Monday, February 10, 2020

Another spike in BSV price today!

"BSV jumps 17% out of nowhere" says one headline. It is actually greater than 25% really but the gist of the headline was it jumped 17% when all other cryptos were in bear mood. When BTC passed 10,000 the whole market of course rebounded including BSV.

Why did BTC pass 10K ?

My take is the slowing global economy prompted by the corona virus ( nCov ). The effects on commodity demand due to China shutdown is being felt. Oil has plunged 20% with little hope of it recovering in the next 2 quarters. The ramifications of this is huge as the price of oil affects highly leverage shale producers immediately and Saudi Arabia needs oil at $80 to balance its budget.

Supply lines have been disrupted leading to many factories including Hyundai, outside China, also shutting down. A consequence of today's just in time production, and this was only due to one week shutdown. China restart was planned for Monday Feb 10 but this may be extended by another week! The mood has changed, lost production, revenue and profits may never be recovered. The long touted recession may finally be here despite all the money printing by reserve banks around the world to avoid it.

Excessive money printing can only result in devaluation of fiat currencies worldwide. Some countries like Columbia and Zimbabwe have adopted the US dollar because their own currency have failed. However, all fiat currencies have only 1 outcome - a move to zero, as governments can never stop printing to offset tax deficits. Normally the affected country will just reset with a new fiat currency but today with the options of digital currencies and cryptos there are choices.

Why the increase in price for BTC

BTC proponents want you to believe that the moonshot is near or here. I believe that BTC price increased because it is the main gateway for new money to flow into BSV. If this is true then the next phase will be for BTC price to fall while BSV rises.

Thursday, February 6, 2020

Corona Virus and Economic Impact

The above show 549 deaths in Hubei out of 564. The death rate in Hubei is way above any other cities even in China. So why is this?

Professor Michael Levitt in the interview below suggest that the death statistics looks more like an instance of poisoning than a viral epidemic because of the localised nature of the deaths concentrated in Hubei. Secondary cities including cities out of China show death rates consistent with the common flu.

What is different about Hubei.

To understand this we have to appreciate why Chinese choose to consume exotic meats. Older generations being generally less educated, believe that consuming such products will benefit them health wise or cure them of certain ailments.

We know that Corona virus jumped from animal to human. Quite likely there was a sick animal which pass the virus to all the people handling it. These people will be the core and source of the infection. Perhaps consumption of the meat was also a health risk especially among older people.

The next round of infection are those that came into close contact with carriers which was made worse by the ability of the virus to spread even in its' incubation stage.

The red flag was first raised on 31st December 2019 and city wide quarantine imposed on January 23. Exposure through close contact probably stopped soon after that as everyone becomes aware of the risks. Quite possibly the virility of the pathogen is greater through direct contact and less from passing proximity or contaminated surfaces.

If 2019-nCov is a deadly killer virus the death rates in the whole of China would be exponential by now rather than tailing off. It is probably less of a killer than the common flu, unless there is close contact and direct exposure. The fact that it can be spread during its' incubation period is what will lead to the virus spreading worldwide and perhaps would be unstoppable. The only solace will be its' low fatality rate.

Is China To Blame?

Viral mutation is a natural phenomenon. It could have happened anywhere. It is fortunate for us that this strain struck in China at this time! Within 7 days of notification Chinese scientist were able to sequence the genome and place the whole cities of the nation under quarantine to stop the spread of the infection nationally and globally. No country in the world could or would be willing to take such draconian measures at such huge cost to their economy. We should be thankful that China did.

We have now learned much about this virus and much will now change. China would probably ban all live wildlife markets and this time it would probably stick. Old superstitions die hard and this experience will hopefully change worldwide attitudes and give new hope to wildlife and endangered species.

As 2019-NCov will most probably remain with us from now on, our attitudes towards personal hygiene, social behavior and cleanliness will change for the better.

Economic Impact.

China is the biggest importer and consumer of crude oil in the world. When China shut the taps crude prices fell 20% immediately. This shows the demand pull on oil prices and emphasis the potential for China to influence crude prices into the future should she wish to do so. OPEC no longer control oil prices. China does. Let us hope that she refrains from implementing a China first policy.

Looking further into the future, oil is a sunset industry with renewals and electrification of transport playing a greater role each year, countries reliant on oil do not have much time left to transform their economy. Elon Musk commented that it would only take 100 X 100 miles of solar panels to power the whole of the United States and a battery bank 1 X 1 mile to do so.

With China closing down its factories for an extra weeks many factories located in other countries also needed to cut or close production because they depend on China's supply chain. It would be difficult to change this reliance and dependency.

More that 140 million Chinese tourist visit other countries each year and many countries will take a hit economically as this revenue source has been completely shut both by China and by the receiving countries. How will China tailor its outbound tourism going forward, after this crisis?

Current estimate is that the world will take a 2% GDP hit in the first quarter of this year with China hit particularly hard. How will the US react to slow or reduce purchases from China as agreed in their phase 1 agreement? To raise dollars China can always sell treasuries and this will not be good for the US as it is still running bigger deficits each year.

A compromise will be found. If anything this episode have highlighted the fact that we have to live together as one people and one world. America first, China first or any country for that matter is a recipe for disaster. There will be a global recession just around the corner and this time there will not be a China pump to bail us out. We will have to do it together.

Monday, January 27, 2020

Bitcoin SV Next Bull Run

When will Bitcoin SV next bull run take place?

Guess we are all still buzzing over the last BSV price run up! When the dust finally settled BSV is up 300% and holding. So why did the last price hop happened? The main excuse was that CSW got the keys to his bitcoins! I commented then that it is nonsense as it was only a rumour and even if true the impact will be negligible. If the fear was that he would dump BTC to push up BSV then BTC should have experience a significant drop in price.

Those who are into BSV know that it is the original and real Bitcoin and are convince that it will be the only blockchain on which all blockchain apps will be built. The run up in price is only the first phase of existing whales and hedge funds building a position and new money coming into BSV.

Had it just been a CSW rumour then  BSV's price would have drop lower than from where it started - about $90. Instead it has settled around $300. The likely scenario is that this is the new floor from which the next price push will take place possibly to settle again between $600 and $900.

Timing a bull run is not a science. We can be sure that BSV will make its' biggest price break when hedge funds are convinced that BSV is the real Bitcoin. This will happen when all the arguments against BSV crumbles one by one and we reach tipping point in public perception first within the crypto community then in the wider public.

With that in mind the start of the next run should happen soon after the Genesis upgrade faultlessly. With that we should see all the apps timing for this event launch on the BSV blockchain. This burst in activity especially in monetized social media apps will pull many within the crypto community towards BSV.

How will it play out?

We should first see a sell-offs in alt as the smart developers and investors realise that their projects will work better on BSV. As before the move will be gradual but we will see it as a match between BCH and BSV.

It is quite surprising that BCH has maintained even the valuation it has now, with such low number of transactions on its' blockchain. Perhaps BCH supporters believe that it is digital silver to BTC'd digital gold. The truth is that with micro-transactions a reality, there is no need for digital silver, bronze or gold for that matter.

So the next phase will be a seesawing battle between BSV and BCH with the BSV whales taking every opportunity to build on their portfolio as the price moves in their favour. I suspect that BCH supporters will fight hard to prop up the value to stay ahead of BSV. If true this behaviour can be taken advantage off.

This phase will complete when BSV move to number 4 on coinmarket ranking indisputably, which will then trigger the next phase which is the race to NO 1.

Tuesday, January 14, 2020

WOW The Skip Happened ! Now For The Flip

When I wrote this article yesterday ( The Coming BSV Skip and Flip ) BSV was sitting at $170. Woke up this morning and it is $336 and has already surpass BCH at $331. No, I do not have a crystal ball or any inside information. I just noticed the volatility of BCH hashrate and suspected that something must be up with the Unknown Miners.

If BCH supporters are really desperately trying to keep their hashrate up by renting mining rigs then the game is really up. It is only a matter of time, as this will be a futile exercise. They will not have enough money to keep up with the rising price of BSV. It is a vicious feedback loop. Now it has happened. There will of course be resistance with market support but the outcome is inevitable. The fundamental value proposition for BCH is flawed.

For my observance this was my reward.

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This is the first time that I have ever been banned and I have not posted there in 2 years. Guess the truth must hurt. Can't be that bad really because BCH price is actually up by about $70 since my post.

So the The Skip is over. Now the mainstream crypto presses will be pushing hard on the Tulip Trust narrative. Come on be serious. Anybody with common sense can see that it is all about the technology. Why is it that hard to fathom?

Unconfirmed if and buts about the tulip trust even if true, cannot account for the huge run up in price. It means that there is real demand especially when you realise that BSV price have been going up steadily since mid December and in reality since the delisting. 

Will The Flip happen now? Of course. More people are starting to believe or hedging their bets just in case.

Pump and Dump

Will there be a huge dump coming up? Unlikely. Those holding BSV are believers. Being a very divisive 3 way tug of war between the 3 coins those who wants to dump have done so already. The BSV community is even smaller than BCH, and those who are invested for the long term will hold on to their coins, which creates scarcity and more upward price pressure.

There will of course be attempts to push the price lower by traders but the variation will be no more than 30% at most and will be good opportunity to buy the dips. 

Watch the hashrate

I have explained what I believe will be the mechanics of The Flip so I will not repeat it here. As hashrate moves over to BSV, BTC's blocktime will rise and the mempool will bloat as well. This will be the start of the dreaded Chain Death Spiral for BTC. 

The average time between blocks for BTC is rising fast and is already at 17 minutes almost taking twice as long for blocks to confirm. 

Now that everybody have seen what happened BTC supporters will surely put up a valiant effort to prevent the Flipping. There will be lies, misinformation, market support, etc and again the outcome is inevitable. The value proposition that BTC is digital gold is also flawed. The great hope for BTC in the lightning network is also in trouble with security ans scalability issues.

As more people who have substantial financial stake in BTC realise, or start to feel uncomfortable about this, they will start to hedge by at least equalising the number of each coin held. This will of course drive up the price of already tightly held BSV. In a rising market miners will also withhold coins, selling only if they have to further restricting supply. Those selling in the hope of buying back on the dip if are unable to do so will quickly re-buyback at a higher price which will again add to upward price pressure.

Why should BSV succeed.

It has a useful value proposition anchored on a stable protocol with massive scaling.

Other ancillary reasons

1) The Bitcoin founder is behind the chain and supports the development of the chain. I have believed that Craig was Satoshi when he first turned up at this discussion back in June 2017. As more people accept this fact the negative connotation of Craig's effect on BSV price in the past will reverse. I also wrote another piece on why it matters.

2) The developer tools available to support building on BSV. The emphasis is on building useful apps, not on currency and price. The only way to get mass adoption is to get the masses using Bitcoin without them knowing that they are. 

3) The nChain team and Bitcoin Association are always announcing new apps, tools and developments. There is a sense of growth and vitality.

4) The BSV development team always deliver on their promises usually ahead of deadline scheduled.

5) The community is alot more friendly.

That said, all that is left to do is to sit back and watch events roll out as predicted. It is a great time to be alive and watch this drama play out.

Monday, January 13, 2020

The Coming BSV Skip and Flip

For the moment all eyes are on the huge price increase of BSV from around 98 USD to 170 USD over the last week. An increase of over 70% and would most probably exceed $200 soon. So what is happening?

For those who believe in the underlying technology of BSV the reason is clear and inevitable. BSV is the original protocol as described in the Bitcoin whitepaper and despite the timeline BTC and BCH are the forks off the true protocol. A "Back To The Future" scenario!

The main theme of this post is a prediction that BSV will soon surpass the price of BCH (The Skip) and thereafter go on to surpass the price of BTC ( The Flip ). Contrary to our intuitive nature of believing in the slow rate of change in the crypto sphere, these events will happen quite quickly, because theses events are very much determined by the mining hashrate.

For most of 2019 the hashrate for BCH was about 2% and BSV around 1% of the total hashrate. This week the hashrate in both these coins have doubled to 4% and 2% respectively. This means that miners are finding it more profitable to mine these two coins or the supporters of these coins are renting hashes to support their chain.

Notice the amount of "unknown" miners on the BCH and BSV blockchain and none on BTC. The hashrate on BCH have been fluctuating between 1.5 to 4.3% recently. For BCH, it is dangerous for its' hashrate to fall below that of BSV as it would very quickly be reflected in the price of these two coins.

Unknown Miners

Unknown miners have always been a part of Bitcoin mining, but the significant part that it is now playing on BCH and BSV is unprecedented. Seeing that is is more than 3%, the increase must be a switch from BTC mining either as a result of mining rentals or BTC miners dedicating some of their hashrates towards BCH and BSV without reveling themselves as doing so.

The increase in blocktime on BTC is starting to show. Keep an eye on this developing situation.

There is still much debate going on about which is the true Bitcoin and which will survive. Miners are business people and they will only be motivated by profit. It does not matter to them which coin wins as they will always mine the most profitable coin.

Prior to November 2018 the price of BCH which included BSV fluctuated a great deal but after that date BCH price have mainly trended downwards.

BSV price on the other hand trended downwards because it was delisted on many leading exchanges but has since trended upwards against BTC as oppose to BCH. The price drop as a result of delisting must be looked upon as a manipulated event and accounted for when studying the chart above.

Against BCH the price of BSV is also clearly trending upwards.

All these events must be looked at as part of the continuing struggle between BTC, BCH and BSV as to which is the real Bitcoin. When 3 coins are competing on the same mining algorithm only one will win. This is a winner takes all scenario.

The Skip
It is dangerous for BCH if its' hashrate falls below that of BSV as this will soon be reflected in the price. Because the price of BSV have been on the uptrend we can expect that some miners are dedicating a little of their hashrate to mining BSV as a defensive move. These will mainly be the source of the Unknown miners we see on the BSV blockchain.

The dilemma for BCH supporters is that if they do not do something about the mining hashrate their coin will be in danger. As price is not a real factor in the volume of Unknown miners on the BCH blockchain we can only surmise that it is the result of hashrate rentals by BCH supporters.

This situation is unsustainable as the more BSV price increase against the more hash rate they must rent from the available rental pool and also carry the losses on the BCH mined as BCH price trends against that of BSV.

This will all come to a head when BSV price exceeds that of BCH. This is the Skip event, after which the price of BCH will move down sharply. BCH goal of becoming digital cash will be over. It is not possible to be used as a digital currency if your market cap is less than 2 Billion USD.

The Flip
During the BTC and BCH war, BCH overtaking and replacing BTC was known in the crypto community as the flippening. This did not happen and BTC successfully retain the overwhelming majority of the Bitcoin hashrate.

BCH survived the Chain Death Spiral because it had the Emergency Difficulty Adjustment programmed in. It was able to retain a percentage of mining hashrate commensurate with its' price for profitable mining. This also applied to BSV after it forked from BCH.

We have already seen today at least 3% of hashrate moving away from BTC. As the battle between BSV and BCH intensify we will see more hashrate moving away.  The BTC blockchain is acutely vulnerable to loss in hashrate and the Chain Death Spiral. We may start seeing a slowdown in BTC blocktime in the next few days.

The halvening of the BTC, BCH and BSV will have a large impact on the price and hashrate distribution between these coins. If prices do not double to maintain profitability, it must be met with increasing value collected through transaction fees. Only BSV have the capacity to gain more from transaction fees per block than block subsidy.

Note the steady increasing trend in transaction fees over block reward for BSV.

Soon after The Slip, our attention will be turn to The Flippening round two BSV against BTC. This time there will be a real difference in ideology between the two chains.

A coin can only be relevant if it is useful. It will not be useful to the masses unless it can scale. Here BSV clearly trumps BTC as it can already achieve thousands of transaction comfortably while BTC is still stuck at a maximum of 7 transactions a second. Large blocks means lower cost per transaction leading to new applications built around micro transactions. Usefulness brings mass adoption. BTC is clearly not geared towards mass adoption but towards being used by a minority as digital gold. This will not succeed as it requires Governments to adopt BTC in their currency reserve in order to push the price of BTC towards a million dollars a coin perhaps. This is unlikely because participants in the world monetary system will not want to see huge chuck of wealth in BTC they do not control.

BSV on the other hand will achieve this by default. In striving for scaling and mass adoption and it will become embedded into all our lives at a global level. National currencies will be tokenised on the BSV blockchain and this will be the "Killer App" that will cement BSV as the real Bitcoin.

With scaling comes mass adoption leading to The Flippening.

Last Note For The Skeptics.
If you are still skeptical about the above then this chart may change your thinking. Using BCH as a base every crypto coin including BTC is negative except for BSV.

The Flippening