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In the classic fable The Ant and the Grasshopper, you’ll remember the ant worked hard all summer to prepare for the winter, while the grasshopper sat around playing jazz violin.
“You gonna store away any food?” asked the ant.
The grasshopper waved him away. “I’m practicing my arpeggios, man,” he said, folding his long legs underneath him and retuning his strings.
Then winter came. The ant was warm and cozy inside his comfortably-furnished ant farm, when he heard a knock at the door. “Who is it?” asked the ant.
“It is I, the grasshopper. I am dying from hunger. Please, do you have any food to spare?”
“Maybe you can go play a few gigs with your jazz orchestra!” replied the ant.
“Please, sir, I am a solo violinist,” begged the grasshopper from outside. “I have no jazz combo.”
“Well then,” replied the ant, “you’ll have to eat your violin.”
The moral of the story, of course, is that ants are a-holes.
Preparing for the Winter
The good news is that we will make it through the winter. We’re humans, and humans are resilient. “Making it through” is kind of what we do. In fact, we’ve been through a lot worse – war, famine, Achy Breaky Heart – and we turned out OK.
If you look at this time as one big stress test of the human species, we’re passing the test. Sure, we lost JCPenney, but they were going down anyway. All told, this has been very difficult – and it’s difficult for all of us, in different ways – but we’ve pulled through.
That’s the good news. The bad news is this ain’t over yet.
We’re most likely in the second inning of this ballgame, not the eighth. If Coronavirus behaves like other flu viruses, it will slow down a bit in the summer, but it could be back with a vengeance in the fall. Now is not the time to practice jazz violin: like the ant, now is the time to prepare. |
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While pandemics are hard to predict, we’ve laid out a likely timeline of what comes next. Remember: the vaccine is the goal. Vaccine means victory, which is why we are calling it “V-Day.” Then we can clear out the economic wreckage and rebuild a great new society. It will all be worth it.
In the meantime, we must prepare for the winter.
Over the last several weeks, we’ve been laying out a vision for the future, offering blockchain-based solutions to the biggest problems brought about by this pandemic. We’ve mapped these to the three “Acts” of this great drama:
- Act 1: Blockchain-based supply chains can help us get critical equipment where it’s needed in Wave 2 of the virus, and may be helpful for basic supplies (depending on how bad things get).
- Act 2: Blockchain “immunity passports” (a.k.a. “FastYes”) will tell us who’s been tested, which will give businesses and consumers more confidence they can start working and spending again.
- Act 3: Blockchain bonds (also called “digital bonds”) will be a way that states and countries can quickly raise money in the meantime, similar to war bonds.
Because you’re a blockchain investor, we’ve also suggested ways you can invest in each of these three solutions as they come to fruition, further planning for the future. (Be the ant.)
These times have been tough. But like the fable of The Ant and the Grasshopper, times may get tougher. We’ve got to work hard now to prepare for the future.
Best case scenario: Things quickly bounce back to normal, the global economy snaps back into place, and we all live happily ever after. But “hoping for best case scenario” (i.e., practicing jazz violin) is not really a plan.
This isn’t over until we get a vaccine, which most scientific experts (not politicians) think is 12 to 18 months away. Right now, everyone is just trying to figure out what to do next, but the smart money -- like the ant -- is planning for the future.
There’s one easy way you can contribute to this effort: spread the word.
Spread the Word, Not the Germ
If COVID-19 is the virus, good communication is the antivirus.
Good communication is explaining: - we’ve still got big problems;
- we’ve also got the solutions to those problems;
- we need to get moving on them now.
Share this newsletter. Tweet these ideas. Talk about these solutions with your family and friends.
For our part, we’re creating massive communication campaigns around these ideas over the coming months. Like the ant, summer is the time to start preparing for a possible Wave 2 in the winter, when the flu season kicks back in.
Our first ebook is now ready for download. We’re making it available to Bitcoin Market Journal newsletter subscribers first, for free. We hope you’ll share it as widely as you can.
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Health, wealth, and happiness, |
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John Hargrave Publisher Bitcoin Market Journal |
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Hi Everyone,
Most people don't know it, but today is actually a holiday for religious crypto clerics. It's known as Bitcoin Pizza Day, when we celebrate the first recorded real-world transaction that took place in bitcoin 10 years ago.
Two Papa John's Pizzas for 10,000 bitcoin was deemed reasonable at the time, at today's exchange rate, that would be $91 million. So I hope the toppings were included. Seriously though, it's tough to imagine a time when each bitcoin was worth less than half a cent.
Back in the day, before crypto exchanges and way before advanced bitcoin trading products, people would actually just give them away. That's how I got my first one.
So, in the spirit of the holiday, I'd like to give away a few coins. Nothing good though, actually I'd like to give you something bad. Badcoin is a really bad blockchain project for people with bad computers. The idea is that instead of rewarding miners for spending money on the latest ASIC technology, this protocol provides the greatest reward to miners with the worst computers.
Like any good blockchain, the backstory is important, but badcoin's backstory is so bad that I can't even bring myself to type it out. Let's just say it was a horrible miscommunication that went wonderfully right. But enough of that....
Anybody who replies to this email within the next 78 hours with a badress (badcoin address) will get 10,000 $BAD to start you off. Don't ask me for any links or instructions though, the documentation and user experience are really really bad. Bonus points for anybody brave enough to try and mine them. |
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Unwavering Confidence
Once again, the pattern repeats. The entire week has been like this already. Heavy selling during the Asian session, bottoming out in Europe and then a rally into the New York opening bell. Let's take a look at the chart. The vertical blue lines are when the NYSE opens. |
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Surely this must mean something.
If I had to guess, I'd say it has to do with the fact that the Americans are the only ones crazy enough to buy this market during a global pandemic and Coronavirus now rising in Brazil and India. Daily confirmed cases have now passed 100,000 per day two days in a row, for the first time. |
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Still, the Americans seem to have unwavering confidence in their central bank's ability to backstop any losses, no matter what happens. Even if the value of the companies go down due to the economy being in the dumps, that's not necessarily a reason for stock prices to drop. Or is it? |
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Back Up
Bitcoin has now come across a major inflection point. We've now seen it retreat from the critical psychological level of $10,000 per coin, but it hasn't really broken any critical levels to the downside just yet.
Looking at the blockchain, it's quite apparent that the network hasn't really recovered from the halvening just yet, and all the added volume that we're seeing is certainly having a negative impact on its performance lately.
The average transaction fee remains elevated, currently at $6.28, as the queue of unconfirmed transactions remains backed up. At the time of this writing, there are more than 50,000 transactions waiting to be confirmed, as the miners are creating blocks approximately 10% slower than they normally would.
Putting it into historical context though, these numbers aren't all that high. Here we can see that in late 2017, the backlog was nearly five times larger than it is now. |
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Back then, the average transaction fee was above $40 for nearly two weeks before the network finally started to clear.
All things considered, the bitcoin blockchain is handling quite well, given that the sustained load is quite higher than it was back then. Here we can see the overall number of on-chain transactions using a 90-day rolling average. The crosshair is pointed to the top of the last bubble, when bitcoin was trading at $20,000. |
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As we can see, back then the transactions topped off at an average of 331,636 per day, but didn't stay there for very long. More recently, the transaction level has remained above 300,000 for over a year. The enhanced performance is largely due to rising adoption of the SegWit solution, but for some reason, the level of transactions using it has dropped lately. |
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Now, I'm not entirely sure why the SegWit level might have dropped. It's pretty clear that this, in addition to the longer block time due to the halvening, is impacting performance lately.
Perhaps for this reason, some blockchain enthusiasts might be losing confidence in the legacy chain. And if price action today is any indication, we can see that other digital assets are certainly rising faster than bitcoin.
Of course this is just speculation, there's only real one digital asset that's actually being adopted right now in any real way, but markets can be somewhat irrational at times, which only makes trading them all the more fun.
Have a wonderful weekend! |
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Mati Greenspan Analysis, Advisory Money Management |
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