For something commonly labeled by the media and “experts” as “having no intrinsic value,” Bitcoin sure does seem to be helping a lot of people globally. Whether it is authoritarian governments seeking to un-bank their citizens or global citizens that happen to be chosen as economic collateral damage in a global economic firefight, bitcoin is helping individuals protect their wealth by storing it in the world’s bank, the Bitcoin network.
Millions of people around the globe have decided they should allocate 1%-100% of their savings to bitcoin. Why? Because bitcoin is better in just about every category versus the current competition (see chart below).
The dollar is being printed into oblivion. Hyperinflation is looming because Powell knows he can’t raise rates like Volcker did because then the government would be paying insane interest on its debt. Gold is extremely difficult to settle large quantities globally quickly and safely and is hard to divide into small quantities. I do think there will be a push for gold-backed currencies if we see problems with dollar hegemony due to printing stateside, but even with a gold-backed currency, the issuer will always be tempted to print more than the current reserves of gold. It is human nature and it ALWAYS happens.
Bitcoin was created by Satoshi to solve these human issues and more. Bitcoin has a code-regulated release schedule meaning that if you take the time to study it, you can understand how many new freshly minted bitcoin will hit the market every day, month, year, from here to about 2140 (when the last bitcoin will be mined). This is a big improvement over the current system where governments just print money when they feel like it, have no idea how much is actually “out there” in the world, and give it to their friends and family first (ie the cantillion effect) allowing them to front-run inflation and buy assets before inflation takes hold.
Bitcoin can transmit monetary energy globally at the speed of light. Banks, governments, businesses, can (and will) settle accounts in bitcoin. Imagine wanting to settle a $1,000,000 international purchase in gold. You would need to first package the 35 lbs of gold, pay a shipping company to haul it for you, pay for insurance, pay for guards to deliver it safely, then the recipient would need to test it for purity. All-in-all let’s call it $10,000 in fees to get this done. With bitcoin you can send $1,000,000 for less than $1 and have it completely SETTLED in less than 1 hour. That is way more than 10x better. It is not even close.
For any of you thinking you are too late to “invest” in bitcoin, please reframe your thinking. You are not “investing” in bitcoin. You are SAVING in bitcoin. You are STORING your wealth for the long haul. Therefore, it is NEVER too late to start saving your hard earned wealth in bitcoin no matter the price in dollars. The choice is clear, spend in fiat, save in bitcoin, sleep at night.
book
“The Book of Satoshi: The Collected Writings of Bitcoin Creator Satoshi Nakamoto”
I read this book hoping to get some insight into the mind of the pseudonymous creator of Bitcoin. I was not disappointed. Champagne put this book together and published it in 2014 so it is one of the OG books of Bitcoin. It doesn’t get much love from the community these days, but it was well worth the read. Satoshi was a visionary. He released this program to a bunch of skeptics on a cryptography message board and changed the world. He calmly corrects their errors in thinking, and shows them why and how he put bitcoin together the way he did. Again, he didn’t create a bunch of new things, he put older technologies together in a completely novel way and created the next global currency. This is good one for those of you (like me) curious about Satoshi.
article
“Energy Cancelled” by Arthur Hayes
Whoa…where to begin…Arthur nails it in this one. He, along with others like Zoltan Pozsar of Credit Suisse, believe that we have entered into Bretton Woods III. The first Bretton Woods being the original in 1945, the second when Nixon took America (and the western world) completely off the gold standard in 1971, and now, the third in 2022 when America weaponized the financial system and stole Russia’s wealth being held abroad. This move will have blowback the likes of which even the CIA will blush at. Read the article, it is WELL worth your time.
video
A light-hearted video from 2021. Enjoy.
If you are interested in buying a little bitcoin every day, week, or month for the long run then join me on Swan Bitcoin and get $10 in free bitcoin once you start a recurring purchase plan (and a free book to boot!). You can set up daily, weekly, or monthly buys with ease. This method of Dollar-Cost Averaging is a great way to level out some of the volatility of bitcoin. Remember! You don’t have to buy a whole bitcoin! When you buy fractions of a bitcoin, it’s called Stacking Sats and Stacking Sats will change your life for the better. Once you start to hold bitcoin, you start to understand it better, you start to learn more, and you ultimately become a better person. Just don’t ask me how that works. It just does.
Hey Cam! Thanks for putting this together. The advent of digital currencies is fascinating but I still dont quite grasp how these currencies will be as transformative as crypto boosters are claiming. I think I have accepted that the block chain tech behind crypto may stick and fundamentally change our financial systems but I dont understand how the currencies, especially bitcoin are going to be the future global denomination. In other words, I can imagine central banks adopting block chain but its harder for me to understand the usurpation of fiat by a decentralized crypto whether bitcoin or other. I have a lot of questions but want to ask about two areas specifically (keep in mind that the below questions are based on my understanding, which may be completely off base):
1. Decentralization: This seems a big "pro crypto" argument in that digital currencies are decentralized with transparent chains of custody. The argument, as I understand it, is that current fiat currency is centralized and can be manipulated by a central bank, which is bad because centralizing of power can be corrupting. Crypto removes the central bank from the equation and this is a good thing because transparency reasons. A counter argument is that while there wouldnt be a central bank there would be centralized nodes of transmission (or server managers). From what I understand, when the internet was first thought of, people envisioned every individual user managing their own server. As we know, thats not what happened but instead people turned to companies that manage their servers for them, which is a consolidated market now. Here is my questions: what would prevent the server managers from consolidating their market capitalization and in effect becoming the central banks of the future?
2. Scarcity: A big pro of bitcoin specifically is that there will be a limited number ever created thus inflation really wont be a problem. However, as your sign off notes, you can buy fractions of a bit coin. Whats to prevent the infinite division of bitcoin leading to the very inflation problem that it seeks to prevent? Also, what happens if people horde bitcoin and there is not enough in circulation to create a viable market?
My current position is that crypto is too speculative and unproven to be a reliable form of currency. The current market cap gives the crypto movement some credibility in my mind but I am just not sold yet. I am open minded though and would have no problems changing my mind at some point in the future.
Thanks again for putting together the newsletter!