Setting Yourself Up Nicely

>> May 19, 2020

>> Blog Post #71

My contributions to this blog have been few and far between recently. I have both wasted a lot of time and yet, have also coincidentally been busy.

The waste of time I can attribute to probably switching tasks too often. You’ll get more done in three straight hours of one project than on one hour of three different projects. Spreading myself thin hasn’t helped and I have to accept that I can’t do all the nice to have things. Focus.

However, I am also cognizant of the fact that these periods generally come hand in hand, at least for me, with periods where I am actually doing a lot of background thinking – you could call it hesitating – on what the best course of action is.

I’ve always believed in luck. Not something that comes out of nowhere and hits you blindly, although that can happen, but something that happens for reasons that weren’t necessarily planned for, just because you had the right surface of “luck potential”. That is how I explained it to myself for years. You can probably do a few things in life that will just help you get lucky more frequently. That was my basic intuition and the little effort I made to explain the concept to myself.

Well yesterday I just started reading Taleb’s Black Swan. I am barely through the first chapter, but it just might be exactly what I needed. A more detailed and thoughtful search into how you can possibly set yourself up nicely for getting lucky.

I am in the free market for maximizing my odds of encountering luck.

How do I do that best, I will have to see. Until now my intuition was that the biggest factor was talking to people. It probably holds some solid statistical properties, but I’ll have to see if Nassim Taleb discusses that or not. I hope he does, as that is something that I would be extremely interested in reading about. If not, I’ll call that an oversight.

I think I’ve moved far enough with my project in a limited space, that is without making it to public and too visible, some sort of nurturing phase. Now it’s time to bring this puppy to town and see what good comes of it. It has a lot of potential. Let’s hope I don’t focus too narrowly and keep a wide “luck potential” surface.

I can’t recommend enough the two previous books from Nassim Taleb that I read : Antifragile & Skin in the Game. Both were superb reads, even though I must admit a strong preference to the first one. What really made an impression on me was how dull the books i read in between these two were in contrast.

Polar Opposites

>> May 12, 2020

>> Blog Post #70

Not a day goes by without you hearing about the dramatic effects the COVID-19 pandemic has on people’s lives and on the economy. The economy has tanked in all countries as a direct consequence of people closing shops during the confinement.

I’ve actually suspected that this economic turmoil is a bigger factor in why many countries are currently getting out of their confined states and back to more normal working arrangements (read normal as in the “norm”) than the sanitary situation itself.

You’d think that the markets would tank because of this but I have actually been extremely surprised by just how fast they have rebounded since the initial – and very strong – crash that occurred between end of February and end of March.

The only reason I can think of, and it’s probably the right one, is that the insane amount of money that has been injected by governments around the world in liquidity has artificially supported markets that are no longer correlated with the real economy. At this point, I believe it is fair to wonder if this can’t just go on forever as no one really seems to care. But please take a look at it and try to spend just two seconds figuring out if you are the one benefiting from the “free” money and / or the stock “performances”. Chances are, you might say no in both cases. Just think about it.

On the other side of the spectrum, Bitcoin has just lived another day yesterday. And nothing has changed. Well actually nothing has changed in the value proposition. The hardest money the world has ever known, sitting on top to a very decentralized protocol and network, with unprecedented censorship resistance characteristics. You have to marvel at what bitcoin has accomplished since its inception.

Yesterday was another milestone in Bitcoin’s very short, yet tremendously rich history. Bitcoin went through its 3rd halving.

See unlike FIAT currencies which might just be inflated into oblivion, Bitcoin’s total market supply is capped. No more than 21 million Bitcoins will ever be produced. The supply is finite, and its rate of production is hard coded in Bitcoin’s consensus rules so that it gradually decreases over time.  Bitcoin’s protocol states that every 210,000 blocks, the block subsidy is cut in half.

Now, I won’t get into too many details on how this works, as it can get confusing fast depending on how much you know regarding bitcoin, but you have to understand that the block subsidy, is part of the reward that is allotted to the miners in return for the work they provide in securing the bitcoin network. Here’s me trying to explain this as succinctly as possible:

Transactions are created every day by the participants who send and receive bitcoin. These transactions are pooled together and included in blocks by the miners, acting as some sort of housekeepers of the network. The miners are compensated for their housekeeping tasks by receiving a reward every time they mine a block. The block reward consists of the block subsidy – the part we are looking at today – and the transaction fees that are included in every single transaction contained in the block that is mined. When mining a new block, the miner will include in the block a transaction paying himself that subsidy, effectively creating new Bitcoins in the process. This is the only way Bitcoin is created, until the total number of Bitcoin every created reaches 21 million, at which point miners will only be collecting transaction fees.

As I said, yesterday was the third halving. Initially, the block subsidy for miners was 50 new bitcoin per block. After block 210,000 the rate of issuance of new money was cut to 25 new bitcoin per block, with blocks being produced approximately every 10 minutes. Since last evening, we are down to 12.5 bitcoin per block, which means every day, approximately 1,800 new bitcoins are issued.

This is going to be a very – VERY – scarce asset, not artificially inflated by governments. Its value proposition is extremely different from that of US dollars or Euros for example. No matter what you think of any of these three currencies, or your home country’s currency, you have to realize there might be some benefit to holding some funds in bitcoin, just in case.

Is This The Time I Finally Do It?

>> May 7, 2020

>> Blog Post #69

I signed up for a coding bootcamp this week. It’s not the first time I take some coding classes online, but up till now I had only taken a few free modules.

This time it’s an entire program and I actually paid for it. It was cheap, so whatever happens it wouldn’t feel like a waste of money, but it is a different feeling to actually pay for something.

I’ve been pretty active on the program for the past three days and it has actually eaten into my nighttime posting routine, but I’m sure I’ll figure out some sort of new organization to make it all work.

I also feel like I’ll be more committed to my learning plan this time around. There is more genuine interest, I actually have plans to use my soon-to-be new skills, my goals are achievable and so far, the program I’m following is really well done. You feel the person who’s put it together is genuinely trying her best to teach you and make sure you are satisfied.

I actually enjoy it so much I need to get back to it, NOW !

Police – Do Not Cross

>> May 6, 2020

>> Blog Post #68

Another week, another company that folds due to restrictive legislation. This time it’s the Dutch company BitKassa.

last time was end of April only… 🙁

Imagine you run a business and from one day to another you see the need to place this big red banner on your front page.

It must hurt so bad.

Here’s their post about why. 1st paragraph includes this:

« Main reason is we no longer want to commit to the excessive demands of the Dutch Central Bank, and the Dutch Ministry of Finance who does a great job serving the Dutch Central Bank in enforcing unreasonable regulation upon Dutch Bitcoin companies. »

Country legislation that protects government sponsored associations of non-elected officials to the detriment of hardworking, honest people who are trying to build for the future.

Makes me sad.

Building is important. Staying in the shade probably is too. It’s still early in the game. I learned early enough that you did not want to sit at the frontier of bitcoin to FIAT if you did not want to face issues. This is just another example of this. License fees, legal delays or costs and fines are designed to run you out of business and protect the establishment.

Multiple Moves Are Possible

>> April 29, 2020

>> Blog Post #67

Up or Down?

Follow the flow or lag behind?

Go against the grain?

Various countries seem to be actively preparing for the next phase, some sort of gradual de confining of their populations.

As I’ve said before, I try to follow the news as little as possible. It is hard to cut off totally though, as people tend to share what they have heard, are doing, or what they fear.

From where I stand, it feels like a lot of countries initially took the same type of measures when putting the confinement in place: close the borders, close the schools, ask companies to go remote, inject massive liquidity on the market, pass “temporary” laws usually only seen during wartimes, etc.

But this here looks different. It seems that the deconfinement strategies may look different from one country to another. The timing might change, the rules might change. Situations might be more country specific.

It probably has to do with two main factors. How bad local economies are hit and how the governments in each country is holding up to the test. Both are obviously linked closely. Strangely I do not believe it has much to do with sanitary reasons at this stage.

My guess is some countries might be willing to take more risks than others, without ever telling you so – of that be certain – because they might not be as well off as you might think. It might be smart to keep an eye out for these.

Where I live schools will be reopening within a couple of weeks. I do not know why as no explanation has really been provided as to why this was necessary, advisable, or just random. Main explanation is that the economies need people to be back at work. Keeping them at home to watch after the kids is probably seen as the biggest factor in preventing that. After all I only know of one person who stopped going to work before they even closed the schools over here, and the only reason he did it is because he really does not like going and would invent any possible story not to go. The story here was that he was hypochondriac, and the pandemic scare was driving him insane. Hilarious.

In any case, I find it really interesting that we need people AT work, not TO work. It seems to me that in this day and age a lot of tools exist to make working from a lot of places relatively easy. In a large number of cases where this is not possible, as a lot of jobs have to be on the job, I think these times offer us an unprecedented opportunity to review the insanely complex logistical chains we are subject to every day and go more local.

Local to me seems less risky, more resilient and more humane.

Here’s what I’ll do and my thought process with all of this. In case of extraordinary situations which are exponential in nature, it’s best to panic and run first. You don’t want to be the last one exiting the flaming cinema, selling your stock during a market crash or waiting in line in front of the bank during a bank run. However, when promises of a return start to be heard, I feel it’s safe to lag behind. To wait for confirmation that the trend is safe and that it won’t all go crashing down again.

Oops sorry everyone is sick again.

Oops sorry it’s mutating into something different now.

The upward trend is more like something you need to ride for a while, and you don’ have to worry about the timing as much.

But there is one final thought here though. All of this is made easier if you can afford it. As I am absolutely convinced that the COVID-19 pandemic has revealed and will continue revealing to a log of people how bad inequalities are, even in the so-called rich countries. Lagging behind because you feel it is a better risk strategy is only possible if the deal is on the table. Being forced to follow the herd is a totally different predicament.

It Has Already Been Written

>> April 28, 2020

>> Blog Post #66


We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. — That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, — That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness. Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly, all experience hath shewn that mankind are more disposed to suffer, while evils are sufferable than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security.

US Declaration of Independance – July 4, 1776

It is the right of the People to abolish it…

But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security.

This tweet also went by today that I thought was interesting

Sliding Into A New Rhythm

>> April 27, 2020

>> blog post #65

I’ve noticed my organisation has started to slide somewhat. I wasn’t necessarily getting as much work done recently because a lot of my time was spent on the family, specifically the kids’ education. But I must say my newfound love for gardening has also been pretty time consuming. All of this has resulted in my days getting longer and longer and any free time has extended in to the early hours more and more, so have my getting up hours. I think I’ve gotten used to this confined state and the novelty has gone a little. That’s probably why the slide is taking over. Need to get back to a better rythm and focus on the tasks at hand.

Some Days Are Tougher Than Others

>> April 24, 2020

>> Blog Post #64

I just learned today that a friend of mine had decided to put a stop to his business preemptively in response to future laws being passed in his country of operations.

He did not do so because what he is doing is illegal. He took that hard decision because he felt he did not want to be morally corrupt, to resort to doing things to his customers that he did not believe in. This takes some kind of guts. And I’m telling you most people would not do that. Respect.

It also took me a couple hours testing some hardware and setting up various accounts here and there to test new services.

Another friend of mine and myself also discussed several bugs we keep encountering in an app we use a lot and that is supposed to be one of the best in the biz….

It’s these days you see just how far you are from what you envision would be a better – yet realistic – future.

I think it’s good to let some doubts assail you once in a while. It keeps you grounded and humble. It also lets you realize how much work there will be to put in and how tough some situations will be. It won’t be easy. But we’ve signed up for it.

Stay strong, follow what you think is right, not what people say is. And support people who you care about.

the pic is a piece of art from probably my favorite bitcoin artist. check him out at:

What If It Got Worse?

>> April 23, 2020

>> Blog Post #63

The weather is gorgeous, we figured out our kids are better served when we are teaching them, we actually spend more quality time together, we have learned (let’s not get ahead of ourselves here – we are just learning) how to grow food for ourselves. Everything is going fine. We are actually looking ahead with hope that this whole COVID-19 crisis will help us take better habits and build a better future. But what if this pandemic episode just led us to even worse?

One of the first things that got me riled up was how the state started telling us what to do, what to eat, what to drink as if we were its babies. Then came the power grab, with those fascist-leaning laws.

But this is only the tip of the iceberg. What we as commoners have to deal with when we are confronted with central governing bodies. But let’s face it, the government doesn’t give a f… about us. To think otherwise would be stupid. So, what you have to do is take a look at what governments care about. Law, order – that’s the part you usually focus on as it has more direct impact on your lives – and outside warfare. This second part is your country fighting with other countries, for power. Look at this closely. Your daily lives have most probably been turned upside down because of the COVID-19 pandemic. But the other part has not paused for one second. There is a strong case to make that it has actually only exacerbated.

Beware, governments are going to fight tooth and nail for power and the monger this lasts, the harder they will cling on to it.

That’s why opting-out of this mess is probably the wiser thing to do, but I believe I have told you that already.

Payjoin is coming to Satoshiindex!

>> April 22, 2020

>> Blog Post #62

Super Bullish!

As I was saying in the last blog post I am very hopeful that people in the bitcoin space are going to actively collaborate to piece together their bits and pieces and offer a better bitcoin to all. This here is a good example of this.

I am still slowly setting up my website, but eventually it will have a store attached to it. One of the payment options will be bitcoin and I will use BTCPay Server as my payment processing software to do so. The BTCPay Server instance I have is running on one of the bitcoin nodes I run.

BTCPay server is terrific and I’ve used it for quite some while now, but it just got better with the “Block 626048” release, which introduces Payjoin support.

Payjoin is a specific type of bitcoin transaction that is designed to enhance privacy for users.

I’ll try to summarize it briefly while maybe giving readers who are not as familiar with how bitcoin works, a few examples.

Example 1

I am going to the bakery to buy bread. I ask for a baguette, which costs 1 € and pay for it with a 10 € bill. The transaction looks like this. I give the baker 10 €, he keeps 1 € and returns 9 € to me.

Example 2

I am trying to purchase the same baguette but only have a few coins in my pocket. I have a 50c and three 20c coins. I give them all to the baker, who keeps the equivalent of 1 € since he will hand me back 10c in change.

If you were trying to make the same payments in bitcoin, it would work exactly the same. Whatever you have in your pockets is used as the input to come up with enough money to pay for the product or service you are looking to buy. The recipient of the transaction will keep what he is owed, and there is a third component, the change that is paid back to you. (for people more familiar with bitcoin, the actual recording of transactions in an “accounting” type of view is different, but I am just trying to explain here what inputs, outputs and change are).

Some people are trying to attack bitcoin by tracking its users’ transactions – the chain analysis companies. This is absolutely unacceptable, as bitcoin should be fungible, meaning 1 bitcoin should be absolutely equal to any other bitcoin out there. They are replaceable by one another. Nothing you do with a bitcoin through your behavior can enhance or reduce the value of a bitcoin.

1 bitcoin = 1 bitcoin

However, the chain analysis companies are trying to flag users and bring AML/KYC rules in the bitcoin environment. They do so by analyzing the blockchain and trying to determine what people do with their coins. They do this through the use of math and … guesswork.

Take example 2 above. When you look at a transaction that adds 50+20+20+20 and that transaction input gives birth to two output transactions: one for 100 (1€)  and one for 10, it is fairly easy to determine that a user took several coins to pay for a product or service that cost 100 and that 10c is the change. If the service was 10c, the user would have only used one of his coins to pay for it. So, the chain analysis company has actually learned a lot from this transaction, but only if one of their assumptions is correct…

The common input ownership heuristic

One element of “guesswork” chain analysis companies rely on is that they consider that all inputs used to build a transaction actually belong to the same user. After all, it is fairly rare for you to buy bread with coins that belong to the person sitting in front of you in the line at the bakery.

Payjoin destroys that heuristic if it is implemented.

In a Payjoin transaction, both the sender and the recipient of a bread purchase will contribute coins to the transaction. The transaction generates the appropriate amounts of (1) payment for the recipient and (2) change for the sender based on both parties’ contributions to the payjoin.

So, what are the advantages?

Payjoin is a privacy enhancement for the network as a whole if implemented. By making it possible for different users to collaborate in creating the input of a transaction, payjoin breaks the assumption that all inputs belong to the same user. Today, I know of one wallet that proposes such a feature, Samourai Wallet. Through the use of the “Stowaway” feature, Samourai Wallet users can collaborate to create payjoin type of transactions.

Better privacy for users is terrific!

But there is also another benefit, this time for merchants. By contributing some of his own coins to the input of the transaction, the merchant will gain the ability to get rid of his spare change and consolidate his pesky cents into larger amounts. In bitcoin terms this is batching and is very useful in order to save on network fees. Through the whole process, the merchant too will gain the privacy benefits of no one knowing which coins are his and which coins are the customers.

I’m really super happy this is coming to BTCPay Server and can’t wait to implement it on this website and offer this as a feature to future customers.

Super Bullish! And congrats to the BTCPay Server team for this implementation of Payjoin (P2EP)!

Here is the official announcement made by BTCPay Server