Update: yes I am of some formatting inconsistencies; wordpress isn't playing nicely but it should be resolved soon.

Living at the bottom of a dam

• An unregulated market
• Unregulated ICOs
• Exchanges that don't respond to tickets, support requests, crash during the most inopportune moments
• Tethers that are used in a manner akin to fractional reserve banking
• Bitcoin Core developers that are on the payroll of AXA and by proxy, Bilderberg

HE'S SHILLING BCASH!!

Nope, sorry; I'm not pumping or shilling Bitcoin Cash here. The perception and argument of BCH/BCC/BCash/BTrash - whatever you choose to call it, at-least for the moment is off the table. It's not even about the technology anymore. It's not about the technological differences, the difference in transaction times, the mempool, the miners, the fees; none of this matters for the moment. Bitcoin Cash has been manipulated just as much; and I don't believe it will be safe in the short term from being squeezed by Tether, Bitcoin maximalists and the ongoing smear campaign. Having said that, going long on Bitcoin Cash, in my view is a good idea. It is cheap right now, and it still does function as a p2p payment system with low fees and fast transactions. SBI Group Backs Bitcoin Cash to be “Used Globally For Daily Payments”. When the SBI Group makes such a statement, it should not be ignored. SBI BITS and nChain Announce Strategic Partnership to Support Cryptocurrency Security and Bitcoin Cash.

It's happened before

Let's ignore Bitcoin Cash for now. Leading up to the dot com bubble there was an environment that was incredibly similar to now. An increase of mania, FOMO (Fear of missing out), over-buying, lack of understanding of the underlying concepts, technologies and people using debt to fund speculation. Everyone had to have a website. Companies paid through the absolute nose for a web presence, and web developers made hand over fist. It was the job title everyone wanted. I remember at this time I was doing my first uni degree, and two subsequent diplomas in inter-network engineering & web and multimedia design and development. What a mouthful. By the time I was finished with the course work; the web development world had imploded and people were churning out templated websites for under $500. Under $250. Leading up to the silver bubble of 2010/2011 we saw the exact same thing. People were taking out debts, going all in, just to be part of the wave. The results were the same.

R vs K selection

As the name implies, r-selected species are those that emphasize high growth rates, typically exploit less-crowded ecological niches, and produce many offspring, each of which has a relatively low probability of surviving to adulthood (i.e., high r, low K).^[8] A typical r species is the dandelion Taraxacum genus.

In unstable or unpredictable environments, r-selection predominates due to the ability to reproduce quickly. There is little advantage in adaptations that permit successful competition with other organisms, because the environment is likely to change again. Among the traits that are thought to characterize r-selection are high fecundity, small body size, early maturity onset, short generation time, and the ability to disperse offspring widely.

By contrast, K-selected species display traits associated with living at densities close to carrying capacity and typically are strong competitors in such crowded niches that invest more heavily in fewer offspring, each of which has a relatively high probability of surviving to adulthood (i.e., low r, high K). In scientific literature, r-selected species are occasionally referred to as "opportunistic" whereas K-selected species are described as "equilibrium".^[8]

In stable or predictable environments, K-selection predominates as the ability to compete successfully for limited resources is crucial and populations of K-selected organisms typically are very constant in number and close to the maximum that the environment can bear (unlike r-selected populations, where population sizes can change much more rapidly).
Risk takers and speculators are running on R Selection. High risk, high return. Short term thinking, obfuscation of the facts and ignorance to the evidence.

Long term investment into projects that have actual use case, premise, address an actual business issue, is a display of K Selection.

Are you a hypocrite?

Back on topic - No, I don't believe so. I am not writing this in a manner that contradicts my own previous statements. As you become aware to new information you should adopt your game plan. I think I've been quite forth coming with my articles and how I have derived my decisions and have provided sufficient evidence to both rationalise my position as well as provide a bedrock for you to conduct your own research and make your own conclusions.

I am not concerned about my own liquidity. I do not have anything at risk. If cryptocurrency were to disappear tomorrow I would just loose the coins. My lifestyle would not change. I have diversified my portfolio and as such, apart from inconvenience, I couldn't care less if we go into a crypto winter. I would in fact welcome some amount of regulation and market control, despite being very much for open markets. The system is gamed and is not fair, it is being centrally controlled by a number of entities that I have alluded to already in previous posts.

I have strategically positioned my portfolio to be aggressive in such a world. I do believe significant change is coming. I have been reading the documents provided by BIS Basel, by the governments of numerous first world countries and it has in many ways influenced my long term strategy.

Setting the stage for regulation, taxation, law enforcement et al

What if this experiment has been graceful modified into a beautifully orchestrated, hijacked and co-opted way of shifting money from the populace into the pockets of wall street bankers, willingly? What if this is a wonderful opportunity to do so in a manner without any government oversight, no rules, no law enforcement, no commissions, no legality issues, just a straight "gibs me dat" that prays on the naivety of speculators.

I keep seeing an ongoing push of "be your own bank!" "fuck the bankers!" "BITTTTCCCOOINNNN!!!" when these people are blissfully unaware of the true extent of existing columns of power and wealth that have penetrated the crypto currency space to drain them of their money. Yes, there are people who are getting rich and are in profit - I am one of them, but I feel that I am one of the few (comparatively) that at least has my eyes partly open to the writing on the wall.

Regardless of the future for Bitcoin, it's becoming exceedingly obvious to me that it is failing at delivering its core premise. A fast, cheap and stable cryptocurrency that provides a viable replacement to existing fiat and is able to scale to handle the demands of more than a relative handful of libertarians who want to say "fuck you!" to the system. I doubt that the majority have even read the Bitcoin Whitepaper, or understand what it represents. Even the postulation of 'store of value' doesn't sit right with me. When ebs and flows are swinging as they are; it will be some time before this becomes an honest and truthful premise that is actually reflective in the stability of the value of Bitcoin.

ICO's are nothing more, in my opinion, than speculative Kick-starter Programs with 0 regulatory enforcement, obligations, compliance requirements. It is often straight out theft, powered by greed on the off chance that you will make money on the other end. So far, I'm really hard pressed to find a single recent ICO that has gone to market that has produced anything tangible yet the values of the tokens are skyrocketing.

None of the major cryptocurrencies have proven to be actually scalable to the point of being able to be used on a daily basis. Ethereum, IOTA, Bitcoin - all of which have shown incredible amounts of lack of resilience, scability, usability, and often security to make them a viable alternative to existing currency. And yes, I know, we're still in the early days of this journey relatively speaking and we need time to iron things out. But having had experience on a number of large scale projects I just get the feeling that the cart is leading the horse and things have been released to production too early. Nobody is really asking questions because we're all making money. But how will it play out long term?

I have talked about Tether and Exchange Solvency enough already; so I won't drum beat that topic too much - but it's part of the overall context of what is coming in my view. At some point, there is going to be a inquiry into and auditing of, the operation, solvency and policy to which these exchanges have been operating. There seems to be too many coincidences. From accounts full of coins being locked out from their owners, to lack of audit trails, lack of transparency, coincidental outages during times of massive price movements, missing data and more. Guess who controls over half a billion Tethers across 3 exchanges—over 73% of USDT currently in circulation.

We can keep rehashing the very plausible idea that we're building a huge amount of speculation on top of a house of cards.

Of interest; the CME Cryptofacilities Platform indices are only using BTC and XRP. Look at the spread. With the stability of XRP and it's speed; is it a way to ingress/outgress large sums of capital / profits without waiting for the mempool and knowing that the transaction will be fast and cheap enough that your profits will not be eaten up by the volatility of the market?

Speaking of CME - this is what people will be up against. "Old hodlers and crypto-veterans will eat up wall street" - I'm not so sure.

A thriller about a genius algorithm builder who dared to stand up against Wall Street. Haim Bodek, aka The Algo Arms Dealer. After Quants: the Alchemists of Wall Street and Money & Speed: Inside the Black Box. This is the final episode of a trilogy in search of the winners and losers of the tech revolution on Wall Street. Trading on the financial market is not longer dominated by humans, but by super fast computers and algorithms. The result of this digital revolution on Wall Street is a complex and fragmented financial system that is hard to understand and overseen. A system that we are all connected to. The only people who understand the system a bit, are the people who built it. Haim Bodek started his own high frequency trading in 2007 and built a from his point of view perfect and fast algorithm. One day it just stopped working. Profits disappeared en he went looking for the cause. He decided to go public with his search to display the rotten system.

But let's move onto what I think will happen.

How it could go down

It's could go down something like this:

1. The market is going to suffer a massive correction, either because of, or in part due to;
   1. Exposure of Exchange Solvency or lack there of
   2. Audit of Exchanges
   3. Exposure of the true nature of tethers
   4. Corrective pressure due to regulatory and compliance action
2. In the event of a run for the doors, class action against exchanges, or other market place issues
   1. https://www.reddit.com/r/BittrexScam/
   2. https://www.reddit.com/r/Bittrex/
   3. https://www.bittrexcon.com/lawsuit
3. Super rich and highly experienced traders demolish the market with futures and/or traditionally immoral, unacceptable and illegal practices since the market is current unregulated.
4. People loose alot of money, feel cheated, and run to the governments of their respective countries demanding regulation.
5. Government imposes legislation and regulatory compliance on exchanges, citizens, cryptocurrency projects etc
   • Or, they just beat us to the gun and do it ahead of time.
   • oh wait they did: BITCOIN EXCHANGES IN AUSTRALIA WILL HAVE TO REGISTER WITH THE GOVERNMENT

Of interest, if you follow Bitcoin Core and the implementation of Lightning Network; it really seems that the following will occur.

1. Lightning Network will create hubs, which will transfer funds from one party to another.
2. This falls into IRS's definition of "third party settlement organization": https://www.irs.gov/payments/third-party-network-transactions-faqs
3. As such, IRS requires these to report the transactions.
4. So, who will be willing to be a Lightning Hub and report to the IRS? Most likely only banks or large exchanges, which are subject to KYC and AML regulations.
5. Expect other countries to follow

Meanwhile, across the pond:

The Payment Services Directive[1] (PSD, 2007/64/EC) is an EU Directive, administered by the European Commission (Directorate General Internal Market) to regulate payment services and payment service providers throughout the European Union (EU) and European Economic Area (EEA). The Directive's purpose was to increase pan-European competition and participation in the payments industry also from non-banks, and to provide for a level playing field by harmonizing consumer protection and the rights and obligations for payment providers and users.

The House Always Wins

So further to Korea, Japan and USA bringing in legislation changes and regulatory changes especially in the ICO space; but in cryptocurrency in general, what am I going to do?

I began researching and investigating all of the cryptocurrencies that were within the top 15 and seeing if they would fit into a decision matrix.

I am willing to delay gratification for the sake of sustained and significant gains.

Found it.

1. Is the project and the currency compliant with the future of regulation and compliance as I believe it will exist. - Below
2. Is the project backed by a significant team, with credentials and experience that is searchable.
   • Ripple Leadership
   • With offices in San Francisco, New York, London, Sydney, India, Singapore and Luxembourg, Ripple has more than 100 customers around the world.
3. Is the project already operating, and has tangible products.
   • Apart from XRP
   • Process Payments xCurrent
   • Source Liquidity xRapid
   • Send Payments xVia
4. Is the project addressing a business requirement in the market today and Is the project addressing a specific niche and use case scenario.
   • Ripple provides one frictionless experience to send money globally using the power of blockchain. By joining Ripple’s growing, global network, financial institutions can process their customers’ payments anywhere in the world instantly, reliably and cost-effectively. Banks and payment providers can use the digital asset XRP to further reduce their costs and access new markets.
   • Use Cases
5. Is the project scalable and able to handle significant transaction counts.
   • XRP - the fastest and most scalable cryptocurrency in production
6. Is the project resilient to change over time and able to be updated without issue.
   • XRP is controlled by Ripple. They can stage forks and performance upgrades (and have done on a significant amount of occasions) in a manner that does not interrupt production nor subjective to ideological differences in consensus (Bitcoin v Bitcoin Cash)
7. Is the project resistant to impact from Green Policy, Eco-Terrorism and other changes in the Energy Space.
   • XRP does not require costly and power inefficient mining. It is pre-mined.
   • Understand consensus on the XRP Ledger

 

The teenage investor sums up my thoughts perfectly:

Why People Aren't Investing in XRP, irrationalities of the crypto market

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What is Ripple(XRP)? Ripple(XRP) Explained For Beginners

The Ripple Roadmap in a nutshell. Thanks to https://www.reddit.com/user/Slajso

Step 1) Get as many banks and institutions to use RippleNET. No XRP yet.
Step 2) Wait for whole regulation
Step 3) Keep accumulating banks and such
Step 4) Regulation hits, banks/institutions now fear nothing
Step 5) Tell ALL of your users (which you've been accumulating for so long) that if they all get use XRP, they will SAVE EVEN MORE money
Step 6) Watch them accept as it benefits everyone
Step 7) People catch on and start buying as well.
Step 8) Profit

MUST READ: Session with Stefan Thomas - CTO at Ripple