BITCOIN (English version)

Pro and cons the hottest thing of today

Bitcoins will go to 50 thousand, then to three hundred thousand, then to one million and even beyond. It will most likely do so!

Faced with these prospects, who would not want to purchase some?

The purpose of this newsletter is not to convince anyone of anything, but a simple and short (not too short) article to try to gain better understanding together. After which, everyone will do as they see fit.

I remember back in 2013, I attended a conference by italian economist Eugenio Benetazzo in Florence. I asked him what he thought of Bitcoins. During his presentation, Eugenio Benetazzo showed great ease and preparation and despite his witty sense of humor, proved to be a very serious person and very much informed on all global scenarios, which is essential to analyze trends in an appropriate way. The conference went on smoothly and quickly without ever being tedious, thanks to the great charisma and sympathy of the speaker and his ability to involve and excite the audience. The final phase was reserved for questions, to which Eugenio Benetazzo replied in a competent and satisfactory way. I asked Benetazzo for his analysis on the gold market. His answer was very clear: “the gold is finished”! Another person asked about silver and Benetazzo replied that silver is worse than gold. When he answered my question about Bitcoins: he said that it is something to be absolutely avoided and he compared it to a recent madness, that of the Iraqi dinar. . The congenial economist from Veneto region addressed me in a succinct way, saying something to the likes of: “does it seem sensible to convert legal tender currency, such as Euros, into something absolutely unregulated like Bitcoin” ?.

He was right. It silenced me in an instant. Bitcoin was worth around $ 300 back then, if I remember correctly. He was so right that Bitcoin then went up to reaching 20 thousand dollars two times. A classic case that in financial jargon is called “biting your own balls”.

Now even Benetazzo seems to have regretted not having “filled the shopping trolley” in those years, and while remaining a serious and cautious investor and consultant, he has begun to disclose the cryptoshere in a very precise way and with great competence, suggesting the opportunities represented by including the Crypto Currencies in his own wallet. I swear to you that if during that conference, had I been told to buy at least 1 Bitcoin, I confess that I would have risked $ 300. But I confess another thing. I am a coward. So don’t take advice from me if I express my doubts about Bitcoin (and other Cryptos), because you would probably be missing out on the greatest opportunity in life.

What prevents me from fully embracing the epochal revolution represented by Crypto is my inability and mental limitation to trust what I don’t fully understand.

Let me explain. For me, a thing of value is something that exists. The scriptural money, Euros, Dollars, Francs, Yen etc. are things that now exists, even though almost solely in the form of numbers within PCs. When I do consultancy and want to make this concept understood, I turn the PC monitor towards the client, on the page of their total asset. I then turn off the monitor. At that point, in front of the astonished face of the customer looking at a black screen, I ask them to show me where their money went. A wise proverb says: “if you dont’ hold it you don’t own it”. Obviously it’s provocation with the above gesture done to my client, otherwise the whole system would not make sense, but in the system itself there are risk progressions to be taken into consideration. So right now it could be a good idea to have some Cryptos in your wallet as well. Always with caution and for modest amounts compared to the total amount of your assets. In short, the old Wall Street rule regarding risky investments applies: never invest more than what you can afford to lose! Benetazzo rightly recommends the concept of Templeton’s three pots. A sensible precaution. It is wise to put aside some money to play with Crypto currencies in order not to miss out on this train of opportunities.

When it comes to Bitcoin, legitimate doubts are raised which I spontaneously listen to, precisely because of my nature or, if you prefer, my cognitive biases.

For example: investor Hugo Salinas Price has stated that he is not a fan of Bitcoin for various reasons. Bitcoin relies on the continued existence of the good electronic functioning of a global internet network. In case of war, the internet would be disconnected and goodbye Bitcoins. Salinas is convinced that Bitcoin is managed by the so-called elites and that it was NOT created to pose a threat to traditional monetary systems that are the monopoly of the banking cartel.

This means that power groups, which Salinas calls with the well-known acronym TPTB (The Powers That Be), can manage Bitcoin as they please. We have been told that Bitcoin offers a great level of security, but no one has bothered to show us the level of knowledge that TPTBs have. “We have no information on this. The existence of Bitcoin is at the lowest level of the hierarchy of physical existence, since it is only an electrical charge. If we accept the fact that an electric charge can have a monetary value, this represents a flight of the imagination. Bitcoin is fictional currency. The imaginary coin is nothing more than a dream. Bitcoin has value only because its (unknown) inventor established that Bitcoin has monetary value and some other individuals have accepted this axiom. After the same individuals involved in its creation repeated the mantra “Bitcoin is Money”, its monetary value started to rise. Basically, Bitcoin is nothing more than a pleasant game to play, but life goes beyond just playing. When the moment comes when you need real money, in a life or death situation, then you realize how many idiots populate the world ”.

Connecting my line of reasoning to these interesting considerations by the Mexican tycoon Hugo Salinas Price, it is important to add what Jim Richards explained very well. According to Richards, Bitcoin was created by a group of very powerful insiders to create a useful tool to distract investors from what is the true value, namely gold. According to Richards, almost all Bitcoins are already in the hands of a very small group of entities that have a de facto monopoly and that, through a process called “Painting The Tape”

(https://www.investopedia.com/terms/p/paintingthetape.asp),

Bitcoins are passed amongst themselves, simulating exchanges and artificially stimulating their growth in value, thus enticing retail investors to throw themselves into this monetary idea, hoping to make a fortune. The mental trigger is therefore the oldest in the world. Who wouldn’t hope to make a lot of money without a drop of sweat? Making money because you are smarter than others, an irresistible pleasure. It always works, in every era, with the variants of the case, from tulips to alphanumeric strings. What I want to clarify is that most of the negative considerations towards Bitcoin come from people who promote gold as the best value preservation tool and that there is a colossal distraction in deterring investors from wanting the metal, enticing them to prefer Bitcoin. In this way, the price of gold remains low and its physical availability can be accumulated by a few powerful people until the new global digital monetary system is ready. The new Bretton Woods. In fact, Bitcoin is explained as being “Digital Gold”, precisely because of its scarcity characteristics. The way in which it is represented is also significant, as a sparkling gold coin with the symbol of the B pierced in the shape of a dollar, with the aim of facilitating, in the simple mind of the public, the combination between Bitcoin, gold and legal tender currency.

Meanwhile, all Nations are moving towards converting their cash coins into digital-only currencies. Europe, Canada, China and the US are working diligently to launch their respective digital currencies with which they will have total control of taxes and complete tracking of payments of every citizen. As I mentioned in the previous newsletter, the Bahamas, my wife’s Country of origin, was the first Country in the world to launch the digital currency issued directly by the Central Bank that went into effect and official launch last October: the Sand Dollar. So it is no longer a matter of hypothesis, but it is already a reality. It already exists.

https://www.forbes.com/sites/vipinbharathan/2020/10/21/central-bank-digital-currency-the-first-nationwide-cbdc-in-the-world-has-been-launched-by-the-bahamas/?sh=7cb7554b506e

We have witnessed the global smear campaign against Trump for opposing this rush to digital currencies. China is starting to launch the “Digital Yuan” and has already outlawed Bitcoin in some ways. Bitcoin was necessary to accustom people to the fact that something totally digital can have the same value as traditional money. By making the game fun, with the thrill of immoderate profits, people have been willingly seduced and started to familiarize themselves with these abstract and virtual dynamics. Some skeptics have pleasantly commented that the value of Bitcoin is determined by the rate of “mutual trust between snuff pedophiles and the drug cartel on the dark web”, which is still the only practical use for exchanging filthy crap on the web including weapons. Even though the traditional money system is a perverse and disgusting debt-based control mechanism, it is still tied to the overall real value of the productive force - the people - and the destructive force during wars. Horrible things: produce and then destroy to keep the banking control pyramid in place. However, money in the bank is represented by the contract between the lending bank and the debtor customer. The contract is based on the guarantee of real estate or income flows deriving from the customer’s work activity. Money is created from nothing, but the customer’s work, and the collateral that comes from using the money, is something that exists, in the form of houses, planes, cars, factories, farms, mines, public works , sewers, buildings, stadiums etc... Even when using a credit card, money is created out of thin air, but it is guaranteed by the salary of the cardholder, who will then pay off the invented sum, using the value deriving from his work for the payment.

It is also interesting to know that in the first place in the world as a Google search for the word Bitcoin, there is Nigeria, the undisputed home of online scams. Another curiosity is that companies have also been formed, that sell Bitcoin schemes based on Multilevel techniques. Such techniques already used by Amway, Herbalife, etc. A sales system based on pyramid growth. But Bitcoin is the key that will open the door to the new world of digital money. An unexplored reality, which will always be managed by the banking cartel and with the same purpose as before: that is, control and perpetual subjection. Many believe that Bitcoins are safe from confiscation or control. But can you really believe such a thing? Where the digital world is in the hands of a very powerful oligopoly connected to the giants of High Tech, secret services and the military, Darpa, Cia, MI6, etc.? There have already been many incidents of confiscation. I personally had the opportunity to talk to a guy who needed to liquidate a very important amount of Bitcoin and who confessed to me that previously, when he had entered a sales order, instead of receiving the equivalent in Euros, he received a communication from the authorities of vigilance that informed him of the failure to complete his transaction, as the high amount was being investigated to establish the legitimacy of the origin of the sum and that they would reply if the sum could be released, in a period of time from 1 to 4 years.

This shows that you can play with Bitcoins as long as it’s modest figures, but when important numbers move, you run the risk of running into situations like the one described above. The US government has also seized the equivalent of a billion dollars in the case of a transaction linked to the ‘Silk Road’ and a certain Ross Ulbricht, who is now in prison with a life sentence. The transaction was uncovered by the British blockchain analysis company Elliptic ,on the recommendation of the American Department of Justice (DOJ). The sum of 69369 Bitcoins had been moved out of a wallet that was the third largest in the world. This demonstrates the ease with which transactions are tracked, contrary to the idea of the absolute anonymity of possession of Crypto. The IRS, the American tax office, also has an operational unit that deals with the tracking of Crypto currencies.

A probable scenario could be this: once the government digital currency is created, a time window will open in which the possibility will be offered to convert one’s Bitcoin, or other Crypto, into the new legal tender digital currency, imposed by the government. Many fearful and obedient citizens will immediately adhere to the provision of the law. For the most recalcitrant, the intervention of the authorities will be necessary which together with the media, as is now customary, will announce mass seizures and arrests of investors and traffickers, with confiscation of personal assets, houses, yachts, luxury cars, surrounded by spectacular images that the mainstream media know how to pack when it comes to convincing people of what they want to impose by brute force. Another plausible objection is the purely technological one. It is undeniable that the growth in the level of technology is exponential. Basing the value of Bitcoin at a given moment on a trend of technological complexity that increases exponentially, ends up making any technological milestone ridiculous. Just think of mobile phones or video games of 10 years ago compared to those of now. The production of Bitcoin is based on a calculation process called mining and on an encrypted security level that offer perfect functioning. A perfect functioning with the technology of now, which is a digital technology based on Bit, while the near future will certainly be managed by quantum computers. I already talked about it in my very interesting newsletter Konzept pt2

https://andreacecchi.substack.com/p/konzept-seconda-parte

“If we have learned anything from the history of discoveries and inventions it is that in the long, but also in the short term, the most fantastic prophecies prove to be the most blatantly conservative! Sir Arthur Clarke. The CIA cipher code is considered one of the safest codes in the world. It would take a supercomputer 600m years to crack the code. A quantum computer with 4000 qubits of power could do this in 120 seconds. A qubit is to the quantum computer as the bit is to the conventional computer. Qubits are exponentially larger quantities than bits in terms of magnitude. While all the attention is focused on artificial intelligence, quatum computing doesn’t make the headlines, but if we ask any national security expert what gives them sleepless nights, they will definitely answer: surprise quantum supremacy.

There are several countries around the world that are aggressively working on quantum computing. The ones that are investing the most are the US and China. The US spends 500m a year. China 10 $ billion, although unofficial estimates are of 30 $ billion. Recently Russia and other countries have also joined this race, but in terms of economic potential, it always remains a science of the future. The development of key technologies generally does not follow a predictable trajectory, so it is difficult to know if we can get there within this decade or in the following years. Achieving quantum supremacy over even the most advanced technology available will be like comparing the power of the computing processors we now have with the pen and paper of the 1800s ”. We are here in a futuristic environment where governments and military work closely and secretly.

There are projects in the energy field where it is planned to be able to mess up the molecules of matter to obtain energy.

In the military, there are frightening developments. A satellite could recognize any person with extreme precision even from their shadow, interpreting and tracking movements in any corner of the globe with total precision.

The development of quantum computing is different from the race for artificial intelligence. Artificial intelligence is more like a marathon, where the one who has prepared himself by working the hardest over time wins. Quantum computing, on the other hand, resembles the deadly martial art of Jujitsu: whoever knows this art immediately pulverizes the opponent and subdues him in an instant with invincible strength and cunning”.

I could go on writing for a long time, but it would turn out into book instead of a newsletter. I hope I have provided some interesting insights. We are in a moment of epochal change. Many people are concerned about how to protect their savings. Indeed, the expansionary maneuvers of monetary creation are like a devastating wave that will hit us all. In the US there is already talk of 5trillion deficits in one year. Remember that 5 trillion is all the money the US spent from 1776 to 1996: 220 years. The same money now lasts for a year. All roads lead to inflation. Indeed, worse, towards “bi-inflation”, that is the inflation of the price of what is indispensable to us and the deflation of the value of our income. In this kind of scenario, Bitcoins could also be a tool to differentiate, with moderation.

As for the most of one’s savings, I remain firm in my belief that the best thing is to understand what is valuable and to convert “bits” into real things. The mega-rich are buying entire Caribbean islands, land and hunting reserves, works of art, vintage cars, antiques, luxury bunkers, and even gold bullion. But maybe they’re wrong and they’re fools. They should convert everything to Bitcoin, like the smart ones do. Time will tell!