FUD Vs Foresight

Today on March 16, 2018 bitcoin is sitting at $8,550 USD. Here we have a couple of my favorite investors throwing shade at bitcoin. What’s interesting is that the crypto industry is actually going thru the necessary growing pains of regulation and use scaling. Because both bitcoin and ethereum are testing their scaling solutions (to compete with banks & visa/mastercard, etc), both are poised for more use adoption this year.

So here’s the FUD:

In February, Berkshire Hathaway, Inc. (BRK.A, BRK.B) vice chairman Charlie Munger had harsh words for bitcoin at the Berkshire annual shareholder meeting.

“It’s just disgusting. Bitcoin is noxious poison,” Munger said. Billionaire Berkshire CEO Warren Buffett once famously called bitcoin “a mirage.”

And the Foresight:

Still, bitcoin has plenty of supporters on Wall Street. Fundstrat Global Advisors co-founder Thomas Lee[WD] says Fundstrat’s bitcoin misery index suggests the sell-off is an excellent buying opportunity for long-term investors.

“The BMI is telling us to keep the negative headlines in perspective,” Lee said, according to CNBC. “When the BMI is at a ‘misery’ level, future returns are very good.”

Fundstrat has a year-end price target for bitcoin of $25,000.

CoinPuffs Vs Coinmarketcap

Coinmarketcap’s homepage.

One day I noticed that the bitcoin price dropped alot, and the coinmarketcap as a whole also dropped $50 billion. What?! It turns out someone running coinmarketcap.com decided to drop South Korea off the market index because it’s prices were higher than other countries without telling anyone in advance. What?! Their prices are higher because South Korea makes it hard to move money in and out of country on purpose–that shouldn’t bar the country from being part of of the general index. Anyway, in the process of discovering this info, I found out that CoinPuffs works like CoinMarketCap, but not as capriciously. It seems more like a community site, and it has over 2000 coins listed. Article on coindesk.

So What does the Federal Reserve Do?

I like to listen to economic news at night and recently heard this lady, Nomi Prins, who was a Goldman Sachs manager, then journalist, talk about the history of the Federal Reserve in America. Her book, All the Presidents’ Bankers is a telling of the relationships between US Presidents and powerful bankers from 1907 to the present.

In 1907 there was a potential stock market meltdown, (caused by some bankers (some people are always trying to game the system)) and Teddy Roosevelt called on his friend J.P. Morgan to fix it. That led to the creation of the Federal Reserve in America. So basically the Fed (the US version of a “Central Bank”) acts as a bridge to do what the Government wants in the economy, via handling Government money. Unfortunately, it seems that printing money (called “fractional reserve banking” and “quantitative easing”), and thus devaluing the currency, is what the Fed tends to do, because it’s easier to flood the economy with money than it is to actually solve the economy’s root problems.

And right now, in 2018, it seems like the US is in the middle of a bigger bubble than it was in 2008 when the banking bubble burst, because the US is over 20 trillion in debt, and is at the point of not being able to make interest payments on the debt if the bond market rates keep going up. So buckle your seat belts!

Insightful Interview with Macro Trader who’s Now Investing in Crypto Currencies

How macro trader Novogratz became a bitcoin convert
How macro trader Mike Novogratz became a bitcoin convert

This article/ video interview is with Mike Novogratz, a veteran Wall Street trader who sees a lot of opportunity in the bitcoin ecosystem:

It started with a late-2015 visit to a friend’s startup in Brooklyn.

“I expected to see Joe, a dog and one assistant. Instead I saw 30 dynamic young people crammed in a Bushwick warehouse, coding, talking on the phone, making plans for this revolution,” Novogratz said. “Macro guys are instinctive. My instinct was, ‘I want to buy a chunk of this company.”’

The article mentions that he’s also starting up a $500 million hedge fund to invest in the crypto-space.

John McAfee Interview: Antivirus, Equifax 137 Million User Hack, US Banks & Bitcoin to $500K

Published Sept 7 2017, Romania

Not feeling so well today so I rested and watched an interview with John McAfee about the state of Cyber Security. John is an intelligent, outspoken character who started McAfee antivirus back in the 80s, then I remember him being in the news, on the run and being deported regarding his neighbor in Belize being murdered a few years ago. (He appears suspicious.) Now he’s peddling security software again, and crypto opportunities. I took some hopefully pertinent notes from the talk.

Interviewer: What’s the state of Cyber Security in 2017?

John M: We have none.

While you are watching your phone, your phone is watching you. This is just a fact of life.

The anti-virus paradigm is no longer functional, it doesn’t work. And I’m the person who invented it. Viruses aren’t the problem, hackers are. It’s a reactive paradigm, and that’s the problem. We have to become proactive. (He’s developing a product “Sentinel” to ID the hackers coming in.)

Smart phones are spy devices. Google: If you have nothing to hide, you have nothing to fear. –Ridiculous.

Everybody exercises different degrees of privacy hundreds of times a day. We are humans, we live in an imperfect world.

On Cryptocurrency:

How secure is Bitcoin? I think it’s extremely secure. On the other hand, people put crypto wallets on their smartphones, and over half of smartphones are infected with key-logging software.

Pornography–the first thing the site does is download a rooting software. After the jailbreak, they download a keylogger. Only takes seconds, and from that point on, somebody is watching. People pay the porn sites to push keylogging software on to phones.

If you have an online wallet, an online account, the next day your money may disappear.

We all have secrets, yes? So why are we giving our data to companies?

Why do we use the cloud? It makes life easy, I can access my data from anywhere. The Cloud is OK for some types of things.

Bitcoin is a New Paradigm of Money

Whether bitcoin or Ethereum or Monero or whatever, you need to Educate yourself, it is easy to lose your money in Crypto

Offline wallet: trezor, seed keys display on the trezor, not on desktop. Don’t keep your wallet on any device.

Future security: Look 4 hacker, not the malware.

The world is on a dangerous cliff. We’re allowing these devices to master us, not the other way around.

At least a dozen big nation States have the power to bring down another nation’s power grid.

I didn’t hear anything about the $500K for bitcoin in the talk, but I may have dozed off when he said it. I did find he said that in twitter in July of 2017: “I Promise to ‘Eat My Own Dick’ If Bitcoin Doesn’t Reach 500k In Three Years”  Seems like just a bit of click bait.