In today’s Exponential Investor
- We launch today!
- Quantum and crypto
- Miners gotta get paid
Today is the big day!
We’re live with our first video from my all new docuseries, The Search for the Next Bitcoin.
Today we release the first video interview with John Butler.
John is a great person to kick this week off. As well as working for Deutsche Bank and Lehman Brothers, he’s been a #1 ranked investment strategist by Institutional Investor magazine. Not only that, he’s an internationally respected gold and crypto expert, and the author of the respected book, Golden Revolution.
And today you’ll hear him talking about a fascinating subject – how bitcoin sits at the intersection of money, markets and technology.
That is you’ll hear him taking if you’ve registered for my seven-part docuseries, The Search for the Next Bitcoin. If you have, great! Enjoy today’s content and the content for the rest of the week.
If you’ve still not registered to view our interviews and get access to our free reports and content, you can still get on board by heading through to The Search for the Next Bitcoin site here
All week we’ll be releasing new video interviews with the best minds in crypto to help you understand what it’s all about and how this seismic change in the world could play out in the coming years.
But I’m fully aware there are still some limitations and barriers that people find difficult to get over before the leap into the crypto markets.
Thankfully I’ve had some great feedback already about this docuseries, namely questions people have about bitcoin, cryptocurrency and how it all works.
I want your journey into crypto to be one of exploration and education. One where your eyes are finally open to the opportunity in play and the potential wealth that is up for grabs.
But I also want you to understand the core ethos of why I put together this docuseries and why I brought together the likes of John Butler, Saifedean Ammous, Charlie Morris, Eoin Tracey, Dominic Frisby and Jason Schenker.
You’ll quickly see when you’re watching the interviews that not all of my guests agree with each other. In fact, some have hugely divergent views on bitcoin and other cryptocurrency.
That’s why we have the mix we do. We don’t expect everyone to agree. That helps to present real quality and thought-provoking content to give you a more rounded view of what’s taking place right now.
In watching the interviews and thinking about the crypto opportunity, I want you to take one key message from and which I explain fully in my video presentation which is going live this Wednesday.
I think it’s the most critically important idea to understand before you take the plunge into the crypto markets.
Make sure you’re registered and get full, FREE, access to all the videos and content that’s waiting for you.
And if you’re already registered and ready to go, I think you’re in for a truly enthralling week.
Now as I said earlier, I’ve had some great feedback about this already. As I say I want this to be educational. That’s why I’m going to answer a few questions today to help you understand some of the more common things people ask about bitcoin and why they might struggle with taking that first step into this amazing market.
Your questions answered…
Let’s kick off with a technology question that a lot of people worry about – the rise of quantum computing. Note: questions have been edited for brevity and clarity.
Question: One of the concerns is that Quantum computing will allow cracking of even highly encrypted transactions in minutes rather than millennia. I assume that this would invalidate cryptocurrencies once it is widely available.
Answer: In late 2019 I covered this very issue in a publication back in Australia. I wrote,
There are already a number of [crypto] algorithms in the works or available now that are said to be quantum-resistant.
These include lamport signatures, ideal lattice cryptography, zk-SNARK cryptography, and even a migration to SHA-384 encryption. This all has the potential to be quantum-proof. And are just four current examples of known work in this field.
We also know that immense research is being directed toward quantum-cryptography.
And a lot of it is coming from the very companies building these new quantum computers.
For example, IBM has quantum-safe cryptography research in the works already. And the US National Institute of Standards and Technology (NIST) is actively working on a standardised method for quantum-proof encryption.
That’s just a snippet of the bigger story, and one I’ll cover again in more detail. But it’s something that’s acknowledged, and has multiple solutions to ensure it’s not a problem already being worked on.
Question: I do have one big remaining concern though: Wallets! I have stored all my crypto purchases via the exchanges where I purchased. Should I move my crypto investments from the above exchanges into another “wallet”?
Answer: Wallets and what to do with them are something that is a roadblock for a lot of people. It doesn’t have to be. Exchanges do often prefer you to hold your crypto in their wallets, and they do go to length to explain the safety of them.
But there’s a saying in crypto, “not your keys, not your crypto”. That means if you don’t have full access to the wallet at all times – by that I mean the cryptographic private encryption key – then you’ll always be at the mercy of a third party.
I don’t like this counterparty risk because it means you’re putting your trust in someone else. In crypto one core principle is to take back that power and control of your money yourself. Yes, that means a little more responsibility but it’s not as scary as it sounds.
That’s why I’ve gone to some lengths to explain more about wallets and the different kinds and the pros and cons of each in my report, “The Ultimate Starters Guide to Crypto” – which is some of the FREE bonus content we’re giving away for everyone who’s registered for this week’s Search for the Next Bitcoin docuseries.
Read that bonus content, and I think you’ll be much more comfortable with the different kinds of wallets. In fact I already had one person who registered for the docuseries write to me to say, “Also I must commend you on your very detailed Ultimate Starters Guide to Crypto. As a complete crypto beginner, I now understand the difference between all the different types of wallets now!”
Question: As the total of bitcoins gets very close to or hits 21 million, what will the miners do? The integrity of the whole BC system depends upon the capitalist aspirations of the miners… sort of in the way that a bank operates today… if the reward is no longer there, who keeps the ledger and the BC honest and intact in perpetuity?
Answer: Great question. And yes, the miners need economic incentive to continue to mine bitcoin and add blocks to the blockchain, otherwise why should they other than altruistic motives?
Bitcoin was always intended to be deflationary, and that there was always a fixed supply. It really plays into the demand/supply economic principles. But the big sky thinking early on was that it would become a globally recognised and appreciated way to conduct transactions online.
As a medium of exchange, a payments system from peer to peer. And in doing so it would scale and grow in size to become a truly global system. With that there would be an exponentially increasing number of transactions as bitcoin scaled and the miners got closer and closer to complete mining of bitcoin.
There was always intended to be a tipping point where the block reward for mining would make bitcoin not economic to continue to mine any more. But the view was that the transaction fees from so many transactions circulating through the network would replace the block reward as the economic incentive.
Hence for a miner, when they mine a block instead of just block rewards they also get all the transaction fees in the block that miner validated. So while the BTC reward might fall away, the expectation is, and it’s looking like it will be the case, that the transaction fees more than replace that and continue to provide economic incentive long term.
That’s just a snippet of some of your questions, and please send in more if you have them. Happy to put these down and provide answers to hopefully clear up any worries or confusion you might have.
Ultimately the more you learn, the more you understand and the more you’ll see the huge crypto opportunity in front of us.
Editor, Exponential Investor