Money Talks, Bullshit Walks

Money is the signifier that annihilates every signification. It is the first commodity to escape use value, and become a sign. Everything gets measured in money, even Bitcoin (which is the latest step in its evolution). The medium is now the message. Or, in cruder terms: "Money talks, bullshit walks."

Once upon a time, according to Jean Baudrillard, money had a referent, the gold standard. That ended in 1971, and since then money has become purely speculative, ballooning into the stratosphere. Bitcoin is the first attempt to retether money to the actual economy, drag it back to earth, giving it concrete value.

The rise of Bitcoin will (as Lyn Alden explains) release the American dollar from the clutches of Triffin's Dilemma. It will enable the greatest debt jubilee of all time. And that jubilee is just about to start...  (For more on the coming debt deflation and reinflation of money, click here.)

Consulting Augur: An Introduction to Decentralized Probability Markets

With all the speculation in the cryptosphere, it is liberating to come across a platform that you can use right here, right now. According to Ben Davidow, Augur is the world's first decentralized prediction market (DPN). It aims to unlock the wisdom of the masses by offering incentives for insider knowledge.  Will Donald Trump win a second term as President?... that is a current question on Augur (probability: 40%). Will there be a big earthquake in Tokyo by April 2019? (probability: 2%.) The theory is, people with secret knowledge, for example Japanese seismologists, will try to exploit their private expertise, and tip off the market. Over time, Augur might answer some of our most profound questions, such as When will AI become self-aware? I would wager never.. but with such an open timeframe, there won't ever be a payday. This is the kind of market I would be ought to stay away from, for reasons that I will shortly explain.

Augur has huge potential, not just in the speculated future, but right now, and that is what attracts me to the platform. That said, the system is still a bit buggy, very much Beta, and counterintuitive for newbies. To begin with, bets are called markets (buying and selling the probability of a certain event). If you want to bet against an event, you sell shares in it (even though you don't own any shares to begin with). Once you wrap your mind around this, it gets a little easier, but there are other problems. The UI can shut down, for days at a time. With some markets it can take a lot of time getting trades through. Cancelling such orders costs more gas (though not as much as it costs to enter or exit a market). Congestion on the Ethereum blockchain can freeze you just when you are about to pounce.

In spite of these obstacles, I persist, because I can see real rewards here. Based on my exchanges so far, I am 93.75% certain that I have found the Holy Grail for bear markets such as these. And since my research has revealed that cryptocurrencies languish in bear markets 75% of their lives, Augur offers me the way to monetize this downtime. Who knows, it could help kickstart the Escape from Oz, a project which has been languishing way too long in my personal bear market... (For the full review of the Augur prediction market, click here.)

Smoking the $-Curve

We could assume that Bitcoin will rise relative to the US dollar by 6% per month, or 100% every year, until it shoots free from the S-Curve. Thus, its value should double every year until the mid 20s, and beyond.

I believe that Bitcoin is in the Era of Ferment stage of its life cycle, and has yet to enter the Early Adopters phase, and cross the chasm. Nonetheless, it seems to be growing in value 100% per year. I am not the first to draw this conclusion. Visionary trader Venzen Khaosan made this very same discovery way back in 2014, while describing a chart: "This up-sloping support line can be interpreted as Bitcoin’s minimum growth trajectory. It is currently at $120 which means it has doubled since a year ago, and this doubling continues at an annual pace according to the support floor’s present inclination..."

Pimping the $-Curve (Japan, 2006)

To complicate things, Bitcoin's value may surge as high as 1300% above the support floor, at any time. The upper range of possible prices from 2014 to 2020 (projected) can be shown here: US$1300 (2014), $2600 (2015), $5200 (2016), $10,400 (2017), $20,000 (2018), $42,250 (2019), $84,500 (2020). The lower possible range of prices over the same period is: $100 (2014), $200 (2015), $400 (2016), $800 (2017), $1600 (2018), $3200 (2019), $6400 (2020). 

While price explosions might be exhilarating, they don't occur so often. Most of the time, price just bounces along some distance above the floor. In my analysis, bear markets last three times longer than bull markets. Absolute lows are hit once every 18 months or so. The complete cycle, from peak to following peak, appears to be getting longer -- the most recent one stretched for four years... (To read my full analysis of how Bitcoin will mature in the years ahead, click here.)