Pirate Beachbum

Bitcoin Editor at Large

Bitcoin Bear Market Diaries Volume 2 with Akin Fernandez

The Bitcoin Bear Market Diaries are a series of interviews featuring various important voices and perspectives in the Bitcoin ecosystem. Each interviewee was carefully selected and asked the same group of questions. The main goal was to provide the world with a collection of commentary and opinions on the state of the current Bitcoin and crypto market. Some of the names you will recognize while others don’t wish for the limelight but have great insight and experience we all can learn from.

These interviews are raw and unfiltered with no agenda other than giving each individual their opportunity to speak their mind. If you like what you see, please share with your friends. If something offends you, you should probably X out and find another crypto fluff piece that gives you warm fuzzies.

Akin is a veteran Bitcoiner and the cofounder of Azte.co and never minces words when it comes to Bitcoin.

Name: Akin Fernandez

Country: UK

How do people know you?

Mostly by Beautyon on Twitter, soon by Azteco.

How long have you been into Bitcoin?
Since 2010.

Best Bitcoin experience?
Running the reference client for the first time, and receiving Bitcoin. Realising that it worked, and that I could build software against it. Understanding that this really was “it”.

Worst Bitcoin experience?

Waiting for a full node to sync.

What do you think is Bitcoin’s biggest threat?

Time. Time is the only real enemy Bitcoin faces. Nothing else can stop it or threaten it.

What are your thoughts on the various Bitcoin forks?

They are all worthless, and a waste of time.

What are you optimistic about in this space?

I am optimistic about Bitcoin. I am optimistic that it is going to change everything so radically, that the “Bitcoin World” will be as different to the world today as the world before automobiles was different to the world after the Model-T Ford and factory production lines. As different as the world before the telephone was to the world after the telephone was widespread.

Biggest regret during the last bull market?

None. Bitcoin is not about the markets, which are a tiny handful of businesses in the first world shoehorning Bitcoin into a 20th Century business model. Bitcoin is not about these services (which have their place). Bitcoin is much much bigger than them, and has a potential that dwarfs their volumes and influence.

What have you learned during the current bear market?

That people still have a lot to learn about Bitcoin, and that there is an opportunity to educate the public and steer the narrative. Bitcoin is still in its early stages; that’s why the market is so irrational. People simply don’t get it yet. And why should they? Bitcoin is hard to understand, because it touches so many disciplines and concepts. Even the ones people think they’re familiar with (what money is and how it works) are upended by Bitcoin.

Imagine going back in a time machine and trying to explain an 8 lane highway to early Wildcat California gold prospectors. You could wave your hand across the landscape and try to describe the Slauson Cutoff or the I-10 freeway, and they would just scratch their beards and think you’re crazy. “Stage Coaches without horses? You mean like a steam engine but without rails?” would be their reply.

This is what it’s like when you try and describe the Bitcoin world to people who are not familiar with it. “Money without a central authority? Everyone is their own bank?”. This is the normal reaction to normal people’s first encounter with the idea of Bitcoin. Obviously you don’t have to go back to the 1800s to draw a comparison either; the idea of an iPhone was pure science fiction in the 1990s, and now it is perfectly normal to have a supercomputer in your pocket, that has no keyboard, that you can use to “Video Call” anywhere on Earth free of charge.

The same people today who think nothing of making a Skype call from an iPhone would have scoffed at the idea if it were put to them in 1990. This is also true of Bitcoin. People hearing, “Fiat money will be abolished. Everyone will be their own bank.” sounds like the wildest science fiction to the computer illiterate, but if you know anything about the history of how software has changed everything, it makes perfect sense that money will fall to the same forces, just as the distribution of books, music, phone calls, photography, mail and everything else that has been “digitised”.

A single class of device has totally killed the consumer chemical film industry. In every town there was a drop off location to get your film developed and photographs printed. Now they are all gone, and what’s more, the number of photos being taken has increased dramatically. 14 trillion photos are taken annually and without a single drop of chemical developer to process them. If you asked the question, “How can we create a system where 14,600,000,000,000 photos could be taken, distributed globally at zero cost and taken with a hand held device that anyone can afford” before the advent of the mobile phone, everyone you asked would say that it is impossible, and that the environmental impact of manufacturing the film, processing it, manufacturing the photographic paper and processing it, would be an environmental disaster. And yet, with a single new device, this has been achieved without any side effects. Everyone benefits, and no one is hurt.

This will all happen with Bitcoin. Bitcoin will unleash astronomical numbers in every field of economic activity. It will abolish payer fraud. It will make time and cost savings across the entire economy. It will bring literally billions of people on to the financial rails. All of this is achievable right now, thanks to a single clever idea.

Digitising money has taken longer because money has special properties and requirements that the other goods and services don’t have. Now that Bitcoin exists, this missing piece of the service pie is complete. The same devices that have cause a complete change in how photography and other things are done will now be done with money, on the same devices where everything else is taking place. Anyone who gets a glimpse of even a small picture of the potential cannot help but be very excited by it. With all of this in mind, the price of Bitcoin today is ridiculously low; even at its all time high of $19,000 it was ridiculously low.

What is the biggest fail you have seen during the bear market?

The bear market. Do you see what I did there?

What do you think helped trigger the current bear market?

Immature systems, immature markets, the wrong demographic at the levers. Market traders are not Bitcoiners, infrastructure builders or long term thinkers.

What kind of damage do you think latest price drop has done to buyer sentiment?

Buyer sentiment is irrelevant. Price drops are irrelevant. Damage is irrelevant. We are Bitcoin. You will service us.

How do you feel about the current state and future of lightning network?

Feelings are irrelevant. Lightning is working and expanding rapidly. It will do what it was designed to do, and it changes everything. Now all the predictions about consumer Bitcoin have another route to fulfillment. Billions of Micropayments, machine to machine payments, and every other fantastic use case are now 100% achievable, at a scale that was previously believed to be impossible.

And this is the key takeaway; if you base your thinking on belief and not facts and history, you will most likely underestimate what is possible. Be careful about saying something is impossible. Be careful about using past experience as a limiting guide to future performance or characteristics. All of the people who used the TPS (Transactions per Second) pretext for saying that Bitcoin could never compete with AmEx/VISA were totally wrong, and now they are proven wrong. Anyone with the correct experience could have seen this, and was reluctant to say “Bitcoin can’t scale”.

What are your thoughts on HODLing Bitcoin?

This is like asking, “What do you think of saving money?” Everyone needs to eat, everyone should save money. How much you save and how much you spend on steak is up to you. No one in their right mind saves money and never spends it, living as a hermit in a cave eating moss because they’re saving their money; money is a tool that serves you, you should not serve money, or live for it.

When Bitcoin is the only money on Earth, everyone’s relationship with Bitcoin will be normal, and the balance between saving and spending will be rational. Because the money (Bitcoin) is sound, it will be worth saving, because inflation will have been abolished. The consumer society of throw away goods, waste, short term thinking will be wiped away by Bitcoin as money, because saving will be a rational act again.

You will be able to plan for tomorrow, or even twenty years in the future, knowing that your money will still be able to buy the same amount of goods. This is what life was like before the end of the gold standard, where the salary of the man of the house was sufficient to provide a prosperous life while storing up savings.

What are you thoughts on alt-coins?

Intelligent people don’t think about alt-coins.” — Anonymous

Do you hold any? If not, why?

I have never touched an alt-coin and never will. I am aligned with the purpose of Bitcoin, because it is rational, and correct. People who are not aligned with the purpose of Bitcoin, and who use logic like, “I can buy a whole DerpCoin for $10 but only a fraction of a Bitcoin, so DerpCoin is better value” (that’s a quote from a real person by the way) don’t understand what Bitcoin is for or how prices or money work. Even discussing alt-coins when talking about Bitcoin is an infamia.

What kind of impact do you think the radical drop in alt coins will have on their future.

Alt-Coins have no future. It’s like asking what future MiniTel has in the age of the Internet, or what future telegrams have in the age of fax machines, or fax machines in the age of email, or photographic film in the age of the iPhone. People don’t seem to understand what alt-coins are; they are all forks, or copies, of Bitcoin, with different logos and parameters. It’s like making a copy of OSX, stripping out all the Apple logos and text, and saying, “We are in the operating system business”. Apple is far more than just a disc image of the final result of the work of some of the best developers and designers in software; Apple is the software and the ongoing work of the developers and designers working there. Bitcoin is exactly the same; you can copy a snapshot of it, and re-brand it, but that doesn’t mean you’re able to develop anything meaningful, create new tools like Lightning and OpenDime or do anything else. All the companies and individuals feeding back into Bitcoin make it incredibly powerful, reinforcing it, nurturing it and expanding it.

A picture is worth a thousand words. This site https://mapofcoins.com/bitcoin shows exactly what I’m describing. All alt-coins are downstream of Bitcoin and Bitcoin innovation. They can never ever beat or out innovate or out perform Bitcoin. That is a fact. You are free to use them and even profit from them, but if your aim is not short term and shallow, you will eschew alt-coins and concentrate only on Bitcoin.

Thoughts on the notion of bitcoinization?
It is inevitable, beneficial, essential, lucrative, entertaining and will be highly profitable.

What Bitcoin startups are you excited about?

Azteco, Samourai Wallet and a new project that was just shown to me that could be very large, powerful and useful.

What “crypto influencers” do you think get it wrong and why?

I prefer to talk about the principles rather than the people, so I will say that the people who get it wrong are those who are not aligned with Bitcoin’s purpose. They will call for an increase in the block size one month, and then call for it being cut in half the next month. They will say Bitcoin needs governance, but also laud it for its “permissionless decentralization”. They’ll say that it’s necessary that the money supply is fixed, but then be fans of Ethereum. They’ll applaud that Bitcoin is immutable, but cheer when democratic processes and centralised controls are applied to alt-coins. They’ll say that Bitcoin is a revolution that can bank the unbanked, but insert into guidelines they draft (that no one asked for) that KYC/AML should be done by default for all users including those who can’t identify themselves without batting an eyelid. This is just a sample of how people get it wrong, and they will never go away. Thankfully their voices will be drowned out in the end, and in the future you’ll just not notice them.

What “crypto influencers” do you think get it right and why?

The only people who matter in Bitcoin are the people writing software. They are the ones who have the real influence, because it is the software that makes everything possible. Bitcoin is not about influencers or opinions or feelings; it is about facts set in motion by software. It is about a new class of tool that can turn symbolic logic into action. What people believe can’t be run in a computer; only software can run in a computer. Apple encrypts its devices and protects the privacy of hundreds of millions of people not because anyone believes that that is true, but because it is true. No one who doesn’t like Apple can stop its devices from being private by default.

This is not to say that people who discuss Bitcoin and spread correct thinking about it have no purpose; education in Bitcoin is crucial, and Bitcoin cannot spread without it. Books like The Bitcoin Standard by Professor Saifedean Ammous have done a lot to pull together in one persuasive work, the thinking and facts behind Bitcoin. Works like this get it right because they tell only the truth, and now with Bitcoin, you have a tool that you can use yourself to verify that what it does is true.

What’s it going to take for this Bear market to turn around?

Psychology, and an explosion in new services that act to set the price. LocalBitcoins is doing huge volumes; that is the real indicator that everyone should be looking at, not some regulated stock market mimicking “Bitcoin Exchange” in the worst jurisdiction for on Earth for Bitcoin.

How bullish are you on Bitcoin despite this recent pullback.

There has been no “pull back”. 1 BTC = 1 BTC. It’s like asking, “What future is there for the Internet?” after the so called “Dot Com Bubble”. Anyone can look back now and see that the many companies that had been formed back then were worthless, but the underlying platform, the Internet, was totally sound. It has changed everything, without changing very much itself. The same stock market class reality distortion field is warping people’s perception of Bitcoin, just as it did in the “Dot Com” era.

The price of Bitcoin expressed on a handful of US exchanges has absolutely nothing to do with Bitcoin, in the same way pets.com has nothing to do with how the Internet works or its future potential. This is the sort of question you’d expect from a Paul Krugman or some other contra-indicator. It is very hard to think abou new tools correctly, and the internet in the 1990s is a perfect example.

No one could have predicted WhatsApp or any of the tools everyone takes for granted now, or the devices they work on, and yet at the time, people really thought that, “the Internet was finished”. The language of the financial sector, “Bullish”, “Bearish”, “Pull-back”, “Market Turn-Around”; none of this is appropriate or applicable to Bitcoin. Using that language with reference to Bitcoin is as absurd as using it in reference to email. None of the developers working in it work on Bitcoin projects with an eye on the market, and they will all tell you as much. They understand what Bitcoin is and how to think about it. Price discovery mechanisms will come, but for now it is unwise to believe that the way Bitcoin’s value is determined is definitive or correct. It isn’t. Looking at how it can bank a percentage of the four billion unbanked as a single use case should tell you just how undervalued Bitcoin is today.

When you understand that there are one million people in the UK who are unbanked, you get a sense of the opportunity that Bitcoin brings to the table. All of the million unbanked in the UK have mobile phones, which are now cheap as chips. All of these people use money; the question is how to get them on to Bitcoin? Azteco solves this problem for them in the same way these million phone users top up their mobile phones to make calls and get internet access. And there are 60,000,000 unbanked in Mexico and so on and son on. These people will top up their Samourai wallets with Bitcoin in the same way they top up their O2 or T-Mobile phone accounts. They will spend their Bitcoin over the same network they use for calls. And there are many advantages to be had from this process.

Because Bitcoin completely eliminates payer fraud, the entire world of ecommerce will open to these financially disenfranchised people and an ecommerce boom will spread across the globe riding on the back of and powered by Bitcoin. If that were not enough, the savings from the elimination of Credit Card fraud alone would be enough of a reason to widely adopt Bitcoin. For these reasons and many others, betting on Bitcoin make perfect sense. It solves so many problems simultaneously, there is no way that it cannot fail to utterly change the world.

Any tips you want to give to people new to Bitcoin?

Download Samouri Wallet and get some Bitcoin. Soon you will be able to buy an Azteco voucher to top up your balance in under 10 seconds. There isn’t anything to understand; once you start using it, it will all just make sense. It isn’t any harder than using WhatsApp for the first time. The most important thing is that you’re using it with the best in class tool.

Best tips for storing Bitcoin?

Samurai Wallet, Open Dime, Ledger.

Name some of your favorite information sources and/or podcasts in the space.

@saifedean on Twitter is a must follow, and his book, “The Bitcoin Standard” is a must read.
@bitcoin_matters is a podcast I do with Shaine Kennedy that’s pithy.

RideTheLightning⚡️@MediumSqueeze is an unmissable Twitter account.
Nick Szabo 🔑 @NickSzabo4 is a valuable and insightful Twitter account.

BitMEX @BitMEXdotcom publishes reports that you should never neglect.

Any last words of wisdom?

How much better is it to get wisdom than gold! 
and to get understanding rather to be chosen than silver!
Proverbs 16:16

Stay tuned for the next Bear Market Bitcoin Diaries. I have some awesome interviews in the queue and will be dropping new volumes regularly. You can find more volumes and articles here!

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