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Ploddingly Slow, But Thorough
I cracked open one of my C++ programming books recently and started leafing through it in the hope of stirring up some warm memories of my use of the language to wrestle embedded systems problems into submission. Instead, I immediately experienced a moment of existential horror! My cherished language of choice all of a sudden looked like an intimidating, unfathomable, encrypted mess. I thought for a moment that I was having my second stroke.
It’s scary at how one can forget so much so fast unless one arduously burns calories to maintain a high level of competence in an area crucial for putting food on the table.
After regaining my bearings, I realized that most programmers who know other languages but don’t know C++ experience an instance of the same abject terror when they scrutinize C++ code for the first time. It’s too bad, but it is what it is.
Before my life was abruptly upended by the Emperor, I used to be a ploddingly slow, but thorough, C++ programmer. But as anyone who has read this blog quickly discovered, I ain’t never been no genius. I had to work much harder and longer than most to become a C++ craftsman. Malcolm Gladwell’s “10,000 hours to become a subject matter expert” threshold to prosperity is too low of a bar to apply to dumschitts like me. I needed 2X the time to become internally confident that I was an excellent C++ programmer. It was a difficult but satisfying road to travel because my mind was richly rewarded with the excitement of learning something new whenever I danced with C++’s exquisitely rich feature set and its “std::” (affectionately pronounced as “stood” 🙂 ) libraries in my head.
While coding away on problems, I was always thinking in the background about what I could do to help future maintainers understand the code ASAP so they could get something done without getting frustratingly stuck. I’m embarrassed and sad to admit it, but it was more of a classic, fear-based, ego-driven mission than an altruistic one. I was afraid of feeling like schitt whenever I envisioned colleagues reading my code. I yearned for everyone who read the code to say “Wow, I wish I knew this maestro!“, instead of “WTF!” after every few lines.
To drill deeper into what I’m exposing here about my dark passenger, I was firmly in the clutches of the “impostor syndrome” for most of my undecorated career. But hey, despite the fact that Stroustrup, Sutter, Meyers, Josuttis, Kalb, Lavavej, Lakos, Williams, Carruth, Niebler, Boehm, Alexandrescu, Gregory, Davidson caused my cancer ( <– just joking), it was a fun, multi-decade, journey down the C++ rabbit hole. I’m extremely gratefuI that all of those wonderful teachers took me along for the adventure.
In closing out this post, I remembered the need to blatantly include some Bitcoin propaganda in it. So, say ‘ello to my leetle friend…
I wish the tat was orange instead of black, but the artist didn’t have any orange ink in her pallet. I’ll make sure my upcoming neck tat is full Satoshi orange though.
The Easiest And The Best
The relentless Bitcoin honey badger has ramped up her increasingly effective, 11 year old, clandestine, catastrophic assault on the archaic, fractional banking industry.
Due to Bitcoin’s latest resurrection from the dead, people have been asking me once again what is the best way to jump onto the Bitcoin bandwagon. The best, but most technically challenging, way to participate in the emerging Bitcoin economy is to follow these 3 steps:
1) Open an account on a well known crypto exchange (coinbase.com, kraken.com, etc) and link it to your fiat checking account.
2) Buy some bitcoin (no shitcoins, please!) with some of your fiat. The exchange will charge a service fee for the conversion and your bitcoin will be deposited in a “custodial” onsite wallet that you can access anytime.
3) Send the bitcoin from your exchange’s “custodial” wallet to your very own personal software or hardware wallet(s). This is what bitcoiners call “taking personal responsibility“, or heeding this advice: “not your keys, not your bitcoin“. Keeping your bitcoin out of the easy reach of “authorities” who can disappear it from you faster than you can say “WTF!” gives you full control over the wealth you store in bitcoin, as it should be for hard working people in any country.
Executing step number 3 requires a modest amount of technical prowess that most people don’t have, or don’t want to have. That’s fine as long as they understand the risk of leaving their bitcoin keys in the hands of someone or thing you have no choice but to “trust“.
A less sexy but easier way of penetrating the Bitcoin universe is to buy shares in a company that either directly holds some bitcoin in its treasury or has integrated the Bitcoin protocol into its business models. Woke companies like Microstrategy ($MSTR), Square Inc. ($SQ), and Paypal ($PYPL) come to mind.
Still others are entering the Bitcoin Zone via Hedge Funds, but ya hafta be pretty rich to be able to puncture through that tight-ass entry point.
Just a couple of years ago, these last two big-money on ramps didn’t even exist. No one with pockets that deep would even glance in Bitcoin’s direction without holding their nose in disdain of the high tech ponzi abomination. But today, the traffic seems to be thickening at a greater pace on each on ramp. The highway crew has even commenced building a bunch of new, huge-ass, on ramps for enlightened central banks. Something in the air smells parabolic.
Gradually, then suddenly
An Adoring Legacy
As I stated in a previous post, one of the goals I’d like to accomplish before being violently escorted off the stage by the dastardly EOAM is to help family, friends, and readers become rich. Well, um, perhaps? This is another post intended to nudge my homies in that direction with the aid of…….. Bitcoin, once again.
The figure below shows the generic S-curve template that accurately models successful new technology adoption. As the new technology (think Bitcoin) gains traction and steals market share from an older, noble but inferior technology (think gold), the early adopters/investors reap the most benefits and the laggards (think stubborn goldbugs like Peter “cuff links” Schiff), the least. It makes sense in a capitalist society that the early risk-takers with more skin in the game are highly rewarded. They have a higher risk of getting rekt if the technology fails to gain traction, never makes it past the “knee” of the S-curve, and returns to the big goose egg.
The next figure shows many specific examples of successful technology adoptions. They all follow the classic S-curve template but the time interval from early-to-laggard acceptance varies quite a bit. It took the telephone 60 years to achieve 80% penetration into the home whereas it took the microwave only 15 years to achieve the same encroachment. The steeper the slope past the knee of the curve, the greater the reward is over a shorter amount of time. The ideal slope is infinity, “…to the moon Alice”.
Yet another graph below shows the latest brazen attempt by the insecure BD00 to look bigly smart. He’s overlaid the current Bitcoin market position on its S-curve assault on the gold market.
So, how did the fake genius BD00 concoct the 3.5% market penetration position? Follow the assumptions, check out the result, and make sure you kindly read the blue note:
To be even more delusionally obsessed, let’s take a look at the approximate market caps for some major monetary asset classes:
If you believe the new kid in town, that Bastard-Bitcoin-Badger, can nestle in with this elitist cartel and gouge out trillions of inflated value as a hedge against a major collapse of these fiat-based assets, then its market value may climb to $50T+, which would jack the Bitcoin price up to $2.85M/BTC. <— WTF?
For reference, let’s look at what my man, god’s third son after Jesus and Satoshi, PlanB, forecasts in his elegant S2FX model below. He’s got BTC cutting the cord at $1M and stepping up just after the next “halvening” occurs in 2024.
That’s enough cray cray for this post, and don’t forget that….
Oh, and there’s just one more thing. I felt the need to rage about this abomination…..
An Uncorrelated Asset
Bitcoin is on yet another volatile, but upward, trajectory. My friends and family insufferably know that I’m a bitcoin champion because of my incessant preaching to them about the virtues of personally-secure money. They also know I’m a long time lover-of-bitcoin, not a skanky shitcoin shill who popped up out of nowhere overnight.
I’ve seen smart people describe bitcoin as an “uncorrelated” asset for quite some time now. Until very recently I thought it strange of them to say that. I look up the price of BTC daily and it seems qualitatively clear to me that bitcoin is positively correlated to the S&P 500 index. Every time the index goes up, BTC seems to go up. Every time the index goes down, BTC goes down.
Fidelity Research helped me understand why calling bitcoin an “uncorrelated” asset is quantitatively correct. The effort of Ria Bhutoria (Director of Research at Fidelity Digital Assets) dotted an “i” and crossed a “t” in my previously infallible mental model of the emerging role of bitcoin in the world. I snipped the following elegant table from her latest thesis (“Bitcoin’s Role As An Alternative Asset“) to record the correlation coefficients between the top financial assets in the world.
The first column clearly shows that bitcoin, like honey badger, don’t care about what other assets do. Unlike any of the other listed assets, none of bitcoin’s correlation coefficients cross the .2 threshold. Interestingly, bitcoin is less correlated to its biggest competitor, gold, than it is to stocks.
An uncorrelated asset like bitcoin is the best hedge against a global financial system crash that deflates the value of all other assets except for, perhaps, gold. But there’s no need to worry about that, right?
The Morphing….
The next blockbuster horror film coming soon to a theater near you: “The Morphing“. It documents the disastrous transition of a fluid, decentralized, unified, team into a hardened, centralized, divided, team.
The World Wide Acceptance Threshold
Assume you’re building a radical new financial system from the ground up intended to be useful to every human being on the planet – not just to the rich, powerful, manipulative, greedsters who lord over the current antiquated and rigged system.
In order to survive the continuous offensive onslaughts from those entrenched oligarchs, your goal is to onboard as many everyday users as needed as fast as possible to unambiguously prove that the ground breaking system is not just being used by “criminals, terrorists, pedophiles, drug dealers, and tax avoiders“. You need to surpass the World Wide Acceptance Threshold (WWAT) of, say, 1 billion users.
Satoshi Nakamoto’s Bitcoin “peer-to-peer electronic cash system” is currently the most popular system trying to reach and exceed the magical WWAT. It currently has millions of users, but the usability of the system (high transaction fees, long confirmation times) is deteriorating at an alarming rate due to network saturation triggered by the rate of growth of new users.
There are two solutions out there competing to relieve the pressure on the bitcoin network so that the rate of new user growth doesn’t go to zero (or negative!): SegWit and Bitcoin Unlimited (BU):
The SegWit solution provides a short term, hard limited, pressure relief valve to allow some network breathing room for orderly new user additions. The BU solution provides a dynamically variable pressure relief valve to achieve the same effect. It tries to adapt to the changing new user growth rate over time.
The above graphs indicate that the SegWit solution is agnostic toward the rate of new user growth and halts system progress toward the WWAT goal at some point after its introduction. The BU solution allows the system to gracefully expand in proportion to the rate of new user growth, providing friction toward progress to the goal, but not a hard stop like SegWit.
SegWit is less technically risky because it is a much more conservative approach and it has undergone more peer review and offline network testing than BU. The biggest risk that BU introduces into the system is the concept of an “Emerging Consensus“. The EC rules allow the market to dynamically decide the network saturation level over time.
Neither SegWit nor BU will push the Bitcoin protocol over the WWAT threshold alone. BOTH need another layer of help on top of the base Bitcoin protocol layer to achieve the goal. However, even though it is riskier than SegWit, I think BU allows more time for Bitcoin to grow before users start leaving in droves for alternative cryptocurrencies due to skyrocketing user fees and transaction times. But hey, that’s just my opinion.
Dubious At Best, Disingenuous At Worst
Adam Back recently claimed on Twitter that the Bitcoin Core development team is “decentralized“.
However, that’s a dubious assertion at best, and a disingenuous one at worst. Mr. Back is the President of Blockstream Inc. His startup company is financed by $70M from traditional bankstas who could give a shit about billions of unbanked/poor people being given the ultimate tool to: bootstrap themselves out of poverty, participate in commerce with merely a cell phone, and dramatically increase the world’s GDP.
Here is a snapshot of some of the most influential and vocal members of the core development team directly employed by Blockstream. The big guns are Adam Back and Greg Maxwell. Interestingly, Mr. Back, who is now an” executive“, but somehow still strangely thought of as a major technical contributor, doesn’t seem to be actively involved in the design/coding effort. That’s because his presidential title makes him responsible for Blockstream’s financial performance over all else.
Admittedly, not all Bitcoin Core developers are paid by Blockstream, but some are contracted out by the private, for-profit, company. But, as the presented evidence shows, the Bitcoin Core development team cannot be claimed to be DECENTRALIZED.
Startup investors, especially bankstas, expect a high ROI on their risky investments ASAP. Regarding Bitcoin, their investment returns can only come from centralized technologies, known as L2 tech, layered on top of Bitcoin. L2 technologies are to Bitcoin like web sites are to the TCP/IP protocol. That’s where real big money is made. By design, Blockstream is an L2 technology product company that must use the Bitcoin protocol to build on top of.
Hence, by implementing and promoting the SegWit improvement to the Bitcoin protocol before a deterministic, time-dependent, dynamically increasing maximum block size policy, raises suspicion in the Bitcoin community that Blockstream is out to freeze Bitcoin L1 on chain scaling growth after SegWit is activated in order to get money-making L2 technologies deployed as fast as possible. Again, suspiciously, there is no unified, visible, commitment from the Core development team as a whole to pursue an on chain scaling improvement next as priority one to relieve network pressure and allow a marginally increased onboarding of a cluster of new, less well off, users. No room to breathe.
Meanwhile, the Bitcoin network is becoming more exponentially saturated as new users (Venezuela, Mexico, Greece, Cypress, China, Japan, Africa, India) try flocking to Bitcoin to use as cash but are turned back by wildly rising transaction fees and confirmation times – a massive decrease in usability to large swaths of people. The flight from Bitcoin to alternative cryptocurrencies resulting from the poor stewardship of the Bitcoin protocol by the Core development team is vividly visible in this market share chart:
Satoshi Nakamoto, the genius creator of Bitcoin, said something to the effect of:
In the future, there will either be massive BTC transaction volume, or zero volume.
Ironically, the anti-fragile Bitcoin system proven to be indestructible by powerful external forces over 8 years of 24 X 7 operation, may end up instantaneously imploding due to internal forces caught in the throes of a bloody death match.
Electronic Cash Or Electronic Gold?
Here’s my personal take on the SegWit (fixed, small block size) vs. Bitcoin Unlimited (dynamically determined block size) war of attrition that keeps raging on within the Bitcoin community:
- SegWit => Steers Bitcoin off of the “electronic cash” path Satoshi Nakamoto originally started it on, and towards an “electronic gold” niche that hard-limits the number of people that can use Bitcoin gainfully.
- Bitcoin Unlimited => Keeps Bitcoin on the “electronic cash” path, providing 2 billion “unbanked” people with the opportunity to bootstrap themselves out of poverty, participate in commerce, and boost the global economy.
Three Options
The bitcoin core development team chose to implement the top option. The bitcoin XT, Classic, and Unlimited development teams chose to implement the middle option. Sadly, no team chose to implement the bottom option.
Two years ago, the XT, Classic, and BU camp(s) saw the high Tx fees and long confirmation times we have in place today – it was clear as day. But rather than paying attention to their concerns and incorporating a max block size increase into their SegWit design, the majority of the Core team and their backers chose to ignore, censor, and ostracize anyone who didn’t agree with their chosen path. As a result, we now have an existential crisis going on within the bitcoin community which may lead to the total collapse of the ground-breaking cryptocurrency. Bummer.
Western Union, Bitcoin, And Mexico
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Meh!
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