We released the newest episode of Value Stack podcast earlier this week and I forgot to send out an announcement. The timestamp links below are to the Youtube Chapters, and the description links provide additional info on each topic. You can find the full audio version on Spotify below as well as the Youtube video.
We discuss our experiences attending local bitcoin meetups in person, and the growth of the bitcoin community post-lockdown.
We have a critical look at the widely-followed Stock to Flow model and discuss its current large deviation from the model prediction. It is make-or-break time for this model to continue to hold. If it does, it looks to be a strong accumulation signal. Otherwise, worse could be ahead for Bitcoin price.
We talk about the Grayscale Trust GBTC lockup expiry soon approaching, and the implications it could have for the bitcoin markets, and the reasons investors may look to sell their position at a loss.
We talk about the risks of trading and timing market cycles, as well as managing emotions behind investing, based on our tenured experience as financial managers and investors in high-growth, volatile assets.
We recognize US Senator Cynthia Lummis' recent OpSec mistake on CNBC in this week's Boating Accident.
We talk about the difficult adjustment period and the implications a 50% hash rate drop has for the bitcoin network, as well as potential considerations to note over the next few months regarding bitcoin mining.
A quick note that our newest hardware wallet review video is out now on YouTube! Wow - this thing is a game-changer!
The Passport by Foundation Devices is a brand new bitcoin-only hardware device with a discreet design that looks like an old Nokia phone. It’s based on the source code of the popular device by Coinkite, called Coldcard. We love both and this has an easier-to-learn signing process than the Coldcard.
It’s an air-gapped, QR code-based, hardware wallet with memory card secure backups, and easy pairing with many of your favorite wallet apps, including Electrum, Bitcoin Core, Wasabi, Blue Wallet, and more.
In this video, we unbox the Passport, verify the supply chain integrity, create a new seed and backup the device on the flash memory cards included, import the wallet to Blue Wallet as a watch-only address, fund it with Strike, and sign/spend using the QR-based camera on the Passport device.
It's a step-by-step guide to sovereignty and we couldn't be happier to show you how!
This hardware wallet is designed and manufactured in the USA and is an incredibly well-made device. Overall, we were extremely pleased with the build quality, thoughtfulness of design, and ease of use in setup and spending from the wallet.
In this episode, we discuss the recent legal tender adoption of Bitcoin in El Salvador, the events that led up to it, and the implications worldwide now that Bitcoin is legal tender.
We have a critical discussion about Bitcoin toxic maximalists and whether they're good for the adoption of Bitcoin or not.
We talk about the difficulty of teaching financial advisors about bitcoin, how to teach bitcoin to people more effectively, and the great importance of remembering why bitcoin is a powerful force for positive change and human rights.
We also talk about recent events surrounding Robert Breedlove and BitClout, and give our takes.
Lastly, we acknowledge the legendary life of John McAfee in this week's Boating Accident.
If you're interested in investing, economics, Bitcoin, and libertarian ideas, then this is the podcast for you!
In case you don’t want to spend the 12+ hours required to really digest the content, allow me to sum the premise of it in a few paragraphs….
Technology is a deflationary force. It is also an exponential force. Because of this, things are becoming increasingly cheaper to produce, at an increasingly faster rate. Going parabolic. This also means that human labor will become less needed, and less prevalent, as a result. I hate to cast generalizations, but from people I talk to, many feel their jobs today are already fading into obsolescence. Their hunches are right.
Now, this may sound concerning - we all NEED jobs to afford to live, right? How can we survive? Strike 1. Jobs are one of the cornerstones of who we are. Heck - our surnames are mostly derived from our jobs if traced back far enough. Strike 2. We also have also historically expected prices to rise over time - not fall. That’s how it’s been for generations. Strike 3.
But that doesn’t mean it’s in line with reality…..
In fact, our understanding of how economies work is at complete opposition to the natural forces of our world. This contradictory reality we try to superimpose over the exponential deflationary curve of technology is the largest contributing factor to wealth inequality today - enriching those who provide the high-margin, low-cost, technology, as the wages of those who consume the tech are disproportionately lower and lower. This gives an explanation to all the Tech Titans like Facebook, Google, etc that have such astonishingly high gross margins.
In the long run, the takeaway is that all but the most technically skilled and creative jobs will be obsoleted by technology. Maybe even those, someday. So what’s a population to do? Embrace, not resist. I am learning that it’s always better to embrace than resist. Things will be okay if we adopt money that gains value over time - money that is harmonious with the deflationary forces of technology - Bitcoin.
You see, we are living in cognitive dissonance right now, as technology should be signaling abundance in our lives, yet we aren’t getting the intended result. At least, not you and I. How can I swipe a million potential mates on Tinder but yet have to nickel and dime to eat out at a fancy restaurant to take said date? Our ability to increasingly consume said technological advancements is tilting faster and faster towards the ultra-rich. And it’s not even “evil” that it’s happening. It’s literally just the underlying forces of our current monetary system working as designed. They’re playing the game with the optimal strategy. One could argue against the rich and powerful’s ability to create the rules of the game, to which I’d direct your attention to a distributed monetary network called Bitcoin, free of centralized control.
Because assets gain value over time in our current system, and money loses value over time, those with assets arbitrage the debt by borrowing debt denominated in a depreciating asset to acquire an appreciating one. It’s basically a risk-free trade if you capitalize well enough. And they make money off the spread between the two, the entire life of the debt instrument, only to repeat the cycle near or at maturity of the debt.
This debt/asset squeeze is a big first-order source of all of the political unrest and divisiveness we see today, as little by little, day by day, our “American Dream” we grew up believing becomes further and further out of reach, like homeownership, which is often a precursor of starting a family. Whether money is squandered away by politicians is mostly a nonfactor. There are no repercussions for poor policy. Both sides are the same party. And it’s even worse for developing nations, as I mentioned in my previous post.
Money is supposed to be finite so that its value can be widely known in a marketplace, and relatively stable. Money is the stable signal, to which you measure the fluctuating noise of technological growth of industry over time. Because our money has no such anchor today, technological growth is further obfuscated into noise, which has profound ripple effects into where capital flows are directed and implications for the profitability of the potential business and whether things like investments in infrastructure projects are undertaken or not. Basically, we’re all guessing.
Jeff Booth and I at the 2021 Bitcoin conference in Miami.
So let’s recap: technology is a deflationary force that we can’t stop and it will and has been eliminating jobs, but will make consumption exponentially cheaper due to those same forces. Without scarce money, this would be bad - and is the reality of our world today. In this world of scarce job availability and income-earning opportunities, money also becomes extremely scarce and valuable, because it’s not just super easy to earn money. But Bitcoin is finite, it gains value over time, and that work you put in the past to earn that bitcoin will inevitably lead to higher purchasing power ability in the future, if not consumed in full immediately. So you’re not doomed. Delayed gratification is rewarded, not penalized.
The behavioral effects that result from less short-term consumption focused living, and the ability to build a framework upon which to reasonably predict future economic outcomes, will lead to human prosperity and further propel technological growth as capital flows are directed to optimal places, given a functional, efficient pricing signal (money) like Bitcoin as a store of value, medium of exchange, and unit of account.
Of course, these days aren’t quite here yet, but it would behoove you to consider what I’m saying - perhaps you’ve even thought of this before and noticed/wondered why some things like houses that aren’t technologically advancing like crazy overnight, are rising in price, but things like TVs are increasing exponentially in quality, yet falling in price. It’s because in those industries, the technological growth force is happening so rapidly, that even the unbridled money printing of Central Banks around the world, are no match. Technological growth leading to deflationary forces in things like housing markets is more encumbered by regulation, scarcity of land, and other exogenous factors, as are many other industries, which is why you don’t see deflation in that market, for example. Not yet. 😏
When we move to a #bitcoinstandard, things will start making a lot more sense.
So bear with me, we’re about to turn these 6’s to 9’s. Til’ next time.
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