The Twelve Days Of Crypto

John Coffey

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I help Corporations & Financial Institutions increase Brand Awareness & secure CRA Benefits & Volunteering Opportunities

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The Twelve Days of Crypto

On the first day of Crypto

Satoshi sent to me

A proof of work which is insanity

On the second day of Crypto

Satoshi sent to me

Two cyberhackers

And a proof of work which is insanity

On the third day of Crypto

Satoshi sent to me

Three Offshore havens

Two cyberhackers

And a proof of work which is insanity

On the fourth day of Crypto

Satoshi sent to me

Four missing passwords

Three Offshore havens

Two cyberhackers

And a proof of work which is insanity

On the fifth day of Crypto

Satoshi sent to me

Five major stings

Four missing passwords

Three offshore havens

Two cyberhackers

And a proof?of work which is insanity

On the sixth day of Crypto

Satoshi sent to me

Six money launderers

Five major stings

Four missing passwords

Three offshore havens

Two cyberhackers

And a proof of work which is insanity

On the seventh day of Crypto

Satoshi sent to me

Seven cocaine dealers

Six money launderers

Five major stings

Four missing passwords

Three offshore havens

Two cyberhackers

And a proof of work which is insanity

On the eighth day of Crypto

My true love sent to me

Eight heavy drawdowns

Seven cocaine dealers

Six money?launderers

Five major stings

Four missing passwords

Three offshore?havens

Two cyberhackers

And a proof of work which is insanity

On the ninth day of Crypto

Satoshi sent to me

No regulators

Eight heavy drawdowns

Seven cocaine dealers

Six money?launderers

Five major stings

Four missing passwords

Three offshore?havens

Two cyberhackers

And a proof of work which is insanity

On the tenth day of Crypto

Satoshi sent to me

Ten Bitcoin Ponzis

No regulators

Eight heavy drawdowns

Seven cocaine dealers

Six money?launderers

Five major stings

Four missing passwords

Three offshore?havens

Two cyberhackers

And a proof of work which is insanity

On the 11th day of Crypto

Satoshi sent to me

A million true believers

Ten Bitcoin Ponzis

No regulators

Eight heavy drawdowns

Seven cocaine dealers

Six money?launderers

Five major stings

Four missing passwords

Three offshore?havens

Two cyberhackers

And a proof of work which is insanity

On the 12th day of Crypto

Satoshi sent to me

Extra Global warming

A million true believers

Ten Bitcoin Ponzis

No regulators

Eight heavy drawdowns

Seven cocaine dealers

Six money?launderers

Five major stings

Four missing passwords

Three offshore?havens

Two cyberhackers

And a proof of work which is insanity

Beware your bias

As someone writes negative posts about crypto on a regular basis, I frequently get accused of heavy bias. However, this is not the case. I am a curious individual, who starts with an open mind, especially when it comes to investments & particularly if I feel that such investments might make money for me.

I have a number of criteria that an investment must meet before I put my money on the table. A prerequisite is that investment in the relevant asset must be rational & must make sense from an investment point of view. It must also have a real ' intrinsic value '.

Warren Buffet once said that he likes to buy businesses which he would be happy to hold if the stock market closed for 5 years. My sentiments would be similar & I like to feel that the assets I invest in would earn money in their own right so that I would not have to exclusively rely on finding another buyer at a higher price to take me out at a profit.

When I first became aware of Bitcoin & the various other cryptos, I tried to apply this rationale and a strong modicum of common sense in analyzing this potential investment. That is where things started to go wrong.

Rather than make an extremely long-winded story, I will simply list the many objections that I have to bitcoin. They are so numerous and so substantial that it will probably be difficult for me to ever consider this ' asset class ' as a viable investment

1. A finite resource " When Satoshi Nakamoto created Bitcoin, he installed a strict limit on the number of Bitcoin that could ever exist. There will never be more than 21 million bitcoin. This limit is encoded in Bitcoin’s source code & enforced by nodes on the network " I struggle to believe that this will remain the case. I have read the technical arguments as to how it will be impossible to exceed 21 million but also arguments to the contrary. The ' finite resource ' theory is central to Bitcoins valuation. If this is flawed, Bitcoin is worth much less, if anything at all. Also, if I want to buy assets based on such a theory, I prefer real estate - they aren't making any more land!
2. Bitcoin mining & the environment " One study warned that Bitcoin?could push global warming beyond 2°C. Bitcoin mining in China could generate 130 million metric tons of CO2 by 2024. With more mining moving to the U.S. & other countries, this amount could grow even larger " At a time when we need to aggressively reduce the world's carbon footprint, this is absolutely crazy
3. Regulation Although Bitcoin claims to be a currency, it is not regulated. We know already how many scandals there have been in regulated markets but offenders are often penalized with very substantial fines. Unregulated markets, by definition, attract participants who don't want to be regulated. This includes criminals, drug dealers, cyberhackers, money launderers as well as a whole swathe of hucksters, snake oil salesmen & scamsters who see the opportunity to rip people off with impunity.
4. Anonymity The fact that the blockchain process protects anonymity is a major attraction to the various unsavory characters as it enables them to keep their ill-gotten gains away from the prying eyes of any regulators or policing authorities
5. Efficiency Bitcoin is heavily promoted for its efficiency. I fail to see that, millions of people having to record a transaction rather than one, is efficient. I fail to see that having to use absolutely massive amounts of computing power to create one bitcoin is efficient.
6. Investor class Most asset classes are dominated by experienced investors. These people usually have a strong academic background in economics & accounting and a strong experience in financial markets. They tend to have a structured investment process that enables them to make rational valuations of alternative investments. Bitcoin investors, for the most part, do not have this background. They tend to be less informed on financial markets generally. They often have a technology background. Some of them have no financial background at all. Many of them are simply ' true believers ' who have a massive emotional attachment to the idea of Bitcoin being the future & they are easily led by gurus such as Elon Musk who can literally move the market with a well-chosen tweet
7. Volatility Any market that can easily move 20% in a day is not one for widows & orphans. Any market that will make such movements on the back of a one-sentence tweet definitely lacks solidity
8. Password issues Any asset class where someone can lose hundreds of millions of dollars just because they lost their password cannot be taken seriously
9. NFT's This is the biggest joke of all. Convincing people to buy ownership of a digital reproduction of a physical item, where anybody can copy this digital item, is sheer madness. NFT's are the Dutch tulip bulbs of the 21st century
10. Mining in the attic We have reached the situation where many Millenials see bitcoin mining & crypto investing as an alternative to work. This seems to be a factor in the current ' great resignation ' where there are millions of jobs that can't be filled. Just take this evolution to its ultimate iteration. If everybody is mining & trading in crypto, then there will be nobody left to work. It's just not sustainable

Life Lesson #2 - 1968

I was a soccer obsessive when I was a kid. I was totally obsessed with ?' The Beautiful Game?'.?Whereas nowadays, I am reduced to watching on TV & going to the occasional match, back then I played soccer from morning till night. During the summer holidays, after breakfast, I & my buddies would go out & play soccer. After lunch, we would go out again, for more soccer. After dinner, if it was bright enough, we would go out & play again, until we got to the point where our attempts were more like ' Orchestral Manoeuvres in the Dark '.?We played on the road?( our road was a cul-de-sac )?and when we were feeling really adventurous, we would travel, around the corner, to play?' our road '?against another road, on the big green, using?' jumpers for goalposts '.?These?' local derbies '?were intensely?fought but as there was no grading or age limit, it was purely random as to whether your road had an older or younger group of players or if they were more skillful or less skillful.

Our road had a younger & smaller group of players, where soccer skills were at a premium and I was definitely?one of the least skilled. I had a good head for tactics and always had great plans as to how we would win a match but invariably the execution of the plan left a lot to be desired. Occasionally, our opponents would get complacent and we might battle to get a 1-0 win.?However, our joy was always short-lived as our neighboring team, suitably chastened by the embarrassment of losing to us, would come out next time & give us?' an absolute trashing '

Once, you reached the age of 8, you could sign up for a team & play in organized leagues on full-size pitches with proper goalposts & sidelines with referees & linesmen. I joined our local team, which was called? ' Willow Park Wanderers '.?We plodded around in one of the lower divisions, without achieving much success but it was nice to have your own team kit & play on a proper pitch with football boots & a proper leather ball. I didn't mind not winning?that much, I just wanted to play.

However, even that became complicated. Assessed honestly, on merit, I was the '?joint 11th best player on the team '.?So, in theory, I should have been selected 50% of the time, along with Jim who had the same, limited ability, as I had. However, it never worked out that way, as Jim was the coach's son. So instead of playing 50% of the matches, I would stand, forlornly, on the sideline, gazing wistfully, as our team battled on. I sometimes got brought on for the last 10 minutes of the game but unless there was an injury to someone, it was rarely more than that.

So this was the first time that I experienced Nepotism. I learned that, when it came to a battle between nepotism & fair play, nepotism usually won. In a wider sense, it?was a ' conflict of interest?', where the coach's obligations to the team were exceeded by loyalty to his son. I would love to say that this story had a happy ending and that I went on to achieve a stellar career as an outstanding footballer but that was never going to happen. As the saying goes " You can't make a silk purse out of a sow's ear "?and my future successes in life lay elsewhere.

Nevertheless, the experience of nepotism & conflict of interest served me well. Having a high level of awareness of these issues enabled me to spot where related challenges might arise?' on the field of business '?and to be a little more able to?' see the wood for the trees '?at important points when I was older and became at least a little wiser.

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