QUARTERLY ROUNDUP – Q3 2014

BITCOIN

Investment Opportunity

“Bitcoin, at this moment, represents one of the greatest investment opportunities the world will ever witness” http://www.reddit.com/comments/2aqo04 – Roger Ver

 

Dell Largest Company to Date to Accept Bitcoin

If you’re a retailer, there’s really no reason not to accept Bitcoin at this point – Dell

 

No Dollars After 2016

Amagi Metals, an online dealer in precious metals and coins, announced that they will stop taking US dollars for payment at the end of 2016. Instead, Amagi plans to be trading exclusively in cryptocurrencies like Bitcoin.

“We want to be a leader in the sound money movement,” Macaskill says. “With the adoption of cryptocurrencies increasing every day, their viability is virtually assured. History shows that paper currency, backed by nothing of value, will ultimately fail. It’s only a matter of time until no one will be accepting the dollar. By trading exclusively in cryptocurrencies, we’ll still be in business when that time comes.”

Amagi Metals has been accepting cryptocurrencies since November of 2012 with a major focus on Bitcoin. Bitcoin now accounts for over 40% of the company’s customer payments – Amagi Metals

 

Hoarding

Bitcoin is poised for exponential growth, so the opportunity costs of not being involved to the highest personal degree possible are incalculable.

Yet merchants, investment peddlers, and other hoarders have been able to convince countless bitcoiners to part with their future riches, despite the obvious downsides given you have a long enough time horizon to see the coming post-fiat world. They’ll tell you spending is vital, that Bitcoin 2.0 will be even better if only you give them some of your Bitcoin 0.9, or that your bitcoins are worth only $475 a piece. They’ll tell you this with a straight face, the wringing of their hands unseen across the Internet.

Bitcoin is exciting. Looking at a static wallet file and balance is not. Instead of holding and forgetting, many bitcoiners choose to “put that money to use,” and endless crypto-peddlers are ready to snatch your bitcoins up. They’ll offer you mining contracts, present their plans for a hedge fund, or entice you into investing in a Bitcoin company. Today, the most popular investment vehicle for bitcoiners are Bitcoin 2.0 schemes, ranging from Mastercoin to Ethereum.

Long term investors should use Bitcoin as their unit of account and every single investment should be compared to the expected returns of Bitcoin.

If hyperbitcoinization occurs, Bitcoin holders will see their purchasing power increase by orders of magnitude. Bitcoiners should think twice before throwing away even a couple millibits towards a project “just to see where it goes.” A running joke in the community is how expensive the two pizzas Laszlo bought were. We joke about a million dollar pizza, and hyperbitcoinization has not even occurred yet. I praise Laszlo for his entrepreneurial use of a new technology, but I do not wish for myself or others to be a Laszlo.

My friends and I joke about starving due to the intense deflation, but I can’t say I don’t look back and wish I had skipped a couple lunches in the crappy dorm cafeteria to buy $10 bitcoins when I had the chance. Hyperbitcoinization will not be a force to trifle with. Even a marginal bitcoin holding right now will constitute a very significant majority of a bitcoiner’s portfolio. Once it happens, there is no going back. One day, your Bitcoin balance will likely never see the decimal point move to the right again. – Michael Goldstein

 

 

MINING

Bitcoin Bull Market Won’t Start Until the ASIC Capex Spending Bubble Bursts

Miners selling coins to cover opex is a factor, but miners selling for capex is driving bitcoin price –Pierre Rochard

 

Miners Selling 70-90% of Their Bitcoin

As mining costs rise, miners come under pressure to sell their freshly unearthed bitcoin to recoup the costs of their investment in equipment. Citi notes that about 3,500 BTC are mined daily (about $2 million worth per day)

Mark Lamb, chief executive at Coinfloor, a London-based bitcoin exchange, said that sell-side pressures have intensified in recent months, with miners and merchants as the most likely traders. “Last year miners were selling a much lower percentage of new bitcoin mined. Nowadays it’s estimated that they’re selling 70–90% of their bitcoin” – Joon Ian Wong

 

The Bitcoin Network

At 5 petahashes (in November 2013) the bitcoin network was already the world’s most powerful computer network (256 times faster than the top 500 supercomputers combined)

It hit 100 petahashes of processing power on 5th June 2014.

As of 28th August 2014, the bitcoin network has reached 220 petahashes 

The network is over 400 times more powerful than 1 year ago

Bitcoin has existed for for 5 years and 9 months. The network has grown more in the last 3 months than it did in its first 5 years and 6 months of existence  – Lee Banfield

 

 

ALTCOINS

Ethereum

Ethereum huge: persistent state, permissionless flexibility to create own Nakamoto-consensus apps. No opnn on price of ether. Ethereum has vast potential, whereas Bitcoin won’t ever do anything well beyond implementing a currency – Nick Szabo

Ethereum have any new useful ideas? seemed more kitchen-sink coin from current ideas. execution = script or development record? – Adam Back, Creator of Hashcash, 1997

Ethereum has the best ideas in block chain tech. Execution, not so much. They’ve combined most of the best ideas. Not about who originated. Execution = development record: not finishing what they start. –Nick Szabo, Creator of Bit gold, 1998-2005

 

Cryptonote Coins

The technically best anon coins (so, CryptoNotes; ie Monero) are really the only interesting alts (cuz Bitcoin will nvr do that) – Dan McArdle

CryptoNote is getting crowded. Now at least 12 coins implementing CryptoNote: https://cryptonote.org/coins/ – Kristov Atlas

 

 

EQUITIES

Expensive US Stocks

Using Professor Robert Shiller’s cyclically adjusted price / earnings ratio for the broad US stock market, US stocks have only been more expensive than they are today on two occasions in the past 130 years: in 1929, and in 2000 – Tim Price, PFP Wealth Management

 

Very Overvalued

I cannot see how a soft landing would be possible here.

Net corporate debt is at all-time highs (so don’t let anyone tell you that corporate balance sheets are strong), interest rates are essentially pinned at zero, and the Fed’s balance sheet has exploded. Based on the Q-ratio—the most robust and predictive valuation measure there is—the stock market is more overvalued today than it was at every major top over the past century, save 2000.

How could this get corrected in an orderly way? – Mark Spitznagel, Universa Investments LP

 

Valuations

It’s very hard for us to have any meaningful conversation about appropriate equity valuations in a world of long-term zero interest rates – Sam Altman

 

 

COMPANIES / PROJECTS

Open Source Distributed Systems

The smartest 1% are creating open-source, distributed systems of resistance to render the state irrelevant through technology and encryption – Roger Ver

 

OpenBazaar

We aren’t setting up a marketplace. We are creating a platform that let’s anyone create their own marketplace in a decentralized network. We aren’t charging for use and don’t have plans to make money on this. CC_EF_JTF

Congrats to openbazaar team and to mankind alike as its fully decentralized global marketplace goes public! http://obdemo.ein-mann-armee.de/html/index.html#/dashboard

Vortex

 

OpenBazaar vs. Alibaba

OpenBazaar is an open source, peer-to-peer marketplace. Instead of buyers and sellers going through a centralized platform, like Alibaba, OpenBazaar allows for direct, person-to-person commerce. Trust, security, and dispute resolution are all handled by the users of the system. Since there are no middlemen, there are no fees. Since there are no gatekeepers, there is no censorship.

Alibaba Group Holding Ltd. revealed its plans for what could be the world’s biggest initial public offering. The Chinese e-commerce behemoth’s potential $24 billion sale would value the company at around $155 billion. Although Alibaba has diversified into payment processing, a shopping search engine, and cloud computing services, the vast majority of its revenue comes from charging fees to the users of its marketplace platform.

If Alibaba is, at its core, a trusted third-party that facilitates commerce between two distributed participants, then what use is it when the participants can provide all the added benefits of having a trusted third-party between themselves?

This is the promise of OpenBazaar.

If I were running a company that did a quarter-trillion dollars worth of transactions and my whole business revolved around being the middleman to every one of those, I would definitely be concerned about the development of OpenBazaar – Valerian Bennett

 

Bitmessage

Is integrated into Monetas. Bitmessage is like email, but without the server. It’s email decentralized. This is what makes the holy grail breakthrough possible, which is decentralized exchange. It solves one of the core problems in the bitcoin ecosystem, and it will make possible a whole new generation of products and services.

Bitmessage gives us totally p2p communications, from which we can have decentralized discovery of market participants. This integration with Bitmessage has lots of potential implications, not just for cross server trading, but also p2p based legacy bank integration, the ability to move funds in and out of legacy banks in a p2p way.

Also it makes possible what we call “the bazaar”. This is like ebay except without the server. Anyone can have venues and vendors and post ads, have listings, ratings and reputations in a completely decentralized and p2p way.

You could also take the concept of the bazaar and have an App store, a completly decentralized p2p App store –  Chris Odom, Monetas July 2014 Update

 

Soylent

Soylent Now Accepting Bitcoin

Leap MotionBoosted BoardsSoylent, and iOgrapher are the launch partners for Shopify’s announcement meaning that each have enabled the Coinbase integration following a recent private beta testing period. (It has to be said that bitcoin and Soylent seem like an anti-establishment match made in heaven.) – Michael Carney

Powdered Science

The smoothie-like substance, which began life as a crowdfunding sensation last year before attracting heavyweight investors like Andreessen Horowitz, is basically powdered science — human nutrition reduced to its most basic essentials. Soylent’s spokesperson told me that they don’t expect most people to adopt a 100 percent Soylent diet, even though you technically can: each day’s packet contains roughly 100 percent (give or take a few percentage points) of your daily FDA-recommended allowance of fat, potassium, carbohydrates, fiber, and a selection of 23 vitamins and minerals.

Soylent isn’t just a science experiment for Silicon Valley movers and shakers who don’t have time to eat: eking out maximum caloric bang for your buck with a nutritionally complete substance could eventually be a huge deal in impoverished areas of the world.

What’s it like to spend a month in the post-food era?

I lost about 12 pounds along the way with very little health drama. For the most part, I actually felt great.

It was nice recouping significant time otherwise spent looking for and eating food — perhaps an hour a day or more. Furthermore, if I was ordering Soylent month to month, I’d be paying $8.50 a day to get effectively all the nutrition and calories I needed to stay alive for the price of a standard New York City lunch.

Soylent is very open about its product — the details of the concoction, which have evolved over the past year to improve its taste, texture, and nutrition, are widely available. The company publishes both its official recipe and hosts a surprisingly active “DIY” forum where Soylent connoisseurs and food hackers of all persuasions trade tweaks, pro tips, and entirely new bult-from-scratch recipes –Chris Ziegler

 

 

PRIVACY

Tor Attacked

On July 4 2014 we found a group of relays that we assume were trying to deanonymize users. They appear to have been targeting people who operate or access Tor hidden services.

While we don’t know when they started doing the attack, users who operated or accessed hidden services from early February through July 4 should assume they were affected – Arma

 

Censorship Resistant Marketplaces

If a system wants to be censorship resistant it has to have two very important qualities.

1) Decentralize the Locus of Control: If your organization has a headquarters, a CEO, a bank account, then men with guns can show up, they can shut it down or they can co-opt it.

2) Protect the Participants: You can do this with anonymity networks like Tor.

 

If you can trade guns and drugs on dark markets, you can trade more pedestrian items. Censorship resistant dark markets can circumvent capital controls for industries that are not explicitly prohibited.

There are at least two important elements of that:

1) Tax avoidance: Taxes make everything extremely expensive because they are multi-tiered (supplier taxes, transportation taxes, sales taxes, property taxes, payroll taxes, social security taxes, health care taxes)

2) Go beyond trade barriers: Restrictions on what goods we can sell, to whom, where we can send them, how we can send them, etc.

 

Circumvention of capital controls is the killer feature of dark market places that is going to drive more and more industries into the dark market. I don’t mean all the companies that currently exist are going to be trading over Open Bazaar. Maybe Amazon or Overstock never wishes to do that, but more and more of the industry will go into these dark market places and eventually replace some of these old companies.

I am anticipating, in addition to a technological singularity, we will also see a private property singularity, where technology allows us to circumvent state regulations. As this happens, economic growth is going to get faster and faster and faster, it’s going to accelerate until the point where it’s going to be very difficult to predict what the market place will look like a year from now, and then a month from now, and then a week from now…

This technology gives us anonymous exchange on market places and anonymous money(using something like dark wallet). Politicians will not like this but they will be powerless to stop it.

The world 10-20 years from now, because of these mechanisms, is going to be so unrecognizable to us that it’s going to blow our minds. It’s partly to do with technology, but it’s got a lot to do with economic liberation as well. The story of the Silk Road is a blueprint for economic global liberation –Kristov Atlas

 

 

PLACES

Crypto Valley: Zug, Switzerland

The neutral European nation is becoming a “mecca” for financial cryptography, says Chris Odom, the Chief Technology Officer at Monetas and the founder of the decentralized Open Transactions platform for encrypted financial tools.

Mr. Odom announced that he had finally moved his family from Austin, Texas, to Zug, Switzerland to be with the rest of the company’s team and help build the German-speaking region’s “Crypto Valley”.

Who are his new neighbors?

* Ethereum

* Bitcoin Suisse, a bitcoin ATM provider

* ProtonMail, which provides decentralized, securely encrypted email

* Threema, a secure version of What’sApp

* Silent Circle, whose BlackPhone project aims to provide secure, encrypted mobile telephony

Why the growth in Switzerland?

Odom attributes it to the country’s “legendary neutrality,” as well as its respect for privacy and security. It is already a tech hub for established names such as International Business Machines Corp. and eBay Inc . He points out that outside of its Mountain View, Calif., headquarters, Google Inc.’s biggest engineering office is in Zurich – Michael J. Casey & Paul Vigna

 

USA

Who in good conscience wants to go their entire working lives supporting a government that wastes tax dollars on bombs, drones, spying on citizens, and bankrupting unborn generations? It’s no wonder why the number of Americans renouncing their citizenship is increasing exponentially… and will likely continue to do so.

Renouncing US citizenship was free of charge until a couple of years ago. Then, overnight, the State Department imposed a $450 fee.

Yesterday they increased it once again– to $2,350. That’s a 422% increase.

In its explanation, the State Department whined that the costs of processing renunciations had simply become too high. It’s curious that a government which denies inflation even exists would complain about the consequences of it – Simon Black

They Could Charge $5,000, They Could Charge $5,000,000

You have to fill out a form if you want to renounce your citizenship—which, by the way, you can only get from a foreign embassy or consulate. Those forms used to be free. Now they’re about $500 apiece. So think about that. If they can charge you $500 for that form, they could charge $5,000, they could charge $5,000,000. They could basically make it impossible for you to leave. And they’re trying to make it more difficult ever since Eduardo Saverin from Facebook went to Singapore.

Now the government is trying to come up with all sorts of ways to punish Americans who try to give up their citizenship, and this really is the sign of a nation in decay. Fifty years ago, nobody would want to give up American citizenship. They would cherish it. The fact that so many people are paying tremendous amounts of money to get this albatross off their neck shows you how much times have changed, that an American passport is not an asset to be cherished but a liability that people are willing to pay to get rid of – Peter Schiff, March 12th 2014

 

 

THE SINGULARITY

5,000 Days of Orbital Colonization

In an anniversary that beautifully showcases the enduring greatness of man’s progress in space, yesterday marked the 5,000th day of continuous human habitation aboard the International Space Station – L. Lawless

 

Rosetta Spacecraft Makes Historic Arrival at Comet

“After ten years, five months and four days travelling towards our destination, looping around the Sun five times and clocking up 6.4 billion kilometres, we are delighted to announce finally we are here” –  Jean-Jacques Dordain, ESA’s Director General

 

Made in Space

A private Dragon cargo ship built by SpaceX arrived at the International Space Station today (Sept. 23) to deliver more than 2 tons of astronaut supplies and experiments for NASA, including the first 3D printer in space.

The 3D printer built by Made in Space will churn out a few initial test parts and send them back with Dragon. Researchers with the California-based Made in Space and its partners at NASA’s Marshall Space Flight Center in Huntsville, Alabama, want to learn as soon as possible how the quality of items printed in microgravity compares with the quality of parts made on Earth – Megan Gannon

 

Cost of Genetic Sequencing Has Dropped 100,000x in the Last 14 Years

Change is coming at breakneck speed. How fast? In the 1980s and 1990s the PC revolution was driven by an insight that legendary Intel cofounder and chairman Gordon Moore had as a researcher in 1965: The number of transistors on an integrated circuit doubles every two years.

But over the past 13 years the cost of sequencing DNA has dropped 1,000 times more than Moore’s Law, from $100 million per human genome to only $1,000.

“The road maps that we have are pretty breathtaking as far as where the technology can move in the next three to five years.”

Matthew Herper

 

Achievable Developments in the Next 10 Years

I’m most excited about developments in the two areas that I’m pioneering: asteroid mining and the extension of the healthy human lifespan.

Through Planetary Resources, we expect to be identifying, prospecting and eventually mining materials from near-Earth asteroids well within this decade. This will create an economic engine that will propel humanity beyond lower orbit.

Through Human Longevity Inc, we will be creating the largest database of human genotypic phenotypic and microbiology data ever assembled and using machine learning to analyze it to truly understand disease and healthy aging. We feel we have the ability to extend the healthy human life by 30 to 40 years. For me, going to space and living longer — it doesn’t get better! – Peter Diamandis, Co-founder of Singularity University

 

Linear vs. Exponential Thinking

I’m currently 17 do you think I will see things such as life extension due the the eradication or management of Cancer, dementia, 3D organ printing etc within my lifetime? What are some technologies that seem way off to your average person that may become a reality within the next decade?

If you’re only 17, you will see a hell of a lot more than just life extension! You’re going to see colonies on Mars. You’re going to see us turn most everything we think of as science fiction today into science fact. We’re living during a time of accelerating change. Don’t think with your linear mind! Yes, we will solve cancer. Yes, we will solve dementia. Yes, we will start regrowing organs. All of this will happen faster than you can imagine.

I think the average person is a linear thinker and most of the extraordinary breakthroughs that will happen this decade will initially seem far off. Then, when the breakthroughs occur, they will take them for granted. So just think about artificial intelligence becoming your physician, or artificial intelligence becoming your personal tutor better than the best Harvard professor, or 3-D printing organs, or extending the human lifespan 30 years, or landing the first private citizens on Mars with in the next 15 years. These things all sound crazy until we make them happen – Peter Diamandis, Co-founder of Singularity University

30 steps linearly gets you to 30…30 steps exponentially gets you to a billion – Ray Kurzweil

 

Is The Singularity Near?

The answer is yes, depending on what you mean by near, but it may well be within our lifetimes – Marvin Minsky, “The Father of AI”

 

bitcoin_logo_small-150x150

Follow me on Twitter @leebanfield1

Bitcoin: 1Jwh6nZiASJf4d3hNytjxqiimWBmEJvJ4S

 

Bitmessage: BM-2cXjeAykLT7gbjzNHZFnCxdawvyryyb4Nf

 

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