysis.

The truth demands that an audience understand certain fundamentals, axioms and concepts.

The truth is actually hard to get to, although not impossible.

And that's the problem of our age really, it is not just a thing of crypto.

Even if you are not trying to sell a scam to the public. Even if you are an honest company with an honest product or solution to a real problem, what ever industry you are in, there's only so much room for messaging in an advertisement. There's only so much detail you can fit in a meme.

The truth takes time to discover, time to communicate, time to consume and time to comprehend.

So even in the best of cases, communicators are going to have to trim the edges, remove some nuance and simplify messaging so that they can peak the interest of the public and hopefully lead them down some tailored rabbit hole.

When it comes to 'crypto', those of us who have experienced the bullshit behind the marketing have quite a challenge. We have to fend off the sponsored marketing teams of shitcoin projects  who can promise early investors outsize returns for an initial marketing (and sometimes development) budget.

They get paid to build a narrative and deploy it at scale through the known marketing channels.

And us? the skeptics? Well. No one is paying us to talk shit on twitter, so of course, the resolution of some of our counterarguments out there can be pretty low, even when hilarious. There are excellent exceptions to this rule.

In fact, some of the most popular people on bitcoin twitter are those who have done deep analysis of these topics. There is a market there for nuance and truth.

Some people that come to mind who take this approach:

Nic Carter

Tone's 'crypto scam podcast' has done some good work here.

Jimmy Song of course

Alex Gladstein

And that is I think what we should strive for when possible. Patient deconstruction of marketing fluff and explanation of fundamentals.

And of course, memes. Lots and lots of memes.

Memes Rule The World

In no way shape or form am I suggesting that we should stop being funny. Bitcoin memes are some of the best things that ever happened.

People come for the money and stay for the memes and we want to keep it that way. Good memerie, good art demand of us a certain lack of fucks. You kind of have to not care about other people's feelings to much for your memes to really hit.

And that's ok, people are gonna cry, let them cry harder.

Some will never believe, let them have fun staying put.

My point is not so much that we should stop having fun, but rather that we should be aware of how little people actually know about Bitcoin and crypto.

And that we are prepared to back our trolls, memes and shitposts with hard, cold nuance.

And there it is, that's my point.

-THE END-

"Billionaire capitalists are designing humanity's future. Don't let them" writes Matt Shaw at the Guardian as he paints the future with a medium-sized brush of tech billionaires and 'barons' controlling the seas, and building city-states in the oceans, space and mars. City states of course where they are kings.

This future Matt Shaw critiques as something to avoid. As a dystopia that goes against 'democratic' values.

I don't disagree with him on the critique, I no more want to be ruled by Biden or Winnie the Pooh than I want to be ruled by Jeff Bezos.

However what Mr. Shaw won't tell you is that democracy is two wolves and a sheep deciding what's for dinner. Since when is majority rule so heavenly? What confidence should minorities have on democracy when the masses can be manipulated so easily by corporate media like the Guardian.

Don't forget it is corporate media like the Guardian who kept stories like the Biden Jr. creepy laptop story out of the public eye before the US's election day. Among many other lies of omission and propaganda that finally got the party of corporate tech elites in office, aka the Democratic party and the party of Davos.

This is the party of old school neo-con American imperialism, Wall street and tech censorship.

And Matt dares to position him as the critic of giants? Go independent Matt, go follow in the foot steps of Glenn Greenwald and stop aiding the monopolist corporations you so condemn by giving them your talent.

An Optimistic Future Distributed And Self Sufficient

All that said, Matt's got an interesting point. Those who invent the future with plausible science fiction, create it.

And so let me briefly lay out a future that is more aligned with what actually gave journalists like Matt the freedom to critic the billionaires while enjoying his Uber delivered  mc-duche frappe, probably somewhere out of San Francisco.

It wasn't democracy that gave us many of the 'human rights' that we struggle to defend in the digital era. It was the idea that there's such universal or objective rights to begin with.

While the American constitution isn't perfect, it brought us here after all as even America faces technocratic rule. It did lay out a foundation of inalienable rights that should not -as a republic- be violated even by a democratic majority.

Some of these 'rights' may need to be updated to deal with the challenges of modernity, as the philosophers of the enlightenment era were brilliant but not clairvoyant.

For example the cartelization of the Silly Con Valley through anti-trust and monopolistic, partisan practices should certainly not be in an ideal future.

In this regard governments with serious anti-trust efforts might be one of few ways that the market - through political will- can correct the excesses of this corporate 'democratic' Davos elite. Market movements like the GameStop phenomenon would work if the SEC wasn't bought and paid for by the same billionaires in question and their hedge fund buddies.

But there's more. Nature is us. And we are part of nature. This ghettoization of modern life, in these giant cities with tiny apartments. Working from home 24/7 now because notifications don't care about your work hours, while your view from what ever windows you have show little more than jungle of concrete.

The closest thing you get to nature is the near by park that in most parts of the world might be locked down because social gatherings of more than a handful are probably still "illegal" - as if the medical fascism that's gripped the world had any sense of justice. Meanwhile as I write this I stare at a lemon tree that's probably too big. Behind it some other 'lazy' tree that we had to trim recently because it indeed got too big. It was covering the pink and violet flowers we have planted in our garden from the sun.

The seeds of these fruits and blooms I wish to be widely distributed in the future I envision. A future that I am working to manifest in my own life first, slowly but one step at a time.

I hope in a non too distant future I will also have solar power, giving me independence from a centralized electric grid that every day carries more risk.

Water? Well many people throughout the world pull the water from the ground, it is literally everywhere if you dare to look, despite local regulator's over reaching restrictions on such use. There's also rain water collection for the use of washing and so on, maybe if it can be purified even to drink as the Mayans did hundreds of years ago in the Yucatan.

Internet? we all know that's an essential now, more important to some of us than even water since without internet there is no moneeey. While you'll be hard pressed to get fiber optic anywhere outside the city core, maybe Elon Musk will deliver us such blessing with this system of internet satellites. Meanwhile I guess we can stick to 4G.

Speaking of money, most of the ills of the world today brought to us by fiat INC, as the rich and powerful print money to bail out their rich and powerful friends, melting whatever meager savings you have slowly but steadily, like an ice cube in a summer day. Bitcoin instead continues to moon. As far as food goes, it's a lie that there isn't enough land for both humans and our cattle. You could fit all human beings in Texas and everyone would have a football field for their cows to grace.

I'm no vegan. And I will not apologize for seeking to integrate a healthy cow into my life essence via a medium rare steak.

But I'm no enemy of veggies either as our home garden produces about than half of the veggies we eat every day. Perhaps through various technologies we can one day make this 100% of our veggies without becoming slaves to the land.

This is the future I want to defend. The future I want to co-create. Hopefully with a bunch of kids running around as I enjoy the chaotic peace of family life, rant on my blog and milk some good Bitcoin trades on our journey beyond the moon.

I hope this vision of the future gives you more optimism than a dystopia ruled and enforced by a sold out 'libertarian', corporate, and 'democratic' elite.