Bitcoin will arrive like an unexpected tsunami for most people who will be shocked by all of the changes to their daily lives and personal finances that this strange new currency will bring seemingly overnight. They will think when they start hearing about crypto currency that it is some sort of social fad, or they may think that Bitcoin is an app like Facebook or maybe PayPal, something they can do without. Credit card companies will compete with cash back offers, and free insurance, or discounts on car rentals and flights. I wrote this book for new first-time Bitcoin adventurers. I also wrote it for any serious players out there who are already doing commerce in the blockchain and Bitcoin space, and who are trying to understand the fast emerging new government laws and regulations, concerning their business activities. My analysis of the American Securities Exchange Commission’s recent bulletin posted on their website concerning the Ethereum blockchain DAO hack will be a chapter unto itself. In another chapter about Bitcoin mining, I will write about my personal niche in the blockchain space: real-estate and property titles, document securement, time-stamping, anti-tampering tools, and unbreakable encryption. I am a miner and I do it for profit, but importantly for me, only miners get to vote. Mining is important because it provides the essential electronic infrastructure that the blockchain runs on, and then connects together with other nodes over the internet worldwide in real time to form unstoppable networks.
Open minded people who investigate what is now happening with blockchain technologies such as Bitcoin and Ethereum, and who then take a chance and invest in this once in a lifetime opportunity will at a minimum have their lives enhanced by suddenly finding themselves making international contacts and transactions. They will start thinking about the world in terms of foreign affairs, economics, business, technology, and science. The profits in this new economic world are staggering, and I must admit that it is completely exhilarating when these cryptos take off. The gambler’s rush in Bitcoin and Ethereum is better than holding a two dollar parlay bet on a longshot horse that becomes a wire to wire triple crown winner; because the thrill of victory often lasts for several months at a time, and making a killing is not a one shot deal. These digital assets often take off with afterburners blazing and they fly straight up the charts with near vertical trajectories. We are talking about seeing your money double in two months, and then do it again the following month, and then rise by 30% in a week. We are often seeing thousand percent annual increases, on ICO initial coin offerings, and on crypto tokens of which there are hundreds. There is around one-hundred billion dollars invested in the tokens right now, with an additional several hundred million dollars of capital invested by corporations such as Microsoft, Wanxiang, and IBM, or venture capital companies such as Fenbushi and Digital Assets, and by governments, and accounting firms such as Deloitte, and consortiums of big banks such as those who have partnered with Blythe Masters. Whether or not Blythe Masters becomes the first Bitcoin Billionaire or not remains to be seen, but I think that Digital Assets will have the greatest dollar volume of all of the global crypto currency and blockchain companies by far. They are just now finishing a complete rebuild of the ASX Austrailian Securities Exchange, but she has eyes on the Toronto Stock Exchange among others and she has many large banks as clients.
In early 2016 I started exploring Bitcoin. I bought my first Bitcoin for $630. Today, a year and a half later, Bitcoin is trading at $4,066 and people are saying that although it is down today it will most likely break $5,000 soon. Others say that until it hits $10,000 the big money will sit on the sidelines and wait and see. Most financial analysts and economists would agree that if only five-percent of the money that is currently invested in gold or gold derivatives worldwide transferred into Bitcoin that the increase in the value of a single Bitcoin would be astounding!
I needed some cash today so much like digging in the couch for lost coins and raiding the piggy bank surprised myself when I raised $485 from QuadrigaCX by selling my three and a half Litecoin for $63 each which was great because I had paid just three dollars each for them eighteen months earlier. I also sold a half of an ETH Ether for $270. Just some residual pocket change from closing out an old wallet with a small balance that had grown to become significant. I also received $6.07 worth of Bitcoin from Genesis Mining to my Blockchain.info bitcoin wallet on my iPhone. That evening I also made $23 from Steemit where just under four hundred dollars remains of my eighty-dollar investment. I earn about seventy cents per day from Slush pool in eastern Europe for the hashes produced by my noisy old, Antminer 5 Bitcoin miner. The seriously outdated but reliable rig has paid itself off many times over and is still running fine. The key to my system of investing in Bitcoin is that I think of that seventy cents daily payout in Bitcoin of around 17,000 to 18,000 Satoshis per day. Imagine the day when a Satoshi is like a dollar is now, and when a Bitcoin will be worth well over one million dollars. I would say that this is all highly speculative but in my view, the extraordinary returns from crypto currencies are matched only by the lottery for the average person; ironically it seems to me that there are very high odds in favor of windfall profits if the Bitcoin is held long term.
There is a reason that so few writers have tried to write a book about what is happening with Bitcoin. This, although it is probably the story of the century, and marks a great epoch in human history. Trying to write a book on this topic is like trying to drink from a much-referenced fire hose. Change is everywhere, and unexpected dramatic change happens weekly. There is always the potential for the digital tokens to disappear if they are not handled correctly or even sometimes if they are. This reminds me of how the penny mining stocks used to be, in the days of commodity exchanges like the VSE Vancouver Stock Exchange. Bitcoin is said to be economically modeled after a commodity such as gold. Bitcoin like gold has a limited supply of twenty-one million and is always becoming more expensive to produce.
Bitcoin went through the planned second ‘Halving Event’ in July of 2016 where the payout per ten- minute block dropped from twenty-five bitcoins to twelve and a half bitcoins per block until the next halving four years hence. The current volume of Bitcoin mined is $7,318,800 per day. this does not include transaction fees. Miners are being rewarded $304,950 USD per hour or $50,825 for each single ten-minute block. As you can imagine there is intense competition among miners to get these prizes. It is a mathematical probability question as to whether a miner should gamble and go it alone mining where if the block is found the entire reward may be kept. I opted instead to join a large group of other independent miners from all over the world who plug our hash rate into Slushpool. Now the mathematical probability equation works in my favor. We share the payouts after pooling our resources, we get to cast votes on critical issues, and we receive reliable daily revenue, which arrives in my Bitcoin wallet. I should say that I do not receive daily mining payouts any longer because when I went to spend the rewards with large transactions there were inordinately high fees due to the composite nature of all those little payouts. I have since switched my payouts from Slushpool and Genesis Mining to 0.01 BCT lots, and just leave them building at the pool or with Genesis.
The inevitable Bitcoin and Ethereum big-events, breakthroughs, milestones, and catastrophes, and hacks to feel crucially important to market participants. There are definitely political aspects to Bitcoin as each and every country and jurisdiction on the planet will try to come up with a Bitcoin strategy. We see issues about the so called un-banked, the potential for micro- loan payments between people of the First World countries and women and men in the Second and Third World. There are consequential matters of freedom and empowerment, like Bitcoin’s potential for eliminating the huge fees migrant workers pay when they try to send money back home to their families. Billions of hard earned and badly needed dollars could stay in the migrant worker’s own hands if they transferred the money using Bitcoin with its comparatively tiny fees for the actual transfer and no foreign exchange fees for currency conversion. We crypto currency enthusiasts learn all too soon that the world is not watching, that most people do not care, and in the end the big Bitcoin halving event, and the various hard and soft forks amounted to mere speed bumps during a technological race that has moved on to new events at new locations by new participants. Bitcoin is a product of consensus, and consensus, in turn, is a function of mathematics, computer code, and game theory.
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Japan has surged ahead among the other leading world economies by adapting point of sale Bitcoin terminals at several hundred- thousand retail stores. The People’s Republic of China is still the dominant world player in Bitcoin because of all of mining and equipment manufacturing design that takes place there, and because their government has had the best Bitcoin strategy. Bobby Lee the CEO of BTCC the first and still the largest Bitcoin exchange in China who is a definite contender for the first Bitcoin Billionaire title, said recently that his company did not encounter much friction from the People’s Bank of China as they were growing their business because the PBOC views Bitcoin as a digital asset rather than a currency. He also says we should not expect terminals to pay for goods with Bitcoin in China because even Hong Kong dollars are not permitted for use in China only the Renminbi China’s official currency may be used as legal tender. Bitmain the major manufacturer of Antminer Bitcoin ASIC or application- specific integrated circuits Bitcoin mining hardware is chronically backlogged with orders for mining equipment; but why should they sell the machines instead of just plugging them in and keeping both the machine and the money it earns everyday Bitcoin mining. The Bitcoin revolution comes at a most opportune time for the Chinese. They have excess hydro-electric generating capacity and they need cash for their rapid expansion, and mining Bitcoin creates immediate cashflow. The situation is much the same in my home province of Manitoba, Canada, with our large northern rivers flowing into the Hudson Bay. I comprise a one- man lobby that is on a mission to promote Bitcoin mining in Manitoba, and I often lobby the government, and Manitoba Hydro the utility which is a Crown Corporation to get involved. That is why I took some extra steps during my visa application to attend Devcon 2 the big worldwide Ethereum Developer’s Conference in Shanghai which I will go into later.
Vitalik Buterin is an extremely intelligent young man who started out writing about Bitcoin and then created Ethereum, which is Bitcoin’s biggest competing currency. The focus was no longer to be on the value of the Ethereum token ETH, but rather on the ability of coded ‘smart contracts’ to use the immutable blockchain in the EVM for legal commerce whereby the funds are not released until certain conditions are seen to have been fulfilled by the smart contract. As an aside, I must say that no one is complaining that Vitalik’s original vision of a cheap token did not work out, and Ethereum has soared to recent prices as high as four hundred dollars and can boast a total capitalization of thirty billion dollars USD with rapid global multi faceted growth. So, will Vitalik be the world’s first Bitcoin Billionaire? I do not know, but he has been voted the most influential person in crypto by industry participants. Like so many intellectuals before him Buterin seems to eschew riches, instead, he is happy in his role as "Chief Scientist" for the Swiss non-profit Ethereum Foundation and extensive travel and learning foreign languages. His sudden ability to speak Chinese surprises audiences as he takes questions and gives lectures in Mandarin. I was surprised to see Vitalik speaking fluent Russian when he met Vladimir Putin recently. Vitalik just announced that Metropolis will be released in late September of 2017 with a hard fork. This will be done in coordination with Joseph Poon and his 'Lightning Network'and will feature 'zkSnarks' or zero knowledge proofs. Vitalik does not like mining, he says that it wastes electricity and computing power. He and Vlad Zamfir have been working on Casper a Proof of Stake system that does not require Proof of Work mining per se. POW makes it too expensive for a hacker to build a super computer and try to overpower or out-speed the blockchain.
In 2016 big money flowed into the development of Ethereum from Microsoft the sponsor of the event along with Wanxiang Blockchain Labs and Fenbushi the largest venture capital firm in Asia. We are talking an easy hundred million dollars committed with every indication that ‘all systems are go’ for even bigger things to come in the near future. The Devcon 2 event in Shanghai was successful beyond all measure and caused me to really stand up and take notice of what these alt-coin pioneers had already accomplished, and where they were headed. I also benefited from the trip by making contacts from Beijing that could help me in my lobby to bring Bitcoin Mining back home to Manitoba.
I watched a YouTube video today that was put out by Roger Ver who would definitely be in contention for the first Bitcoin Billionaire title. He is a majority owner of Blockchain.info which is my recommended Bitcoin wallet. The wallet web portal is based in Luxembourg, but it seems that most transactions are routed through some small islands off the west coast of Africa, and has more funds than all of the other Bitcoin wallets combined. I keep my Bitcoin in my Blockchain.info wallets on my Samsung S7 Android, and on my iPhone 6, and I also have a matched version on my main desktop PC. I really like the way the Blockchain.info wallet user interface works. They have fifteen million wallets in use and have completed one hundred million transactions. Ver was criticizing the Bitcoin Core team and Blockstream a closely related company that employees many Bitcoin Core developers. Adam Back heads up Blockstream and he is a very respected long time Bitcoin developer. I sat across from him at lunch at Construct 2016 the invite only San Francisco developer’s conference put on by CoinDesk and sponsored by IBM. I said loudly so as to catch his ear that I liked the idea of flexible fees. I have interests in Bitcoin mining and I like earning mining fees. So yes, I admit that I am biased, but I still want fees to be fair for migrant workers and people in the third world. There are about two- hundred and fifty thousand dollars per day paid to miners in fees. Roger Ver is saying that people will leave Bitcoin for alternative crypto currencies if fees get too high or the network has delayed confirmation times, what he warns could become a poor user experience. This was in fact happening and fees had risen from being nearly free to fifty dollars and more sometimes, which Core points out people were willingly paying albeit with a grumble. But everyone had made such high profits just on the increase in the value of Bitcoin alone that they could bear the fees with ease and they did.
The Bitcoin blockchain forked on August 1, 2017. That means that if you had a tenth of a Bitcoin on July 31 you got a matching tenth of a BCH token. You doubled your token count you now hold BTC and BCH. My website has live prices smartpropertyblockchain.ca Bitcoin is at $5,352.55 Canadian Dollars and BCH at $899.23 CAD. The Ethereum blockchain had seen a previous fork and stable trading patterns have evolved over the past year my website shows Ethereum priced at $418.03 CAD and ETC at $18.90. These forks are a little bit like stock splits but there is no guarantee that you can access the cloned token unless you have made arrangements.
The decision to do the fork on August 1st must have been made at the Consensus 2017 event in New York sponsored by Barry Silbert. He is America’s premier cryptocurrency entrepreneur. He would be my pick and he would get the highest rating in my handicapping of the Bitcoin Billionaire’s Stake Race. He has fifty- seven crypto currency related companies in eighteen countries. I really feel like a small thinker when I watch the maneuvers of a big thinker like Barry Silbert, owner of the Digital Currency Group, Grayscale Investment Trust, and CoinDesk magazine. I invested in the new Bitcoin ETF derivative GBTC units from Grayscale, and I did ok with them. They only deal with accredited investors with net worth of over one million dollars exclusive of residence or income of over two hundred thousand dollars a year for each of the past two years. Luckily for me the oil business was not yet completely dead so I qualified on income. The units are based on NAV net asset value rather than being a fraction of a bitcoin as many people mistakenly believed when the fund was launched. I balked and sold out after receiving an offer to invest two hundred and fifty thousand dollars at four o’clock PM that would be priced at NAV regardless of where the unit price had ended trading on close at 4 PM. I could not see much difference between this overly attractive offer and the late- trading issues mutual companies had seen many years ago.
I must admit however that I was wrong earlier when I was very critical when Silbert started buying ETC tokens after the Ethereum fork. As Andreas Antonopoulos the best promoter of Bitcoin on earth whose opinion I value so highly warned in a video I watched about the topic of ETC. “When one is most absolutist in their position, that is often the time when one is completely wrong” and time has shown that such was the case. I attended the conference with my pitch for Bitcoin mining in Manitoba but had no inkling about what was happening behind the scenes in the five floors of meeting rooms at the New York Marriot Marquis hotel located on Broadway in bustling Times Square. A so called “New York Consensus” was agreed to by many big time Bitcoin companies and exchanges in some hidden back room at the trade show. It was later announced that an unstoppable fork would take place on August 1, 2017, as it later, in fact, did, just as predicted.
The one-megabyte block size will remain the same with slight capacity improvements as part of Segregated Witness off chain features are added that save space. This is an improvement that Erik Lombrozo has been promoting for the Core team, and that Andreas Antonopoulos has recommended as a good BIP or Bitcoin improvement. This will mean that fees will remain higher than they would be if the block size went to 2 megabytes as many thought it was poised to do, or to an eight megabyte size that many users were also lobbying for the past year. Transactions may be slower because of the full blocks but the ten-minute block benchmark is adjusted by a mechanism called the ‘difficulty’ which adjusts every two weeks in Bitcoin and every four hundred blocks in the much faster fourteen- second Ethereum blockchain. It is August 23, 2017, three weeks on today, and I have not seen problems with high fees or slow confirmations. People said yes I want that free money and welcomed the new BCH received after the split. Did I mention that BCH is worth $899.23 CAD?