Do ₿itcoin Hard Forks Help or Hinder the Iconic Coin?
It has always been clear to me that Bitcoin is a great investment, and the Bitcoin price keeps rising, so I can’t help wondering why that is not so clear to others. Hard forking is perhaps the most recent reason that makes people wary. But are they justified?
Despite the Forking, the Bitcoin Price keeps going up.
All right, I’ll admit that my predictions are not always exact. I’m not Nostradamus, I was stupid enough to predict, when Bitcoin was sitting at around $5800, that it would reach $6300 by the 25th of October. Instead, it took until the 29th of the month to achieve that level.
Some people think that I should stop making predictions. However if you add the value of BCH, Bitcoin Cash, and BTG, Bitcoin Gold to the value of BTC, Bitcoin, holders of Bitcoin through the last two forks now have not what seems will be for the next week or so, the ‘natural price’ of $6400 per coin (ignoring price fluctuations), but they have $6900 in fiat value. And growing. At the time of writing, Bitcoin has just reached a new all-time high of $6,415.28. Makes you regret not buying it when it was $5500 just a couple of weeks ago, does it not?
That is precisely why I always say, there is no wrong time to buy Bitcoin. The time is not wrong now just because Bitcoin is on a high. Next month, this price will be a low point for Bitcoin, if it drops back down to this level about the middle of November. Bitcoin, unlike water, does the impossible.
Bitcoin Weathers Storms
And Bitcoin has weathered another storm successfully, lifting consumer and investor confidence yet again. It seems that nothing can keep the good coin down. Not the Central Banks, not government regulations, not hard forks, and not even banning Bitcoin trading or mining. Every obstacle Bitcoin encounters just makes it stronger. We are the Champions! The people, not the bankers.
Illegal Bitcoin Mining?
This is a diversion from the main topic of this article, but I feel it’s important as a way of showing how Bitcoin endures.
Even when made illegal, tens of thousands of mining operations for Bitcoin and Ether are taking place where mining is severely frowned upon by the authorities. And it is often done ‘underground’, spreading electricity connections through neighbors, or otherwise defeating ways of monitoring their consumption, so as not to alert authorities.
Venezuela and the Bitcoin Phenomenon
A diversion: let me discuss Venezuela for a moment, and the mining going on there. It can be the only way for many people to make a living that is not instantly absorbed by the 1000% inflation rate. The government and Central Bank doesn’t like it. But really, can that economy actually be harmed? Are not people who make Bitcoin bringing money into the economy that would otherwise be missing?
Fortunately for miners, (and it’s probably one of the few places in the world where it is fortunate to have corrupt police), since the police are responsible for around 20% of the crimes there, and are underpaid, with the super-inflation meaning that their wage today can only buy them a cabbage tomorrow, they are more likely to take a bribe than arrest someone.
It is understandable. And the mining is difficult to stop. If people can’t take power from the grid without being noticed, generators can run on subsidised farmer’s diesel, up in the hills. Or small hydro-electric plants from rivers running through their land.
And the point is that this happens all over the world. Mining just can’t be stopped effectively. Cryptographically connect for a few seconds to a satellite, or to a multiplexed proxy VPN and you’ve updated your Blockchain. But Venezuelan Bitcoin mining is just an example of how difficult it is for any authority to stop miners. Even in a very authoritarian regime. Bitcoin wins almost always against politicians and regulators.
But back to the Bitcoin splits…
A Dark Cloud on the Horizon:
The next ‘perfect storm’ will be around the middle of November, when the SEGwit2 fork is due to occur, although doubt is now growing as to whether it will have enough miner support to happen.
But whether it happens or not, it’s not going to harm the value of Bitcoin. Not for long anyway. That is the light shining through the dark cloud.
A pattern seems to be emerging. Up to about a week before a fork, Bitcoin value rises, as more people shift money into Bitcoin to get hold of the extra value provided by the new coin that emerges.
Some Take Chances to make ₿itcoin wins:
Some people will remortgage their house to do that, although I wouldn’t advise it, (because I never give financial advice), but who can blame them? Nobody can predict what value the SEGwit2 coin will have immediately after coming into existence. However, going by past experience it’ll be between $300 and $800.
So after the fork, you’ll have some new coin. Added value. But you might need to sell that new Bitcoiney-fork-coin as soon as it becomes tradable, to retain that profit, if you are going to take your profit immediately rather than wait to see what happens, because the pattern says that forked coins lose value quickly, before taking a long time to pick up again.
If you own 100 BTC you could thus make $40000 overnight. That’s a great instant Bitcoin win. But at today’s prices, if you are not someone who got into Bitcoin a couple of years ago or earlier, it could cost you a house to buy 100 BTC.
You Keep What You Kill!
So after the fork, you’ve still got your Bitcoin. If you bought-in just to profit from the fork, you might want to sell that. If that is the case, and you wait until about a week after the fork, you are likely to make another load of profit. Because the pattern continues. After the fork, Bitcoin value will probably rise above the highest value it achieved before the fork. Then it’ll drop a bit as people sell off after taking their fork profits. Then it’ll begin to soar again.
Not that I recommend going down that road. The road of speculative trading, that is. As I’ve said before, my approach to Bitcoin is buying and holding. You keep what you kill!
That said, I did most of my buying when Bitcoin cost much less and I got some for contributing knowledge to the ‘canon’, or to company publications, not that I thought much of that at the time. Most publishers, I have found to be a bunch of crooks. But although I didn’t really value that then, I do now!
On a side note, but relevant, have you read about Julian Assange lately?
You Hold You make Bitcoin Wins
You sell, long-term, you lose. But whatever, when you have it, keep it safe. Use a hardware wallet like the Trezor, or the Ledger Nano, and also engrave your passwords, secret keys, and seed words, using a Dremel engraving drill, onto aluminium plates (safer than writing them down) and deposit them in multiple safety deposit boxes that you can only get access to by giving a password. But if you lose your Trezor and forget that password, you are basically f****d.
Don’t say you’ve not been warned! I’ll write soon about generating strong passwords, and about making up memorable ones in your head from words and numbers that only have significance to you. Whilst someone might be able to steal your identity, they can’t get what’s in your head without torturing you. So read Bravo Two Zero by Andy McNab to learn how an SAS squad withstood months of torture and fed false information time-after-time to their captors in Iraq. And if you have valuable information in your possession, protect yourself. Personally, I’d recommend being paranoid! I won’t go into more detail on this matter, but if you don’t understand what I mean, you are not quite bright enough to own Bitcoin, let alone trying to take any arguments on board about what will make the Bitcoin price continue to rise.
Don’t Stop Just Because you Can!
Don’t forget that every new Bitcoin you buy adds value to Bitcoin that you already own! You add to the market cap, you add to the value.
Personally, I still take profits from other investments and put them in Bitcoin. I can’t think of any other investment that would be so profitable, and regular readers will know that I believe Bitcoin has no limit on how valuable it will become. If I live long-enough to see the Full Value emerge, (and that’ll be greater than $tens of millions per Bitcoin, I think I’ll be able to buy a younger body! Joking, but not really!
I clearly hold the long-term view and believe in Bitcoin’s long-term potential. You can’t go wrong by buying and holding, IMHO, because without stress you then benefit from any forking that occurs, whilst, if you bother looking, watching the value of Bitcoin rising, month by month. Of course there will be more trials, more regulations, and more forks. Bring them on. They will only add to the value of Bitcoin.
Jamie Dimon—the Ass of ₿itcoin
Just a word. As for that Ass of the Year, JP Morgan Chief Executive Jamie Dimon, well, let’s ignore the fact that JP Morgan is the only reason Nicola Tesla’s vision of free electricity for everyone was dashed. If they don’t profit from it, they seem to want it to disappear! Ahh… or perhaps don‘t ignore it. Each of us should take into account when considering the moralistic standpoint of JP Morgan, their past behaviour. Dimon, literally the voice of JP Morgan Chase and its ass, is good for Bitcoin price. When he says Bitcoin is a fad, a bubble, or a con, the value rises to prove him wrong. And being wrong all the time further discredits what seems to me to be the morally corrupt firm of JP Morgan. Yes, I’m aware of libel law! Come on Jamie, slag Bitcoin again. People trust you so much that they take the opposite of what you say as the truth. And those people have been proven right on Bitcoin so far. So the more you slag it off, the better it gets for us. I bet that really chews you up inside. But your voice is rapidly losing credibility, as if you didn’t know that already. So far, you’ve had Scargill effect on JP Morgan. Keep it going…
Not another Nostradamus Like Prediction?
So, another foolish prediction coming up: Bitcoin will reach $6800 by the 12th or 13th October 17. Then some profit taking will happen, and it could drop down to as low as $6250. Then, after the SEGwit2 fork, the price will shoot up again, reaching $7000 or more by the end of October. Or should I say…
In the month of the dark of the month before the solstice;
When Mars and Venus sit early in the sky;
The Witness will rise, Segregating the prophet;
And the arrow will follow the curve.
Bitcoin Winning is ₿asic Pattern Recognition!
I haven’t been wrong so far! Well, okay, I have, but not by far. Well, okay, sometimes I’ve been far off, but not by miles. Well, sometimes by miles, but not to the moon and back! But my judgement is good. Well, not if you include my ex-wives… Okay, I give up! You keep arguing like that, and I can’t win!
Disclaimer: Please don’t take my word for anything! Or at least don’t act on it… And don’t try ‘deconstructing’ my writing. It’s easy to find hidden messages where none exist. Or do they? Whatever, do your own due diligence before you invest a penny in anything, and remember that you could lose everything you invest in anything for any random reason from stupidity through recklessness to putting your trust in the wrong place or person. And there are always software errors or being robbed. And my usual last word: I’m not, never have been, or ever will be a financial advisor. I’m not keen on them, as a rule, but you never know… you really don’t; somewhere, someplace, there may be a good one and you may get some reasonably actionable advice from that person at a cost that might not be more than your investment is worth.
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