Revisiting Bitcoin Fair Value Calculation

In an April 2014 article, I demonstrated how one might approach a fair Bitcoin valuation.

  • Original Methodology: What fraction will Bitcoin capture
    of the float needed to support daily global commerce?

My methodology was based on the demand that Bitcoin would generate if it displaced a small fraction of cash and credit used for retail and commercial payments around the world. At the time, Bitcoin had a value of USD $450. I estimated that if it captured 5% of global payments, it would have a fair value of about $10,000/BTC (I didn’t complete the calculation—I left that up to the reader. That’s because I was concerned that publishing such a prediction would cause me to lose credibility as an economist and blogger). For what it is worth, I also predicted that a rise to $10,000 would take 5~8 years.

As you might imagine, my friends and family urged me to unload my BTC investment. The April 2014 price of $450/BTC seemed very high to most armchair analysts. After all, thirteen months earlier, it had been just $45.

Yet, now, just 2½ years later, Bitcoin has reached $18,000 per coin. Last week, on Dec 7, 2017, it climbed 40% in just 40 hours, and 120% in less than 2 months. Naturally, this leaves everyone asking if Bitcoin’s rapid rise in value represents an investment “bubble”.

…And so it is time to update the calculation of a fair value for Bitcoin. I can’t do better than point to a terrific prediction model described by Divyanth Jayaraj. His answer to a question at Quora presents a sound basis for valuation—much better than my original valuation method. How so?…

  • Reserve Methodology: What fraction of int’l business will be
    settled with the transfer of Bitcoin instead of Gold or Dollars?


Bitcoin is rapidly demonstrating viability as a reserve rather than a daily transaction currency. Few people believe that Bitcoin will replace national currencies throughout the world, but it very well may replace gold for government and interbank settlement, and for large intercontinental purchases of commodities, such as oil, grain or airplanes.

Sure! When developers and miners get a handle on transaction cost and delays, it may also become a de facto instrument for retail payments and debt settlement even among consumers. But, even if Bitcoin never achieves this status, Divyanth’s excellent analysis is still valid.

I won’t steal the author’s thunder. Click the link and learn what is very likely to be a fair future value for Bitcoin. Prepare to digest a very large number. I didn’t think of this valuation methodology, but I agree that it represents a realistic peek into the future.

For a few other methods of determining Bitcoin’s inherent value, check out the links at the bottom of my original article. But that was then and this is now. Give extra weight to this newer analysis. The methodology is more accurate given what we know now.

Ellery Davies co-chairs CRYPSA, publishes A Wild Duck and hosts the Bitcoin Event. He was keynote at Cryptocurrency Expo in Dubai. Click Here to inquire about a presentation or consulting engagement.

Bitcoin: up 120% in less than 2 months

At the end of October, I delivered a keynote speech at the Cryptocurrency Expo in Dubai. That was just 5 weeks ago. When I left for the conference, Bitcoin was trading at $6,300/BTC. But in the next few weeks, it reached $10,000. Last week, I liquidated part of my investment at just under $13,000/BTC. Now, Bitcoin is about to cross $16,000. (I began writing this 10 minutes ago… But it has risen another $1600.00 since then. Now, it is $17,000).

Dear Reader: I believe in Bitcoin. Yet, there is a “But” in the last paragraph below…

I believe in Bitcoin. Its rise is not fueled solely by investor hysteria. Rather, it is a product of delayed appreciation for a radical, transformative network technology.

In the mid 1970s, the microprocessor was spreading to every consumer gadget. It started a trend toward tools that added power and enjoyment to all facets of life. And they were quickly becoming faster, lower-power, lower-cost and more ubiquitous. If you understood the potential of the computer chip before mainstream investors, you couldn’t really invest directly in the microprocessor. After all, it is a platform improvement. But you could come very close—You might have invested in Intel, Fairchild or Texas Instruments.

Jump forward 20 years: In the mid-1990s, the Internet was spreading to every class of citizen and to all corners of the earth. But just as with a computer chip, you could own a web site, but you couldn’t own a piece of the internet’s market potential. You can’t invest in an idea, unless you are the inventor and you hold a patent.

But, 5, 6 and 7 years ago, many individuals saw the future. They understood that Bitcoin is transformative. They recognized that—contrary to popular misconception—Bitcoin is backed by something more tangible than dollars, Euros and Renminbi. More importantly, it exhibits the potential to become the global reserve currency. And it continues to do so, even as internal bickering threatens its utility as a consumer payment instrument. That’s because it diverts liquidity away from gold and national FIAT. Ultimately, it forces governments to be transparent and accountable to its citizens. This is further reinforced by rampant inflation in countries around the world and a growing list of trading partners who seek alternatives to the US dollar.

But, just like real estate, the supply of Bitcoin is capped. No one can produce more. It’s the math, stupid! Even if you only realized this one year ago, you still would have reaped a 2000% return on your investment as of this morning. (I am cherry-picking here, but Bitcoin had just crossed $630 on October 20 2016).

Let’s be clear: This is not a dot-com bubble or a 17th century Dutch tulip bulb mania. It is far more comparable to the 19th century California gold rush. The only frenzy is to acquire a functional instrument that is still trading for far below par value—but with the strange caveat that hoarding retards liquidity and the ‘functional’ adoption that we need to sustain long-term value.

The Bottom Line

In the grand scheme of things, Bitcoin is still undervalued—even at $17,000/BTC. It will fall and it will rise, but it will certainly be valued higher years from now.

…But, I must admit that this sudden and urgent race into outer space is a bit unsettling. From an investor perspective, it is not rational to leave when I recognize that the exuberance is rational. Yet, here we are at $17,000. I am taking some bitcoin off the table—A bit of bitcoin. I have taken some Bitcoin off the table.

Dr. Steven Gundry says plant-based diets are the problem

Have you seen the clickbait campaign that focuses on the research of Dr. Steven Gundry. It employs a slimy, photo-tile lure that asks you to turn up your speakers and then hawks a product or service disguised as a breakthrough discovery. These scams force the viewer to stay on the page. Typically, there is no indication of how long the video is, or any way to skip forward,

But often, it is hard to tell if a photo tile is news or clickbait. Big companies like Yahoo and Outbrain intermingle genuine news with marketing scams, teasers and outright fake news into an array of little photos at the end of every feature. This particular clickbait may be a story of a dogged counter-cultural researcher with a genuinely relevant finding. It could be newsworthy…I’m just not sure. Dr. Gundry clearly believes that our health is adversely affected by many of the plant based foods that we thought was healthy, because of a defense mechanism linked to lectin.

Steven Gundry Food Pyramid

Passing judgement on Dr. Gundry’s evolutionary claims and diet recommendations begs for independent clinical studies, or at least the analysis and commentary of scholars in nutrition, gastroenterology and evolution. But, like Robert Atkins and Dean Ornish, Dr. Gundry seems earnest in his research and motives. I don’t think that he is selling anything other than his opinion.

I found web sites and white papers that summarize his research and conclusions without a scammy video. If true, this would be an eye-opener—completely unexpected! While his points fascinate, I don’t have the tools to determine if this may be legit. This certainly merits vetting.
For example, Gundry claims that farmers have selectively reinforced a genetic mutation in cows, which appeared only two thousand years ago—and that this has resulted in a lectin-like protein in milk called Casein A1. (Normal cows make Casein A2, a safe protein). Apparently, the only herds of “normal” cows are on farms in southern Europe. Could this result in food poisoning for the rest of us? Dr. Gundry is pretty convincing that the answer could be “Yes”.

This article is a stub without a conclusion. Rather than passing judgement, I encourage further inquiry. Reader feedback is invited. What do you think about Dr. Gundry’s analysis and claims. Might there be adverse problems associated with many “healthy” vegetables and out of season fruits? Tell me, doctor: Must I give up sun-dried tomato and eggplant?!

Will Futures Market Affect Bitcoin Value or Viability?

The Chicago Mercantile Exchange (CBT) is likely to begin listing options contracts for Bitcoin futures. And the CBOE is very likely to follow suit. What impact will this have on the value of Bitcoin holdings around the world? And what impact on it’s use as a money transmission mechanism?

This Financial Times article* explains that an internationally accessible options market will create the first opportunity for betting against Bitcoin, other than unloading coins which were previously purchased. Some individuals feel that this could precipitate a crash in the Bitcoin exchange rate.

I disagree. Buying “puts” or Selling “calls” against a commodity risks upward spikes, because individuals writing an uncovered option must make good on the contract buy buying it, even if the price has recently run up. This pushes the commodity even higher into the stratosphere—until the buyer unloads to realize his gains. This magnifies short term volatility (sometimes massively), but has no effect for long users or term buy-and-hold investors.

Contrary to conventional wisdom, it also has no effect on the utilitarian value of Bitcoin as an instrument of debit, payment and settlement. Volatility has no real effect on payment users or long term investors. But adding sanctioned financial markets—even risky ones, like CBT options—adds demand to capped commodity. Like real estate, no one can make more Bitcoin. There will never be more than 21 million units. So, in this respect, the new market will push ever more early investors into millionaire territory.

* Disclosure: I had no role in this article, and I do not know the author. But The Financial Times was a sponsor for my keynote presentation to the Cryptocurrency Expo in Dubai 3 weeks ago (End of October 2017).


Big insight from tiny fraction of bitcoin owners

Quick—Take a guess: How many individuals own at least 1 BTC?

I was asked this question today at Quora, a popular Q&A blog covering a variety of technical and economic disciplines. Under my alias “Ellery”, I am the most viewed author on Bitcoin and the blockchain.

While this question may sound like a factoid for a trivia game, the answer has far reaching impact on your pocketbook and your future. It goes to the heart of a debate between warring factions: In the 2nd half of this answer, I address a more pressing question:

Is Bitcoin a pyramid scheme? Or are we still early on the adoption curve?

But, let’s start with the question at hand…

There is no certain answer to the number of people who own Bitcoin or how many own more than 1 BTC. We know that tens of millions of wallets have been created, but this certainly doesn’t help. Although the value of every single wallet is publicly disclosed on the blockchain (most have a zero balance), there is no way to determine who owns each wallet. Some may be controlled by organizations or custodians on behalf of many individuals, while others may be just one of many wallets with a single owner.

Most of my Bitcoin is in a wallet or a vault hosted by Coinbase, the San Francisco exchange. When I log into my account to view my wallet ID, I see that I have dozens of wallets—all valid. The large number of wallets is not related to my wealth. Rather, it a byproduct of my many small transactions. Coinbase creates a new wallet each time that I buy, sell, or purchase something with BTC. There are good reasons for this practice, but it certainly muddies the correlation between wallets and number of owners.

There are 16.6 million coins in circulation today (a bit less, since some have been irretrievably lost). That puts a cap answering the question. There cannot be more than this many people with a full BTC—currently worth about USD $5900.

But, we know that the number of individuals with a full coin is considerably less. After all, many people in my own circles own dozens of coins, and Satoshi is very likely to hold 1 million BTC. Coinbase and Bitstamp are just two of very many custodial exchanges (i.e. they offer a cloud wallet or vault service to their clients). They host many hundreds of wallets with more than 50 coins. In almost each case, the client has provided single-user taxpayer information to these services, and so it is very unlikely that a significant fraction of these wallets belong to more than a single person or family.

And, let’s not forget that a far greater fraction of exchanges fly under the covers. That is, they don’t collect taxpayer information or report the wallets that they administer to any authority—nor to analysts or journalists like me.

So, while no one can accurately estimate the number of individuals who own 1 or more BTC, the answer is very likely under 2.5 million, worldwide. 1

The number of people who have heard of Bitcoin is growing rapidly. In the United States, fewer than one in twenty people were aware of Bitcoin just 2½ years ago (at the beginning of 2015). By September 2017, almost one in four USA adults has a reasonable idea what it is—and many of them have an opinion about its future. 2

There will never be more than 21 million bitcoin. This is a mathematical upper limit. Compare this with the current US population of 323 million. So even if all Bitcoin owners are in America (they are not!) and if no one owns more than 1 BTC, fewer than 1 in 19 Americans could own a full Bitcoin today and fewer than 1 in 15 after all bitcoin are mined.

If we consider the global population of 7.6 billion, fewer than 1 in 458 people could own a full Bitcoin today. Since most early adopters have more than 1 BTC, the actual fraction is probably much smaller than 1 in 25,000 individuals.

In the introduction, above, I said that the question about how many people own more than 1 BTC leads to a more profound question. In fact, this innocent trivia question, leads to insight about adoption and the economics of investing in a deflationary instrument as it spreads beyond speculators, into commerce and all sorts of institutions.

Moral of the story…

The original question asks for a simple number. It doesn’t ask for editorial perspective. But it’s tough to resist. With fewer than 1 in 25 thousand people owning a bitcoin, a reasonable question is:

Will adoption increase, even if interest is limited to only one sector?

For example, what if Bitcoin falters in all but one of these venues?… Bleeding edge geeks, collectors, investors, p2p payments, interbank transfer, debt settlement, or treatment in some regions as a full-fledged currency.

Answer: Even if Bitcoin continues to show strength in just one of these areas, it will eventually be used or accumulated by millions of new users—even if they don’t realize it!

Do you see where I am going with this? Even if you believe that Bitcoin will…

  • never be treated as a store of value (this is nonsense of course),
  • only be used on one continent (nonsense, again),
  • never erode payment & settlement services such as Visa or PayPal (it already has),
  • that governments can successfully block payments or deter growth (they cannot—and they are gradually realizing that it does not interfere with taxing or spending or sovereignty),
  • that another digital coin will overtake Bitcoin (it cannot—the reasons are subtle, but they are well understood)…

Even if you believe in all of these limiting factors, the overall demand for Bitcoin has barely begun. We have not even started climbing the hockey-stick curve toward limited adoption as an occasional, alternative payment mechanism.

At conferences and in my own classroom, I am often asked: Should I still acquire Bitcoin? —Or is it too late? After all, it has risen from a fraction of a penny to $6,000 in just a 7 years. And from under $1000 to $6,000 this year alone!

I am not a financial advisor. I often speculate, but never offer guidance. I embrace the wisdom that past performance is never an assurance of future gains. But, I ask students to look at the assumptions and at the math: Unlike US dollars, shares in Apple, pork bellies or gold pressed latinum, Bitcoin is firmly capped. There will never be more than a paltry 21 million coins. That means that each coin absolutely, positively must increase in value with even a modest adoption scenario.

The Argument Against Bitcoin

Bitcoin is a pure supply-demand commodity. Since the supply is fixed and well understood, the only argument against acquiring Bitcoin arises from a belief that demand will dwindle. This is the argument of someone who believes that Bitcoin will fail to gain any further traction in any sector.

Perhaps you believe that something else will displace it, or that governments will find a way to effectively defeat it. If you have been reading my Blog (or my Quora answers) for more than a few months, then you already know that neither scenario is realistic.

I believe that investment in Bitcoin a speculative asset retards adoption. I defend this opinion in many interviews and articles. Although I hope for fewer speculators and more ‘legitimate’ users, I own an outsize share of the world’s future value store, transfer media and fungible, liquid asset. I am guilty of the speculation that I seek to deter.

1 & 2 CRYPSA Research, Feb 2015 and Oct 2017, Cryptocurrency Standards Association. Polls conducted at Rein’s New York Deli in Vernon CT and Spectrum Center, Irvine CA.

Ellery Davies co-chairs CRYPSA, publishes Wild Duck and hosts the New York Bitcoin Event. He sits on the New Money Systems board at Lifeboat Foundation and kicks off the Cryptocurrency Expo in Dubai this month. He frequently consults and presents.

Fundamental Particles & Forces: What do we know?

Do you remember all the hoopla last year when the Higgs Boson was confirmed by physicists at the Large Hadron Collider? That’s the one called the ‘God particle’, because it was touted as helping to resolve the forces of nature into one elegant theory. Well—Not so fast, bucko!…

First, some credit where credit is due: The LHC is a 27-kilometer ring of superconductor magnets interspersed by accelerators that boost the energy of the particles as they whip around and smash into each other. For physicists—and anyone who seeks a deeper understanding of what goes into everything—it certainly inspires awe.

Existence of the Higgs Boson (aka, The God Particle) was predicted. Physicists were fairly certain that it would be observed. But its discovery is a ‘worst case’ scenario for the Standard Model of particle physics. It points to shortcomings in our ability to model and predict things. Chemists have long had a master blueprint of atoms in the Periodic Table. It charts all the elements in their basic states. But, physicists are a long way from building something analogous. That’s because we know a lot more about atomic elements than the fundamental building blocks of matter and energy.   [continue below image]

So, what do we know about fundamental particles the forces that bind them? HINT: There are 61 that we know of or have predicted and at least two about which we don’t yet have any clue: The pull of Gravity and dark matter / dark energy.

This video produced by the BBC Earth project is an actors’ portrayal of a news interviewer and a particle physicist. If we were to simply watch these two guys talk in front of a camera, it would be pretty boring (unless, of course, the physicist has charm and panache of the late Richard Feynman or my own Cornell professor, Carl Sagan). So, to spice it up a bit, BBC has added a corny animation of two guys talking with an anthropomorphic illustration of cartoon particles. Corny? Yes! But it helps to keep a viewer captivated. And, for any armchair physicist, the story is really exciting!

See the video here. It takes a moment to load—but for me, the wait is worthwhile.

Jump into Bitcoin with Intuitive Understanding

In the past, I have written articles for beginners:

More recently, I have written about economics of adoption, tech issues / growing pains, and the politics of a stateless money that cannot be controlled:

It’s time to try something different. The largest segment of society is still sitting on the sidelines. They want to know more about Bitcoin, but they don’t want baby steps. They are business people, students, armchair economists or investors—and they want to get up to speed quickly.

Grab a cup of coffee and view these two videos by the eloquent and charismatic Andreas Antonopoulos. They can bring anyone up to speed on the economic and geopolitical ramifications of Bitcoin—without wading through code, math or gobbly-geek. If you are college educated or experienced in finance or economics, these short presentations are all you need. You can fill in the blanks with your own experience or by checking out the articles linked above. They provide the missing details.

Who is Andreas Antonopoulos?

No one knows who is Satoshi Nakomoto, the effusive genius behind Bitcoin and the blockchain. So without an inventor or founder to appear on TV news interviews or the evening talk shows, we have Andreas Antonopoulos as the charismatic face of Bitcoin. He is intelligent, passionate, incredibly articulate and he is an advocate for individual empowerment.

Like Andreas, I teach a class on the Blockchain, give academic lectures, consult to banks and businesses, write columns and develop courseware. But there is no way to get around the fact that I run a distant second behind Andreas. His voice (and his widow’s peak hairline) are associated with the most important financial development of the 21st century.

I first met Andreas at the 2015 MIT Bitcoin Expo. Later that month he was keynote speaker at the New York Bitcoin Event at which I was co-host and producer. Way back then, Andreas told me that Bitcoin would never become a money—and so, it would never be a threat to national currencies. Well, if these two videos are any guide, then he has certainly changed his mind. Either way, my more popular peer is now in violent agreement with my view of Bitcoin’s full potential, and so it is no accident that these videos will also give you a dose of our shared economic and political perspective.

  1. Fake News, Fake Money (26 minutes)

2. Money as a System of Control (17 minutes)

These videos don’t describe how Bitcoin works, where to obtain it, or how it is mined. Those are just details. Instead, the videos put Bitcoin into perspective against the history of money and the geopolitical interests of governments. Once you have viewed the videos, browse the articles linked at the top of this page. They backfill the details. Then, you will have become a Bitcoin pundit the quick way…by jumping into the deep end of the pool!

Bad News is Good News for Bitcoin Investors

Bitcoin was hit by a double whammy this week. On Tuesday, Jamie Dimon of JP Morgan declared that Bitcoin is a fraud that will “blow up”. Then, just this morning, a Bitcoin exchange in China announced that it would shut its doors in response to verbal pressure from regulators and an uncertain regulatory environment.

Don’t ya just love it when bad news breaks on Bitcoin? I sure do! It creates a buying opportunity. After all, just look at what happened after the last five bouts of bad news:
[chart updated at end of Oct 2017]

In each case, the Bitcoin exchange rate dropped—very briefly—and then climbed higher with renewed vigor. Heck it, doubled from $2400 to $4800 in just the past month! But here’s a the real question: Does either bad news events have legs? Does it spell the end of Bitcoin adoption and enthusiasm, at least for now?

After all, if it were discovered that the math behind Bitcoin were flawed, and that anyone could create forged coins, the empire would come tumbling down. In my book, this would constitute a crisis. But what about now? Do these two damning events—and a 35% correction in the past week—constitute a long-term crisis? To answer, we must first determine if public fears over these two events are credible…

China and JP Morgan: (a) A frightened authority (b) Simple Ignorance

Like most governments, the Chinese are concerned that the growing flight to Bitcoin is impacting liquidity of their national currency. [A superb presentation by Andreas Antonopoulos—Click it, after you read this article]. They are also concerned about the large number of Bitcoin exchanges that operate outside of a tight regulatory framework. They obscure the flow of money in and out of the country and they are a clear scapegoat for tax evasion or other criminal activity. Like any agency charged with financial regulation, the Chinese seek to reign in and regulate these maverick exchanges.

It is interesting to note that the Chinese government is not discouraging Bitcoin mining or even personal savings—only the proliferation of unlicensed exchanges and quasi-anonymous users. After all, More than 50% of all mining is done in China, and it helps to balance the loss of liquidity in the national currency.

Bitcoin is experiencing increased adoption—not just as a payment mechanism—but as a new form of stored value. Is this is a bad thing for governments? Surprise! When a government loses control over its own reserve and monetary policy, it may present more of an opportunity than a threat—for both  citizens and governments. Gradually, economists, treasury secretaries, reserve board governors and monetary tsars will are coming to the same conclusion. But regardless of your position on this point of debate, here is a fact that is less controversial…
When governments attempt to restrict an activity that cannot be economically monitored or enforced—or at least when they attempt to do it in a way that leaves no relief valve for hobbyists, business, commerce, research or NGOs—they ultimately fuel the activity that they set out to stifle. Ultimately, if the public cannot discern a reasonable basis for government censorship or excessive restrictions, it leads to interest, innovation, adoption and the emergence of hot new markets.

Consider, again, the graph of Bitcoin price -vs- Bad news events at the top of this page.

On each date highlighted above, there was a damning piece of information that should cause early adopters to reconsider their enthusiasm for Bitcoin. In fact, the Hearn Dump really should have ended the whole party. A core developer sold off his entire BTC savings and claimed that the experiment was a failure. He published an article with his reasons for believing that Bitcoin was dead. Likewise, the SEC decision to prohibit the creation of an exchange traded fund (the Winkelvoss ETF), it sent a clear signal that governments really didn’t consider cryptocurrencies to be an asset at all.

But the graph demonstrates that each piece of “bad news” fueled a miniature rally. That’s because Bitcoin has none of the elements of a pyramid scheme. It is not an MLM and it cannot be manufactured or controlled by any organization. Rather, it is an exercise in pure supply, demand and market recognition. It is pure adoption mechanism that leads to a two-sided network. It’s benefits multiply as more users join the party.

What about Jamie Dimon at JP Morgan? He says that Bitcoin will crash.

Bitcoin has had a rocky road these first 8 years. Major exchanges have been bankrupt or worse, enormous criminal conspiracies were among the early adopters, the SEC has prohibited the creation of an ETF based on cryptocurrency, rogue spin-off coins are driving a wedge among users, and there are serious problems related to scaling and governance. A casual observer might wonder who is in control and who can be held responsible? After all, the idea of an economic mechanism that is altered by democratic—but decentralized—factors is new and radical. How can Bitcoin evolve, adapt and grow in the absence of an authority at its heart?

This confusion arises from the newness and unfamiliarity of blockchain architecture. Skepticism is natural. Indeed, Bitcoin is guided by an authority, but it doesn’t reside at the center of the network. It resides at the edges. This is the concept behind Proof-of-Stake and Proof-of-Work. Unlike a classic authority, your will matters just as much as anyone else’s. It is exceptionally democratic, self-enforcing, and resistant to gaming.

This is a difficult concept to wrap our heads around, because it is so different than we were taught and it is different than we have experienced for centuries. For this reason, Jamie Dimon’s statement that there is nothing behind Bitcoin presents a buy opportunity for individuals who were late to the table. Jamie may not yet understand intrinsic value, but we can educate ourselves. Bitcoin has more standing behind it than the US dollar.

… But don’t take this as investment advice. Bitcoin should not be thought of as an investment. It is the future of money. Speculation (both day trading and long term buy-&-hold) act to retard the eventual adoption of Bitcoin as a serious monetary instrument. Although I have Bitcoin, I do not encourage people to think of it as an investment. It is more important that it be used for ordinary business and commerce:

  • Products and services
  • Loans and debt settlement
  • Stored value transfer (gift cads & prepaid services)
  • Escrow
  • Quotations and price guarantees
  • Interbank exchange
  • Smart contracts
  • Liens and letters of credit

When the fraction of Bitcoin transactions servicing these consumer and business activities exceeds the fraction driven by savers and speculators, the dominos will begin to fall rapidly.

Articles about Jamie Dimon and JP Morgan…

  1. Jamie Dimon: Bitcoin Is A Fraud
  2. John McAfee: I challenge Jamie Dimon’s bitcoin skepticism
  3. Crypto Is Here to Stay (Whatever Jamie Dimon Might Say)

Can we draw a conclusion? Certainly, we can. And, we can toss in a prediction. It’s not even a high risk prediction. The recent pullback has no fundamental basis. No legs at all. The two “bad news” are not just a red herring—they present a buying opportunity. If I were allowed to give investor advice (I am not; and I don’t), I would express my opinion with more verve and obvious conviction.

Caveat Emptor (Everything comes with a disclaimer)…

I am a Bitcoin educator, proponent, early adopter and blockchain consultant. But here is the contradiction: Although I am also a Bitcoin investor, I discourage others from treating Bitcoin as an investment. Use it, but please don’t save it!

Why do I discourage others from investing in Bitcoin?

It’s not that I don’t believe that Bitcoin will increase in exchange value. It will rise spectacularly, as adoption grows. But Bitcoin will not become ubiquitous and trusted until the majority of coins are recycled into the market for payments, settlement, loans, interbank transfers, escrow, contract settlement, etc. That is, its use for business and commerce must exceed the fraction of trades that are driven by savers and speculators. Until this happens, Bitcoin will remain volatile. It will be the subject of suspicion. It won’t be used for large settlements and it won’t become the money itself.

Speculation acts against fluidity. It won’t block the eventual acceptance of Bitcoin as a global currency. Hoarding is not a deal stopper. But It retards momentum and delays the inevitable.

Ellery Davies co-chairs CRYPSA, produces The Bitcoin Event, edits A Wild Duck and is moderator of LinkedIN Bitcoin P2P, the largest discussion group of it’s kind. He is keynote at this year’s Digital Currency Summit in Johannesburg and sits on the New Money Systems board at Lifeboat Foundation. Use the contact form to inquire about a live presentation or consulting engagement.

Spell it Out: What, exactly, backs Bitcoin?

On August 1 2017, the value of a Bitcoin was at $2,750 US dollars. Today, just over one month later, it is poised to leap past $5,000 per unit. With this gain, many people are asking if Bitcoin has any genuine, inherent value. Is it a pyramid scheme? —Or is it simply a house of cards ready to collapse when the wind picks up?

In a past article, I explained that Bitcoin fundamentals ought to place its value in the vicinity of $10,000.* (At the time, it was less than $450, and had even fallen to $220 in the following year).

For many consumers viewing the rising interest in Bitcoin from the stands, there is great mystery surrounding the underlying value. What, if anything, stands behind it? This is a question with a clear and concise answer. In fact, it has a very definitive and believable answer—but it is easiest to understand with just a little bit of historical perspective.

At one time, G7 fiat currencies were backed by a reserve of physical Gold or the pooling or cross-ownership of other currencies that are backed by gold. That ended in 1971 when the Bretton Woods agreement was dissolved by president Richard Nixon in Ithaca NY.

Today, US currency is backed by “The good faith and credit of the American worker” (This is the government explanation of intrinsic value). But in truth its future value is loosely tied to one simple question: Does the typical vendor or consumer (for example, someone accepting a $20 bill in exchange for a movie ticket or 2 large pizzas) expect it to buy these same things in the next few months?

A considerable number of speculative components contribute to the answer. For example:

  • Debt: This is the elephant in the room. A house built on debt cannot thrive forever—without a fresh stream of exports and productivity. These are the measures of a nation’s income and its balance sheet. Here, then is the key question: Is new money being printed without a commensurate added value to GDP? After all, this is how a nation repays its debts.
  • Public Trust: Good faith goes beyond debt. Can consumers and creditors be certain that a change of government won’t cause rampant inflation or a willful failure to retire future debt? Can they be assured that their fellow workers will continue to produce and export manufactured goods in ever increasing quantity?
  • Guns & Tanks: Citizens are compelled by law to pay their taxes in official state currency. Even for those who attempt to fly under the wire or use alternate currencies during the tax year, this ultimately forces fiat currency to be recognized and honored.
  • Geopolitical Stability: The US has been a debtor nation for decades and it has significant political and economic disputes with its largest creditors (China and nations of oil-rich gulf states). What would be the effect of these trade partners (a) moving away from the dollar as their reserve currency, or (b) investing the trillions of dollars they have earned in some other country—or within their own borders?

This list is not exhaustive, but each constituent boils down to two fundamental concepts: Supply-and-demand –and– How long will demand last?

The dollar is an invention of a transient government. Even with a long history of stability and a complex banking framework, it is no more real than Bitcoin. Supply and demand for any commodity is based on popular recognition, anti-counterfeit features, innate desire and public goodwill. The real question is: What contributes to the desire to own or spend Bitcoin?

The answer is that Bitcoin is backed by something far more reliable and trustworthy than the transient whim of elected legislators. It is backed by something that carries more weight than the US government. What could possibly guaranty the value of a Bitcoin? After all, it does not convey ownership in gold, and it has no redemption guarantee. There is no picture of Caesar on the coin. (In fact, there is no coin at all!)…

Answer: Bitcoin is backed by math, a firm cap, a completely transparent set of books, and the critical mass of a two-sided network. Although it can be taxed (like any asset), it can be owned and transferred with impunity and without recourse. These may not seem like critical components of intrinsic value, but they are. In fact, they define intrinsic value in the modern era.


Ellery Davies co-chairs CRYPSA, produces The Bitcoin Event, edits A Wild Duck
and is keynote at this year’s Digital Currency Summit in Johannesburg.

Absolutely, the last word on Donald Trump

Months ago, before and after the election of our 45th president, I recognized that a growing fraction of posts in this blog were diatribes—railing against Trump and intolerance, and focusing on national politics. These topics were never intended to be a major focus of Wild Duck. I was concerned that personal politics was beginning to detract from the goals of a blog dedicated primarily to Bitcoin, privacy and the intersection of technology with social policy.

And so, I am doubling down on my commitment to move the shame and disgrace of the US president off of this web site. This is not the place. This is no longer the time. This is not the venue for political divisiveness.

except just this one last time. Please, Gawd! Just one last word about an issue of global importance.

Instead of making America great again, our president is dragging America into a pit of denial, division, xenophobia, and intolerance.

The longer that we tolerate this glitch of democracy; the longer we delay impeachment or guided resignation; the longer we accept divisiveness—this will be the period during which our nation treads three rungs below mediocrity. We grunt and grit our teeth; but, we slip further toward a cliff of irreversible, historical and ecological consequences.

Last week, I was traveling with my daughter in Costa Rica, and so I missed a New York Times op-ed (Aug 17, 2017). It screams out from the page—confronting and demanding reconciliation; it deserves amplification. Please consider what you read. Don’t just nod in agreement or reject it due to Trump loyalty. Truly consider the consequences. Stand up. Call your neighbors and friends. Do something. [Click image at bottom]

BCH: Did I throw away $$$$? Perhaps…

Yesterday was D-Day in the Bitcoin world: On Tuesday, Aug 1st 2017, Bitcoin Cash (BCH) forked off of Bitcoin (BTC). For anyone with control over their wallet and private keys, they now have an equal amount of BTC and BCH.

I have a Bitcoin wallet. Yet, I don’t have any new Bitcoin Cash—and I have no one to blame but myself. Will I ever get the BCH associated with my pre-fork coins? I think that it is likely, though certainly not assured. If not, it will still be my fault. After all, I had fair warning from the company that I trust as custodian of my assets.

A Cryptocurrency Mantra:
“Woe be the person who trusts decentralized cash to a custodian”

I trust Coinbase for good reason. I left my BTC in my Coinbase wallet and vault throughout the fork. Let me tell you how I view the risks of failing to remove my coins before August 1…

  1. Coinbase was clear in warning that BTC withdrawals would be frozen before and after a fork. No problem…I had no immediate need to access my coins.

2. Coinbase warned they had no plan to support BCH—not even for withdrawal after a fork.

I accepted this 2nd warning, even though their reasoning and motives were terribly weak. But, today, I feel very sore. I need a morning after pill! Bitcoin still trades at the level of the past week—about $2700 US/BTC. But my non-existent BCH holdings have significant value! It was briefly as high as $750 per coin, and is now trading at $475. This means that even if I have no desire to save or spend the new coin, I no longer have the option to liquidate my forked asset. I lost a slam-dunk opportunity to capture 17½%.

We’re not talking about a theoretical gain or a gain that assumes liquidation at a momentary spike. We’re talking about right now—a missed opportunity to pocket thousands of dollars!

Am I angry? Not really. I am disappointed in my lack of initiative, but I have only myself to blame. For the record, I don’t believe that I have a reasonable legal claim against Coinbase. After all, they warned me! But, I hope that they will give me my forked coins—eventually. They have already acknowledged to conspiracy theorists that they will not keep the forked BCH, in the event that they create a conversion mechanism. In that case, they will allow withdrawal by the owner of the associated BTC. Now that they see dramatic fractional value, how could they not complete the fork?!

Where Does This Leave Me?

I’m not poorer today than I was yesterday, and I am surprised to find that I have not lost value in original Bitcoin. But, I missed a zero-risk opportunity to gain 17½% overnight. It was staring me in the face and I passed it up. At least I draw comfort in my confidence that Coinbase will complete the fork. Please, Coinbase: Complete the fork!

Ellery Davies co-chairs Crypsa & Bitcoin Event, columnist & board member at Lifeboat, editor
at WildDuck and will deliver the keynote address at Digital Currency Summit in Johannesburg.

Are Online File-Conversion Services Safe?

At Quora, I occasionally play, “Ask the expert”. Hundreds of my Quora answers are linked at the top right. Today, I was asked if it is safe to use free, online services that convert between file formats. For example, many web services allows you to upload a JPEG image and get back a PNG file. Others convert between DOC and PDF, or between popular video or audio formats.

Some of these services include additional processing. For example, stringing separate images together into a single animated GIF file—or rotating pages and adding a password within a PDF file. If you don’t have a locally installed program that does these things, is it safe to use these free, online services?

And what about the apps that you download and install? These present separate risks! But, with a little common sense, you can figure out which ones you can trust…

The short answer: It depends on the file type. A JPEG file that is processed via an online service is safe. SVG is not.*

A More Complete Answer…

There are three factors that relate to the safety of free online file converters:

  1. Is the target file type passive? That is, is it a data-only file that you will open with your own application. But watch out!

    Most—but not all—media formats (files that store pictures, music or video), cannot contain malicious code, unless you are tricked into opening them with the wrong program. Most of these formats simply direct your application to present pictures to your screen or audio signals to the speakers, without launching other apps or executing code that reads or writes to your device. But there are exceptions. Some popular formats support scripts, which are a form of program instructions. And, rarely, you may even be susceptible to execution of a data only file.*

    In my opinion, JPEG files are safe (including .jpg and .jiff file extensions). So are bmp, gif, mp3, avi, and mp4 files. But svg, doc and pdf files are not necessarily safe! These file formats permit javascript or other code which can be activated when you attempt to open the file. Therefore, if you use a service to create SVG, DOC or these other file types, be sure that you use your own applications to open it, and that you have configured your application to restrict execution on files that are downloaded from the Internet.

  2. Is there anything sensitive in your source material? (i.e. is your file confidential or embarrassing?). If so, it will be in the hands of strangers for all time. Do not use an online service to convert the file—nor even to store it, unless it is first encrypted on your device.
  3. Is there possibility of misdirection or error during the process? That is, could you be tricked into uploading the wrong file or revealing more information than you intended? For example, with deceptive tactics, a web service might slip you a routine that fools with your file associations. Now, a file ending with .JPG is no longer interpreted as an image, but contains an active and malicious threat.

Most Important: Never accept options that offers an upload manager, browser plug-in or “assistant”. These are programs over which you have no control! They often contain malware that threatens your data and your entire network. Helper apps and plug-ins should only be installed from rock-solid sources, such as the maker of your operating system or browser (Apple, Microsoft, Google) or from highly reputable, open-source projects.

Disambiguation: That last warning is about apps installed on your device, rather than online services. But, how can a non-techie be secure in their decision to download or install an app? Here is way to think about your options and safety: The maker of your app should fall into one of these two categories:

  • The vendor has a lot to lose if they fail to fully vet the context and security of an executable. This is typically true of large, audited, publicly funded companies like Adobe, Citrix or Google. (Being big does not inherently make them trustworthy, but it makes them very careful to verify their claims against internal practices).
  • —OR— The executable is offered via a reputable open source community with a broad base of technical and critical developers. It helps if developers are rewarded for finding and reporting bugs.

Online file conversion services fail these tests—But they are not locally installed apps. Remember, these last two tests are intended for apps that you plan to install, whereas online file-conversion services simply process data and return it to you. So to protect yourself from file-conversion programs that you download and install, you must ensure that they don’t install or interact with your other applications and data.

One way of ensuring this is to run in a sandbox or protected environment (as if you maintained a separate PC for use only with file conversions). The more practical way is to educate yourself on the vendor’s practices, reputation and history. A dedicated file conversion utility should interact only with files you select—and only to generate passive content that you open with your own applications.

* Even data-only files can be exploited. For example, malware can use a “buffer overrun” weakness to treat some of the music or photo data in your files as executable program code. But don’t worry. Although this might seem impossible to defend, such opportunistic exploits are unlikely if you have good antivirus protection, and if allow your trusted applications to update regularly.

Additional reading about SVG file format:

Free, Online Blockchain Courses

I develop Bitcoin and Blockchain courses for a profitable venture—And so, I may be shooting myself in the foot with a competitive referral. But, hey!—It’s for a good cause.

Jeremy Boris; Zero to 60 in six months

Jeremy Boris has a degree in business management. He became interested in blockchains a few months ago. In just the first half of this year, he has leapt beyond the realm of enthusiast. He already casts himself as a blockchain developer.

Now, Jeremy seeks to spread the joy (and the potential for career income). Here is his annotated list of free, online blockchain courses, covering all six critical technologies.

Everyone needs a starting point. This is a great one!

Vicente Fox: Message to Donald

I try hard to avoid pushing too many Trump posts into AWildDuck. The blog is intended to be more about technology, privacy, cryptocurrency and social policy.

But all too often, something like this hits the news and it’s tempting; like Adam & Eve and the apple, all over again!

I could be mistaken, but it appears that this video message to US president Donald Trump was really produced and presented by former Mexican president Vicente Fox. It does not appear to be an actor or comedian. The video is posted on President Fox’s Facebook page and his own personal web page.

Even if this is an actor portraying the Mexican president, it is clearly authorized. It is not only funny, but insightful and relevant—and very sad. That too! Funny, but sad…

Solar System Map: Surprisingly deceptive

What’s wrong with this illustration of the planets in our solar system?            »

For one thing, it suggests that the planets line up for photos on the same solar ray, just like baby ducks in a row. That’s a pretty rare occurrence—perhaps once in several billion years. In fact, Pluto doesn’t even orbit on the same plane as the planets. Its orbit is tilted 17 degrees. So, forget it lining up with anything, except on rare occasions, when it crosses the equatorial plane. On that day, you might get it to line up with one or two planets.

But what about scale? Space is so vast. Perhaps our solar system looks like this ↓

No such luck! Stars and planets do not fill a significant volume of the void. They are lonely specs in the great enveloping cosmic dark.* Space is mostly filled with—well—space! Lots and lots of it. In fact, if Pluto and our own moon were represented by just a single pixel on your computer screen, you wouldn’t see anything around it. Even if you daisy chain a few hundred computer screens, you will not discern the outer planets. They are just too far away.

Josh Worth has created an interactive map of our solar system. For convenience, it also assumes that planets are lined up like ducks. But the relative sizes and distance between planets are accurate. Prepare to change your view of the cosmos…

1/7 the way to Pluto. I enlarged Jupiter’s moons. On a full-screen view, they are barely visible.

Just swipe your finger from the right edge of the screen to move away from the sun. Despite a fascinating experience (and many cute, provocative Easter eggs hidden between the planets), few readers swipe all the way out to Pluto and the author credits. On my high-resolution monitor, it requires more than a thousand swipes. Imagine if the Moon had been more than 1 pixel…It would take a long, long time! I would rather go out to dinner and a movie. But I urge you to travel at least to Jupiter. At 1/7 of the trip to Pluto, it should take less than 5 minutes.

On this scale, you won’t see the 1½ or 2 million asteroids between Mars and Jupiter. They aren’t large enough to merit a pixel. As Josh states, “Most space charts leave out the most significant part – all the space.” (an Easter egg at 1.12 billion km on the map).

* I borrowed this phrase from my former Cornell professor, Carl Sagan. He uses it in Pale Blue Dot [timestamp 2:14.]. This video tribute became a touchstone in my life; even more than having Sagan as a professor and mentor.

If you view it, be sure to also view Consider Again, Sagan’s follow-up in the video below. It is a thought-provoking observation of human-chauvinism throughout history—even among ancient Greeks. Carl isn’t the first atheist, of course. But he is eloquent in describing mankind’s ego trip: The delusion of a privileged place in the universe, or the religious depiction of God and his relationship with our species.


Credit:  ▪ Josh Worth and Sachin Gadhave who offers an illustrative answer at

Ellery Davies co-chairs Crypsa & Bitcoin Event, columnist & board member at Lifeboat, editor
at WildDuck and will deliver the keynote address at Digital Currency Summit in Johannesburg.

US withdrawal from Paris accord; Universal disappointment

Yesterday, I had a fantasy. One that I passionately hoped would become reality. Minutes before Trump announced the withdrawal of the United States from the Paris Climate Accord, I began to daydream…

  • I dreamt that Trump might listen to his top science advisors and his daughter
  • I dreamt that he might not gamble our existence on his minority opinion that humans cannot help rescue the environment.
  • I dreamt that he would recognize that clean energy jobs trump legacy coal mining
  • I dreamt that he would avoid export tariffs for failing to respect international norms
  • I dreamt that he would stop pandering to Yahoos and stand for something worthy and undeniable

No such luck! The USA has lost its Mojo—at least while it is led by a man with no grasp of science, history, morals or a global perspective. As Trump begun to speak, I was sucked into a cruel nightmare. But this nightmare is reality. It’s the reality of a buffoon representing you and me in our nation’s highest office.

Question: Time for a thought experiment. Can you guess the answer?…

What do Arnold Schwarzenegger, Elon Musk, The Pope, Richard Branson and French president, Emmanuel Macron, have in common?

Answer: They are all saddened that the US is surrendering its inspiration, leadership and common sense. Clean energy creates jobs, saves our planet, and aids the political and military stability of nations. Trump doesn’t sense any of this. He is validated by his base and his Yes men. He is a climate denier, and he doesn’t even read. He only watches what others say about him on television.                     [continue below video]

I cannot add perspective nor amplify President Macron’s urgent message to Americans. The clip is trending on Facebook with the caption: “French president destroys Trump in 5 words”. This suggest that he is taking a jab at Trump; mocking his poor grasp on science and the environment. But, politics plays no role in this message. It is about global impact and opportunity…

The French president hasn’t made a fool of Trump. Trump has brought shame onto his office and made a fool of our system of government, all on his own. His defiance of science and complete lack of understanding history risks irreparable harm to our planet. Trump feels that American jobs come before environmental policy. Yet, he is turning his back on the biggest jobs market since the steam engine.                 [Continue below video]

Perhaps more critically, his withdrawal from the global accord will bring about tariffs against US cars, steel, airplanes, timber and electronics. After all, by pulling out of the Paris accords, we ducking environmental safeties in an effort to make America great — or more accurately, in our effort to bury our heads in the sands and let the rest of the world take the lead on clean energy, efficiency, reducing pollution and averting global warming.

Response to US withdrawal…

Ellery Davies co-chairs Crypsa & Bitcoin Event, columnist & board member at Lifeboat, editor
at WildDuck and will deliver the keynote address at Digital Currency Summit in Johannesburg.

Wallet Security: Cloud/Exchange Services

3½ years ago, I wrote a Bitcoin wallet safety primer for Naked Security, a newsletter by Sophos, the European antivirus lab. Articles are limited to just 500 hundred words, and so my primer barely conveyed a mindset—It outlined broad steps for protecting a Bitcoin wallet.

In retrospect, that article may have been a disservice to digital currency novices. For example, did you know that a mobile text message is not a good form of two-factor authentication? Relying on SMS can get your life savings wiped out. Who knew?!

With a tip of the hat to Cody Brown, here is an online wallet security narrative that beats my article by a mile. Actually, it is more of a warning than a tutorial. But, read it closely. Learn from Cody’s misfortune. Practice safe storage. If you glean anything from the article, at least do this:

  • Install Google Authenticator. Require it for any online account with stored value. If someone hijacks your phone account, they cannot authenticate an exchange or wallet transaction—even with Authenticator.
  • Many exchanges (like Coinbase) offer a “vault”. Sweep most of your savings into the vault instead of the daily-use wallet. This gives you time to detect a scam or intrusion and to halt withdrawals. What is a vault? In my opinion, it is better than a paper wallet! Like a bank account, it is a wallet administered by a trusted vendor, but with no internet connection and forced access delay.

Exchange and cloud users want instant response. They want to purchase things without delay and they want quick settlement of currency exchange. But online wallets come with great risk. They can be emptied in an instant. It is not as difficult to spoof your identity as you may think (Again: Read Cody’s article below!)

Some privacy and security advocates insist on taking possession and control of their wallet. They want wealth printed out and tucked under the mattress. Personally, I think this ‘total-control’ methodology yields greater risk than a trusted, audited custodial relationship with constant updates and best practice reviews.

In case you want just the basics, here is my original wallet security primer. It won’t give you everything that you need, but it sets a tone for discipline, safety and a healthy dollop of fear.

Ellery Davies co-chairs Crypsa & Bitcoin Event, columnist & board member at Lifeboat, editor
at WildDuck and will deliver the keynote address at Digital Currency Summit in Johannesburg.

Incentivize Bitcoin Miners After All 21M BTC Are Awarded

Individuals who mine Bitcoins needn’t be miners. We call them ‘miners’ because they are awarded BTC as they solve mathematical computations. The competition to unearth these reserve coins also serves a vital purpose. They validate the transactions of Bitcoin users all over the world: buyers, loans & debt settlement, exchange transactions, inter-bank transfers, etc. They are not really miners. They are more accurately engaged in transaction validation or ‘bookkeeping’.

There are numerous proposals for how to incentivize miners once all 21 million coins have been mined/awarded in May 2140. Depending upon the network load and the value of each coin, we may need to agree on an alternate incentive earlier than 2140. At the opening of the 2015 MIT Bitcoin Expo, Andreas Antonopolous proposed some validator incentive alternatives. One very novel suggestion was based on game theory and involved competition and status rather than cash payments.

I envision an alternative approach—one that also addresses the problem of miners and users having different goals. In an ideal world the locus of users should intersect more fully with the overseers…

To achieve this, I have proposed that every wallet be capable of also mining, even if the wallet is simply a smartphone app or part of a cloud account at an exchange service. To get uses participating in validating the transactions of peers, any transaction fee could be waived for anyone who completes 1 validation for each n transactions. (Say one validation for every five or ten transactions). In this manner, everyone pitches in a small amount of resources to maintain a robust network.

A small transaction fee would accrue to anyone who does not participate in ‘mining’ at all. That cost will float with supply and demand. Users can duck the fee by simply participating in the validation process, which continues to be based on either proof-of-work, proof-of-stake — or one of the more exotic proof theories that are being proposed now.

Ellery Davies co-chairs Crypsa & Bitcoin Event, columnist & board member at Lifeboat, editor
at WildDuck and will deliver the keynote address at Digital Currency Summit in Johannesburg.

Sex Equality: I’m With Her

A Wild Duck guest editorial

Lydia Begag is a high school junior at Advanced Math and Science Academy in Massachusetts. She got our attention when she published an editorial critical of the school’s uniform policy. With eloquence and articulation, she laid out a brilliant and persuasive argument that the policy was anything but uniform. It was ambiguous, arbitrary and discriminatory.

I’m with Her
Ideas Regarding Sex Equality—Forget the Rest

Political and social turmoil are everywhere we turn, especially in the early months of 2017. Lunch conversations, small talk at work, and, of course, the media we consume have all become related to a singular topic: the United States government and its workings. Emotionally, I want to curl up in a ball and block out the political nonsense being spewed left and right until the day I die (pun very much intended)—but I feel intellectually obliged to confront the controversy.

All who live and breath America understand why politics have always been a hot topic for debate. Every ideology, action, and word are potentially contentious. Such is especially the case with modern feminism. Everyone seems to have a different opinion of it and portrays it in different ways, from the group of men wolf whistling at a woman on her way to her car after work to powerful cultural figures who associate themselves with the movement. Before we can even begin to familiarize ourselves with conflicting beliefs towards women and feminism in general and their reflection of a worrisome mentality, it is crucial to first understand feminism’s roots in the United States, and how interpretations of the word and the movement have varied throughout the years.

Feminism begins its legacy in 19th-century America, where its first-wave arises at the Seneca Falls Convention of July 1948. Prominent feminists of the era (including Elizabeth Cady Stanton—more on her later!) issued a Declaration of Sentiments for women that emulated the Declaration of Independence their husbands had crafted 170 years earlier. The document asserted that women had fundamental rights that were denied without cause, including suffrage. However, the first-wave feminist movement raised a series of questions regarding whether it was acceptable to promote black civil rights over and into women’s rights. Should the rights of black men be prioritized over establishing and recognizing rights for women? Should black women be considered in the fight for gender equality as well, or would that undermine the cause white women had been fighting for for so long? The moral conflict eventually resulted in a success for the women’s suffrage movement in 1920. White women, led by famous feminists such as Stanton, Alice Paul, and Lucy Burns, gained the right to vote in federal and state elections via the 19th Amendment to the U.S. Constitution. Women of color, however, were left in the dust and did not start to gain suffrage until 1965. This type of exclusive feminism did not end when women of color gained suffrage; it has proven itself to be significant even today.

The list of American feminist milestones goes on and on. Women experienced sexual liberation in the Roaring 20s, when life was grander and more exquisite than ever. They essentially took over maintenance of the U.S. economy when men went  to fight in the world wars, and Rosie the Riveter was born. Women were also becoming increasingly influential in politics. Such milestones included the first woman to run for president on a major-party ticket in 1972 to landmark Supreme Court cases asserting that a right to privacy does include guaranteed legal accessibility to abortion and contraceptives. Title 9, the amendment to the Education Amendments Act of 1972, enabled girls in schools across the country to receive the same benefits as their male peers. All of these milestones reshaped a woman’s role in society throughout the 20th century onwards, but they did not come without drawbacks. The ’20s was an intense era of sexist and classist attitudes. Female sexual liberation resulted in extreme objectification. After WWI was over and soldiers came home, women were whisked back into the households to resume their roles as obedient housewives. Male dominance made running for public office harder for a woman, despite having the opportunity. And let us not forget the controversy surrounding a woman’s right to privacy. A significant factor involves religious morals and/or other ethical reasoning that are not related to gender equality, but it is impossible to ignore the misogynistic rationale that many pro-lifers exhibit. All of the achievements we’ve had have seemingly been countered by just as much dissent as support, a persistent reality since Abigail Adams urged her husband to support gender equality.

We are currently in the era of what fundamentalist feminists call “Take A Shot Every time You Offend Someone With One of Your Comments.” That term, of course, is colloquialism at its finest. You’re probably more familiar with something called third-wave feminism. This type of feminism has become increasingly less focused on the kind of feminism Stanton was prominent for (Yay! Exclusivity!) and more on queer and non-white women. The concept of intersectionality was introduced in the late ’80s just before this third wave began. It has received great support by women of color and those who had always been ignored by exclusive feminists, but as we already know, dissent is just around the corner.

The most popular criticism focuses on a lack of cohesion. First wave feminism fought for and gained female suffrage. The second wave fought for the right for women to have access to equal opportunity in the workforce and an end to legal sex discrimination. What is third wave feminism’s goal? Is there even a goal, or are its advocates serving as the world’s determinators of what is PC and what is not? The stigma around the feminist movement has existed ever since its origins in this country, but the increasing disassociation of women from the term ‘feminism’ has become alarming in recent years. For every outspoken celebrity and political feminist there is out there (think Emma Watson, Shonda Rhimes, Nancy Pelosi) there is an equally prominent female figure that opposes the movement, such as Lana del Rey, Tomi Lahren, and Shailene Woodley. Here’s the kicker: these role models usually aren’t misogynistic or demeaning. They simply seek to avoid affiliation with the word itself and its modern day supporters. This is understandable; we’re a country founded on grounds of freedom. If a person doesn’t want to associate themselves with a movement, there’s no obligation to. However, the fact that women don’t even want to be labeled feminists because of what it has come to signify is something I find very problematic. I don’t see this as an inadequate reflection of what 21st century women believe in, but rather a poor reflection on the feminist crusade. The way I look at it is this: apples don’t fall off a tree because they are too heavy. Rather, they fall off because the stem is too weak to support them.

This creation of a conflict within a conflict has led to major confusion on what “right” feminism is. As defined by Merriam Webster, “feminism” is the theory of the political, economic, and social equality of the sexes. This most basic meaning of the word is something most women, if not all, should consider when they debate  whether or not to label themselves a feminist. Sex equality is really the only thing the third-wave feminist movement should be focused on. Issues such as racial inequality, and rights for LGBT and disabled persons, are a matter for a cause much broader than feminism (think egalitarianism). The more narrow a movement and its fight becomes, the more likely it is to accomplish its goals. The first two waves of feminism all had a set goal in mind, which was something that followed core feminism to the nines. In the midst of all of the social unrest that has risen since the ’80s, the feminist movement has been trying to take over the egalitarianist one. However, if women ever wish to gain social equality between the sexes, it is necessary to narrow the cause to its fundamental roots.

Another issue with the modern feminist movement is that, in the effort towards sex equality, many feminists have interpreted being equal to men as trying to act just like them. Men and women are different, biologically and perhaps psychologically, but of equal value. To quote Mary Ramirez’s “Dear Daughter: Here’s Why I Didn’t March For You”: “…we are biologically and physically and emotionally different from men, but that doesn’t mean we’re less. It means we’re special.”

Nonetheless, achieving social equality between the sexes is something I consider crucial, particularly for the girls just starting to grow up in this country. It is disheartening for women to live in a world where, from the moment we start to grow up and find ourselves in a male-centric society, life becomes a tale of denigration and overt sexualization. However, the problem with using modern feminism to change this sexist attitude is that it has turned into a male resentment club, and no longer seems to revolve around sex equality in society. Off the top of my head, I can think of multiple times where the “feminists” surrounding me on a daily basis have remarked on female superiority or denounced women who do not wholeheartedly accept their idea of feminism. Feminism should preach equality and acceptance. Instead, it has turned into a catty game of doing to the men what the men have done to us. We live in a world where raising people up has turned into knocking others down. Vulgarity and impertinence has turned into the ideal image of a “strong” woman, and has become more and more acceptable. The idea of a feminist who respects others’ opinions has seemingly been swapped with one that thrives off of the idea of being regarded as “bitchy,” angry, or disrespectful. We’ve come a long way since our feminist founding mothers marched down Pennsylvania Avenue fighting for suffrage, and unfortunately, it’s not for the best.

Envisioning myself in the world of politics five or ten years down the road…I won’t pretend it doesn’t worry me at times.Influential female politicians over the years have found not their beliefs or their policy agendas as the primary subject of media conversation, but rather whether or not they’re menstruating or have considered cosmetic surgery. Seeing myself and others in my current situation has worried me as well. Despite growing up in a privileged setting where I receive nothing but acceptance from my family, the school and work environment has offered me and similar girls slut-shaming, catcalling, and the craftiest of off-hand remarks (“Who are you trying to impress today with that outfit?”). A multitude of women who come from different backgrounds have experienced similar toxicity in their surroundings. Ultimately, any setting for a woman can be a problematic one, and a promotion of classic feminism could turn things around. To me, an advocacy for respect on both sexes’ parts—rather than claimed superiority—would be transformative in making these conditions for bearable for young American women and men. Right now, what we have is extreme exclusivity and not enough acceptance.

Want to call yourself a feminist? Great! Reluctant to associate yourself with the movement but still support sex equality? Sounds good! Don’t support sex equality and a reversal of traditional gender roles? That is still okay! Obviously if an opinion undermines the cause you are fighting for, you’re not inclined to encourage it. But what the American public needs to realize is that, when advocates contradict the cause of unity and respect with their actions and words change will not come. Crudity does not empower you; it only cheapens you.

As mentioned before, narrowing down the movement’s goals is also crucial in moving forward. In comparison to many nations around the world, the United States has seen great success when it comes to fighting for sex equality. The third-wave feminist movement does have some valid issues to advocate for—domestic violence, raising awareness for rape victims, pay discrimination, etc.—but also chooses to focus on trivial causes like Free the Nipple and eliminating “manspreading.” Perhaps it is because we have obtained legal equality (thanks, first two waves!). But now that social equity has become the main focus, a blur of ideas and beliefs have resulted in a chaotic, incohesive movement. If you consider feminism at its core, the social issue to fight for is clear. There are many causes worth fighting for: racial inequality, ableism, and marriage justness, to name a few. But for the love of God, leave the aspects that do not relate to sex equality for the egalitarians. They’re there for a reason.

Author’s Note:  Add a comment or question below. I will respond promptly.

— Lydia Begag

Bitcoin closes in on (US) $2000; Why it matters

At the beginning of 2016, Bitcoin was fairly steady at $430. Richelle Ross predicted that it would finish the year at $650. She would have been right, if the year had ended in November. During 2016, Bitcoin’s US dollar exchange rose from $433 to $1000. In the past 2 months (March 24~May 20, 2017), Bitcoin has tacked on 114%, rising from $936 to $2000.  [continue below image]…

If this were stock in a corporation, I would recommend liquidating or cutting back on holdings. But the value of Bitcoin is not tied to the future earnings or property value of an organization. In this case, supply demand is fueled—in part—by speculation. Yes, of course. But, it is also fueled by a two-sided network built on the growing base of utilitarian adoption. And not just an adoption fad, but adoption that mirrors the shift in our very understanding of bookkeeping, trust and transparency.

Despite problems of growth, governance and regulation, Bitcoin is more clearly taking its place as the future of money. Even if it never becomes “legal tender” in any country—and is used only as a mechanism of payments and settlement, it is still woefully undervalued. $2000 is not an end-game. It is a beginning.

Ellery Davies co-chairs Crypsa & The Bitcoin Event. He is a columnist & board member at Lifeboat Foundation,
editor at WildDuck and is delivering the keynote address at the 2017 Digital Currency Summit in Johannesburg.