Part 4
One smart thing
This fun debate opens the door to discuss important topics that everyone in the crypto space can, and should, understand. By using their positions, and missed arguments, you can take it as a cue from Gordon, why you need a strategy for what you are doing in crypto. Take one smart thing from Richard and one smart thing from Schiff.
First, Richard Heart:
Investing in Hex is based on the idea that people are their own worst enemy. They buy something out of FUD or FOMO, and when it shoots down they freak out, jump while they can, and lose big. Or, they see a crazy pump and jump fast, grabbing profit before something goes wrong, and they miss the biggest long term opportunity.
Hex (not an endorsement) is designed to reward you for your own patience, allowing something that is designed, NOT guaranteed, but designed, to gain in value the longer you hold, and penalize you by rewarding others if you cash out early. It is a digitized version of a real world investment tool.
One of the things we are all supposed to understand inside of crypto that perhaps others on the outside don't get, is that we often place our confidence and beliefs in things that often don't make any real logical sense. Trust money because the government tells you to, when the governments are among the most lethal, corrupt institutions on earth. But we're also supposed to take the government's word not to trust something like Bitcoin, unless it comes in a derivative of some sort that benefits bankers first, before the individual... then it's okay.
The world outside the crypto bubble are so used to being cautioned when something is a risk, they will always look around the corner, afraid of what comes next that they didn't know. Crypto is, more than anything, a place where every experiment in money, digital value, savings and trading merge. The value isn't just in a pump, but in the knowledge that comes with it.
We tell people to trust shiny rocks because why? Because other people have done so. Since government issued trash, like bonds and legal tender perform worse, rocks must be good. Isn't that Schiff's argument? That's what I heard. And, I'm not anti-gold OR anti-Schiff, so that's gotta tell you something.
Buying something that someone spent a great measure of time and money developing, for a purpose stated as a clear goal, is just as good a reason to guess on an investment as anything else. Delayed gratification is a great incentive for someone to learn patience at market, and Schiff would advise people the exact same way.
He doesn't tell people to grab fast cash from stocks or from gold, but to seek slow leak dividends from companies that do well over decades, not minutes. So, the take away, is a good investment is something you can study and reason, and come to the conclusion that there is something inventive, valuable to society, likely to blow up from all the trending data, or other, that lets you guess an educated guess, in place of short term FUD or FOMO.
There are no guarantees, and even playing to Heart's best intentions, something could compromise Hex or Pulsechain in the future that he didn't anticipate, but the likelihood is no different than a major flaw in an important car line or Apple phone. Having some official stamp of approval often just means the real juice has already been squeezed out by bankers or governments, and now they want to pawn it off on you.
Now, Schiff:
Choosing investments that are believed to stand the test of time, earning safely over time, is a better plan for 99% of people than to take other people's advice on what is trendy. Buying gold to hedge against inflation has worked more times in history, than not. But, I take issue with that being a use case, any more than choosing any crypto you personally have a debatable argument for having confidence in. Most people, most of the time, have only lost a little from listening to Schiff, and have earned moderately over a long time as a result. It doesn't make his assessment of crypto valid; it means it will be epic if he changes his mind, and even more epic if another decade goes by and he still tries to maintain his position.
The most important thing I think we should consider about Schiff, is that there would be no controversy in his position on stocks, dividends, or gold, if he were to simply understand that there are use cases for technology. That's really the Achilles heel for him. He is doubling down hard on there being zero real world value for crypto, and of all the valid arguments, that one has been proven wrong at every level.
To leave it on a good Schiff point: advising people to earn steady, slow, safe retirement money from mutual funds and dividends, placing a little money in gold just in case they need to hedge out of cash for a while, or sell it to go deep into a rare dip, is not unreasonable- it only becomes unreasonable when used as a lofty plan over the top crypto choices.
What makes for a good investment?
A good investment is an educated guess, at best.
The world, the planet, and all of your time on it, has no guarantees. The most skilled traders, who are not the enemy of markets by the way, are hoping to barely out-perform 50%, placing their analysis on having a better chance at earning a larger profit, than when they guess wrong and cut loose. It is a guess. It is a gamble.
But, in crypto, picking a good investment means cutting through a LOT more hype and a lot more scammy behavior at market. For the first 7 years we accepted that. Now, we anticipate such a strong "us against them" narrative, myself included, that we find ourselves often defending the entire space against the true criminals; the guys running the agencies.
But, the mere fact that we know Gensler and friends are the enemy of freedom, in the name of safety, doesn't change the fact that most items in the crypto market are scammy, or simply gonna pump and die. Those deaths take a long, long time. But, hundreds of legitimate projects are going to attempt real goals, and fail. That is true for every single industry. There is a difference. Most businesses fail, but they do so quietly in private. Most businesses don't die in public, listed at market. If your company goes public, it tends to make it through numerous rounds of fundraising and scrutiny, meaning there are some protections that if you read, analyze, listen to advice, you will avoid some pitfalls in stocks.
In crypto, the more you listen to people, the more they will tell you with zero conviction, to buy something that tanks, and never apologize later. The disclaimer "not financial advice" is their actual job description. Keep that in mind.
The best crypto analyst will tell you what they have read about a coin. That is all. The REAL crypto analyst, like myself, NOT financial advice, will tell you to follow in my footsteps, and that means the risk is real every single day, but 99.999% of it is manufactured risk from governments, IF, and only if, you are focusing on the most important, longest lasting, most stable projects. You choose your destiny, but a good investment IS something that can continuously do what it says it is designed to do. I am a fan of finding those hidden crypto gems that come from real people, with real good intentions, taking real risks, working hard to prove their worth, solving hard complexities in math, science, economics and security. To say those things aren't of value is ignorant. No one in the investment sector should feel qualified to speak against the benefits of computer technology if we are this deep into the use of encryption, online accounts, investment accounts, paying bills online, and yes, experimenting with cryptocurrencies.
Having said that, if you're gonna larp into new things, and risk your funds regularly doing so, realize you are doing so as entertainment and it is gambling, but if you attempt this with education, then getting in early is the entire ballgame. Get in, ride the pump, get out. If you are chasing mad gainz, you're not playing the investment game. Again, this is not my advice. I personally think you should research and choose projects that give you a reason to believe they can withstand the political storms raging and provide the incentive to their user base to remain honest, open, and work through the hard times instead of pretending the hard times don't exist.
You have two choices in chasing profits; learn to trade effectively with good TA and a risk/reward like winning traders do, meaning you have huge capital and can benefit from life-changing money by earning off of the 2-5% of the time you guess right. Or, go long term and continuously add to DCA in something like Bitcoin, Litecoin, Ether based on your convictions. If you're a 3rd category like myself, it only makes any sense at all if you can handle true dedication round the clock to watch the charts, tune out the noise, pick very small, consistent, safe positions that will grow enough fiat to continue entering smart positions in safer coins that are very difficult to earn from. Confidence is much more important than radical, fast pumps, the more that you grow your wealth.
What makes for a good use case?
Use case, use case, use case. It's hard not to return to this over and over again. People like Schiff are either brainwashed, which I don't think is the case with him, unable to think for themselves, again I don't think is his case, or a couple of other possibilities. He may be so dedicated to his position that he will not allow himself to do the research, listen to the opposing valid statements, or consider for one moment that perhaps he is wrong. The issue with this, is that along with Schiff's good advice, comes the terrible advice to avoid what could be one of the most important assets in our time, at a moment in time where everyone needs something like Bitcoin as a safety hedge more than any other time in history.
So, if the white paper for Bitcoin stated that its purpose was to be e-cash, directly peer-to-peer, cutting out intermediary platforms like PayPal and banks, then the fact that it succeeded is the point. That IS the use case. It is not a question of whether it can handle every payment from every human being on planet earth; the white paper didn't say Bitcoin would need to be able to handle 1 million payment transactions per second. It needed to validate transactions accurately, discretely, carefully, never exposing one's personal account, and it needed to keep a record that is nearly impossible to erase.
Bitcoin has accomplished all of these things. Then, we can look at whether anything can be improved. Layer 2 solutions allow you to make small sacrifices in security for massive upside in the speed of transactions and reduction in fees. The fact that you can essentially discover areas where Bitcoin needs an addition, and clip that baby on top, is more proof that it not only succeeded in its original purpose, but can scale where new requirements become apparent.
So, cheap, fast, free payments in remittance to 3rd world countries, war time in Ukraine, small businesses who no longer have to send someone to travel for hours, wasting money on public transient, risking safety at payment handling locations, losing 20-40% of the value of their payments to send money to family is not a use case?
But, what about store of value? Store of value doesn't mean something is an investment vehicle meant to offer crazy pumps and massive profits. By definition, it is meant to protect you from losing wealth, not necessarily guarantee you more. But, from the first time Bitcoin was worth a penny to hitting $68K, the dips have been 50-80% at key TA positions, and the peaks have been 200-500%. If we are talking about an invention that is designed as a monetary tool, how is the fact that no one who has ever held Bitcoin for a 3 year stretch, any 3 years, has ever lost money by holding it that time? If we time the last ATH, I will be shocked (well, not with government intrusion) if someone holding from that second forward, wouldn't be up after 5 years in Bitcoin.
If, in the next 5 years, Bitcoin isn't at least hitting $70K at least once, yes I will be surprised, unless the govt has made it so difficult to access or crushed any benefits in using it.
Again, how is that not a use case?
The fact that difficulty and value are linked to the real world through physical hardware requirements should at least provide some interest that designing ASIC chips is an actual industry that benefits from Bitcoin. If more countries place a focus on designing future-forward energy solutions, Bitcoin will be one of the strongest cases for providing incentive for such a thing. Intel is talking about releasing a new ASIC that is massively lower in energy consumption. That's the idea. Governments banning technology instead of using the hurdles as an excuse to allow room for innovation, is the very mentality that led us to the need for crypto to begin with.
There are a lot of things I like about Ether, and there are a ton of things I don't. They do not make me wish for it to be banned. Tether may get caught doing something wrong at some point. That doesn't mean we can't get huge benefits from stablecoins. If you don't like meat, become a vegan. That's the beauty of choice.
Speaking of use cases; what about assigning blockchain ledgers to copyright law? What about assigning blockchain to inventory for businesses? What about using blockchain to keep a permanent ledger for a better voting platform sometime in the future? What about using coins to stomp out government censorship? What about offering privacy? Personal responsibility in self-custody? Learning fiscal self-reliance?
I really could go on for quite some time, but the fact that you can program scarcity, you can program integrity through a network, you can program reliability that we cannot get from any current banking system, are all reasons that people are flocking to crypto, not running away.
The more the government screams warnings, the less trust people are placing in institutions they see every day, and more trust they are willing to risk in digital systems of the imagination.
What makes these investment vehicles and stores of value real, is the real need people have for them. It's time for people like Peter Schiff to open their eyes wider to the reality that his job, much like ours in the space, is to serve people. The people are telling you with more and more conviction; what they want is a better choice than big corps and big govts are offering. At some point, they're going to have the same hard time taking you seriously as I do.
And on that note, Crypto Gordon Freeman moving forward to Part 5!!!, for now... out
