My Experience
It was early April or so of 2010 when I first saw the word 'Bitcoin' used in a sentence. Buried deep in an unrelated forum, which has long since been archived or deleted, one anonymous user slung an insult at another. An insult that changed my entire perception of the future of humanity.
“You sound like one of those bit coin people,” they so casually spit.
No response was given by the target, and no further mention was found.
Nothing within this document should be taken or construed as Financial, Legal, or
Investment Advice under any circumstances or pretenses.
This document is created for speculative and entertainment purposes only.
Please consult a Professional Financial Adviser before making any Financial Decisions.
Without Prejudice, within and in its entirety.
Immediately I was curious, so I googled 'What is bit coin' and found zero relevant results across the first and second page of indexed websites.
Slang? Regional language? Some coded phrase I couldn't understand?
I had no idea.
Fast forward to late 2010 – BTC Price $0.00001
Here is where I discovered the now (not-so) famous Bitcoin Talk Forums. A forum I would spend a considerable amount of time lurking on, and later, my data was hacked along with most of its user base – which wasn't relevant as I usually used fake names and unrelated user names wherever I traveled across these deep webs. A side-effect of being a habitual deleter who shirked followers and fans more quickly than clingy girlfriends.
Before this point, most people who follow economic topics have heard of or played with E-Gold and other such technologies. I love technology of all sorts, and therefore I'm always willing to try something new and hopefully learn something. Bitcoin presented for its first users something fascinating to the intellect – Peer 2 Peer Decentralized Money. A ridiculous sort of concept, then, but fascinating to deconstruct and reconstruct intellectually, applying its potential across various digital and analog sectors.
I present to you the original Bitcoin Whitepaper.
“I think the Bitcoin white paper is one of the most
seminal works of computer science in the last 20-30 years; It’s poetry.”
-Jack Dorsey, 2019
At the time, I barely had a clue what I was looking at. All I knew was this technology was different, it had fascinating properties, and it was the first of what could be many versions – a critical mistake and oversight of mine at the time.
Fast forward to mid to late 2011 - BTC Price: $1.00-$30.00
I still remember watching Bitcoin hit parity with the US Dollar. I took my girlfriend out at the time to celebrate. Bitcoin was now a currency, or so I thought. I was determined to try this new technology. With a budget just north of $1,000 I purchased the cheapest parts I could and built my own PC. In the event this wasn't a secure network or my hardware were to become damaged, I wanted to limit the impact. A PC running the modestly powerful AMD 6770 and compiled Linux Operating System. Linux was later abandoned, due to hardware conflicts, for Windows. After approximately three days of building, compiling, and downloading the Bitcoin Blockchain, I was officially 'mining' my own Bitcoin.
Hindsight 20-20 = Purchased Bitcoin instead of mining equipment – Balance of 950 coins +/-
Forward to 2013 - BTC Price: $5.00-$1100.00
The Butterfly Labs ASIC (Application-Specific Integrated Circuit) shocked the community. Gloom and Doom abounded among the excitement of the potential. I pre-ordered two devices, but due to several manufacturing delays (I suspected they were burning the chips before delivery to maximize their profits), by the time they had arrived, the network difficulty was adjusted, and I barely recovered the investment. One device quit within months, and the other's performance was less than specified. I eventually shut it off as the power consumption was significantly greater than the reward after breaking even on my investment.
Hindsight 20-20 = Purchased Bitcoin instead of Mining – Balance of 1,100 coins +/-
The rest, as they say, is history. I've tried almost every service, layer, and coin of any significance in the following years. Perpetually drawn to the technology over the profit. I did later lose a significant sum in the BTC-Jam bankruptcy (Micro-Loans Service), and I saw some losses in the Bitfinex Hack (2016), but I managed to avoid the Mt. Gox hack of 2014 that wiped hundreds of millions. Mt. Gox required a lot of personal information that I wasn't comfortable sharing with a Japanese-based company, to my benefit, as it turned out.
So, on the one hand, I potentially could have had a respectable Bitcoin Balance of 1,100 coins, assuming I never spent any in the preceding years. Whereas on the other, it is entirely possible I would have left a portion, if not all, of those coins on Mt. Gox and therefore had lost the entire balance along with many others. Life has a funny way of working out.
Total Valuation of 1,100 Coins Today: $18,150,000 USD
Total Valuation of 1,100 Coins at ATH: $75,667,000 USD
Regrets
Do I have any regrets? Surprisingly, no. I look at those numbers above with both amusement and shock. How far we've come in such a short period of time is impeccable. Looking back through my own timeline, I know I wouldn't have the original 1,100 coins today even if I did buy them. Circumstances, breakups, and momentary losses accumulated over that span. Or as I like to call it, “Life Happened.”
Bitcoin Today - BTC Price at Publication: $16,500
Bitcoin has evolved a lot since 2013, both in technology and public awareness. No longer is it relegated to the deep web of obscure and relatively unknown forums, but truly a highlight on the public radar. With speculation regarding Bitcoin's inclusion in even the newest Grand Theft Auto 6 installment in development, it truly has reached the cultural zeitgeist.
Bitcoin today can be transacted both Online and Offline through all sorts of means, including paper wallets, morse code, mesh networks (localized and private IPs), and even the Blockstream Bitcoin Satellite broadcasting to areas without internet access – a true testament to the power of this technology and its participants.
Senator Warren (born 1949) of Massachusetts has even remarked during congressional testimony as to the sheer volume of Crypto-related media publications as it relates to this seemingly 'nascent' space of technology. Politicians, given their job, tend towards a hyper-awareness of both media and media influence.
For those of you who have looked into Bitcoin or even done heavy research, I'm not going to rehash the same-old. If you don't know anything about Bitcoin, there are plenty of videos on Youtube in short and long formats to explain. That being said, here are a few things to consider about not only this topic but the future of these technologies:
Layers of Bitcoin
Currently, Bitcoin has two official layers – Bitcoin Core and Layer Two: Lightning Network. The third layer of Bitcoin is in development relating to Secured Identification for future applications. Namely, the third layer of Bitcoin will give you, the user, full control over your personal data through encryption. Herein, you will have full control over not only who has access to your personal information but also what information and when. Own-Your-Data is going mainstream, as I eluded to here:
The fourth layer of Bitcoin, not yet in development, should hold some interesting promises for the future, but we will save that for another article.
Truly a technology of evolution and a product of its core transmission, the Internet.
7 Layers of Bitcoin
This little tidbit was entirely plagiarized and stolen from Michael Saylor from his 26+ hour Saylor Series of interviews on the 'What is Money' Podcast on Youtube.
(Not to be confused with the programming layers of bitcoin above)
For your consideration,
Saylor's 7 Layers of Bitcoin:
Energy – Refers to the ability to transmit energy through the Internet through the Proof-of-Work Algorithm. Namely, by mining Bitcoin in a region with cheap and abundant power and transferring that Bitcoin to areas with expensive power, this indirectly creates a system of transferring energy without transmission lines.
Technology – This refers to the above, in that Bitcoin Protocol is a system of layers with added features and developments that will further revolutionize our world
Political – This topic is a little more nuanced but imagined in terms of our Political Apparatus, Voting, and Systems
Financial – Bitcoin and Crypto have truly democratized our financial systems in terms of access to otherwise highly exotic products, such as Futures Contracts and Margin Trading
Mining – The creation of billions worth of publicly and privately owned companies, manufacturing facilities, and all related infrastructure
Spatial – This refers to the solutions Bitcoin offers Geospatial (GIS) industries and systems.
Technical/Temporal – Bitcoin is Timeless. This is one of the crucial arguments Saylor makes regarding Bitcoin's ability to pass through time in an effect that Inflationary Systems are incapable of doing.
General Lessons
Lesson #1: I never made a Mt. Gox account, and therefore, my balance was never at risk. Mt. Gox wanted far too much personal information for me to be comfortable, and was based out of Japan, making it legally dubious to engage. Therefore, if someone is asking too much from you - they better be handing you a check in return.
Lesson #2: Not your Keys, Not Your Crypto. Never trust anyone with your private holdings. The only institutions I trust today are Binance and Coinbase, and not with my full balance. DYOR.
Lesson #3: Easy Gains is Easy Loses. If the interest rate offered is ridiculous, then the terms of providing that rate are equally ridiculous. Common sense prevails.
Lesson #4: A rule with technology is that the first version of something is never the final version. That rule is violated when it comes to digital technologies, which can evolve over time. This was my most critical mistake.
Lesson #5: Never tell anyone your crypto balance. Not friends and especially not family. They might laugh at you today, but they will come asking for some tomorrow. It’s none of their business lest you become the future ‘Crypto-dude’ in your region.
Lesson #6: Never leave all your eggs in one basket, and spread out the risk - including across multiple hardware wallets and even manufacturers of hardware wallets if your balance is significant enough.
Lesson #7: Always back up your Private Keys. Never make them digital or take a picture of them. Never trust any one person with your full key set. Always have backups of backups - fires happen, and life happens.
Lesson #8: If you are in a relationship or marriage of fewer than 15 years - hide your wallets if possible. Not my lesson, but a common one online.
Lesson #9: Micro-Loans are fun, but an external risk to these platforms is the underlying value of the currency. Currencies fail and have throughout all of history. Protect yourself.
Lesson #10: Alt-Coins are fun to play with and speculate on, but very few of them have any value. I still remember reading forums about ‘Peer Coin’ and ‘Feather Token,’ both of which were in the Top 10.
Ever heard of them? Of course not. They’re dead, along with some suicidal investors who remortgaged their houses to buy more - not joking.
Bonus Lesson: Faster and Cheaper are not always a good thing, but sometimes actually hindrances that scare investors away and lead to greater problems. If someone tells you this ‘next coin’ is better, distrust until you can prove otherwise using other metrics than ‘faster’ or ‘cheaper.’ Cheap money is lost Fast.
As always,
Farewell and Good Luck.
-Dark Philosopher
Forecasting Trends
Bitcoin's future price is expected to significantly increase with deteriorating economic conditions – what we call an inverse correlation
By 2035 (BTC 7th Cycle) Bitcoin's price, adjusted for inflation and in consideration of future hyper-inflationary events, is expected to be significantly above 30 Million USD in those dollars.
Difficult variables include the extent of Federal Reserve actions to circumvent market pressures and extend the current economic system. The harder they try, the worse the result and greater the impact on Bitcoin's price in inverse correlation
Worse-Case Scenario - Bitcoin at 100M by middle of next decade (7th Cycle)
Current “Expert” Projections Suggest 1M by 2025
BTC 4th Cycle
Development and Deployment of Layers 3 and 4 of Bitcoin and Alt-coins
Cities, States, and Countries further adoption
Bitcoin held as Central Bank Reserve Asset across the globe
IMF - UN’s Currency Issuer - Includes Bitcoin in Basket for SDR’s
Muslim World Holds Out
Muslim Religion and conflicts with Bitcoin
Expected to Reverse on Trending Data
Price Stabilization
Expected to begin around 2028-2032 (BTC 5th Cycle)
Exponential Growth Curve, easing of Cycle Lows
Black Swan Possibilities
Federal Government Shutdown
The only viable method of circumventing the current trajectory would be a near-entire shutdown of the Federal Branch and some aspects of State Governments for a period of 5-10 years.
This is extremely unlikely. There is no historical precedent and therefore borderline impossible before the coming calamity
Federal Government 'Bans' Crypto
Highly unlikely, lack of political support (Eg: Bitcoin Congressional Caucus) and even if accomplished is almost entirely unenforceable
Limited Impact, would result in US Interests losing ground to International Competition
Complete Collapse of the Dollar and Abandonment by Trading Nations and the Middle East, Dumping of Chinese Held Reserves
Developing towards Likelihood
Monitoring
North Korea Bitcoin Holdings
FTX and Exchange Collapse – Expected Exchange Collapses, but Earlier than Anticipated
Governments start accumulating to support National Currency Reserves
May already be occurring at Federal Reserve
Already in process at other National Central Banks and Governments
Mexico, Africa, and South America
Suspected Russian, Chinese, and Korean use in Economic Sanction bypass
“Akon City”, Senegal, Africa (The Crypto City)
“Bitcoin-City” El Salvador – Powered by Volcanic Activity
Mexico Bitcoin Legal-Tender Adoption and Infrastructure
Defacto or Adopted Consumer Price Unit - Satoshi
CBDCs as Limited-Hold Transactional Currency
Day2Day Only - Inflation wipes away value
… and a whole lot more. Stay tuned, developing.
November 16th, 2023 - Fixed Format, Layout, and Signature