When the perils of exposing wealth to the old systems were finally exposed in a big way, nations and big capital started looking for alternatives. BTC perhaps had promise, but turned out to be too unstable to be used purely as a store of wealth, hence the birth of stablecoin. Now it turns out to be, as you describe, no better than its predecessors at avoiding the jaws of the corrupt USD financial network. Right now the lesson seems to be that the owners of capital still in the system need to avoid getting sideways with Washington, else their assets will be seized/frozen.
Soon (perhaps already?) the need to find fault with someone so their assets can be seized will evolve; they will simply seize those assets without pretext whenever they need them.
Avoiding all this crypto business was wise, as it seems there is no limit to their ability to eventually corrupt every new platform or idea. "Each instrument gets weaponized. Each weaponization destroys the demand the instrument was built to attract. Each new instrument has to recover the trust the last weaponization destroyed."
“Because gold doesn’t take phone calls from Washington.” Words for the investor to live by.
BTC succeeds because it's following the Proof of Work model. Permissionless and as long as you hold the keys, no one can take it from you. It's also pseudonymous as long as you don't link your fiat to BTC transactions somehow (cash is king).
The Proof of Stake model is completely different and why it's ultimately destined to fail. As soon as the code can be used to shut down the transaction, it's no longer permissionless.
So at least avoid proof of stake coins (which is most of them), and as always, don't have all your eggs in one basket.
As you say, the difference between proof of work and proof of stake is key. I wonder how many people (even among BTC or stable coin investors, even in this forum) have the vaguest idea what you're talking about?
I suspect the answer is, about as many investors in the Dutch tulip mania knew anything about growing tulips.
Bitcoin was not conceived to be used a store of wealth but as a decentralised currency controlled only by cold hard math.
Since it is an open source project it was only a matter of time before the Borg took over to alter or limit its functionality so as to make it unattractive as an alternative to fiat money. They basically made transactions too slow or with unpredictable completion time or otherwise cumbersome, and used mass social engineering to scare people into dumping it.
Blimey. The only comments i can think of are quotes such as 'one (a sucker) is born every day', applied to the level of CBs and State Treasuries. Of course the ancient Romans had a better and typically pithy phrase: "vae victis", where we ordinary peasants, as always, look to be the vanquished. However, peasants have a certain cunning, honed over millennia, which might counteract GENIUSses IRL.
Love your posts. Felt an urge to comment though: it is wrong to conflate Bitcoin with "crypto" Stablecoins or any other coin. Stablecoins were freezable by design and only ignorant was not aware of that.
Bitcoin is not freezable and it works exactly as designed for such situations. It has nothing to do with "crypto". Whatver Iran holds in bitcoin is not freezable or confiscatable. And now they learned it as well.
People do what is in their nature to do. Especially bad faith actors. Certain things attract certain kinds of people. Parasites and predators are attracted to prey, and potential prey. If potential prey can be turned into prey, then that's what they'll do.
Institutions themselves may not be bad and detrimental in and off themselves. They are an often created to fulfill a perceived need of whatever kind. However, any and all institutions, as has been discovered, are particularly prone to ideological parasitic infestation, as well as criminal infestation and subversion by bad faith actors, sometimes, these infestations and subversivions are one and the same thing. Unless the reality of the above is recognised, understood, and rigorous, sufficient steps to deter, detect, eject, and punish, any bad faith and potential bad faith actors, are not built into the infrastructure and the surrounding structures of an institution; all of which not only need to be rigorously and diligently implemented and enforced. Then Institutions are going to continue to become infested and subverted by bad faith actors and their ilk.
I'm using a generic analogy, to explain a specific problem, but I think that the problems of bad faith/ideological actors has been proven repeatedly and effectively over time, and applies across the board.
indeed, exactly why the slow-burn-run into gold started somewhere in 23 (after countless CB meetings to determine what to act on after the Russian asset seizure)
Any digital currency runs on infrastructure that each government controls within its borders. Externally, in the international arena, the vast majority of digital infrastructure is controlled by US corporations. Which are drinking the US government's bathwater, and vice versa. You can see where this is going.
All digital currencies are vulnerable to government manipulation and attack. They're much worse than holding fiat cash in that respect. Cash-in-hand is vulnerable only to government debasement of it's entire money supply, which governments try to avoid. Digital currency however only has value when it travels on government-controlled infrastructure. That mobility can be curtailed or even eliminated at any time the government wishes.
The mantra, "If you don't hold it you don't own it," is true of physical assets, including cash. However that truism should be extended to include the medium of exchange as well. The means by which assets trade hands is just as vital as the value of the assets themselves. Any vulnerability in the means of exchange is taken on by the asset. While digital assets may be inviolable in the hands of the owner, they are vulnerable as soon as the owner tries to use them via the digital infrastructure which the government controls. That's in addition to any control the government might have over the issuer of the digital currency, as in the US$Tether situation.
Holding physical assets like gold and silver as a medium of exchange and store of value is not risk-free. Nothing is. But I judge that digital assets are much riskier. True that you're gaining practicality and mobility, but you're taking on greatly increased risk, even to the degree that your digital assets could instantly become worthless at the push of a button.
Of course you knew the story. Good article—I wasn’t following you back then and your link is a welcome prompt to go back into your archive and read more gems. Keep up the great work!
Ok. I need to hold 5 ounces. I am a lowly permaculture gardener and hip hop producer in the woods but I'm gunna find a way.
Question. Will physical get difficult to convert into cash/usable currency for things like buying a load of building materials for my son's house as an example? Can't they make it a capital gains tax?
Every store of value, and its medium of exchange, carries risk. There are no exceptions. For example, you could be robbed on your way to trade some gold for building supplies. The government could even make your ownership of gold illegal, as the US did in 1934. However, precious metals are invulnerable to a government debasing its own currency, which is the chief risk that most people face against their monetary assets. The government is stealing value from them constantly. It's just a slower way of being robbed.
I use Defythegrid for my purchases since they ship overseas, but no doubt there are other reputable sellers too.
I've got a set of Goldbacks (1, 5, 10, 25, 50) that I'm keeping for my kids alongside the fiat currency equivalent I bought them for. I plan to frame them one day. No doubt by the time they're ready to ask the question, the Goldbacks will have become much more valuable than the fiat set, thus teaching them a simple lesson about inflation and how value is destroyed over time in fiat currencies.
I also bought a bunch of 1s and give them away to friends, family, their kids etc along with a short spiel on holding it and watching the value relative to fiat over time, for the same purpose.
Economic Flurry. One political gust and they’ll rob you in a hurry. I chalked it up to my own ignorance but I never really understood why people thought these things were safe. I guess the symbolism is nice. Once again the exponential pattern repeats. The problems expand, the timelines collapse and the trust evaporates. What to do, what to do. Put some metal in my shoe ….
All roads lead to gold and silver.
🎯... Exactly why I'm bullish
Surely you mean gold credit cards, yeah? I wanna see €1000 notes myself. Maybe even get to use one to light a bonfire with.
As Canada learned during the trucker's protest, that which can be frozen and confiscated, will be.
Tell that to Iran 😜
Great idea!!! For forfeiture...
Cryptos are delusional...
When the perils of exposing wealth to the old systems were finally exposed in a big way, nations and big capital started looking for alternatives. BTC perhaps had promise, but turned out to be too unstable to be used purely as a store of wealth, hence the birth of stablecoin. Now it turns out to be, as you describe, no better than its predecessors at avoiding the jaws of the corrupt USD financial network. Right now the lesson seems to be that the owners of capital still in the system need to avoid getting sideways with Washington, else their assets will be seized/frozen.
Soon (perhaps already?) the need to find fault with someone so their assets can be seized will evolve; they will simply seize those assets without pretext whenever they need them.
Avoiding all this crypto business was wise, as it seems there is no limit to their ability to eventually corrupt every new platform or idea. "Each instrument gets weaponized. Each weaponization destroys the demand the instrument was built to attract. Each new instrument has to recover the trust the last weaponization destroyed."
“Because gold doesn’t take phone calls from Washington.” Words for the investor to live by.
BTC succeeds because it's following the Proof of Work model. Permissionless and as long as you hold the keys, no one can take it from you. It's also pseudonymous as long as you don't link your fiat to BTC transactions somehow (cash is king).
The Proof of Stake model is completely different and why it's ultimately destined to fail. As soon as the code can be used to shut down the transaction, it's no longer permissionless.
So at least avoid proof of stake coins (which is most of them), and as always, don't have all your eggs in one basket.
As you say, the difference between proof of work and proof of stake is key. I wonder how many people (even among BTC or stable coin investors, even in this forum) have the vaguest idea what you're talking about?
I suspect the answer is, about as many investors in the Dutch tulip mania knew anything about growing tulips.
FYI: https://no01.substack.com/p/crypto-explained-simply
So simple even Occam understood it 😂
Bitcoin was not conceived to be used a store of wealth but as a decentralised currency controlled only by cold hard math.
Since it is an open source project it was only a matter of time before the Borg took over to alter or limit its functionality so as to make it unattractive as an alternative to fiat money. They basically made transactions too slow or with unpredictable completion time or otherwise cumbersome, and used mass social engineering to scare people into dumping it.
Blimey. The only comments i can think of are quotes such as 'one (a sucker) is born every day', applied to the level of CBs and State Treasuries. Of course the ancient Romans had a better and typically pithy phrase: "vae victis", where we ordinary peasants, as always, look to be the vanquished. However, peasants have a certain cunning, honed over millennia, which might counteract GENIUSses IRL.
Love your posts. Felt an urge to comment though: it is wrong to conflate Bitcoin with "crypto" Stablecoins or any other coin. Stablecoins were freezable by design and only ignorant was not aware of that.
Bitcoin is not freezable and it works exactly as designed for such situations. It has nothing to do with "crypto". Whatver Iran holds in bitcoin is not freezable or confiscatable. And now they learned it as well.
You are correct of course, but for the layman both BTC and ETH are the same.
It's up to us to teach people there is a huge difference.
I share you my crypto 4 dummies here: https://no01.substack.com/p/crypto-explained-simply
People do what is in their nature to do. Especially bad faith actors. Certain things attract certain kinds of people. Parasites and predators are attracted to prey, and potential prey. If potential prey can be turned into prey, then that's what they'll do.
Institutions themselves may not be bad and detrimental in and off themselves. They are an often created to fulfill a perceived need of whatever kind. However, any and all institutions, as has been discovered, are particularly prone to ideological parasitic infestation, as well as criminal infestation and subversion by bad faith actors, sometimes, these infestations and subversivions are one and the same thing. Unless the reality of the above is recognised, understood, and rigorous, sufficient steps to deter, detect, eject, and punish, any bad faith and potential bad faith actors, are not built into the infrastructure and the surrounding structures of an institution; all of which not only need to be rigorously and diligently implemented and enforced. Then Institutions are going to continue to become infested and subverted by bad faith actors and their ilk.
I'm using a generic analogy, to explain a specific problem, but I think that the problems of bad faith/ideological actors has been proven repeatedly and effectively over time, and applies across the board.
As we say in the stacker world, if you don’t hold your metal physically, you don’t own it.
Central banks figured this out after the Iranians and Russians were robbed by Washington.
indeed, exactly why the slow-burn-run into gold started somewhere in 23 (after countless CB meetings to determine what to act on after the Russian asset seizure)
"The purpose of a thing is what it does." ;-/
Missed ya!
Any digital currency runs on infrastructure that each government controls within its borders. Externally, in the international arena, the vast majority of digital infrastructure is controlled by US corporations. Which are drinking the US government's bathwater, and vice versa. You can see where this is going.
All digital currencies are vulnerable to government manipulation and attack. They're much worse than holding fiat cash in that respect. Cash-in-hand is vulnerable only to government debasement of it's entire money supply, which governments try to avoid. Digital currency however only has value when it travels on government-controlled infrastructure. That mobility can be curtailed or even eliminated at any time the government wishes.
The mantra, "If you don't hold it you don't own it," is true of physical assets, including cash. However that truism should be extended to include the medium of exchange as well. The means by which assets trade hands is just as vital as the value of the assets themselves. Any vulnerability in the means of exchange is taken on by the asset. While digital assets may be inviolable in the hands of the owner, they are vulnerable as soon as the owner tries to use them via the digital infrastructure which the government controls. That's in addition to any control the government might have over the issuer of the digital currency, as in the US$Tether situation.
Holding physical assets like gold and silver as a medium of exchange and store of value is not risk-free. Nothing is. But I judge that digital assets are much riskier. True that you're gaining practicality and mobility, but you're taking on greatly increased risk, even to the degree that your digital assets could instantly become worthless at the push of a button.
Of course you know the story of the scorpion and the turtle . . . scorpions do what it is their nature to do
Funny you mention that story : https://no01.substack.com/p/the-scorpion-and-the-turtle
Of course you knew the story. Good article—I wasn’t following you back then and your link is a welcome prompt to go back into your archive and read more gems. Keep up the great work!
I know it as the scorpion and the frog. One of my fav fables.
The scorpion allays the frogs fear of being stung while crossing the stream. Why would I sting you, we’ll BOTH drown.
Halfway across the scorpion stings the frog anyway, and when asked why, replies:
"It's my nature!"
Ok. I need to hold 5 ounces. I am a lowly permaculture gardener and hip hop producer in the woods but I'm gunna find a way.
Question. Will physical get difficult to convert into cash/usable currency for things like buying a load of building materials for my son's house as an example? Can't they make it a capital gains tax?
I imagine that at a certain point they will try to do that yes.
But like VP said: goldbacks (or more generally: coins) will probably be able to be handled "under the table" thus circumventing the tax)
Every store of value, and its medium of exchange, carries risk. There are no exceptions. For example, you could be robbed on your way to trade some gold for building supplies. The government could even make your ownership of gold illegal, as the US did in 1934. However, precious metals are invulnerable to a government debasing its own currency, which is the chief risk that most people face against their monetary assets. The government is stealing value from them constantly. It's just a slower way of being robbed.
1oz gold coins worth ~$5000 are kinda large for day to day transactions, but there are smaller alternatives all the way down to the ridiculous (?) 1 gram level: https://online.kitco.com/buy/31107/1g-Gold-MapleGram25-Coin-9999-31107
1g is a shopping cart full of goods? Although, how to pay with a gram... That's ridiculously small.
Yep. I like the 10th oz gold Eagles for this reason. But also this is where silver enters the chat.
Awesome!
Goldbacks have a premium over gold bars etc, but they're much easier to handle for day to day transactions.
Thank you for this info. Much more achievable for me to pay the premium but keep adding to an extremely modest store.
I use Defythegrid for my purchases since they ship overseas, but no doubt there are other reputable sellers too.
I've got a set of Goldbacks (1, 5, 10, 25, 50) that I'm keeping for my kids alongside the fiat currency equivalent I bought them for. I plan to frame them one day. No doubt by the time they're ready to ask the question, the Goldbacks will have become much more valuable than the fiat set, thus teaching them a simple lesson about inflation and how value is destroyed over time in fiat currencies.
I also bought a bunch of 1s and give them away to friends, family, their kids etc along with a short spiel on holding it and watching the value relative to fiat over time, for the same purpose.
Glad to help!
Excellent forensic analysis relating to the CBDC world here, NO1.
This article is a wowsie.
Thank you for the write up
I read about it the day it happened and realized the implications right away but couldn't put it together like you did
Did you notice that Polymarket converted from USDT to their new pUSD in a surprise "systems upgrade" yesterday ?
Lol. We have palm USD, plume USD and now polymarket USD...
Damn. Crypto is tough.
"Because gold doesn’t take phone calls from Washington"
Heh-heh! You don't think they're working on that?
Gold made programmable at the molecular level . . .will take phone calls from whoever controls the code.
Not necessarily Washington, nota bene.
My Ag/Au is still 99.9% pure, no cellphone chips included yet ...
Molecular programming
Next Level down from "chips"
Search and Yee shall find
https://principiabiomathematica.com/molecular-programming-101
Ok, I have a hard time seeing this applied to gold atoms.
But, why not? At some point in time . . .
😂
Emphasis on the "yet..."
https://www.mint.ca/en/bullion/bullion-dna
Still 99.9% pure.
Economic Flurry. One political gust and they’ll rob you in a hurry. I chalked it up to my own ignorance but I never really understood why people thought these things were safe. I guess the symbolism is nice. Once again the exponential pattern repeats. The problems expand, the timelines collapse and the trust evaporates. What to do, what to do. Put some metal in my shoe ….