The Bitcoin Blockchain - Chain to rule all Chains.

Bitcoin will remain the dominant coin amomg all coins.

Proof of Work is the most secure

The most important reason is that Proof Of Work is the most secure consensus system ever invented. This according to Chris Odam.



Chris Odom of Open Transactions at 13.30

He believes that all other systems have some niggly problems at the edge and when you peel at it you come back to proof of work.

At this stage Ethereum seems like the most likely candidate to take over Bitcoin mantle especially with the rush to adoption by banks, however if Chris is right, then for security it will also have to seek refuge behind Bitcoin's proof of work consensus system. And it is confirmed here.

Other proof of work coins dont have and will never have the huge infrastructure of Asic mining hardware and miners securing the network.

Most people learning about cryptocurriencies will have heard about bitcoin first. Most Bitcoin 2,0 applications are built on the bitcoin network.

Turing Complete Can and will be added to bitcoin

Ethereum was developed by Vitalik Buterin on the premise that bitcoin should have a turing complete language for handling smart contracts. However it may be possible in future to add turing complere op code into the bitcoin blockchain or include it as a sidechain.

At 19.20 Joseph Perling alluded to Jeff Garzic commenting that a new Op Code could be implemented so that calls can be made to a turing complete language from within bitcoin. It does not exist yet but it could be implemented.

Another implementation Rootstock uses sidechain to integrate the turing complete capabilities of Ethereum. In essense whatever that can be done on an Altcoin can be implemented on the Bitciin blockchain and because bitcoin has the largest user base it will be. There is money in it.

Bitcoin community
The size and contribution of the community matters,and bitcoin is the largest and has the most number of contributors. Just this week (WE 10/12/2015) major developments for upcoming upgrades to the bitcoin protocol were announced at scaling bitcoin in Hong Kong.
1) Segregated Witness - Effectively lossless compression of the blockchain
2) IBLT - Speed enhancement

Get A Coinbase Wallet

1FSCmbGrKCHWTnKYaYSip9YTJVsCfVQ36T

Bitcoin Price - Its Value Is In The Network

Value the network by taking the number of transactions and working out the PE
At 7.23 Charles Morris editor at Atlas Pulse values the network at 382 dollars

He based his calculations on weekly Market Cap to Fee Ratio CFR
At CFR of 7 he calculates the price at around $382

As the number of transactions increase, the value of the network increases.
Below an infographic on the possible growth of the network.



What is not considered is the value of off-chain transactions.

I can agree that the value of bitcoin is related to the value of the network but measuring that is a little problematic. At best it is a guide and we should see the price of bitcoin increase as it's adoption increases.

On my analysis the current price floor is Here.

Get A Coinbase Wallet


1FSCmbGrKCHWTnKYaYSip9YTJVsCfVQ36T

Bitcoin Donation Address

Bitcoin Will Be Ready When The Next Credit Crisis Hits - Get Some

Take a look at this video for a glimpse at what's in store when the next credit crisis hits.

This credit cycle started in the 1970's when Paul Volker put interbank inerest rate up to 21% to reign in inflation. Since then interest rate have dropped until it is at zero and trending negative. Many countries of the developed world already have negative interest rates. This is because central banks have not allowed the system to correct itself. Negative interest rates are unnatural and sends the wrong signals to the market. The time will come when it will correct. We have to be prepared.

Look at German bond rates at the last bond auction 18 November 2015


Two year and five year bonds have negative yields. This means that investors are expecting that rates in the next five years will go negative further. That is if the politicians will let this state of affairs continue. What happens if central banks decides that enough is enough and allow bond markets to correct ?

Look at this next graph which shows the monetary base go nuts from quantative easing.



The reason why QE never resulted in inflation is because that money never made it to the general economy. All it did was shored up bank balance sheets, kept deflation at bay and inflation just above zero. Interest rates were kept low to negative. This led to distortions in the economy and runaway assets prices. We now have huge asset bubles in stocks, housing and collectibles, except precious metals. Zero interest rates in the US also led to that money finding it's way into developing economies in a carry trade looking for positive returns. This is economics in the twilight zone. We are in Lala land!

So why is gold and silver exempt from this asset bubble. Why has it gone down from a high of $1900 in 2011 to $1070 today.


The fact is pysical gold is hard to come by. Any offer of minted gold coins are quickly snapped up. What is left is paper gold. This is not the real metal just a promise to deliver the real metal. Gold and silver markets are manipulated with paper gold because if gold prices were to go up, the public will percieve that the economy is in trouble. Economics is all about perception and herd mentality.

So what will the next credit crisis look like ?

No economic text, courses or diplomas can prepare us for what is happening now and tell us what will happen next. Nobody knows. Perhaps we can look at what happened in 2008.

Basically overnight, the assets in the bank books were not what it says. When the bank makes a loan the entry is :

Debit : Loan Owed By Customer ( Asset, backed by Property )
Credit : Customer Current Account. ( Liability, Just a Book Entry )

The amount of liability (money) it can create is limited by the reserve ratio and the amount of cash it must keep with the central bank. Now if the value of the property it holds is less than the loan owed, the bank is technically insolvent. It must make up the reserve ratio and can no longer make any new loans. If the bank must 'Mark To Market', it is bankrupt. If all the banks face this same problem, the whole financial system is frozen. The economy as we know it, is dead. Only cash works.

In 2008 the reserve bank printed the money in the form of QE and gave it to the bank to shore up it's balance sheet. This rescued the banks from being insolvent. MAGIC. It is the same as your father giving you the cash to make up the negative balance when your housing loan exceeds the value of your house.

How did the bank repay it's loan to the reserve bank? They sold all the underperforming loans to the reserve bank and waited for the housing market to pick up. Of course you and I do not have this luxury. Our houses will be foreclose in a mortgagee sale, and we will be thrown out on the streets.

So when the next credit crisis hits, asset prices will go south. The trigger will be interest rates going up. People can no longer afford the huge mortgage on very low interest rates. Everyone will try to sell their properties that they can no longer afford to service, at the same time. The carry trade will go in reverse. This is why the reserve bank will find it very difficult to increse interest rates. Even a little bit.

Will this ever happen? Will the government let it? Problem is that interest rates are already zero and they can't reduce it further, as long as we have cash. Negative interest rates will not work if cash is an alternative, people will just keep their cash out of the banks. Banks will limit the amount you can withdraw like in Greece recently. This is why there is a push to outlaw cash and Sweden is now the first cashless economy. Others will follow.

What Can We Do ?

Life will still go on. Unemployment will increase and will hit the young hard. Business confidence will be low and most businesses will have to cut cost to conserve cashflows. House prices will be down so will the stock market.

Your bank account may be frozen and access to cash withdrawal will be curtail. This will be hard for businesses as they will be unable to pay their creditors especially for overseas purchases. However if they have access to bitcoins they can circumvent such difficulties.

Bargains are to be had if you have CASH or BITCOIN. Bitcoin is the first truly global currency.
The price of bitcoins will go 'to the moon' as the demand for it will come from all over the world as a hedge against currency devaluations.

Get A Coinbase Wallet

1FSCmbGrKCHWTnKYaYSip9YTJVsCfVQ36T

Bitcoin Donation Address

Central banks need to hold bitcoins to prevent "A Bitcoin Speculative Attack"

What is a Bitcoin Speculative Attack?

Take for instance there is a rush to purchase bitcoins in Venezuela. This increase in demand will result in a premium for bitcoin in venezuela say $100 above the US market. The result will be speculators rushing in to sell the Bolivars for US dollars to purchase bitcoins. This selloff of the Bolivar will need a response from the government to defend the currency by increasing the interest rate, capital controls or worse.

To fight such speculation the government could sell bitcoins in the market to drive the price down but this would neccessitate the government having access to bitcoins in the first place. The IMF have already discuss contingencies if this scenario should ever eventuate.

At the bottom of it, bitcoin is just Perfect Money. It is accepted all over the world and it can move between borders effortlessly and cheaply. It is a good store of value and over time it's value will always increase secured by the hard limit of 21 million bitcoin to ever exist.

As good money it will always drive out bad. If for any reason the citizens of a country suddenly lose confidence in heir currency perhaps because of hyperinflation through excess money printing, we may get a rush to purchase bicoins to preserve purchasing value.

IMF 'unable' to supply the currency needed to counter speculative attack using bitcoin

Bitcoin Speculative Attack

Central Bank Of Barbados Advised To Holds Bitcoins (Updated 29/11/2015)

Economist Dr Winstone Moore and Jeremy Stephens have produced a report for the Central Bank of Barbados advising the central bank to holds a small amount of bitcoin in their reserve portfolio. Precisely against speculative attacks and mitigate against depreciation of other reserve currencies such as the USD and Euro in their portfolio.

This is an indication of the current climate of thinking all round the world. There is only going to be 21 million bitcoins, ever. If only some of these small nation acted on such advise bitcoin price will escalate exponentially. Only a matter of time when some will make the move.

Singapore's prime minister advises banks and regulators to heed bitcoin and blockchain technology.

Get A Coinbase Wallet



1FSCmbGrKCHWTnKYaYSip9YTJVsCfVQ36T

Bitcoin Donation Address

Where Bitcoin - Global Bitcoin Adoption

Current Price Floor (21/11/2015) : $320

The importance of understanding the price floor is to help with investment into the bitcoin space.

Bitcoin price is underpined by it's adoption.
A : Initially 2009 - 2010 it was only the developers like Satoshi where it did not have any value.
B : 2010 - 2011 a small community developed and value was established over forums price of bitcoin was less than a dollar.
C : 2011 - 2012 Mt Gox the first exchange established and the community grew around libetarians and anarchist. Price increased to a few dollars.
D : 2012 - 2013 Silk Road was a unique use case for bitcoin and value exploded to around $30
E : 2013 - Nov 2014 New users and speculators started coming into the space. Mining exploded in popularity and the mining arms race was on. Price increased to around $200.
F : 2014 - July 2015 Bitcoin price went to $1200 but I believe that this was pure speculation and due to events around Mt Gox and should be discounted. Price floor should reasonably be around $230.
G : July 2015 - Nov 2015 MMM Ponzi scheme took off in East Asia new price floor of $300

Awaiting more use case for bitcoin to bring in more users and adopters, which will establish higher price floor for bitcoin.

Bitcoin Embassies Around The World

Physical Businesses Accepting Bitcoins

Infographic of the Bitcoin Ecosystem

Get A Coinbase Wallet


1FSCmbGrKCHWTnKYaYSip9YTJVsCfVQ36T

Bitcoin Donation Address