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Bitcoin – 27 November (Don’t Panic)

November 27, 2019 Published by

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)

November 18, 2019 Published by

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

Bit Brain recommends:

Crypto Exchanges:




Cryptocurrency Drama (The Final Act)

November 15, 2019 Published by

At last you can read the spellbinding conclusion to this epic saga!

Big request: at the moment Twitter – in their infinite wisdom – have locked me out of my account for the FOURTH time. No Twitter, I’m STILL not a bot! They don’t like the fact that I refuse to give them my phone number. If you’re reading this, then please share a link on Twitter for me – I am currently unable to promote this post myself.

Just a reminder that I will publish this entire play as one BIG post in the near future.

For now, here are parts 1 – 3 in case you missed them. I hope that you’ve enjoyed this series. Let me know if you’d like to see another one in the future:

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 rings to announces his entrance.

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*

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 drama

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:




Cryptocurrency Drama (Part 3)

November 14, 2019 Published by

Behold, the penultimate instalment in my first and only play! It’s brilliant so far, isn’t it?

In case you missed part’s 1 and 2, you’d better catch up here: (or else you will be totally lost!)

Enjoy!

See you tomorrow for the thrilling conclusion to this drama!

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 there 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

Cryptocurrency Drama (Part 2)

November 13, 2019 Published by

This post will make little sense if you have not already read “Cryptocurrency Drama”. Read that first before continuing here.

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 use 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.

Cryptocurrency Drama

November 12, 2019 Published by

This is the first full length play I’ve ever written. Fair warning, it’s long – it took most of the day for me to write it. I will split it into four posts of one scene each. For those who wish to wait, I will publish the play in it’s entirety after I have released all of the separate scenes.

Ladies and gentlemen, please take your seats, switch your phones to silent and stow your noisy children. Now sit back as we raise the curtain on tonight’s performance of “Cryptocurrency Drama”!

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 wonders 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!

Perspective on Altcoins

November 4, 2019 Published by

Today I would like to do a fun little exercise. Well, I think it’s fun because I’m a crypto lover. If you don’t like crypto, then you should probably stay well clear of my blog!

I spoke about the silliness of altcoin bashing last week, so I’m not going to delve into that again. Suffice to say: I believe in the cyclic nature of markets, and that altcoins will rise again. There ARE signs that that rise has started (meaning that altcoins have bottomed), but that has yet to be confirmed.

For today’s exercise I’m going to look at the following hypothetical situation:

Say I put $100 into the top 20 altcoins. What would they all be worth if they then got back to their All Time Highs?

I will be using the CoinGecko top 20. I know that most people prefer CMC, but I like the added functionality that CoinGecko offers. For example: with CoinGecko I can easily see how far each coin is from its All Time High (ATH).

From https://www.coingecko.com/en?view=all_time_high

Below is a table which I constructed to display those figures. Remember, in each case we are investing $100 at current prices, and then seeing what will happen if that coin gets back to its ATH.

1 BTC $214,59
2 ETH $800,00
3 XRP $1 162,79
4 BCH $1 315,79
5 USDT $132,28
6 LTC $613,50
7 EOS $694,44
8 BNB $194,17
9 BSV $199,20
10 XLM $1 265,82
11 ADA $2 857,14
12 TRX $1 219,51
13 XMR $862,07
14 LEO $200,80
15 OKB $168,07
16 LINK $168,92
17 HT $156,99
18 ATOM $206,19
19 NEO $1 785,71
20 IOTA $1 960,78

It’s true that one shouldn’t read too much into this: the playing field is not entirely level (for reasons such as some coins only being launched after the peak of the bull market). But what it does serve as is a semi-standardised benchmark indicator of potential ROI.

Yes, we all know that BTC is safer than altcoins, but I personally believe in chasing some higher potential ROI at the expense of a little more risk, and even a little bit of extreme ROI at the expense of massive risk. Note: being the top 20 coins, this table does not represent the “massive risk” section of the market – well….. that’s debatable, we’ll get back to that shortly.

Those are the numbers, the raw stats. Let’s now dig into them a little deeper:

At a mere $214.59 return on a $100 investment, BTC looks positively pedestrian when compared to the average – and it is. This is the entire point of investing in altcoins instead of in BTC, that and helping many small projects to become part of our everyday lives – thereby greatly enhancing them.

However, and this applies to all the coins, these returns are only to get back to ATH. They do not include further market growth beyond that point! Only the staunchest bears would believe that BTC has already reached its ultimate ATH. Another term for such people is “idiots who should be ignored”. As the ultimate crypto store of value, I believe that every portfolio should have BTC in it. I would consider 10-20% to be a good figure, though that is largely down to personal taste (and my own percentage is way outside that bracket at the moment!)

Moving lower down the table we see ETH returning $800. Wow, that’s really not a bad potential investment! Ethereum remains the biggest and most popular crypto platform by far, and it is really the only one with many high quality DApps already running on it. No, your 100 casino DApps on your favourite chain are not “high quality”. Even NEO – and you all know how much I love NEO – can boast only a small handful of good DApps at this stage. But Ethereum has hundreds of them, even if it is also packed full of trash coins which should, and probably will, die. The ETH team is also still very active and the platform continues to be developed, albeit that it misses target dates almost as badly as Cardano does! 😄 In summary, Ether is a fairly secure investment with possibly much higher returns than what BTC can offer.

You all know my feelings on Ripple. I mean XRP. I mean Ripple. Apparently XRP is Ripple when Ripple does good things such as forming major partnerships; but XRP is not Ripple when Ripple is criticised for e.g. being centralised or being a company full of ex-bankers. Oh how I hate Ripple and everything it stands for! BUT: like most dodgy investments, Ripple still has a LOT of support. I do not doubt that Ripple will once again see very good returns when the market runs. However, I could never condone investing in such centralised, anti-Satoshi rubbish – so if you want to hold Ripple, then you will be doing so without my support! The returns you may get on Ripple are better than those of ETH, but I would chose to put my money on ETH instead!

BCH and LTC remain viable alternatives to BTC, especially for smaller transactions. I believe that there is a strong future for such coins, a future in which BTC is the store of value, and such coins (you can add DASH, NANO etc to the mix) become the de facto mediums of exchange. It is interesting that BCH offers far higher returns than LTC when looking at their respective ATHs. I surmise that this may be because people once perceived BCH as possible legitimate competition for BTC, whereas LTC was only ever a coin that worked alongside BTC. The two coins are pretty even in my eyes.

Note Tether sitting between BCH and LTC, with a possible return of $132.28! I find that rather amusing! 😆

At $694.44 EOS is not looking as good as ETH. This should serve as a mild warning to EOS investors. I have long said that EOS is good, but over-hyped. I stand by that statement.

At $194.17, BNB is deceptive. As far as exchanges go, Binance is by far the most well known. Crucially, its ROI to ATH is less than that of BTC, which on its own should make the decision to buy BTC instead of BNB a simple one. But BNB is a special case, and I caution against writing it off. While my favourite exchange is KuCoin (and its KCS token), I can not ignore the fact that Binance is also launching programs, projects and platforms left, right and centre. It’s very popular and I have great faith in its CEO. CZ has a brilliant mind and a comprehensive understanding of blockchain technology, business principles, international affairs and also a general sense of what a powerful agent of positive change cryptocurrencies can become.

I assess that if any blockchain company can become the next “Amazon”, “Google” or “Microsoft”, then Binance has the best chance of being that company. It is even possible that as other cryptocurrencies grow, so Binance may one day pass even BTC in terms of market cap! Don’t laugh, just think about it…

BSV is a joke, as is Mr I-did-not-pay-now-I’m-back-in-court Faketoshi. It is sad that such people even exist, they are an ugly scar on the beautiful face of crypto. ‘Nuff said.

Of the top 10 coins, XLM offers the second best potential returns (after BCH) on its climb back to ATH. Personally I consider it a little over-valued, but I far prefer it to its greatly overvalued and far more dodgy cousin XRP.

With the best potential returns of the lot (an incredible $2857.14 for a $100 investment) ADA does look like a prime choice! However, I urge you to remember what I have often said: that US investors are too fixated on US crypto in general, and also that ADA is way behind where it should be: many promises, no deliveries. Other platform coins have since moved far past it, even if market cap has yet to catch up to that fact.

At $1219.51 for $100, TRX is looking strong! It’s not that high up that you would expect it to fall down the market cap ladder, the potential returns look good and Tron is a good product. True, like most of the platforms, it also lacks a large number of good DApps – but those will probably come with time. Justin Sun is a dynamic young entrepreneur with enviable levels of charisma, I think there is a high chance that he will lead Tron to success.

XMR has been quiet lately, which is not always a good sign. But I still see Riccardo Spagni on every episode of “Magical Crypto Friends” and he still seems enthusiastic. While they still have issues to iron out, Monero remains the biggest name in privacy coins, and that is NOT something to ignore! A potential return of $862,07 to ATH is only slightly better than that of ETH, but one could argue strongly in favour of privacy coins, based on the way that crypto regulations are going. With exchanges blocking ZCash (which I no longer endorse), it is clear that privacy coins are a threat to the financial centres of the world. If they do succeed, then XMR may well be the most successful of them all.

LEO has a relatively low potential return (very similar to that of BTC), easily explained because it is so new. However, it is the coin of BitFinex, and I have no love for that exchange. I’m still waiting for the whole dodgy BitFinex/Tether monster to come tumbling down. I’m happy to have closed my account there a long time ago, and I have no intention of having anything further to do with that exchange. I suggest avoiding it.

OKB is the coin of another big exchange, though honestly it isn’t one of my favourites and there are other exchange coins which I would much rather hold. There’s nothing inherently wrong with it though, and like LEO, its price is not reflective of it’s potential, because it was only launched after the demise of the 2017/18 bull run.

To an impartial outside observer, the LINK figure of $168.92 should be very troubling! I keep saying that LINK is way too hyped at the moment. It’s possibly the most over-hyped cryptocurrency of all (at the moment). LINK is not a new coin and it’s not even a special coin in any way. Investors should be very worried that it is hovering so close to its ATH figure. I like LINK, but I would NOT buy it now!

HT is almost identical to OKB for the purpose of this post. I wouldn’t put money there.

ATOM has low returns back up to ATH. But Cosmos has been around since 2014 so it… wait. What’s that you say? Cosmos is a new coin? Oh yes, you’re right. Cosmos is a 2019 coin which (to me) looks remarkably similar to Blocknet (BLOCK) – a coin which has been around since 2014. Why is that relevant? Because BLOCK has a market cap that is more than 130 times smaller than that of very similar Cosmos. What does that mean? It means that ATOM is all new coin hype. No thanks.

NEO’s looking solid with a potential return of $1785.71 for its $100. It’s well known how much I love NEO, and with the current blockchain developments in China (which I have been predicting since the China FUD in 2017), I love it more than ever.

IOTA is a dark (and largely forgotten) horse, sitting at the bottom of the list, but with a figure of $1960.78 per $100 should it make it back to ATH. That’s the second highest in the table, and should not be ignored. I know there have been some criticisms of it, but I honestly haven’t looked deep enough into IOTA lately to know if they are valid or not. As with everything in crypto – you should do your own research.

Conclusion

I believe that good altcoins (note: GOOD altcoins) stand to provide much better returns than Bitcoin will in the near future. Of course with the chance of greater returns comes greater risk. How much risk you are willing to expose yourself to will depend largely on your investing style and current financial situation – I recommend being safe rather than sorry. Having said that, the mere fact that somebody chooses to invest in crypto indicates that they probably have a pioneering spirit (it’s still early days for crypto) and personally I already see BTC as a minor “risk”. If BTC works, then it’s logical that altcoins should work too, thus I invest a decent amount of money in them. As of yesterday, 43.2% of my crypto portfolio is in Bitcoin, which is actually almost the highest percentage it has ever been, a consequence of me holding my alts through the bear market.

I continue to invest slowly and carefully, some in BTC, some in altcoins (though I also keep missing the dips!). In the long-term I believe that altcoin investors will be richly rewarded, and I will continue to invest accordingly. Remember that the table above only deals with the top 20, there are many more coins out there. I suggest that people do their best to make decisions based on facts as opposed to emotional attachment. Crypto is often a sentiment game, but sentiment can’t keep a coin going indefinitely.

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:




Cryptocurrencies – Recent Highlights and the Road Ahead

October 27, 2019 Published by

Well it’s been quite a week for crypto! After too many months of no significant action, things are (finally) starting to come to a head. I’ll briefly discuss the highlights by fitting them in under the simple headings of “Bitcoin” and “Altcoins”.

Bitcoin

The recent Bitcoin price dip to below $7500 was not a surprise. I, like many other analysts, both expected it and welcomed it as a buying opportunity. Most of us (myself included) expected it to dip further. Indeed, I had yet to have a buy order fill (silly me). What we didn’t expect was a rapid BTC rise. Twice.

That the reason for those rises is still open to debate, indicates that (as usual) nobody REALLY knows the real reason behind them. Bullish sentiment appears to be partly from short squeezes, but mainly from FOMO about pro-blockchain comments made by Chinese president Xi Jinping. No doubt the full story is more complex than that, but FOMO never bothers with getting all the facts.

Despite the rapid rise, a little messing around on my charts reveals that BTC MAY still be in a descending channel.

I emphasise that this is just a theory, but I wouldn’t rule it out. My gut feel (which is often wrong when it comes to crypto) suggests that prices may yet again dip lower in the channel. I still believe that BTC has to reach the vicinity of its long-term trendline (approximate position indicated below) before it can begin to climb properly. Granted: the exact position of that trendline is hardly cast in stone.

The massive volume increase which followed the Bitcoin price rise is indicative of just how much (dumb) money is just waiting in the wings – waiting for some sort of confirmation that bitcoin is not going
to crash to zero before it decides to invest.

Altcoins

I have never been impressed by the altcoin bashing that has been so prevalent ever since the Bitcoin Maximalists greatly and suddenly multiplied in number starting in mid-2018. I consider altcoin bashing to be rather immature and short-sighted. As sure as my name is Bit Brain, most of the altcoin bashers will flip and become some of the biggest pro-altcoin campaigners when altcoin season returns.

Altcoin season has threatened to return on several occasions, though we have no positive confirmation of that happening yet. Of course there will always be isolated instances, such as Chainlink which is doing
very well at the moment. I can only shake my head in dismay as I see the Chainlink supporters declare their coin to be bulletproof and capable of decimating all the others. Guys – Chainlink is good, but it REALLY isn’t
anything super-special!

Before I get too far off-topic, I think that altcoin season WILL return very shortly, and I strongly suggest (as I have been doing for over a year now!) that investors stock up on all the ridiculously, laughably, insanely, insert-superlative-herely cheap altcoins that are currently available.

This last year has given us considerable new insight into the possible long-term nature of BTC dominance (seen below). It appears that BTC dominance will probably cease to increase now, freeing up a lot of money to be invested in altcoins.

From https://www.coingecko.com/en/global_charts; modified by Bit Brain

The SHITPERP Index (that’s a real thing, I promise) which tracks the performance of selected altcoins is indicating the same thing. It’s chart shows a double-bottom, indicative of a transition from losing value to gaining value.

President Xi Jinping’s comments (referenced earlier) seem to be having a direct effect on Chinese coins. I have noticed my beloved NEO doing exceptionally well ever since BTC took-off this weekend. The same applies to some of my other Chinese coins such as Ontology (ONT) and THEKEY (TKY). I have been saying for a LONG time that Chinese altcoins is where the smart crypto money should be. I’m sticking to that.

China definitely seems to be looking more blockchain friendly than both the US and the EU at the moment. Combined with their rise to global economic and military dominance (sorry USA, that is happening), I’m feeling VERY good about my Chinese altcoin investments.

BUT:

Note that Xi Jinping is talking about BLOCKCHAINS, not cryptocurrencies! I honestly think that the Chinese crypto hype is premature. Sure, it’s a GREAT idea to get in very early at ultra-low prices, but I don’t think that the current FOMO wave is thinking along those lines; they’re just thinking “China” = “pro-crypto” = “Chinese crypto to the Moon”; which is not necessarily the case. Chinese authorities appear to want blockchain tech that they can control, that’s NOT crypto!

It is however true that Xi Jinping is a visionary and that he knows the importance of not getting left behind in the blockchain race. In the long-run I believe that China will come around to the realisation that decentralised blockchains are the ones that work best and that centralised ones (like many reserve banks are currently investigating, or like Zuckerberg’s shitcoin extraordinaire) are doomed to fail thanks to the transparency and forced accountability that blockchains offer. It’s worth remembering that the Chinese government has been trialling THEKEY for several months already. I also remind you that Da Hongfei got WAY ahead of the game and helped China develop Chinese blockchain regulations about two years ago – regulations he built NEO (and by extension, Ontology too) around…

Looking to the future of alts, my crypto investing suggestions remain unchanged:

1) Good Chinese coins (NEO is still by far the best example, but others (e.g. VeChain) – are also worthy of consideration)

2) Good Exchange coins (My best bets are: Binance (BNB), KuCoin (KCS) and Nash Exchange (NEX) – all of which I have referral links to in my signature block)

3) Good Platform coins (you guessed it: NEO again! Other coins that I would recommend in this category are EOS, Ether (ETH), Ontology (ONT), Tron (TRX) and Holochain (HOT).

4) Other coins which have good use cases, especially the neglected ones which have survived the extremely harsh altcoin winter. Yes, I STILL love CargoX (CXO) (check them out at www.cargox.io and tell me what’s NOT to like!), but there are many others such as Kyber (KNC), Enjin coin (ENJ), UTrust (UTK), TenX (PAY), Worldwide Asset Exchange (WAX), OmiseGo (OMG) – too many to list. Just remember: “Favourite” does not equal “Good”!

Final Word

To my fellow NEO investors, it’s good to see NEO getting some LONG overdue attention, but be prepared for the FOMO-turns-to-FUD price drops which are sure to come. Like most good investments, NEO’s strength will lie in its long-term performance.

Yours in crypto

Bit Brain

Featured image in the public domain. Sourced from https://knowyourmeme.com/memes/its-over-9000

All uncaptioned 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:




BTC update: 21 October

October 21, 2019 Published by

As BTC grows so it slows. This is a little frustrating to those of us who have grown used to the rapidly changing BTC market of old, but on the other hand, it’s a positive sign of adoption and of maturation.

While on that subject, I would like to remind everybody just how far we’ve come since late 2017 (when BTC was at the height of a major bull run). We may not see the developments taking place on a day-to-day basis, we may not notice how much the market has changed since then, but it HAS!

Think of the primitive wallets you used two years ago. Think of the clunky exchanges and their primitive user interfaces. Think of all the new crypto derivatives products, the regulations which make institutional investment possible, the constant mainstream news coverage. The price doesn’t reflect it, but crypto has made good use of the bear market and subsequent consolidation period. Crypto has grown – something that will stand it in good stead when hype picks up again. For example: Bitcoin’s hash rate is currently about six times what it was when BTC was at its All Time High. Crypto is fully ready for the next bull run, now it’s just a question of waiting for the investors to catch up!

Without further ado, let’s look at some charts:

Forecast:

My last couple of posts on Twitter have looked something like this:

It is my belief that BTC price is forming a bear flag, from which I expect it to drop into the low $7000s, possibly even into the $6000s if the $7000 psychological support level fails to hold.

For this reason I have made the mid-to-low $7000s my “Buy Zone”, while anything in the $6000s is my “Buy Like Crazy Zone”. I do not anticipate a scenario where BTC drops below $6000.

However, my already-published Bear Flag Charts can not be quite correct. I say this because BTC broke below their base this weekend, but then recovered. Analysing this, I have concluded that the most likely scenario is that a bear flag is still forming, and I have adjusted my charts accordingly to incorporate the recent price dip. My latest interpretation of the flag is depicted by the shaded rectangle on the chart below.

The most likely short-term future scenario is now that BTC will climb in price until it reaches the top of the flag again. This will occur at approximately $9000. Thereafter, BTC should drop back to the bottom of the flag and break through into the “Buy Zone” (at least I hope it will). I expect such a downwards break to occur in the last three days of October.

You may have noticed a thin, dotted, horizontal red line at $7600 on the charts, this is merely a price alert that I have set at that level. If it triggers, I will fine-tune my own buy prices, because I’m looking to buy from $7500 downwards.

Accuracy and probability:

My original bear flag was a text book example of a bear flag. For this reason I had fairly high confidence in it, though flag and pennants are never a sure thing. After the adjustment of the flag, it may be that it becomes more of a Descending Channel than a bear flag, but this doesn’t really matter because:

1) The outcome of the two patterns is identical,
2) The two patterns have similar levels of predictive reliability (around 70%).

Unfortunately there are many different possible scenarios that could occur from this point forwards. For this reason it is difficult to confidently predict any specific scenario with certainty. BTC may continue to rise now and break out of the top of the flag – destroying it completely, or it could continue sideways and begin to create some other pattern.

What I have described in this post in my best guess, based on current levels of market hype (low), volume (stagnant), previous price movement patterns and long-term trendlines. I am about 50% sure that BTC will take a dip to the low $7000s/$6000s, find the long-term trendline and then move gradually upwards again. It’s also worth remembering that during times such as these, markets often plunge unexpectedly, followed by a very rapid recovery. Such a price movement may move well beyond the levels predicted, and could be exploited by shrewd traders who have their order prices set to catch it.

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:




Cryptocurrency Quarterly Report – Q3 2019 (by CoinGecko)

October 14, 2019 Published by

Hooray, it’s that time of year again!

The time of the next CoinGecko Quarterly Report on cryptocurrencies.

Bit Brain readers may remember that I’ve spoken about CoinGecko Quarterly Reports before. Back in July I wrote this post “Cryptocurrency Quarterly Report” about the Q2 2019 CoinGecko report.

As before, I want to use this post to give you an idea of what is in that report, so that you can be sufficiently tempted into reading it for yourself. Once again I want to start by praising the high quality of the report, and stating what a smashing job CoinGecko does in the cryptospace. CoinGecko remains Bit Brain’s go-to site for general crypto information – especially related to token/coin prices and trading. The reason I use CoinGecko so much is simple: it is the best site.

Remember that I don’t work for CoinGecko, they don’t pay me to write this, and I’m not affiliated with them in any way (not that I would object to any donations *cough cough* ? ). What I write here is thus an honest representation of my findings and experiences. With no further ado, let’s take a look at what can be found in the Q3 Quarterly Report.

CoinGecko Quarterly Report for Q3 2019

Firstly – where do you find it? On the CoinGecko site, click the three horizontal dots in the main links bar and select “REPORTS”. From there you choose the latest report “Q3 2019 Report”, and voilà – the information is yours to absorb!

The CoinGecko team have stuck with the formula of producing something long enough to be complete, but short enough so as not to bore you. As before, this report is comprised mainly of diagrams, charts and infographics, as opposed to boring walls of text. The report is 53 pages long (“slides” is probably a more accurate term than “pages”), of which about 5 pages are non-content intro and outro sections. etoro has sponsored this report, so thanks to them for that..

This report begins with the usual “Founders’ Notes”, whereafter it dives into its first major topic: Market Dynamics.

The Market Dynamics section is ten pages long, and is a must-read for crypto aficionados. Much of the information will be old news to those who watch crypto closely, but even so there is value to be had from seeing this information from CoinGecko’s perspective. Even arrogant people like myself can appreciate an objective and intelligent overview of the crypto market when presented in this manner.

I find that such information helps to put things into perspective and to check that my own predictions are in keeping with a realistic and unbiased view of the future (and past).

The next section of the report deals with CoinGecko’s unique “Trust Score”. While I have already reviewed CoinGecko’s Trust Score in detail, that was during its infancy and much has changed since then. For those who may not know: CoinGecko assigns a score to each trading pair for each cryptocurrency listed on its site. How they arrive at those scores is briefly outlined in this report. They indicate the differences between their new Trust Score 2.0 and the previous Trust Score 1.0, as well as mentioning upcoming features to be integrated into the Trust Score system.

The next major section of the report is dedicated to Derivatives.

Crypto derivatives are becoming ever more popular, especially as crypto companies are eventually starting to get approvals from conservative regulatory bodies such as the United States SEC.

On a personal level I should state that I am not a fan of any form of crypto derivatives and that I don’t use any of them. It’s not that I don’t trust them, it’s just that I am opposed to a system that deals with derivatives as opposed to the underlying assets. I believe that many of the problems of current fiat systems are tied to a runaway derivatives market.

My old-school beliefs aside, derivatives are exciting for crypto and are an indication of a more mature market that should gain more credibility and public acceptance. They also provide new on-ramps into crypto. Much good can come from crypto derivatives, such as greatly increased publicity.

For those who are keen to start trading derivative but don’t really understand them; CoinGecko gives a fairly complete high-level overview of crypto derivatives. You will be introduced to all the major types of derivatives and the terms associated with trading them.

The explanations are very simple and are written for the layperson, so most people should have no trouble understanding them (see the pumpkin-based example below which explains how Futures contracts work).

For more experienced traders there is a “Derivatives 201 – Serious Traders’ Handbook” section. It’s also not rocket science, but explains some of the more advanced terms of derivatives trading.

The Derivatives section of report ends on an exciting note: that CoinGecko is working on their own Derivatives Market tracker (much like their existing coin tracker). If you want to see a screenshot of what it looks like in prototype – then go read the report!

The News section of the report deals with the big news stories of the quarter, just a very short introduction into each. I learnt that I had missed news of a “shitcoin index”. Interesting…

This page dedicated to Binance shows just how much binance has been up to in the last quarter: quite amazing!

I keep suggesting that Binance Coin (BNB) is a really good coin to hold…

I would love to see a similar slide for KuCoin, that exchange has been REALLY active in the last quarter! (How about it next time CoinGecko?)

While you’re out buying BNB (at ridiculously low discount prices right now), you may want to check out some (far cheaper) KuCoin Shares (KCS) too…

The next big section of the report deals with DeFi (Decentralised Finance). DeFi has quickly become a buzzword in the crypto community, though it remains poorly defined and possibly misunderstood.

The CoinGecko Report delves into with DeFi in surprising depth, and should therefore give anyone a very good idea of what it is, why it exists and what it means to the future of finance.

DeFi should be old news to the crypto stalwarts, but will be valuable information to those who have only started learning about crypto this year.

The final main section of the report deals with DApps. A series of tables and charts analyse DApps by blockchain, activity and type. This is probably my least favourite section of the report, because I would like to see more of the big name blockchains added to it. Having chains like TOMO and IOST in the report while excluding chains like NEO, Waves or Cardano makes little sense to me. I know that Cardano is largely a bunch of unmet promises, but it still has a very high market cap. It would be good to include it – if for no other reason than that its over-optimistic bag-holders realise that…

The report finishes up with a brief look at the CoinGecko Changelog platform hosted at Coindesk’s “Invest: Asia”.

Finally there is the usual page with links to their (many) social media accounts. I follow them on Twitter and STEEM and I have an account on CoinGecko itself. I also use CoinGecko API calls for my personal crypto-tracking spreadsheets.

Conclusion

Well done to CoinGecko for producing another very fine market report. For those who haven’t read one before, I suggest you take a look at it. For those who don’t use CoinGecko, I strongly suggest that you do. Since I started using CoinGecko as my main coin tracker (about a year ago), I haven’t looked back.

As we move into the final quarter of 2019, I expect to see the market take its final dip before finally turning around properly. Altcoins are well overdue for some serious attention, and have been heavily neglected and even openly mocked throughout 2019. That situation will not last, and while I think that BTC will have to regain popularity before altcoins do, I think that this final quarter is the period where that process will begin. We should have an exciting Q4 of 2019 – but not nearly as exciting as what 2020 will be… I hope to see some increasingly bullish CoinGecko reports next year!

Yours in crypto

Bit Brain

All images are taken from the CoinGecko Quarterly Report for Q3 2019. Note that Bit Brain has been granted permission by CoinGecko to use their images.

“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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