Fellow humans,
Allow me to start the new year with a question about Americans. America is by far one of the most high-speed nations on earth. We have one of the strongest militaries, advanced economies, and cutting edge technologies to accomplish nearly anything. Our citizens are smart, hard-working, and mostly benevolent.
What are we building in America to benefit the rest of the world?
Life is a rollercoaster which we cannot escape. Ups and downs, twists and turns, unexpected drops, and the freakish feeling of fear and excitement in the pits of our stomachs. Not only the drops, but the whole ride can be unexpected at times, and just when we think we’re able to anticipate the route, things switch up.
A dramatic introduction to say that we don’t know what the future holds, and we should always strive to adapt and overcome. Conviction is a complex concept, because there are universal truths which are forever safe to believe in, and then there are evidence-based opinion/fact hybrids which are more flexible in nature.
An example of a universal truth is the concept of respect. Respecting others has always been and will always be the right move. The other type of truth can become false as the world changes. For example, alcohol during the prohibition was unacceptable until the prohibition ended, even though alcohol didn’t change.
The key is to recognize turning points and understand what’s happening to ultimately set ourselves up for success. Life is filled with too many variables to be closed off to new ideas. We’re best served when we embrace and accept new information, learn something new, then move forward in a better direction.
Bitcoin (capital B) is the blockchain/network; bitcoin (lowercase b) is the token.
Bitcoin maximalism might be the best monetary/blockchain solution in theory. Having one sound chain to interconnect the world, and one sound monetary asset appears to be the most solid idea. It’s like having one common language throughout the world, but we know the world wants [needs?] multiple languages.
In other words, bitcoin maximalism does not work in reality. In fact, serious momentum is already moving swiftly in the opposite direction. Thousands upon thousands of crypto-assets already exist (we should avoid most), many have their own blockchain, and some have large and supportive communities.
My goal is not to reduce the importance of Bitcoin. Rather, my goal is to adapt. Maybe someday Bitcoin will be the only surviving crypto, but that’s not the case today, and doesn’t seem to be on the horizon. As of early 2023, the crypto ecosystem has no shortage of chain variety, and this seems to work well.
Why have different chains? Bitcoin is designed to settle peer-to-peer monetary transfers with no banks or governing bodies as middlemen. Simply send bitcoin on Bitcoin. Stacks and Ethereum are designed to enable fully-expressive smart contracts. Basically, automated protocols to reduce human involvement/error.
One blockchain cannot efficiently handle all features within the crypto space, which is the reason for separate chains, layer 2’s (L2), side-chains, etc. Lightning (LN) is an L2 programmed on Bitcoin to enable instant, nearly free payments, because Bitcoin will forever process transactions too slowly for retail use.
Too much information, not enough context? Today’s message is actually quite simple — Bitcoin is a chain, but not the only chain, and bitcoin is a token, but not the only token, so bitcoin might not be the only wise investment. Investors should strive to be ahead of the curve during the next phase of crypto adoption.
I’m sure many alternate chains have been growing substantially during the bear market (I’m not paying much attention), which might lead to huge paydays for investors. The more people rally around a chain, and the more useful a chain becomes, the higher probability for a token to explode in market value.
Bitcoin has been hovering around $17,000 for nearly 2 months, and the market sentiment is apparent — bitcoin is dying, which is hysterical because bitcoin reached nearly $20,000 for the first time in December 2017, then from January 2018 to November 2020, traded far below $17,000, falling to roughly $3,200.
It’s funny because old bullish prices quickly became new bearish prices.
Certain people hyper-focus on the all-time highs (currently $68,500), and dwell on the large percentage losses over shorter time periods. I’d rather focus on the pattern of the lows over longer time periods. Each cycle, bitcoin forms higher lows. During the last cycle, we would have been celebrating $17,000.
If we stay around $17k for the remainder of the bear market, then we’re on track to maintain higher lows, and we’ll be in fantastic shape. However, if we crash to previous cycle lows ($3,200), then we’re probably in terrible shape, but who knows? As long as the current cycle is similar to previous cycles, we win.
For the record, I’m currently invested in three tokens:
bitcoin ($16,650) — heavily and forever
stacks (21 cents) — hoping early adoption pays well
dogecoin (7 cents) — meme culture is a fun underdog (funderdog)
Until next time,
Salvatore Norge
P.S. — I was in bed by 9pm on New Year’s Eve, and regret nothing.
“Keep falsehood and lies far from me; give me neither poverty nor riches, but give me only my daily bread. Otherwise, I may have too much and disown you and say, ‘Who is the Lord?’ Or I may become poor and steal, and so dishonor the name of my God.” -PROVERBS 30:8-9
I’m not very wise. Never financial advice. Do your research.