Bitcoin and Major Markets – The post you MUST read!

Yesterday I was not worried. Truly, that dip did not bother me.

But things have changed.

We are experiencing the perfect storm. The last straw for the markets seems to be the Trump travel ban (the ludicrous one which excludes the UK and Ireland for “doing a good job” and which ignores the fact that the USA is one of the worst hit and fastest growing Covid-19 countries).

I’ve said on multiple occasions that this dip is not THAT economic crash – the fiat house-of-cards collapse which many of us have been expecting to see in the near future. I stand by that statement. For now…

BUT

That doesn’t mean that THIS collapse will be any better!

And a collapse it is…

The significance:

Yesterday my BTC price long-term base trendline was breached. As I explained on Twitter, there are circumstances under which this can and does happen. It did not matter at that stage.

But BTC has subsequently plunged beyond (and stayed there) to levels which indicate that this will not be a “quick dip below the line” or just a tail on a weekly candle.

The important thing is that a VERY substantial and important BTC trendline has broken down. This is not an analysis fault on my part. It is not a TA fault with a misplaced trendline.

WHAT IS HAPPENING NOW IS NOTHING SHORT OF THE COLLAPSE OF MAJOR ECONOMIC MARKETS!

Read that again, it’s important.

Note that I did not say “dip”. Nor did I say “contraction” or “retracement”.

I said “collapse”, and I meant it!

Remember Bit Brain’s Fourth Law of Crypto which states that: Technical Analysis is a graphical representation of market psychology. It is a way to visualise the feelings of masses of people wrt trading.

TA is psychology on a chart. People don’t panic because charts dip; charts dip because people panic!

The complete breakdown of my long-term base trendline for BTC means that the markets are suffering a complete breakdown!

Do not make the mistake of interpreting this as “analysts who got it wrong and are justifying their poor predictions”. If that were the case then I wouldn’t be writing this post and drawing attention to it.

Also: do not make the mistake of following the predictions of some lucky outlier analyst who guessed right and happened to call this crash from a long way away. Prior to about a month ago, there was no indication as to how bad things would get. A good analyst could have called this as part of a worst case scenario a month ago, maybe some of them did, but I didn’t see any do so.

Future Implications

Firstly: don’t think that this is a crypto issue, it isn’t.

The crypto crash is only a symptom of a much greater problem. To sell crypto now would be foolish: it’s already taken a larger hit than most – so selling it for something else would mean making a loss (even if you are ahead in USD terms). I can’t tell you what to do, but what I am going to do is to hold through this crash until we come out the other side. I’m not selling crypto at a loss.

I can say that because while TA may not longer be on our side, the fundamentals of crypto are as strong as ever!

The charts may have changed, but nothing has changed in the fundamentals of Bitcoin and the alts. Each and every reason we have to believe in the massively disruptive
revolution that public blockchains are is still 100% valid.

My faith in blockchain tech and its associated cryptocurrencies remains absolutely unshaken.

In other words: I have no doubt that crypto will not only recover from this, but thrive. Perhaps next time around BTC will be seen as the ultimate store of value.

The second major implication is that the major fiat crash has yet to come. That will be the crash based on loss of faith in fiat economies. This crash may still turn into that crash, but we have yet to
see significant signs of that happening. If Covid-19 hangs around long enough, it is possible that the fiat monster – already stretched rather close to breaking point – may collapse entirely.

Assuming that the lose-faith-in-fiat-economies crash does not occur; the effect of a corona-crash will be that it is likely to delay that crash. It will do so by resetting the values of over-valued pseudo-assets, a process which is already well underway.

Whatever happens, crypto is still the place to be in the long-term.

The final major implication is China (again).

It was only the other day that I spoke about how I hate having to praise a communist government for its actions, and yet here I am – doing it again! (Perhaps that demonstrates just how seriously our ridiculously liberal and corrupt Representative Democracies have failed?)

China has not only beaten Covid-19 (to all intents and purposes), but it has managed to end up with the bulk of global manufacturing capability located within its very own borders. In a virus-ravaged world, that gives the Chinese economy unrivalled power and far greater ability to recover from a disaster than anyone else. Chinese manufacturing stocks may be the best place to invest right now! Already its economy seems to be weathering this storm better than many others, despite strict lock-downs and the highest number of Covid cases to date.

Conclusion

I realise that this post is somewhat distressing, but unfortunately that can be the nature of the game. As a realist, I must tell it like it is, even when the truth hurts. My own portfolio is lying in tatters, leaving me in an even more precarious situation than usual. I know how it feels. Nevertheless; I do not believe that having faith in crypto is a naive or foolish pursuit, and I will continue to buy more of it if I manage to get money to do so. (I bought yesterday, just by the way.)

If you are looking for Covid-19 insights and information then do not miss my post “Analysis of a Sick Market – Part 1 (The Virus)” from earlier this week. It will not only tell you the important things, it will tell you that which others don’t.

DO NOT UNDERESTIMATE THIS VIRUS! I see far too many complacent people doing that, it is most distressing! (Not to mention selfish and foolish!)

Good luck out there guys. I hope you can weather this storm without too much hardship. The best advice I can possibly give you is this: “don’t panic”. Stay calm, stay rational. Avoid making
decisions in haste. Do what you need to do to get by for now, and we can pick up the pieces on the other side of this disaster.

The Sun will rise again!

P.S. If you just need to chat / unload stress / rant a little / discuss your fears / whatever – my ear is available to you.

Yours in crypto

Bit Brain

“The secret to success: find out where people are going and get there first” 

~ Mark Twain

“Crypto does not require institutional investment to succeed; institutions require crypto investments to remain successful” 

~ Bit Brain

Bit Brain recommends:

Crypto Exchanges:




In trading move technically and not emotionally BTC / USD

Hello, everybody! :), today I wanted to share with all of you this chart I made where I put in perspective why this year 2020 I want to be highly bullish, we have an excellent scenario here present that any trader or investor would buy, the hyper bullish triad of a bullish flag, a cup & handle and an inverted SHS, all the package together at the same price!! far from the emotional chatter that can be read by crypto twitter during the last week, in which most tend to repeat at any time of the trend just the cry of let’s go to ATH!, without taking into account the corrections on the way, as a holder or long term trader, that’s not bad, but for a day trader or swing trader, that’s important 

I hope this post and the chart will be useful to understand the reason of this next third bullish wave, out of this year’s halving or the gold cross that many are announcing these days without taking into account that these indicators don’t work in real time, the cross will happen in due time after the correction and after the strong rise that we will have during the month of March, but for now it is time to wait for the train to take us to the launch area where the rocket is ready along with the strong volume investor ready to go to the moon, if you have not yet bought, this will be your last chance to do so at a very good price, BTC will not return to that level 

This post only represents my personal opinion, it is not an investment advice, I am not a financial advisor, always remember to make your own analysis when trading 

You can follow me on Twitter: https://twitter.com/armijogarcia

Binance’s 10th Token Burn

Binance was founded and
run by the one of the great minds in the crypto space, Changpeng Zhao aka CZ.
CZ was originally a coder who built high-frequency trading systems on Wall
Street. He eventually moved into the crypto space working for crypto
wallet/block explorer service Blockchain.info and serving as CTO for the crypto
project OKCoin.

But then CZ lauched Binance in the 2017 and in nine months, Binance became the world’s largest cryptocurrency exchange by trading volume making CZ a billionaire in the process. The rest is kind of history, but Binance continues to make history and make money moves.

In July 2019, Binance created a new entity in Singapore with Vertex Ventures. In Nov. 2019, they acquired WazirX, India’s largest cryptocurrency exchange. Recently, they made it possible for the people in Thailand to trade and invest in cryptos.

Related image

Why the emphasis to expand in Asia? Southeast Asia is the cryptocurrency capital of the world. Most of the bitcoin trading volume and cryptocurrency demand comes from this region. South Koreans spend billions of dollars each year on digital goods like avatars and digital gifts.

South Koreans spend billions of dollars each year on digital goods like avatars and digital gifts. Combined with their love for gambling and speculation, along with their love for digital goods, buying cryptocurrencies instantly became a part of the culture.

Binance just announced its 10th successful quarterly burn in a blog today, and with it, a total of 2.216 million BNB tokens worth $38.8 million were burnt from October to December 2019.

Image result for binance 10th burn

When you think about it, burning tokens in crypto space serves the same purpose of companies on the equity markets buying back their shares…it’s all about the perception of supply and demand and how we value that supply and demand of shares/tokens. But in the crypto space, unlike the equity markets, when a crypto company buys back their token to burn, that token disappears forever.

The main reason for burning a cryptocurrency is to increase the value of the other tokens that are in circulation. Many cryptocurrencies have a finite total number that can exist and therefore, assuming the demand for the token remains the same, the value should theoretically go up if there are less in circulation.

But even if Binance didn’t have any token burns, their token price would still go up over time because they continue to make history and innovate. So where is price headed next, the chart suggests, price is heading to the weekly supply at $23.

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

Round Pegs in Square Holes (Bitcoin)

This is not a quick read. I don’t apologise for that – it’s a really good post and it may teach you a lot about long-term BTC trends.

Introduction:

In a sea of crypto analysts, it’s important that you are able to differentiate the good from the bad from the ugly. The good and the ugly are fine (I’m both), but the bad are – by definition –
no good.

The New Year has heralded the dreaded return of price predictions, exacerbated in this case by the upcoming infamous Bitcoin halving. I tell you again, all the halving affects is short-to medium term price volatility, not long-term price! These two posts remain more relevant than ever:

· The Bitcoin Halving Event – Part 1

· The Bitcoin Halving Event – Part 2

I don’t bother myself with short-term Bitcoin price movements, I’m an investor, not a trader. What matters to me is not that Bitcoin has gone up (or down) today, but rather that it will have gone up a lot five years from now!

With this in mind, I focus more on long-term charting than on short-term charting. Long-term charting is more predictable, accurate – and to investors such as myself – useful.

If you are a trader, then by all means trade – but to me BTC is an investment asset. Traders help with liquidity and volume, so they do help the overall credibility of BTC a bit, but it is the investors who
BELIEVE in BTC and who are actively driving the adoption of crypto. Those who have the belief in BTC – enough belief to hold it as a long-term asset – they are the ones who are really driving the adoption of crypto and the
creation of a better world for us all. But enough about that, let’s get to the interesting stuff!

Round Pegs in Square Holes:

I often publish long-term BTC charts. On the majority of these charts you will find my “Long-term base trendline”, such as in this chart from the end of December post: “Bitcoin – Approaching 2020”.

But what is this line exactly? What does it mean? Is my line better than anyone else’s line?

Without the answers to these questions, my line is just another random line published by just another crypto analyst. It’s equal in status to any other similar line you may know of.

With the answers to these questions my line becomes a veritable tour de force – an answer to questions yet to be asked and a Sword of Damocles above the head of lesser analysts!

This line is thus very important to me, I stake not only my reputation on it, but also my own investment strategy.

Caveats: NEVER have I had a line on a chart which stays fixed indefinitely. It’s true that this particular line is about as fixed as they come, but it DOES move from time to time. So far the movements have always been very small – more “adjustments” than “movements” – call it “fine tuning”. Just note that the line is not 100% fixed and is consequently not 100% accurate. Also note that while it is valid 99% of the time, there ARE times that price can momentarily dip below it when BTC has serious negative momentum. Such dips never last, but they have occurred in the past, and will probably do so again in the future. That being said, I have great faith in this line and have spent so much time on it that I am absolutely satisfied with how accurately it is dialled in right now.

But not everybody would agree with my line – and they have strong reasons not to. This post shows you why, and then explains why I have chosen what I have chosen. As always – YOU must decide for yourself!

Round Pegs

While I choose to use a straight line, there are those who prefer curved lines. They are in the majority.

[Pause for quick rant]:

When has “Majority” ever equated to “Right”? Anyone with an understanding of politics, the media or propaganda can quickly point out the logical flaws in using populism as a basis or substitute for correctness!

[Rant over]

Don’t ignore that rant, it’s important. Now let’s look at curved lines:

There is considerable evidence to show that logarithmic curves can be made to fit the history of BTC price. You will often see charts such as this one:

On the face of it that’s a great looking chart. The indicator lines do what they should: they hit the tops of the peaks and the lows of the troughs. They are consistent curves which account for all prices during the time period, and they narrow together over time – accounting for reduced volatility as the market matures.

It all sounds so very credible – right?

It really does, so much so in fact, that I was quite impressed the first time I saw such curves used (about two years ago).

But taking something at face value is not a Bit Brain trait, especially if there are flaws in the logic or rationale behind it.

Look: the model is good. I am genuinely impressed by it and I think it does a pretty good job of accounting for BTC price at the moment. But I am concerned because I have found flaws with it and I don’t know how well it will hold up over time.

I DON’T KNOW the right answer here, because I can’t tell the future. I look at the data available to me – ALL the data – and then I try to make the best judgement calls I can based on that. These curved lines don’t account for all the data, which is where the problem come in. I KNOW that I’m not always right, but I have a higher chance of being right because I’m not looking for the simple answer. I’m not looking for that one curve that fits all the data. Similarly, I’m also not ignoring all the data that doesn’t fit, or making overly broad price brackets to try to account for all anomalies (here’s looking at you stock-to-flow!)

But Bit Brain, what’s wrong with these curved lines? What don’t they do?

I’m glad you asked…

They simply don’t fit all the observed data. Spot the problem on the chart below (which goes back to mid-2010 as opposed to the mid-2011 chart seen earlier):

It may not look like much, but it’s there at the beginning. The curve simply doesn’t fit all available data.

Can ANY curve fit the all data? As an experiment, I tried to construct my own curve to fit all the data, or at least the data with respect to the low end of the BTC prices over time (similar to the bottom curve on the chart seen above). Here is what I got:

That’s the best I could do.

THERE IS NO CURVED LINE THAT CAN ACCOUNT FOR ALL THE DATA IN THE HISTORY OF BTC

The line I drew is about as close as you can get to an all-data-encompassing-curved line for BTC base price over time. It’s no good because the BTC price is way below it near the beginning, but it’s still about the best you can do. This is how it looks next to the curved log lines that are commonly used:

“Houston, we’ve had a problem.”

Remember that there is another year and a half of (unavailable on my charts) data before this time (mid-2010) which only makes the problem far worse!

The commonly used logarithmic curves don’t fit. So what now? How bad is the problem? Is it really a problem? How will this play out in the future?

Once again I DON’T KNOW, but I DO KNOW some other things and I will use those to show you why I use what I do.

Summing up the Round Pegs:

It is my suspicion that the curved lines are working semi-well for a moment in time. The curves are not too far off reality, even though they can’t account for outlying information, so they look good. But I suspect that they will begin to degrade at increasing speed over time. Anomalies and/or a price trend shift away from the curves may well render them useless in times to come. I suspect that the curves will hold true for the next five years or so, but doubt that they will last for a decade. During this time (if I am right), they will become increasingly useless as prediction tools, because their lower and upper limits will begin to stray away from the lowest points of bear markets and the highest points of bull markets.

I believe that the curves fit a snapshot of time: for now that time is June 2011 to date. I suspect that they may have useful a shelf-life of approximately 15 years.

While we’re at it…

I mentioned stock-to-flow earlier. It’s not strictly related to these log curves, but Stock-to-flow is wrong in the same way that I say the curves above are wrong, but only more so – MUCH more! In addition to this, there are FUNDAMENTAL REASONS WHY STOCK-TO-FLOW IS WRONG! Those reasons are the same as other supply-sided arguments which I debunk in my “Bitcoin Halving” posts, as linked to at the beginning of this article. Go check them out.

Before I let Stock-to-flow off the hook and move on, let’s take a look at a chart or two:

Having trouble getting all the data to fit? Just make ridiculously broad price bands to encapsulate all the data! Ignore the fact that some data STILL doesn’t fit your model!

From https://cointelegraph.com/news/new-bitcoin-stock-to-flow-chart-shows-bearish-periods-precede-halvings

Or how about this, from PlanB themselves: Remember that EACH VERTICAL BLOCK represents a factor of 10x. So if an arrow is one block high, then PlanB’s predicted price is ten times too high or too low!

From https://twitter.com/100trillionUSD/status/1151077015149260802/photo/1; modified by Bit Brain

The largest of those arrows shows that the real price is about 14 times higher than the predicted one! I mean, come ON! Why would anyone use this? Remember my rant earlier about the difference between being popular and being right? Now you know why I say that…

Square Holes

Right, now here comes the tricky part: I’ve ripped the arguments of the majority apart, now I have to justify and explain my own standpoint. Here goes:

The key to my long-term trendline is this: I don’t try to fit all the data into one all-encompassing line.

I do not believe there is a way to fit all the data neatly into one indicator (short of using ridiculously wide price bands to account for all anomalies). I look at the markets and their history, I take the fundamentals into account, and then I try to project what is left in the form of usable indicators.

Below is another look at my long-term base trendline, this time seen in its entirety. Note where it begins: mid-2013.

I have often stated that I do not trust BTC data from the early years of BTC trading. I normally state that mid-2013 is the time that I start to find data sufficiently representative to provide useful statistical value.

The reasoning behind this is simple: Prior to 2013 Bitcoin simply wasn’t big enough, I’ve said this before but it bears repeating. There were not enough people invested in Bitcoin. They were not financial investors, they were not trying to to find fair price or make winning trades. They were tech geeks, cryptographic geeks, computer scientists and programmers who were playing with a new toy – taking a long shot that had little chance of going mainstream. The further you go back, the more true this becomes.

Any big buy had a radical effect on the price of BTC – which traded for less than $10 for most of that period and for less than $0.50 prior to 2011. You have to understand that even though logarithms do an excellent job of accounting for both small and large numbers in the same data-set, those numbers have to be consistent in order to provide good data without corrupting the model. Early BTC data is NOT consistent enough! It’s not something such as cell division which happens at a predictable rate and then to leads smooth, chartable exponential growth. Filling an equation with anomaly prone data taken from an overly-small data set is scientifically incorrect and will not yield a correct result! You have to have a sufficiently large sample size in order for the statistics to become valid. In the early days of BTC, the sample size was simply too small.

I’m really not comfortable with the way that logarithmic BTC price explanations try to incorporate all this old garbage data into their models. That’s why I ignore the early data entirely on my charts. From a fundamental perspective I haven’t ignored it, I’ve realised that it’s not proper data. I know why the data is bad and I know which data is bad. Thus my method incorporates all the given data, while remaining accurate by filtering out that which is not relevant – at least that’s the theory – a theory which is better than any mainstream ones I know of.

So that you don’t have to take me at face value, let me show you a chart or two which should help you make up your own mind on this topic:

The chart below expands on one of the charts we saw previously; the one with the “This is a problem!” section at the start of the log curve data. Here we can see that region in context, along with the regions which come after it (which I described earlier). The log curves are overlaid on the chart too.

My own model doesn’t use either of the first two regions.

Below I have removed the log lines and replaced them with an ascending channel, the base of which forms my long-term base trendline.

Starting to make sense now?

But wait, I’m not done yet…

I watch other major markets too. No market exists in isolation, they tend to influence one another. Some display similarities and correlations – we have such a case which effects BTC.

Early growth of BTC

BTC price shot up very rapidly in the early days – too rapidly to fit comfortably into accurate price models. Now: whether you believe me or not about the lack of BTC data in the early days making it impossible to accurately analyse and model that data, you will have to pay attention to the next point:

Bitcoin is often compared to Gold (whether a certain grouchy anti-BTC gold bug likes it or not). Both store value well, both are constantly climbing in value, albeit with some retracements and corrections when the fiat-based markets are booming. So here is an interesting little fact for you all: between the time of the Bitcoin Genesis Block and the start of 2013, Gold flew up in value. Gold went from approximately $830 at the time of the Bitcoin Genesis block, to over $1900 in August 2011, and then slowly dropped to around $1300 at the time I started trusting Bitcoin price data in mid 2013.

If market pressures were such that Gold got a huge boost, then such pressures may well have influenced Bitcoin too. Whether is was people looking for a store of value or just having money available with which to speculate is irrelevant; Gold went up very fast so it makes sense that Bitcoin should have done the same (much as Gold and Bitcoin have been doing since mid-December 2019).

The chart below illustrates this graphically:

It’s not just Gold – I used Gold because it’s easier for most people to see how it compares to BTC. You can look at the S&P, or the Dow or other large indices / commodities / etc. You’ll see the same thing.

Explanation / Summary

Here’s what I think happened: BTC was born after the market crash of 2008. It was born into the rapid recovery phase of that crash. Combined with its inherent early growth, this supercharged BTC in the early days – creating unrealistic and unsustainable growth rates for most of the first four years of its existence.

As can be seen from looking at Gold, the hype phase died away throughout the duration of 2012 and things went back to normal, which is why I only start to trust BTC after it settled down in 2013. It’s hard to say exactly when BTC data becomes trustworthy, there is no clearly defined line. I normally choose to use 1 July 2013 – the halfway mark. The reality is that it could have been a few months earlier, but not as early as 1 January 2013.

To put thing into perspective, BTC had a total market cap of roughly $150 mil on 1 January 2013. That grew to well over $1Bn in less than three months! At that stage BTC got noticed and became a serious investment asset. It then corrected downwards to below $1Bn by mid-year – which is when I start using the data – before starting to climb again. I attribute the climbing after June 2013 to organic BTC growth instead of to external market driving factors; which is why BTC then continued to climb – but at a different rate to what it had previously – while Gold continued to lose value and stagnate for the rest of the decade.

In basic terms: BTC only matured as an investment asset in early to mid-2013. Data before that time can be ignored – as long as you understand why it can be ignored!

Notes on Square Holes:

My straight line approach to the BTC base trend comes with a few caveats of its own. While my line is normally well labelled, it is commonly misunderstood. The Long-Term Base Trendline I show is NOT a price prediction! It is a BASE PRICE which BTC should remain ABOVE most of the time. Please bear that in mind if using my data or posts for information.

As I stated earlier, it can change over time. The changes will probably be hardly noticeable, but may occur. If BTC were to make a definitive drop below $7000 today and stay there, then my long-term trendline would have to either be significantly adjusted, or thrown away altogether. Here’s an interesting implication derived from that:

You won’t see Bitcoin selling for below $7000 again. Bit Brain has spoken.

(That excludes a whale tanking the price on individual exchanges, price display errors, Bitcoin being replaced by something better 10 years from now, etc)

I won’t go into the details because this post is long enough, but continued constant growth of BTC can also be largely attributed to the S-curve of technology adoption. I wrote about the S-curve in one of my earliest STEEM posts two years ago: check it out here “BITCOIN PRICE PREDICTIONS – Chart Display – Part 3 – The S curve (More good news!)”.

Footnotes and Conclusion

There is also a lot I can say about the nature of logarithms and using them in charting. I spent hours running common logs vs natural logs scenarios in preparing for this article – research which I am choosing not to include in the interests of keeping things on topic. But here are the sentient points:

  • The BTC price curve MIGHT be a natural log function, but this would only apply to more recent data (mid-2013 and beyond) and not before.
  • There is no log function that works for all BTC price data.
  • Log functions straighten out over time. Using a straight line might be an approximation of an log function, we will only know this after a few more years once either the logs or the straight lines start to diverge from the data observed.
  • This is what you get when you plot the natural logs of the base values of BTC on a chart .
    • You can see that it’s not a straight line (as a correct log function that explains all BTC price action would be), but that using straight lines over specific periods might work.
    • This ties in with what I said earlier about BTC normalising towards mid-2013.
    • The x-axis is the number of days since the genesis block.
  • My straight lines ARE actually log lines because they are only straight on Log (base 10) charts.
    • No I’m not elaborating on that now – this is a blog, not a mathematics class!
Made by Bit Brain using PlanMaker from the FreeOffice suite

If you’ve made it this far then well done – you may print this medal out and frame it as a reminder of your fortitude:

The truth is that right now there isn’t much difference between my straight line and the curved log lines, but over time this WILL change! In 2026 the commonly used base log line puts BTC crossing $500 000 while my trendline will puts BTC crossing $1 000 000 per coin. That’s a factor of two and is no longer negligible!

Continuing to put round pegs (log lines) into straight holes (straight trendlines) will work for a few more years, but if I am right about the holes being straight, then eventually those round pegs will no longer fit.

Yes I know I should have broken this post up. Once again I DIDN’T break up a long article because it loses it’s coherent logical flow and then you end up with two half stories instead on one whole one.

I hope that this article has achieved its purpose: to provide you with the UNDERSTANDING of why I use a straight trendline as my BTC base. I hope it shows you the difference between an analyst that develops and refines his own methods – questioning everything along the way, and those who use what is already available and merely try to fit lines and curves to what they see on the charts. I may not always be right, but I have a damn good understanding of the fundamentals what I do and how it works. When I am wrong, I make sure that I find out why and I take steps to correct that (and God knows I do make mistakes!)

So off you go now, the ball is in your court. Believe quantity or believe quality. No – you can’t take the middle ground – that’s just being wrong from both perspectives! I hoped you enjoyed reading this post as much as what I enjoyed writing it.

See you again soon.

Yours in crypto

Bit Brain

All charts made by Bit Brain with TradingView

“The secret to success: find out where people are going and get there first” 

~ Mark Twain

“Crypto does not require institutional investment to succeed; institutions require crypto investments to remain successful” 

~ Bit Brain

Bit Brain recommends:

Crypto Exchanges:




Bitcoin and Cryptocurrencies 2020

Yes I am still alive. (Sorry to disappoint you politicians, mass media journalists, bankers and other scum – you don’t get off the hook that easily!)

My recent silence has not been voluntary, unfortunately I am once again looking after an injured wife. Sadly this takes up the majority of my time, but now that she is slowly on the mend, I will try to get
back to my neglected blogging.

Let’s take a holistic view of the markets, looking at Bitcoin in particular but also at a few related events/issues/etc.

The year started with a bang – a literal bang if your name is (was) General Soleimani of the Iranian Revolutionary Guard Corps. Let us pause for a moment on this single issue, because the ramifications of that attack are potentially far-reaching. I’m not going to go into whether the attack was justified or not, what Iran did to deserve it etc – go down that path and you get lost in the nitty gritty – that I will leave up to you to decide for yourselves. Since this post is more about BTC than about how the world works, I’ll skip the detailed political/military/economic analysis and will merely mention the high level interesting effects that I think this attack has brought to light.

Bit Brainian thoughts to ponder over:

  • Media coverage was immediate and widespread – to a disproportionate degree if viewed against similar events.
    • This is exactly like the disproportionate amount of coverage received by Greta Thunberg. If you want to know more about how and why this happens, then don’t miss this spectacluar eye-opener: “When Children Cry”.
  • Wars make a very useful national distraction for presidents who are struggling with domestic opposition – Clinton launched a similar attack prior to his impeachment trial.
    • If you want to unite a divided population, then few things work better than a war. People forget their differences when they combine against an external “threat” – whether than threat is real or just a perceived threat created by the government propaganda machine (like the “threat” posed by Jews to Germany in the WWII era).
  • This was an inflationary move (in terms of tension and military aggression) that will destabilise the world. There is no telling how far this destabilising effect will go – a chain reaction is hard to control. With the global economy already on shaky ground, the tipping point of grand-scale economic systems-failure could come sooner (weeks or months) rather than later (within a year or two).
  • Bitcoin price shot up due to instability and uncertainty – or FUD if you prefer. Such a rise is a panic reaction and is based on very little fundamental reasoning.
    • The goldfish-like memories of investors may soon fade, sending the price of BTC back down by maybe $500 to $1000.
    • Ironically the more intelligent long-term investors will have been buying up BTC for years because of long-term instability and uncertainty of the fiat-based markets.
  • It’s interesting to note how BTC was clearly used as a store-of-value as soon as an international crisis loomed.
    • BTC’s transformation into “Digital Gold” in the eyes investors has spread beyond the realm of early adopters and is entering the mainstream collective psyche.
      • …which just makes Peter Schiff’s incoherent panic-ranting look ever more pathetic!

Bitcoin

My last post of 2020 “Bitcoin – Approaching 2020” showed how everything was running exactly according to plan and prediction. Well, it was running exactly according to MY plans and predictions – if you follow lesser analysts and their incorrect tales of weak TA fiction, then that’s your own problem.

The post mentioned above was published on 16 December and I haven’t actually needed to update you since then, because that post has been right on the money ever since. Let’s recap a little and see what’s happening now.

The day after I wrote that post I posted this Tweet:

16 hours after Tweeting that, the price of BTC hit a seven month low and turned (generally) positive. The prediction was based on a triple-line convergence point, the details of which may be found in “Bitcoin – Approaching 2020” and which remain valid.

It must be mentioned that THE BITCOIN PRICE TURNAROUND HAS YET TO BE CONFIRMED!

Until BTC has conclusively broken through the top of the descending channel, the scenario that BTC may continue to trend downwards remains. I BELIEVE that the price movement of BTC (and of crypto in general) has now turned around, but at this stage I am still willing to concede that I may be mistaken – though the evidence suggests that I am not.

To break out of the channel, BTC will have to break through the red zone depicted on the chart below.

Note in the chart above that BTC price is currently well above my projected price line (yellow), so (as I said earlier) don’t panic if the FUD-based buying comes to an abrupt halt and the price drops into the mid $7000s.

On the other hand, this buying spree and obvious faith placed in BTC as a store-of-value may well trigger another bull run and send crypto prices to new ATHs. At this stage we can’t tell what will happen yet, so just keep calm and take it day by day, remembering that crypto investing is a long-term game.

The performance of altcoins in 2020 suggests that crypto sentiment has indeed swung positive. Those who didn’t pick up alts in December (or earlier) may have missed the best opportunity to do so, though seen in the greater scheme of things altcoins are still ridiculously cheap and are well worth buying! Just remember that many altcoins are utter rubbish (even some big name alts, hey XRP? Hey BSV?), so choose carefully. Sure, the price of the bad coins will probably Moon when the other alts do, but so did the price of BitConnect once upon a time…

With the apparent change in sentiment, I have begun constructing new positive Fib levels (as opposed to the negative ones I was using in the descending channel – as seen above). These are still in the test phase and will require considerable tuning before they start to yield information worthy of “prediction value”. For what it’s worth, my positive Fib levels look like this for now:

I will probably keep the positive Fib levels away from my primary BTC chart for the time being, until such a time as I have confirmed that the descending channel is no longer governing BTC’s price movement. Adding too much data to a chart just becomes confusing and is undesirable, the fewer lines there are on a chart, the more I can see.

Conclusion:

As described in my older posts, I expect BTC to now hover just above my Long-term Base Trendline for the foreseeable future – probably most of 2020. At some stage (or possibly stages) BTC will rise sharply up from that line and we will have another bull market – probably an unbelievably strong record-breaking one. Maybe it won’t be one big one, but rather a series of smaller bull runs, much like the mini-run we saw in mid-2019.

Whatever the outcome, I remain more bullish on BTC than ever before. I’m a long-term investor, when I buy something I’m looking at least five years into the future, more likely a decade or longer. I got into crypto because I saw the long-term potential of decentralised blockchain technology, a potential which will surely be realised.

I think that 2020 will be the year that the masses warm up to the idea of BTC, this will be the year that Bitcoin moves from “geek money” to “legitimate alternative investment”.

Remember that crypto is only a part of a balanced portfolio. I believe that crypto is very important, but I also believe in not putting all one’s eggs in one basket. You can, for example, be a fan of both Bitcoin AND Gold, or even Bitcoin and Stocks – don’t let short-sighted fools like Schiff of Buffett polarise your views.

I wish you all a merry 2020, and I look forward to interacting with all of you wonderful blockchain-friendly visionaries over the course of the year.

Yours in crypto

Bit Brain

All charts made by Bit Brain with TradingView

“The secret to success: find out where people are going and get there first” 

~ Mark Twain

“Crypto does not require institutional investment to succeed; institutions require crypto investments to remain successful” 

~ Bit Brain

Bit Brain recommends:

Crypto Exchanges:




Bitcoin – Approaching 2020

Oh how I wish we were seeing the kind of Bitcoin price action that we saw back in December of 2017! Alas, it can’t always be a bull market. However, while reading this post, remember that when looking at investments it is LONG-TERM performance that counts! Everything else is just “noise”.

Let’s fall into the trap of getting lost in some of that noise – just for the hell of it, and thereafter we’ll zoom out and see how the long-term market looks.

All is well

Everything is still going according to plan (almost uncannily so), even if the trend is negative. Counter-intuitively, this is a positive sign: a predictable market is more stable and easier to analyse accurately, it has less chance of giving (good) analysts a shock.

The current market has been incredibly predictable. My post of 27 November (uncreatively titled “Bitcoin – 27 November (Don’t Panic)”) shows exactly how predictable that market is, and how I am still calling the market today based on analysis that is now five months old. I strongly recommend reading that post as background to this one, it gives a much better indication of the age and accuracy of these predictions, as well as an explanation of what they are based on.

Short-term

The yellow price prediction line seen in the post mentioned above is still in play. Remember: it is a rough indication of expected price movement – a “best guess” scenario and should only be taken as such.

The fact that it is still doing a good job 29 days after its creation is a positive sign. With BTC price sitting where it is right now, we can see that the prediction line is sitting about $500 below it. Again, don’t read too much into that, but – it is likely that price may drop another $500 or so before reaching the turnaround level.

The descending channel (you DID read that post I recommended earlier, didn’t you?) is still the dominant local price-governing pattern.

You can see my faint Fib-levels within the structure of the channel, levels which determine short-term price jumps, but which will ultimately become inconsequential in the long-term. Like other savvy investors, I have been making use of these levels to stack sats when BTC dips to the lowest levels, it helps a little with ROI in the long-term.

Medium-term

Looking at 2019 in isolation, it is noteworthy that despite not being a great year, BTC is up 91.69% from its start-of-year price ($3691.87 on Coinbase at 00:00 GMT on 1 January; measured to time of writing). Annual performance is a trivial and arbitrary figure, but the more traditional financial markets are fascinated by such numbers, so why not ask them how many of their assets can match that figure?

Far more importantly on this chart, we see the triple convergence point of three support lines: medium-term, semi-long-term and long-term. We are just passing the end of that convergence point right now!

An explanation of this convergence point can once again be found in the previous post, though we will cover it briefly on the next chart. The significance of passing this point is that BTC price movement should now turn positive.

Hark. Bit Brain has spoken.

“Turning positive” implies that BTC price will start to move towards the top of the six-month-old descending channel and eventually break through it. For what it’s worth, my charts place that breakout date in the second week of March 2020. Consider that date to be highly flexible, though it shouldn’t happen much later than that.

Long-term

As I said above, this chart gives an idea of where the other two converging lines originate from (the third line of the convergence point being the base of the descending channel). This is why BTC is now crossing a triple-support threshold.

The “Long-term base trendline” is the most important of the three lines by a country mile. It is the only line that will carry and meaningful significance into 2020.

It is critical that BTC does not execute a definitive break through this trendline. At five years old, it has been Bitcoin’s reliable support level for half of BTC’s life, a situation which I deem unlikely to change soon. A small break below it (such as that of late 2015) is fine, but a big break would mean that all bets are off and that I need to go back to the analysis drawing board.

It is worth nothing that long-term BTC trends may curve slightly downwards as opposed to being straight like this trendline is. But beware of taking the majority of curved-line posts too seriously! I’m sure you’ve all seen the popular “stock-to-flow” charts circulating around; it’s a pity they are just very broad and largely useless “predictions” – much like a TA version of “psychic” readings or astrology. Perhaps I’ll write a post to debunk them sometime, or perhaps you can just read these two posts and figure the problem out for yourself: (in addition to the problem of the ridiculously wide channels they use – which still get breached.)

In fact, ENSURE you read those posts, since the economics behind halvings is still ridiculously misunderstood in the crypto space.

Conclusion

Passing the convergence zone today finally puts us back on the path towards higher prices. The mini bull run of May/June did us no favours – prematurely pushing the price of BTC high above the base trendline and causing it to fall for the remainder of the year. That fall should now finally come to an end, though is has already caused further damage (after that caused in 2018) to the altcoin market and its credibility.

I see this as a great time to buy: we are at the (probable) end of a descending channel, near the bottom of that channel and about to hit firm support and an upwards trend. The altcoin market lies in tatters, meaning that many literally unbeatable deals await the brave investor. Having spent a little money on large-cap alts recently, I think that I may be ready to chance a little on smaller cap coins now. The opportunity to buy into genuinely good crypto projects with a total market cap of $1 mil or less is too good to pass up on!

If anyone is going away soon and won’t be reading my blog for a while: I wish you a very Merry Christmas and a Happy New Year! Please travel safely and don’t do anything silly like drinking and driving. I did some of that in my younger days and it is nothing to be proud of – it’s just incredibly stupid and selfish. Be better than I was.

May Santa bring all of you big bags of cryptocurrencies!

Yours in crypto

Bit Brain

All charts made by Bit Brain with TradingView

“The secret to success: find out where people are going and get there first” 

~ Mark Twain

“Crypto does not require institutional investment to succeed; institutions require crypto investments to remain successful” 

~ Bit Brain

Bit Brain recommends:

Crypto Exchanges:




It’s a Good Day!

Today is a good day. I’m looking forward to its outcome.

My fight against governments is unending, a daily burden, but one which I undertake willingly.

I pride myself in fighting governments on every front that I possibly can: it doesn’t matter which level of government or even which country’s government I fight. As long as
I am making it hard for tyrants to be tyrants, then I am doing something right.

Today is a good day because, God willing, tonight I will get to confront a government official face to face. Tyrants being what they are, such opportunities are rare. “Democracy”
is only a word, a word which Representative Democracies have become the antithesis of.

I’m not naive, I know that I can’t change a politician. I can’t change a politician, but I may be able to help change politics! I will be in a room of influential people: voters, business elite, political party funders, and I fully intend to make best use of this opportunity to open their eyes.

The groundswell against politics in general is growing large, noticeable large – but that groundswell is generally confined to the lower levels. Richer citizens tend to ignore it,
they have more capacity to absorb tyranny – it doesn’t hurt them much and I doubt that they even notice it much of the time. Tonight I will do my best to enlighten the rich, and I will do this by backing the government
official into a corner, forcing them to expose their lies, greed and alternative agendas.

At least, I’ll make my best efforts to do so.

The rich have much to fear. While the average millionaire is not complicit in the day-to-day tyranny that representative democracies now are, WHEN the torches and pitchforks come out, there is no telling how far down they will go in their quest for vengeance and retribution. The average millionaires would thus do well to
enlighten themselves a little and to sympathise with the plight of those poorer then themselves. When business heavyweights start to pressure political parties and hold them accountable, that can have an immediate positive
effect on communities. No political party wants to deal with the bad press of a large company actively and publicly opposing them. If there is one thing a politician really despises, then it is the truth coming out of the
mouth of a well-known and crespected source.

And so the process continues: continually trying to open the eyes of those who have yet to see, or perhaps don’t want to see.

I’m tired of this fight, I’m really REALLY tired of it. It is a reality that I live 24/7/365, and one which I take seriously. The burden of constantly opposing corrupt governments is rather draining, because there is just so much damn evil to oppose!
I know that my many posts, blogs, emails, discussions etc often go completely ignored – but there is method to my madness.

I saw that earlier this week.

I tend to get a little shunned; not in the nasty “ostracised by the community” kind of way, but more in the “try to avoid him him, he’ll just berate you for voting
and tell you yet again why fiat money is evil” kind of way. People would rather not be around me, because “light conversation” with me tends to become rather heavy, and I won’t let them walk away without
the added burden of what they could be doing to help bring about change.

BUT

I’m right – and they know it.

There is a saying, something along the lines of “Nobody loves a warrior until the enemy is at the gate”. I am such a warrior, in more ways than one, and I wear that lack of love as a badge of pride.

And so it happens, that when the proverbial brown stuff hits the fan, suddenly I find myself to be popular again. That is what happened earlier this week.

Government (in my country) made such a large and obvious mess up, that the usually complacent sheep were temporarily jolted out of their rose-tinted slumber, and they took to social media
en masse to express their disapproval.

The words they used were heart-warming – because I saw them repeating words that I so often speak. You see, when you carry on and on and on until people are sick of you, something
you say sticks in their brains. Deep down they get the nagging feeling that all is not well. When circumstances eventually do become undeniably nasty, a little trigger fires in the back of their minds and they remember your
words.

I have made the most of this opportunity. I did not to welcome the newly awakened with open arms, but rather to chastise them for their regular conduct and to warn them against doing so
again in the future. I’m driving the lesson home. Next time around it they will react quicker and with more conviction…

It doesn’t take a lot of people to oust a tyrannical system of government, but it does take more than we have available at the moment. The longer the sheep keep their heads down and
try to ignore issues, the longer we will all suffer.

It is with that in mind that I go with a smile on my face to tonight’s meeting. I know that the politician stands no chance against me. True, it’s only a big fish in a small
pond, but this particular pond is a relatively large and significant one – the ramifications of losing control of it could have a major ripple
effect for a certain political party and even for my country as a whole. So I will be giving it my all. Wishes of good luck and prayers (irrespective of faith or denomination) are most welcome.

Conclusion

Bitcoin is coming. I absolutely believe in the power of decentralised cryptocurrencies and the revolutionary disruptive effect that they are capable of having on international finance. I
absolutely believe that governments can be starved of funding and can be rendered obsolete by blockchains; both in a financial and in an administrative role.

But Bitcoin is going to take time. The upcoming global stock market crash is not going to automatically result in cryptocurrencies replacing fiat currencies overnight. Sure, it will give
crypto an enormous boost, but this is not the crash that will spell the end of fiat forever, it will only be the beginning of the end.

It is still up to us to fight wherever we can: to fight for what is right – not legal. To fight for true patriotism – not the words and symbols created by politicians. To fight for liberty
and free will, not disguised socialism and “democracies” that aren’t democratic.

The battle is hard and the end is nowhere in sight. But if you and I don’t fight it, who will?

Yours in crypto

Bit Brain

All charts made by Bit Brain with TradingView

“The secret to success: find out where people are going and get there first” 

~ Mark Twain

“Crypto does not require institutional investment to succeed; institutions require crypto investments to remain successful” 

~ Bit Brain

Bit Brain recommends:

Crypto Exchanges:




BrainMetric – IT’S STILL ALIVE!

Does anybody remember reading this?

No? Well I don’t blame you. It’s from THIS POST back on 5 August, so I hardly remember it myself!

In all seriousness, I didn’t forget about it, and I actually have been working on it (albeit at a rather low level) for the last four months. I want to reassure you
that I still fully intend to finish it, though it’s going to take much longer than expected. This is it’s story so far…

A Brief History of BrainMetric

As you can see above, I described my metric as being “a quantitative metric used to determine the investor confidence of the market”. That’s no longer an accurate description of it.

The more I worked on it, the more I realised what else I could do with it by expanding upon it. I’ll spare you the details of the equations, partly to protect my own intellectual property, but mostly
because equations tend to make people’s eyes glaze over!*[1]

I soon realised that my metric needed a benchmark. Finding a good benchmarks is trickier than it seems, because cryptocurrencies are anything but constant. They vary wildly in price compared to other
asset classes, as well as to one another. Even a single cryptocurrency tends to have high price volatility. I reasoned that the best benchmark to have would be an aggregate of the combined data of all of the cryptocurrencies
averaged over different time durations.

The trouble with that approach is that it is practically impossible to do. Wash trading wrecks it. Unlisted coins corrupt it. Delisted coin data are no longer readily available. Data anomalies (e.g. a
spike caused by a data capture error) have a big effect on it. Even in a best case scenario it will only ever provide you with an approximation. With so much data and so many potential points of failure, it becomes a bad idea.

Big Data vs Little Bit Brain

The death blow to the “all coins” approach is the sheer amount of data it requires. Assuming the other issues can be resolved, I would still have to import, capture and process practically
the entire historical database of a site such as CoinMarketCap or CoinGecko. CMC has got almost 4900 coins, CoinGecko (whose API I prefer to use) has over 6200! I’m working alone on this, and that amount of data is way
too much for me to handle! Put it this way: Bitcoin alone represents about 15000 rows of data, each row being several columns wide! In fact, all I’ve managed so far is to process Bitcoin data.

But that’s fine. During this process, I have been able to plan my next steps, and have also found value in BTC data on its own.

Analysis of BTC’s data processed through my most basic algorithm, reveals that it behaves much as as Bollinger Bands do (with similar predictive abilities). It is my hope that I will be able to
calibrate the figures into a form of meaningful “market tension” indicator, an advanced warning sign of when some big price move is about to happen. Take a look at what I mean, this is the most basic form of BrainMetric
data displayed in graphic form:

(Embarrassingly) Made by Bit Brain

Excuse the rudimentary charting, I originally made these strictly for developmental purposes, not for publishing! The aim of charting this was to determine how to use it as a benchmark. What you see
above is basically how BTC trading activity (of which volume is only a part) changes over time. It’s a few months old, but you can notice that the far right side is already very “squashed” – much like the
squeezing of Bollinger Bands. When I calibrate my data, this “squashing” will translate into a market tension; the more squashed it is and the longer it remains squashed, the higher the market tension figure will
be.

Beyond BTC

I have decided that BTC will be my industry benchmark, it’s far easier working with one coin than with thousands! There is the option of using total market data, but this data is very hard to find
for the early years and tends to be inherently corrupted by aggregation, lack of data and coins constantly being added to it. As a constant, it is very poor. It’s also interesting to note that you can’t use something
like the “Top 10” coins, because while the names of those Top 10 may seem fairly constant, they change significantly over time. – making their data impossible for me to process.

I aim to be able to average my BrainMetic over time (in intervals of selectable duration for both macro and micro trends), and then compare it to the values of specific altcoins worked out using the same
method. This will work in much the same way as we currently use BTC/sats price to benchmark the performance of different altcoins. Only, unlike with sats price, with BrainMetric the algorithms will allow us to compare apples
with apples. You can’t say that e.g. DASH is better than TRX just because DASH has a higher sats price. But with BrainMetric you WILL be able to say that one is better than the other, since price will not be a primary
factor.

“Better” is not the correct word, I think “less overbought” would be a more accurate description. BrainMetric will be similar to my 4 November post: “Perspective on Altcoins”, in which I used a pseudo-neutral metric (percentage drop from All Time High) to compare altcoins to one another. (Note: BrainMetric equations will not use ATH.)

Joining the Dots

At the end of the day I have a vision of what I want from BrainMetric, I want something that will show:

· The “Market Tension” of BTC – and maybe selected altcoins too.

· … possibly graphically.

· A fair comparison between various altcoins to show which are undervalued and which are overvalued.

· The later incorporation of an additional metric which I have yet to develop.

BrainMetric will probably take the form of some sort of dashboard with a simple interface that hides all the background number crunching.

Yes, as the last bullet point states, there is a second metric in the pipeline. My brain laid yet another original idea egg that will tie in very nicely with my BrainMetric
vision. So “BrainMetric” will probably become “BrainMetrics” as the second metric literally gets added into the equation. IF I can get it calibrated and start getting good predictive data from it, then the addition of the second metric will:

· Further help to determine “Market Tension” (i.e. how likely the next big jump will be), and

· (importantly) give percentage probabilities as to which direction that big jump will be in.

The second metric will operate on the principle of a rudimentary Kalman filter, calculating future jumps based on the frequency, sizes and directions of previous jumps. At this stage the second metric
exists solely in my head, I haven’t had a chance to even start looking at the equation for it.

Making things happen

After deciding last year that Microsoft has got enough money, I stopped using Excel for my crypto-tracking spreadsheets. After trialling several free alternatives, I settled on the excellent FreeOffice suite for my day-to-day needs. (Visit www.freeoffice.com to check it out for yourself, MS Office users should feel right at home. This post was originally created in FreeOffice.)

Figuring that learning how to import APIs/scrape webpage info into FreeOffice spreadsheets might not be so fun (it can be bad enough in Excel), I decided to switch to the web-based Google Sheets for
my crypto spreadsheet needs. I figured that Google may have better internet data integration tools. That was only partially true, and subsequently took a large step backwards when the most popular crypto plugin ceased working.
But I pushed on and have become moderately competent at getting Google Sheets to work for me.

Level 5+ Excel Grand Wizards will know that with enough time and practise, you can make Excel do just about ANYTHING! It may look similar to its siblings Word and Powerpoint (and the other younger ones that few people use), but under the hood, Excel is a V8-powered, fire-breathing beast! Still used to the formidable capabilities of this beast, I built BrainMetric in Google Sheets.

..and that’s why I’m taking so long to do this.

After much struggling, I realised that it just wasn’t going to work. Using Sheets I simply did not have the tools I needed to effectively process all that data. I don’t blame Google: Sheets
is a very capable web app which can do most things, but it just isn’t Excel which can do absolutely anything!

Knowing what I would have to do, I tried the old “ignore the problem and hope it goes away” trick. It didn’t. Eventually I confronted my demons and dusted off some long-neglected bookmarks in my browser. I started the painful process of re-teaching myself computer programming.

Unfortunately programming is not like riding a bike, it’s a perishable skill – one which I learnt at university two decades ago! Modern programming languages evolve constantly: the little which
I do remember is horribly out of date. It’s like semi-remembering the home phone numbers of people you knew 20 years ago: you dial a few, half of them are wrong, and the other half no longer work anymore. The language
Java is now on version 13. I learnt version 1. An early edition of version 1!

Worse still, I have to fight my way through the badly outdated Java documentation – the hallmark of massive open-source software projects. Since I want to use a specific type of user interface creator
(JavaFX), Java 13 is actually not really suitable for my purposes. Java 11 sort of is. Java 8 is. Don’t ask about the in-between version, just don’t. It’s probably only after
Java 14 is released in Q2 of 2020 that things will work properly again (after some work by the community). If only I’d know that at the beginning, I would have saved days, days which I wasted trying to correctly configure the programming environment of my PC.

Now that everything is running semi- properly, as much as I want to jump straight into coding BrainMetric, I need to first practise the fundamentals and make stupid mistakes as part of the re-learning
process. Yesterday I started writing a very basic word processor program. Once I can get that finished, then I should be about 70% of the way there and will just need to work on charting and data management skills. That and
Christmas madness should take me well into early 2020.

So BrainMetric is coming, but I wouldn’t start holding my breath just yet!

For now, what I can tell you is that the prototype charts show a very squashed BTC profile. Something is going to happen soon.

*[1] Stephen Hawking said that when he was writing “A Brief History of Time”, he was advised that each equation in the book would halve his sales. He took the advice to heart and included only “E=mc2”, acknowledging that leaving it out may have doubled the sales of his wildly successful bestseller.

Yours in crypto

Bit Brain

“The secret to success: find out where people are going and get there first” 

~ Mark Twain

“Crypto does not require institutional investment to succeed; institutions require crypto investments to remain successful” 

~ Bit Brain

Bit Brain recommends:

Crypto Exchanges:




Bitcoin – 27 November (Don’t Panic)

I meant to type this post on Monday, but I was WAY too busy trading. Yesterday my usually quiet family suddenly became super-communicative – ruining my chances of getting a proper post out.

However, here IS a post at last. I believe this post is important to write because – as I often lament – the media is littered with ABSOLUTELY CLUELESS crypto analysis (some purposefully so, some real). I need to set the record straight and to remind people (in the words of the immortal Douglas Adams): “Don’t Panic!”

Background (important)

I need to stress that what has happened to BTC during the last few days is:

  1. Perfectly normal
  2. Expected

If you did not expect it, or if you don’t think it is normal, then I can only shake my head at you and make the universal disappointed clicking noises “tsk tsk”, because it means that you did not listen to Uncle Bit Brain. Maybe next time you will…

When reading and interpreting crypto predictions:

It is important to remember that crypto is inherently unpredictable and that even the best analysts (like me) can’t predict short-term events with a certainty of more than about 60%, even when they are very certain. With that in mind, remember that we WILL get things wrong and that our predictions DO change over time. But also note that the more long-term a prediction is, the higher the chances of it being right. It sounds counter-intuitive, but I can predict BTC prices in 2022 with a much higher certainty than what I can predict BTC prices next week.

Confirmations are vitally important in this game. My regular modus operandi is that usually see a pattern emerge, I wait a day or two for initial confirmation, I publish my idea and then I confirm it with increasing certainty as price movements tie in with my predictions. The confirmation process usually requires the fine-tuning of my predictions or, if they are not working out, abandoning my predictions altogether.

Now that you have the background, let’s look at BTC:

BTC

I have long been predicting the movements of BTC which we are seeing now. I’ve been Tweeting about them, blogging about them and displaying my ideas both graphically and in text form.

With this post I aim to set your mind at rest by showing just how far back these predictions go, and also showing you (once again) why you should always listen to Bit Brain…

To keep this post of realistic length, I’ve limited it mainly to graphical Twitter posts, with a few blog charts dotted in between.

The first time I correctly identified and wrote about the BTC descending channel was on 23 July. That’s really not bad (if I do say so myself); it was only this past weekend (four months later) that I first noticed most other analysts at last referring to a descending channel. Some still haven’t realised it… Here is my 23 July chart (from THIS post):

Price movements in early August confirmed the channel, and my faith in it grew (and allowed me to fine-tune it). This chart is from the 5 August post BTC – Beginning of the Week Analysis:

Further mid-August confirmations as BTC rode the top of the channel lower:

At this stage of the game I was still rather optimistic about price, not realising how long the channel would last (it’s now 5 months old, and will probably last for about another month).

September brought us another channel confirmation (with the possibility of turning it into a pennant):

This late September chart is the kind of information that I buy on: a well confirmed trend indicating that prices are relatively low, but can be expected to recover significantly at a later stage. I feel very comfortable placing buy orders based on charts like this:

…so confident that I can even risk missing out on mid-channel dips in favour of better opportunities later (not recommended).

October movements (the next two charts are from THIS post of 24 October) allowed me to modify my channel and to differentiate “Mean Highs” from “Absolute Highs”. Note that my channel has not needed to be modified since then.

Very importantly; October gave me an indicator that the channel was a long-term one and that I shouldn’t expect it to end before the end of 2019. That is still my current thinking.

When BTC dipped through a smaller local channel on 8 November, I was very confident that we would soon be heading down to the bottom of the main channel again. Once again I set buy orders with supreme confidence (note that “65%+”!) and realistic target prices.

Expecting the price drop, I pencilled in a rough sketch of an expected BTC price trajectory. It’s still on my charts today and I’m still using it as a realistic estimate of what may happen.

Which brings us to today:

Everything that is happening is ABSOLUTELY NORMAL and expected. I’m still perfectly happy with the channel and am confident in its long history of predictions and adjustments.

The keen-eyed may have observed that I have just placed my good old diagonal Fib levels on the chart – I believe that they may help a bit in predicting minor resistance/support levels while this channel remains active.

The medium-term chart gives better perspective and introduces a very interesting possibly coincidence/possible important indicator: the convergence of the bottom of the channel, a long-term support/resistance line and the long-term BTC price support line. No I did not cook the books, the lines just worked out that way. The chart after this one better illustrates where the latter two lines come from.

I think there is a very strong possibility that BTC will receive considerable support from the (white dashed) support/resistance line, as well as from the long-term base trendline. that means that BTC should continue to follow my rough little yellow prediction line, and that we should hit 2020 headed in a positive direction.

It also means that we may dip further during the next couple of weeks as the bottom of the channel continues towards lower lows. I expect a final trend reversal in the vicinity of 16 December.

Remember:

  • It’s not about catching the very bottom of the dip, it’s about getting in at a good enough price. I would rather buy a few hundred dollars away from the bottom of the dip, than miss it altogether.
  • Many excellent altcoins are very near to All Time Lows. DON’T FORGET THE ALTCOINS! As I Tweeted yesterday: if you don’t buy them now, then when will you buy them?
  • Trade with your head, not with your heart.

Yours in crypto

Bit Brain

All charts made by Bit Brain with TradingView

“The secret to success: find out where people are going and get there first” 

~ Mark Twain

“Crypto does not require institutional investment to succeed; institutions require crypto investments to remain successful” 

~ Bit Brain

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Cryptocurrency Drama (Full Play)

As promised, here is the whole play (previously published in four episodes) in one big part. It’s far more coherent this way, though obviously not a quick read.

Shakespeare wishes that he was this good! I’ll bet he’s never even heard of Bitcoin!

DRAMATIS PERSONAE

ERNIE, an opportunistic salesman
BIT BRAIN, a customer
THE DIRECTOR OF AUTOMATED NETWORKS, a director of a large franchise
NED, a director of a small franchise

ACT 1 – The Past

Scene 1

Bit Brain enters a large store on the main road of a frontier Western Town established by pioneers. There he is greeted by an opportunistic salesman named Ernie.

ERNIE the OPPORTUNISTIC SALESMAN
Welcome sir! And a very good day to you!

BIT BRAIN
Thank you kind fellow, and a very good day to you too!

ERNIE the OPPORTUNISTIC SALESMAN
Is there anything that I can assist you with?

BIT BRAIN
Perhaps a little later. I’ve heard a lot of good things about this store, it seems to be very popular. I wanted to see for myself what all the hype was about.

ERNIE the OPPORTUNISTIC SALESMAN
No problem, just let me know if you need me.

BB wanders around the store and surveys the merchandise.

BIT BRAIN
Ernie! Would you mind if I asked you a few questions?

ERNIE the OPPORTUNISTIC SALESMAN
No problem sir! Ask away!

BIT BRAIN
I see a lot of new businesses have opened up around here recently. What’s happening?

ERNIE the OPPORTUNISTIC SALESMAN
Oh yes sir! You see, this is a frontier town. We have fled the mismanaged areas of the central government and have moved to this free and previously unsettled area. We didn’t feel safe living and working in the big towns anymore. I used to work in a bank in a large town, do you know what the building was made of?

BIT BRAIN
No, do tell.

ERNIE the OPPORTUNISTIC SALESMAN
It was made of cards! It has become common practice for them to construct financial institutions out of playing cards! I would never have believed it if I had not seen it with my own two eyes, I know that many others do not believe it when I tell them!

BIT BRAIN
I believe you Ernie, I too have witnessed the houses of cards with my own eyes. That’s why my people and I have now moved out here to the frontier. What I’m trying to do now is to make a few good investments to set me up for the future. That’s why I’m here today, to see if I’m interested in buying what you guys are selling.

ERNIE the OPPORTUNISTIC SALESMAN
I assume that sir has already been to the largest building in our town, the one with an enormous sign that says “Bank Toppling Currency”? They create most of the money that we use around here – we just abbreviate it as “BTC”. They actually have a mine beneath the building. Anyone with a pickaxe is free to go and mine their own money; wonderful system isn’t it?

BIT BRAIN
Yes indeed! I have been into the mine myself. Unfortunately my mining tools are rather crude compared to some of the advanced mining equipment that people are using down there, so I just bought some of their BTC off them with my dollars.

Speaking of BTC; I’ve taken a little walk around your store, and I like what I see. I would be interested in spending some of my BTC here, does this store accept it?

ERNIE the OPPORTUNISTIC SALESMAN
Oh I’m delighted to hear that sir! Yes of course we take BTC, but we have our own little account system that you will have be to registered on before we can process any transactions.

BIT BRAIN
Okay, how do I do that?

ERNIE the OPPORTUNISTIC SALESMAN
We operate on a system whereby you buy everything on a store loyalty card. We call it the “Customer Purchasing Unit” or “CPU”. I’m afraid that it’s not a quick and easy process to get an account going, but it’s worth it in the long run. What you then do is you deposit a small amount of BTC onto your CPU, and that guarantees that you will always be able to use our store! Great system, isn’t it?

BIT BRAIN
Weeeeelll, it does sound a tad over-complicated, but for guaranteed access to this obviously expanding store, it seems like a fair trade-off.

ERNIE the OPPORTUNISTIC SALESMAN
Yes, I’m afraid that one of the directors here is known for developing very complex in-store economic systems, but he is very popular and there is no lack of customers queueing up to use them! Once you have a CPU, you can transact with any of the stores in our growing franchise!

BIT BRAIN
Sign me up Ernie!

ACT 2 – The Present

Scene 1

Bit Brain is seen entering the same store as before. The store is very busy inside, though the town outside seems almost like a wasteland. Tumble-weeds blow across the main road
and many buildings stand abandoned.

ERNIE the OPPORTUNISTIC SALESMAN
Welcome back sir! It’s been quite a few months since we last saw you!

BIT BRAIN
Thanks Ernie. I’m afraid that I don’t come into town often these days, most of the time I just stay on the other side of the river with my tribe, the Timmites. There doesn’t seem to be any freely available BTC around at the moment, and that which I have, I am struggling to use. Last year I bought three horses for 1 BTC, this year just one horse costs 1 BTC!

EOS
Sadly that is true. You see, while you were away, a large pack of bears marauded their way through our town! They trashed all of our stores and wrecked a lot of the valuables inside. Our store is worth but a fraction of what it once was. Some of the smaller buildings around here were completely flattened, their owners packed up and left, everything inside them was lost.

BB
That’s terrible to hear! I suppose that the reality of being part of a dangerous frontier adventure is that we stand to gain high potential rewards, but at the cost of high potential risk.

EOS
Agreed. Is there anything specific I might help you with today sir?

BB
Well actually Ernie, I was rather hoping that you might. You see I took my CPU to one of your little franchises on the other side of the river last week, but they declined it. They said that it was unable to transact with the your network.

EOS
Oh dear sir, I‘m afraid that your CPU must have been negatively affected by the EIDOS!

BB
What’s an EIDOS?

EOS
The Entrepreneurial-Intentioned Destructive-Outcome Suggestions is the massive suggestion box located in the entrance foyer of our store. EIDOS causes so many suggestions to be submitted that our entire franchise has become completely dedicated to them. Basically, our network of stores has gone into “suggestion mode”.

That’s a good thing because now it shows how many suggestions we can handle!

Soon we will be completely revamping our store, we call it “Version 2.0”. It’s very exciting that we can handle so many suggestions already and we don’t even have our Version 2.0-optimised
store yet!

BB
But Ernie, my CPU doesn’t work. I can’t access your network of stores at all. Despite having deposited way more than the minimum, I’m locked out of the system!

EOS
Well you see, we’ve grown so much that our store is even catching up to Enormous Trade Holdings, the biggest name in the business, apart from Bank Toppling Currency of course! We have so many customers using the suggestion box that there is almost no capacity for anything else right now, but we see that level of activity as being a good thing.

BB
But what about the guaranteed access to your store that you promised me? That was the reason I got the CPU in the first place.

Wasn’t it?

EOS
Well yes, but we weren’t in suggestion mode then. Now that we are, you can see the true cost of using our network. That’s a good thing, because now we all have a more accurate idea of what it really costs to reserve access to our network of stores.

BB
But then you misled people with the whole “guaranteed access” story! You had enormous hidden costs waiting down the line! Ernie this is beginning to remind me of how the banks operate…

So you’re telling me that I’m locked out forever and that it’s just too bad?

EOS
Noooo sir! Of course not!

All you need to do is to increase the size of the deposit on your CPU.

BB
By how much? How big is this hidden cost to “guaranteed access” that you conveniently never mentioned before?

EOS
*mumbling*

Prices have risen roughly 100 000 times.

BB
*visibly shocked*

WHAT?!

EOS
*still mumbling*

But it doesn’t really matter anyway, since you can’t access the network to deposit more onto your CPU… .

..because you don’t have enough CPU to get CPU.

BB
Are you kidding me? I can’t get CPU because I don’t have enough CPU? So I am locked out forever!

EOS
Noooo sir! Of course not!

You can just borrow somebody else’s CPU for a while!

BB
*getting wary*

Okay…

But wouldn’t that be a lengthy and laborious process? How would I find someone? How would that even work in practical terms? How do I even do that? Please, help me here!

EOS
*visibly brightening up and going back into full “salesman mode”*

You can use Ridiculously Extended Xerographics!

BB
Dare I even ask what “Xerographics” means?

EOS
Xerographics, it’s a copying technique, so basically Ridiculously Extended Xerographics – or REX – allows you to lend the same CPU to different people over and over again, hence the copying analogy. You get paid interest for lending out your CPU.

BB
But that’s a ridiculously extended process just to be able to conduct a normal transaction on a shopping network!

EOS
Well, not really. We don’t see it that way, it’s a good thing.

*suddenly Ernie returns to his far more demure state*
Well, to be perfectly honest, there is a little snag with REX too. There still has to be CPU on REX that is available to be lent out.

*Ernie looks downright miserable*
Currently there isn’t any left…

BB
… because everybody is already borrowing all the CPU for EIDOS, right?

EOS
*Brightening up again*

Correct. Almost all the resources on REX and in this store are completely dedicated to EIDOS. But it shows the system works! You must see how many suggestions we process each day! It’s a good thing!

BB
Ernie, thanks for the explanation, but I’d very much like to speak to your manager.

EOS
Very well sir, let me see if the Director of Automated Networks is available.

Scene 2

The is a knock on the door. The Director of Automated Networks opens it to reveal Bit Brain standing in the doorway.

DIRECTOR of AUTOMATED NETWORKS
Please, step inside and have a seat Mr Brain!

BB enters and shakes the extended hand of the DAN. They both take a seat.

DIRECTOR of AUTOMATED NETWORKS
Ernie tells me that you wish to discuss something with me?

BB
Thank you Mr Director. Yes, I would.

DAN
I’m guessing that this has to do with your insufficient CPU preventing you from carrying out transactions on our shopping network?

You do realise that this is just temporary right? A month from now the REX lending contracts will expire and things will probably return to normal. Probably. Until then we get to demonstrate how much traffic
our network can handle from the EIDOS box; it’s a good thing. Also our franchise will soon upgrade to our optimised “Version 2.0”, that will make us even more efficient!

BB
Well, I suppose that the CPU issue inspired me to be here, but that’s not really why I asked to see you.

DAN
Then I am curious Mr Brain, why are you here?

BB
I am here because I’m concerned Mr Director. I’m concerned because your store is experiencing a rather severe issue, and all anybody
says about it is that “it’s a good thing”. Mr Director, I am concerned because you and your supporters are in denial! I haven’t seen this much denial since that German guy said he was going to open a bar that specialises in selling carrot juice; I still can’t believe that so many of the Carrot Bar’s investors were
in denial about that scam!

Mr Director, thousands of shoppers can’t shop here at the moment, and you just don’t seem to care because the richest ones still can! Don’t you see how bad that looks?

DAN
Mr Brain, I think you’re blowing this out of proportion. Anyone who puts enough money into our CPU can still use the system, I don’t see the problem.

BB
I can appreciate that. Can you appreciate that many users can’t afford that? Do you have any idea what it’s like to be in their shoes? My memory is a little fuzzy on this point, remind me again just how much investment capital you attracted when you started up this business?

DAN
Yes, yes, we broke records when we started this business, but that’s not my money, that money belongs to the business.

BB
Yet the board of directors controls it. You get to say how and when it is used. You would never know what it is like to be stuck with only a single unit of credit on your CPU card, because that isn’t a reality that any of you have ever had to experience. But that is a reality that thousands of us customers experience right now, and Mr Director, we can not use your shopping network!

DAN
But can’t you see? The system is working as it should. That is what decentralisation is all about! He who puts the most into the scheme, gets the most benefit from the scheme.

BB
That’s fine, I think we can all accept that. But many of us were led to believe that we had already put sufficient money into the scheme, only to now be told that we will have to invest far more if we want to enjoy predictable, regular access to it! That’s not fair Mr Director! You need to address the problem of EIDOS denying resources to the majority of the network. You need to address the exploitation of your system!

DAN
We don’t see it that way. This is a good thing. There is no problem here.

BB
Damn it Mr Director! Can’t you see that I’m trying to help you guys? Can’t you see that having a whole lot of people who can’t access your network, despite having CPUs, is a big problem? Don’t you appreciate that people don’t want to wait a month to be able to make a transaction? Can’t you understand that nobody wants to create a start-up business as part of your franchise if their customers won’t be able to access their services?

Yesterday I ran into a new guy in town, he says he is the newly appointed District Apothecary. He wants to move into one of the abandoned buildings and start his own District Apothecary service – his DApp,
but he is afraid of the start-up costs. In the past I may have sent him here, to you guys, but now I would never do that to him. Instead I am going to suggest that he joins Ned from across the road and becomes part of his
franchise.

You see Mr Director, your mentality is becoming dangerously elitist, your store no longer cares about serving the man on the street, as long as it can serve a rich happy few or those who are willing to exploit the system. That’s not right Mr Director, that’s not why we moved out here to the frontier! We are supposed to be moving away from systems like that, we are supposed to be creating fair systems for all! Sure the rich can enjoy benefits, but don’t shut the poor out of the network altogether!

DAN
That’s not our objective Mr Brain, we are neither anti-poor, nor pro-rich, we’re just decentralised.

BB
Don’t you worry about your franchisees? Don’t you worry that they will lose business after having placed their faith in you?

DAN
Our franchisees can create systems whereby they loan their own CPU to their customers, allowing them to continue to use our network of services.

BB
But surely some customers will exploit that to the detriment of others? That sounds like quite a complex undertaking for a start-up business to have to deal with; one which will require a potentially complex solution.

DAN
That’s true. But give it time.

BB
That could be more time and money than what people trying to create a DApp or something similar can afford…

Mr Director, as long as you can’t even admit that there is a problem, you can’t begin to address the problem. You know as well as I do that your franchise is hardly decentralised, the majority of resources and control sits right up at the top here with you! That’s fine, but then use it wisely! You need to address this issue! If you do not, then it will have repercussions for your business! Please just admit that there is a problem so that the problem can be tackled! The frontier is a new place, people accept that mistakes are being made, but in order to retain their confidence and respect, you need to be honest with the people! Being realistic, open and honest attracts community support, that’s much better than sitting with disillusioned customers!

DAN
I’m sorry you see it that way Mr Brain. We see no issue. I tell you again, this is a good thing.

BB
Well I’m sorry too Mr Director. I tried to show you an impartial reality, but there are none so blind as those who will not see.

Exit Bit Brain

ACT 3

Scene 1

Bit Brain waves a defeated goodbye to Ernie as he leaves the store. He walks straight across the dusty road and into the building directly opposite.

Bit Brain opens the door and a little bell jingles to announce his arrival.

NED
Welcome to Ned’s Excellent Offers! My name is Ned, how may I help you today?

Bit Brain turns slowly to his left to face Ned behind the counter. He takes in his surroundings as he does so. The store has a fair amount of people in it, but nothing like the
one across the road. Most of the people here appear to be of Eastern descent.

BB
How do you do Ned! People call me Bit Brain. I’m looking for another place to shop, my CPU no longer works at the store across the road. Sorry that I don’t have much money to spend, I just want to pick up a few things, preferably cheap items that may gain value over time.

NED
Ah yes, I understand. You are not the first person to come in here with a story like that. I’m afraid that the CPU system of the store across the road has caused similar problems for many people. I’m scared that they may already have gone too far, that they may already have blocked one too many people from their shopping network.

BB
Blocked ONE too many, they’ve blocked thousands!

NED
Ha ha ha! It sounds like you know the full story then! Yes, they have. For the last week we have seen many angry faces leave that store empty-handed, each one of them blocked from the system by the CPU requirements. My friend Erik and I have watched them through our store-front windows. Whenever we see such a person, we say “oh not again, they’ve blocked another one!” Amongst ourselves we’ve started calling their store “the Blocked One”.

BB
That must be good for you in terms of increased business?

NED
I suppose it is, in the long-term. But it’s still sad, not something we like to see. I don’t think that pioneering frontier businesses should be run that way. It’s certainly not how we run! They may be our competition, but that doesn’t mean that we enjoy watching them fail.

BB
How do you run things here?

NED
Why, our store is free to use of course! Unlike some others, there are no tall barriers to entry for our customers.
Obviously you still pay for the items you buy, but we don’t charge you any transaction fees for that. In fact, our credit system is practically unique in that there are no transaction fees on our main line of products.

BB
I don’t get it, why isn’t your store busier than theirs?

NED
For few reasons I guess. For one, we are not originally from around here.

BB
Well none of us are, we all came to the frontier from back East.

NED
True, but our tribe came from much further East, we came from very far East. My people are called “the Eastese”. We look a little different to the locals and our traditional culture is not like the culture here.

BB
Please don’t play the racism card, that card is so tired and over-used!

NED
Don’t worry, that’s not what I was implying. We don’t have problems with racism here, we just have problems with people stuck in their comfort zones. You see Mr Brain, people like to stick to what is familiar to them. The locals here are attracted to people such as the Director of Automated Networks at “the Blocked One”, because they all originally came from the same place. When he makes mistakes, they choose to follow him blindly rather than to hold him accountable. Combined with a significant amount of denial, they are greatly hamstringing themselves by taking that approach.

BB
That’s just what I told them!

NED
There are a great many people around here who do not believe that I am capable of competing with the Blocked One, though their reasoning is largely grounded in some form of biased familiarity – a logical fallacy – but a powerful one nonetheless.

It’s ironic because, and please excuse me if this sounds boastful, back in my homeland, Ned’s Excellent Offers is the biggest name in frontier businesses!

Sadly our Eastern frontier was a very harsh place, even worse than here. We also fled into the wilderness, but government forces caught up to us and forced us to turn back and play by their rules.

BB
Oh no, that’s terrible!

NED
Well yes, and no.

They learnt that we were not going away, and we learnt how to get along with them. At first they were incredibly hostile towards our ideas, banning many of them outright, but since then they have made much progress, frustratingly slowly at first, but now the pace is finally picking up.

BB
Couldn’t you just have fled again and run even faster and further East to escape the clutches of your government?

NED
I suppose we could have kept on running, but I also realised that this was a battle we would one day have to fight. What I then did was to work with my government, advising them on frontier businesses so that they could establish policies which worked for all of us. My country is highly conservative, so it has had to implement those policies bit by bit so as not to upset the older conservatives, but things are changing fast now!

I built Ned’s Excellent Offers with government policies in mind, so that I would make it fully compliant. I could have run, but why run when you no longer need to? The government back in Eastenia is
now even becoming supportive of BTC, previously that would have been unheard of!

Best of all, and something the people over here tend to ignore, is that Eastese population back home outnumbers the locals here in the West by far! Our average wealth is considerably lower, but that is rapidly
changing as our economy develops. Us Eastese are a growing force of significant magnitude, something which often goes unnoticed, or also just gets denied.

BB
Your store, I can’t help notice that the variety of goods here is not nearly as great as at the Blocked One.

NED
There is no hiding that, you are correct. Our policy here is to stock high-quality goods. It means that we have had a slow start, but I believe that it is the correct approach and will pay future dividends. We charge our suppliers a substantial fee to place their goods on our shelves. This ensures that the fly-by-night merchants with low quality goods do not approach us to sell their wares.

BB
That could be a problem, I know a man who wants to start a District Apothecary service, I was hoping he could run his DApp as part of your store network.

NED
Give me his details. I have a growth fund which exists to help such businesses. We can help him create it and offer him substantial funding if necessary. We place great importance on growing our own little economy, that is the smart thing to do. Here at Ned’s Excellent Offers we like to act as the hub of a “smart economy”.

BB
That sounds great Ned, I’m very excited to have found you guys. Looking at the facts – free of emotion and bias – it seems to me as if you guys are indeed where the smart money is.

NED
I can not say for sure, but we would like to think so. It pains me to see people blindly follow something which isn’t working properly. Follow it, sure, but then don’t be shy to complain about it if it is failing you!

You know, we all make mistakes, even us “smart economy guys”! Back in October we tried to start a small zoo. We arranged for a few different types of Eastenian animals to be transported here.
The one consignment was a large group of yaks. They were shipped in big wooden crates marked “YEZ” – Yaks of the Eastenian Zoo. Unfortunately there was a problem with our delivery process. The crates were much
bigger than we anticipated and they started blocking up all our storage space and transport pathways. We lacked the transport capability to deal with all of them and they were coming in faster than we could carry them away.

We had rigged a system of large cranes designed to swing the YEZ crates over our buildings and to drop them gently out of the air onto the waiting transport carts. Unfortunately we forgot that we can only
process so many “air drops” at a time, after that our network gets too busy, much like the people in “suggestion mode” over at the Blocked One.

But unlike them we admitted that we had a problem. Our distribution network did behave as expected, it did what it was designed to do, but we still saw it as a problem. We have looked at how we might prevent this in the future, because we don’t want such problems again!
This may mean that we have to charge a very small amount for future transactions, but we are not going to a CPU system, we will keep it very cheap. We already have a logistics system which is Greater than Archaic Systems –
we call it “GAS”. GAS can be used to create cheap priority transactions without bottle-necking our distribution channels, especially once we revamp our own store into Ned’s Excellent Offers Version 3.0 next
year!

BB
Well Ned that does sound better than what the Blocked One is doing. I still find it hard to believe that so many supporters of that store fail to criticise it when it does wrong. I believe that creating sacred cows is very dangerous. It’s not as if the Blocked One even has a wealth of great products on their shelves, if you look closely, most of them are either fairly simple games or some type of casino equipment.

NED
That’s also true, remember what I told you about us having a policy of fewer but higher quality products?

By the way, did you ever visit Alan’s Document Archive on the far side of town?

BB
No, I don’t believe I did.

NED
Well you aren’t missing much, there is practically nothing there. His building remains “under construction” even though it’s been years since the foundations were first laid.

Alan’s Document Archive doesn’t have any documents archived in it!

Ned looks upwards, thinks for a few seconds, and then carries on speaking

NED
Well, that’s not entirely true. He does have one small document there. It’s yellowing with age now, but he still refers to it as his “whitepaper”, it’s kept under the otherwise empty front counter. Alan stands there each day, telling people how great his store will be – one day. Construction does take place, but he’s now way behind the rest of us!

BB
How does his business survive, where does he get the money from?

NED
That’s the sad thing, it’s the same sort of bias we spoke about earlier. You see, the nasty reality is that Alan’s Document Archives is valued at more than what Ned’s Excellent Offers is!

BB
You have got to be kidding me!

NED
No I swear to you! Look, we all pop in to say “hi” to Alan on a regular basis, he’s a genuinely nice guy and he tries hard. It’s not his fault that he has had issues with some of his business co-founders, that was just unfortunate. Alan also struggles to take charge of his construction team, they make him promises, he makes his investors promises, and then the construction team somehow gets behind. Over and over again. Alan gets terribly excited about his grand ideas, but we rarely see anything come to fruition.

One would think that at some stage his investors would start backing out, but they don’t. Some say that it’s because he once organised an event where he took all the investors down to the dam
just outside of town. They sat on the pier together and he read them his whitepaper. For reasons I can’t understand, the investors walked away very impressed by that “pier review” process. Basically all that
means is that a bunch of like-minded people agreed with Alan. To me that really doesn’t mean much.

At the moment everybody is just talking about how great Alan’s Document Archive will be once his wife Shelley finally arrives to help him. Shelley will no doubt make improvements,
but at the end of the day, Alan’s Document Archive remains Alan’s Document Archive.

We know that the whole town took a big knock during the bear rampage, but Alan’s Document Archive is still a lot better off in terms of public support than what I think it should be. The facts are simple:
his store has empty shelves and an incomplete building.

Yet it is worth more than mine, go figure! In fact, I’ve just heard that with all the EIDOS trouble at the Blocked One, some people are now suggesting that ADA may be the answer to their troubles! They
just don’t learn…

BB
I hear you. Supporting something you believe in is commendable, but how many times will you allow someone to drop you before you cease to enable them? How can you let people make you empty promises and then not even challenge them when they go down the wrong path?

If you are going to allow someone unrestricted free reign, then they will never develop respect for you as an investor. They are going to walk all over you. By doing so you encourage bad behaviour. That’s bad for them, bad for you, and bad for frontier developments as a whole!

NED
You are correct. No outsiders are ever going to take their projects seriously. Just imagine this scenario:

“Can I sign up for CPU?”,
“Sorry ma’am, not today, please come back in a month and bring a lot of cash.”
“What’s the problem?”
“There is no problem. Everything is working as it should.”
“But I can’t get my CPU today?”
“No ma’am. But don’t worry, this is good.”

That’s not how you do business! That much should be obvious, even to a child!

BB
Well thanks for the discussion Ned. It’s been a little depressing, but unexpectedly enlightening. I’ll be seeing you around for sure!

NED
Thanks for stopping by Mr Brain. Why not swing by my next-door neighbour on your way out? His store is called Virtual Entity Traders, it’s growth prospects are starting to look rather good now that the Eastenian government has become so friendly towards BTC and similar projects.

BB
Thanks, Ned, I think I’ll do that.

Final Curtain

Yours in crypto

Bit Brain

“The secret to success: find out where people are going and get there first” 

~ Mark Twain

“Crypto does not require institutional investment to succeed; institutions require crypto investments to remain successful” 

~ Bit Brain

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