Photo Lucas Saporosi: First meeting between Camilo and Roma, the cat
Camilo, my first grandson, was born on September 14, 2022, three months before the Argentine Soccer Team won the title of World Champion for the third time in its history.
Every time I get up close and personal with the miracle of birth, I go into a period of numbness that lasts for months, trying to explain the inexplicable. Everything flows, everything surpasses us and shows us our littleness. It is the prodigy that has accompanied humanity for 14,000 years.
Now, in the middle of 2023, what is the best thing that a crypto-grandfather can do for a crypto-grandson who, when he turns 18 and enters his majority, will only talk about crypto assets and read about banks in history books?
What I did the same day he was born is to create a wallet for Camilo, in which I began to deposit cryptocurrency for him, and I continue to do so absolutely every day since he was born. I actually created several wallets, with the famous basket and eggs concept.
Now, the question that arises, since ultimately with this action I am planning a very long term, let's say, 20 years, is what currency to put in Camilo's wallets. I could not explain to my grandson that his grandfather, being a cryptocurrency consultant when he was born, made a very bad mistake, and what he receives as a gift is worthless.
What would you guys do? (leave your comments below).
Well, the truth is that planning for such a long term is quite complicated, especially at a time when, due to the lust for power of the rulers of the planet, we don't know if we are going to last 20 years. I mean humanity. Because when it comes to the MMT and the banking system, few doubt that they will soon disappear without the need for nuclear warheads from Russia or NATO.
I have an advantage that is the relatively easy mobility that I have to quickly change cryptocurrencies in case they do not work for such a long period. But anyway, what I try to do is imagine the world in 20 years.
For the moment I leaned towards the Lightning Network for Camilo. So I am collecting sats every day with various actions that I describe below. I'm also collecting sats for myself, although not only sats, I'll leave that for another post. When thinking about the Lightning Network, what I'm doing is thinking about the speed of transactions and the micropayment amounts that often characterize the life of a teenager.
Now, if I lean towards BTC thinking 20 years ahead because of speed and micropayments, BCH (Bitcoin Cash) advocates will tell me, why don't you pool BCH instead of BTC?
The question is logical, since, in terms of macro strategy, I am explicitly assuming that in a short time, the youngest will not use anything other than cryptocurrencies to pay and collect and that fiat will continue to live for a while longer for large operations between corporations and states, as long as these two institutions of capitalism continue to exist.
In any case, why not choose another coin like ETH, BNB, ADA, USDT, USDC, ZEC, XMR, or some other promising project like those? Well, several times I commented about my doubts about the change from ETH to PoS and its possible centralization in the wrong hands, and the same goes for ADA (what will happen when Vitalik and Hoskinson disappear?). In the case of BNB, my sense of smell tells me that the centralized companies are going to weaken over time and that they are going to stop being protagonists. In the case of stablecoins, I believe that they have a temporary mission to moderate the volatility of the very volatile young markets of crypto assets, but that they have no reason to exist in a totally decentralized environment like the one that I believe will exist in 20 years, without inflation, which will surely result in a total recomposition of the relative prices that the MMT distorted in favor of corporations in the last 50 years. “Private” coins like ZEC and XMR are very attractive to the older ones, but I don't think they make sense for the younger ones, having very different goals.
So, for the moment, I think that the currency that will be used the most in a short time and for many years is the sat and that is why I get on the vibrant Lightning Network (LN) and its unique environment. Furthermore, sats can be collected relatively easily, with hundreds of apps being released by developers every day, and stored in the LN wallets that proliferate in the environment. Below I talk about the applications and wallets that I am using.
But first I would like to talk a little about the LN and compare it with BCH, a little to justify my decision.
Bitcoin adds transactions to blocks every ten minutes or so. Payments are considered secure after the confirmation of six blocks, a time frame of approximately one hour, depending on the state of the network, causing thousands of transactions to accumulate waiting to be added to the blocks of the chain. With this saturation comes high network fees, which are the payments that users make to miners so that their transactions are preferably included in the next block. The higher the commission, the faster the transaction will be included in the next block. These problems make transactions for a few cents on the dollar, or micro-payments, unfeasible because network fees far exceed the amount of these. The Lightning Network was born to solve these problems. But BCH too, according to its proponents. On the Lightning Network, payments don't need block confirmations and are instant and atomic. Atomicity implies that payments will be made or not: it is not possible for them to be left halfway in the event of a failure. In addition, it allows you to send funds as small as 1 satoshi, or 0.00000001 BTC, without custody risk and high commissions. Transactions on the Lightning Network take place outside of the blockchain in principle, with no delegation of trust or ownership, allowing users to transact nearly unlimitedly with each other.
The Lightning Network has been in a long testing phase since its launch in 2018. Various developers have been researching and testing projects. The main ones are Lightning Labs, ACINQ, and Blockstream. In March 2018, Lightning Labs released Lightning Charge, a tool for developers to build LApps with. LApps are Lightning applications, like payment services, that are built on the Lightning network.
As a technology, Bitcoin is years ahead of traditional banking, but as a monetary system, it still has to work a lot. Imagine all the little purchases you make throughout the day. Can you imagine buying a bus ticket or a coffee with a Bitcoin transaction? Using the main Bitcoin blockchain for small purchases is like using a bank transfer or check to pay for a cup of coffee. Let's not forget that Satoshi Nakamoto's vision was of a payment network. This is the best argument that BCH defenders make. However, for me, the Lightning network is the best solution that has been suggested so far. It's not ready yet, but when it is, we could see the kind of Bitcoin network that Satoshi Nakamoto envisioned back in 2009.
BCH is a hard fork of the original BTC blockchain. Although it was not the only one, it is the project that has the best marketing. It was born out of a long disagreement between 2015 and 2017 within the Bitcoin (BTC) community over the proper way to scale the peer-to-peer system. BCH allows mining blocks of transactions larger than BTC (1 MB), initially 8 MB and later increased to 32 MB, but does not respect the SegWit transaction scheme that BTC adopted at the end of 2017.
BCH is one of the currencies that cause the most doubts among newbies and experienced. Is it or is it not Bitcoin? Why do they have the same name? The mere fact of the confusion that is generated already makes me a little nervous. Not only that, BCH is not the only coin that is called Bitcoin, there are also Bitcoin Gold (BTG), Bitcoin Diamond (BCD), Bitcoin SV (BSV), and Wrapped Bitcoin (WBTC). All this complicates the situation.
I don't think hard forks are bad, because they are a great test of decentralization in action when there is a disagreement in the community. In short, from my point of view, the revolutionary characteristic of blockchain technology continues to be the concept of "trustless" that comes from having solved the problem of the Byzantine generals. That is the quid pro quo of blockchain technology, and hard forks prove it. But afterward, you have to prove to be good in practice, and that's where BCH still hasn't shown a guitar player's fingernail as we say in Argentina. After this hard fork, it became clear that Bitcoin is still the most widely accepted currency.
The original BTC community argues that the size of the block should not be increased, but the transaction speed must be increased, which materialized through the SegWit (Segregated Witness) protocol, which allowed the size of the information occupied to be reduced by 4 times for the transactions in the blocks, and with the creation of the Lightning Network as layer 2 built on the Bitcoin code, which allows a speed of 1 million TPS to be reached.
On top of that, the problem got a bit complicated for BCH. In November 2018, BCH suffered a hard fork that gave rise to Bitcoin SV (Satoshi Vision). Among his defenders was Craig Wright, who had told the world that he was Satoshi Nakamoto. Bitcoin SV increased the block size of its network to 128MB. BCH kept the size of 32 MB after the hard fork.
Being the Lightning Network a layer 2 mounted on the original BTC code that significantly accelerates transactions, which experienced spectacular growth in the last two years, which has a large number of developers working on applications on this protocol, and BCH being a somewhat mysterious and doubtful thing for the moment, it seems appropriate to think of Camilo in terms of sats. At least for the moment.
So how do I collect daily sats for Camilo?
There are hundreds of apps and games to do this on top of the Lightning Network.
For example, I have been using ZEBEDEE for a while now.
Zebedee is basically a platform to earn bitcoin rewards.
The company defines itself on its website as a provider of "virtual payments for virtual worlds." Zebedee can be considered a revolutionary platform, using Bitcoin to create a gaming ecosystem where it is possible to earn BTC rewards with payments through the Lightning network. This implementation can be integrated into several games already established in the community. I am specifically playing three games within the ZEBEDEE platform, which also serves as a sat wallet on the Lightning Network. The games are Bitcoin Chess, Solitaire, and Amazeballs (a kind of puzzle with balls). Payments stay in this wallet.
But also within ZEBEDEE there is an application that seems extraordinary to me. It's called Fountain Podcasts. There are a large number of very interesting podcasts on crypto topics and by listening to them you receive sats. The good thing about this is that you can listen to podcasts while doing something else, while the games need your attention. Fountain in turn acts as a wallet, so I leave the sats earned here. (my referral code for Fountain)
Coming out of ZEBEDEE, I get sats daily for reading really interesting articles in the Bitcoin Magazine app.
Bitcoin Magazine does not act as a wallet, so I send the sats earned to a Phoenix wallet.
The moment I am using all these solutions for 6 months, but I keep exploring the LN world because every day there is something new and fun.
Every morning, after exercising and having breakfast, I spend a little over an hour collecting sats for Camilo. In total, I can collect between 75 and 300 sats per day, depending on my skills and also the luck needed for some games.
If every day I collect an average of 150 sats, I can collect about 4,500 sats per month, that is, 54,000 sats per year. If I manage to remain faithful to this routine for 18 years, which is when I am going to give Camilo his wallet, then I will have collected about 972,000 sats, that is, 0.00972000 BTC.
At the current price of BTC ($28.5K, March 24, 2023) that means about $272.
It does not seem like a figure that can stimulate many, less an 18-year-old.
But this number arises assuming two powerful assumptions: 1) That in 20 years the dollar will exist as a fiat currency, which presupposes the existence of the BTC/USD pair, and 2) That the price of a BTC will continue to be $28.5. While the first has some probability of being true, the second has none. Let's remember that in 20 years we are going to have 5 halvings and that decentralization is going to be an important part of humanity for that time, with which we can expect that the long-awaited adoption and massive acceptance has already arrived, having won the battle against regulators and hostile corporations. (A term of 20 years seems more logical and less painful than a bet to reach a million dollars in 90 days, lol)
If we consider that the first is true in 20 years and that the price of a BTC is 1 million dollars in 20 years, then 972,000 sats will mean about $9,720, which is somewhat more attractive. And if the price of a BTC is 10 million dollars, then we are talking about $97,200, which seems like a good figure.
But what happens if the dollar no longer exists 20 years from now, or loses its international reference value? In other words, the question is no longer how many dollars a BTC costs, but how much BTC does a dollar cost?
It is here where I would like to elaborate a bit to talk about a structural issue of world economies, which is the enormous distortion of relative prices caused by the so-called MMT, Modern Monetary Theory from its implementation in the 70s when the dollar was established as currency. world reference. Precisely, what happened is a relative distortion in favor of large corporations and to the detriment of the population in general.
Relative prices refer to the costs of goods or services in relation to others. That is, it is the relationship between the prices of two different goods.
The relative price is an opportunity cost. Microeconomics is the study of how economic agents react to changes in relative prices and how these relative prices are affected by the behavior of producers. In any market economy, relative prices act as signals about the surplus or shortage that may exist in each particular field.
If we say that a bag of candy costs $1, can we say that this is a good price or not? Is the price too high or too low? Without other information at hand, you can't really answer those questions. You would need to know the cost of other goods, the salary you earn, and even the price of other candies of different brands. In other words, we should know how much a bag of sweets costs measured in kilograms of potatoes, or liters of gasoline, or average wages for the population. That is a relative price.
I firmly believe that, within 18 years, the currency that will be used the most will be the sat, whether this is legal or not, whether it is prohibited or not, whether we are obliged to spend and receive the evil CBDC or not.
So the question is not what can you buy with $200 or with $97,200, but what can you buy with 972,000 sats. That is a big difference, since, always according to my criteria, decentralization will bring about the greatest recomposition of relative prices that human civilization has experienced.
Let me give you a very simple example. When I was young and planning a fishing trip with my friends to the coast, the price of gasoline was not a relevant item. We did not calculate gasoline in the trip budget because it was very cheap. Today, for any trip, gasoline is one of the main items in any travel budget. What happened? Is the process of obtaining gasoline more expensive? No, actually, it's cheaper. So? Yeah! You guessed it! The explanation is that the oil corporations, probably the most powerful corporations on Earth, increased their profitability. This can be easily demonstrated by the so-called "Cantillon Effect" that I spoke of more than once in previous posts, which consists of the fact that, from the printing of currency by a centralized government office, it is the corporations that benefit the most, while that the population, in general, suffers the inflation caused by this spurious issue.
This example can be applied to everything you can imagine, from food to medical treatments, including entertainment, clothing, and kiosk cookies. The distortion of relative prices means that, among other things, millennials today cannot access a home as we could access it relatively easily 40 years ago. Don't look for big economic treatises full of bullshit about economic forecasts, because those who do it are paid desk dummies who work for the universities paid for by those corporations. The numerous daily economic reports are pure rubbish. They are useless. The corporations are deciding the future of humanity with the MMT and with the distortion of relative prices that they continue to manage in their favor with their daily actions.
Corporations use inflation as an excuse to increase prices and achieve better returns for shareholders. And the problem becomes more visible every day because the relative prices are completely distorted in a labyrinthine structure that will take a long time to unravel. The problem is magnified if one considers that, for 40 years, the concentration through mergers and acquisitions of large companies has made the concept of "competition" practically disappear from the markets, therefore, the large conglomerates do what they want with the prices.
My vision (and my most fervent wish!) is that the new generations, the kids that are being born today, incorporate the concept of decentralization into their DNA to begin to unravel the labyrinth of relative prices. When this happens, the prices of goods will tend to have more to do with labor productivity than with the decision of a bureaucrat at a desk to multiply the prices of a product by a factor that has to do with an "official index" of price increases, made by a moron who received orders from somewhere higher up in the machine.
The result of this rearrangement will be that 972,000 sats will buy many more goods than $97,200 today.
CONCLUSION
I sincerely hope that, in 18 years, the date on which I plan to hand over his wallets to Camilo, the biggest plagues that plague the planet have disappeared forever: The Death Star, Darth Vader, the Emperor, Jabba the Hutt and Bib Fortune (IMF, World Bank, BIS, big banks, central banks) and there is no more discussion about decentralization because it will already be part of the daily life of humanity.
In any case, and although it is very difficult to forecast 20 years, what we do know is that the world is going to be very, very different from the one we are living in today, and, if we manage to save ourselves from nuclear wars, plandemics and printing banknotes to stimulate the economy, decentralization, once imposed as a philosophical concept, will result in a more equitable world.
Camilo, it's worth it!
Thank you for reading! Decentralize yourselves as much as you can, and much more! Work for yourselves, not for others. When you work for someone else, they pay you what YOUR POSITION is worth, when you work for yourself, they pay you what YOU are worth. No one achieves financial independence by working as an employee. Live long and prosper!
Never forget:
As usual, none of the things written in this post are financial advice and are not intended to replace personal research. My sole intention in writing this post is informative. Several of the things discussed here could be wrong, so in no way can this post be construed as financial advice, and in no way should it replace your own research.
If you have any questions or comments, please feel free to leave them down below
You can also contact me at [email protected]
Twitter https://twitter.com/SirGerardThe1st
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