The Cryptocurrency Explosion

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Cryptocurrency is all of the rage right now, what was once the realm of tech nerds and crazy uncles is now becoming part of the mainstream.  The maturation of this technology, as well as the attention given to it by celebrities and billionaires, combined with concern about inflationary monetary policies has created a wave of crypto mania on social media.  It is now something I’ll talk about with friends or coworkers who aren’t especially geeky.  Very soon even grandma will have a crypto wallet.

So, what is cryptocurrency?

To understand cryptocurrency one first must understand what the money in their wallet is.  Money is a store of value.  It is something developed thousands upon thousands of years ago as means of exchange and make trade easier.  If there was no money we could barter and yet that would be cumbersome.  

Imagine someone wanted two ears of corn from their neighbor and only had pigs.  Two ears of corn is worth far less than a whole pig, but it is rather difficult to divide the pig into fractions without killing the animal.  So to barter for the corn one would either need to take corn that they didn’t really want or give the pig away for far less than it’s actual value.

As a solution to this problem eventually someone got the bright idea: Let’s trade a shiny (and rare) metal in exchange for our goods rather than barter.  These metal tokens of trade would eventually become standardized coins.

In the corn and pig scenario this means that the person with the pig could sell the pig for ten coins and then buy the ears of corn without having to divide up the pig.  It was also far easier not to need both the pig and corn to be together at the same place and time.  These coins were made of non-perishable metals, could be stored and used at any time.

However, shiny metal coins are heavy and very soon institutions offered to keep the coins safe and then give the owner of the metal a special note saying that they owned the metal.  This “bank note” itself became the means of exchange.  And the banking or government institutions with the actual metal also learned that they could simply print more of the notes, without having the metal to back it, then have all of the pigs and corn that they wanted.

Thanks Telegraph: https://www.telegraph.co.uk/finance/businessclub/money/11174013/The-history-of-money-from-barter-to-bitcoin.html

Paper money has value based upon trust in the system that has produced it.  Prior to a certain time, exchanging a pig or corn for paper would be sheer lunacy.  The paper in your wallet only has value that is derived from faith that it can be exchanged for things of practical value.  

So, again, what is cryptocurrency?

First and foremost, cryptocurrency, like the dollar in your wallet, is a store of value.  And it gets it’s value from the collective faith of those who believe it has value.  Like shiny metal replaced the impractical bartering of pigs and corn, like paper notes replaced heavy shiny metal, cryptocurrency is now ready to replace paper notes and for a variety of reasons.

The Federal Reserve Inflation Scam

Most people notice that the price of goods and services is always going up.  But not enough can give a good answer as for why this inflation occurs.  Some price increase is due to increase in costs, such as employee wages or more looters helping themselves to items.  There is also supply and demand, if there’s only so much land, and more people who want it, then price will price will go up as more people bid against each other for a limited resource.

However, the biggest driver of this upward trend is inflationary monetary policy or the fact that central banks continue to print more money and, right now, at an ever increasing rate.  Of course, since paper is basically worthless, the value of this new money has to come from somewhere and that somewhere is your grandma’s savings account.  In the United States the Federal Reserve (a private bank) inflates the currency supply through printing, then loans this newly minted cash to the Federal government.

Need some bread?

That’s right.  The Federal Reserve (a private bank) creates money out of thin air, the value of it coming from shrinking the value of the money in your own wallet, and then loans it to the Federal government where it is distributed to the cronies of politicians, which is eventually must be paid back by taxpayers.  If this seems like a scam, you’re correct, it is.  Only those at the top benefit and then they placate you with ‘stimilus’ crumbs off their table.

Do you hear that sucking sound? That’s the sound of the value being drawn out of your savings account with every new dollar.

There are no limits to how much paper money government and their private bankster partners can print.  The more money they print the less valuable the money that you earned is worth.  They rob us blind, and then claim to have our best interests at heart when they give back some of what was taken from us.  If most people understood this, how much the current system is costing them, they would revolt and put an end to the robbery.

How does cryptocurrency work differently?

The most important thing to understand about cryptocurrency is that supply is limited.  What this means is that value, at least related to the dollar, will increase over time.  

Cryptocurrency, unlike printed money, has a set amount of virtual ‘coins’ or digital tokens that can be produced.  Bitcoin, for example, has a maximum number of coins set at 21 million.  This compared to trillions of US dollars in circulation.  And, as more dollars are produced the number of Bitcoin only decreases in relation.  And, as more people use their dollars to buy this limited supply of Bitcoin that comparative value will only continue to rise.

But what would stop Bitcoin from making more coins?

This is where things get technical, here’s what Forbes says:

Bitcoin is a decentralized digital currency that you can buy, sell and exchange directly, without an intermediary like a bank. Bitcoin’s creator, Satoshi Nakamoto, originally described the need for “an electronic payment system based on cryptographic proof instead of trust.”

Each and every Bitcoin transaction that’s ever been made exists on a public ledger accessible to everyone, making transactions hard to reverse and difficult to fake. That’s by design: Core to their decentralized nature, Bitcoins aren’t backed by the government or any issuing institution, and there’s nothing to guarantee their value besides the proof baked in the heart of the system.

The short version is that Bitcoin is not a centralized bank, not a corporation, it is a code and the security provided through blockchain technology or cryptology and direct user oversight rather than by an institution.  The transactions are the currency and it is pretty much impossible to counterfeit or fake.  Someone would need simultaneous access to every one of the digital ledgers to create more.  Even if this were possible it would cost way too much, require far too much genius, to be practical as a scheme.

The end result is that cryptocurrency is more secure.  The dollar being printed into oblivion is robbing many people blind with the inflation it produces.  Even tokens, like Dogecoin, which have a set percentage increase of supply (to make it more viable as an actual form of currency) doesn’t even come close to the amount of new dollars put into circulation every year.  What this means is that cryptocurrency will continue to increase in dollar value even if there was no increase in demand for the tokens.

Add to this the many people who are only now discovering the crypto revolution, the development of platforms like Coinbase, Webull, Robinhood and others that make it easier for retail customers, and the sky truly is the limit.  Those who missed the opportunity to become millionaires by getting into Bitcoin early now can ride on the Dogecoin phenomenon.  It is a true modern day gold rush.

What are the risks?

This blog would be incomplete without getting into the potential risks.  First of all, not all cryptocurrencies will gain value like Bitcoin, Ethereum, Dogecoin or others.  It seems likely that eventually the market will become saturated with new coins and prices will remain stagnant or even drop with established brands.  And, second, with so much new interest, there are going to be an ever growing number of straight up scams.  So, if you don’t know much, play it safe and talk to that nerdy friend before making an investment.

The other risk is that what goes up fast can also go down as fast.  Dogecoin has gone up 400% in a matter of days and could go up by the same amount in coming weeks.  And yet, sentiment could change, some of the big ‘whale’ investors could pull out with their profits, and there be the equivalent of a bank run (look at the 1920s) as those invested see a rapid decline and sell in a panic.  In the opinions of some, the gains of value amount to a speculative bubble, like the “Tulip mania” that swept the Dutch Republic in 1700s, and eventually the price will collapse.

Also, seller beware, cryptocurrency profits are taxed differently than other income and trading too often could end up putting you in a hole as the IRS demands their slice

Add to that the possibility that governments, like Turkey, fearing the loss of their currency monopolies, lost tax revenue and control over markets, will decide to crackdown and make life difficult for those already in the game. Even the threat could drive prices through the basement.

My own advice?  

1) Do not put all of your eggs in one basket, diversity is usually a strength when it comes to investments.

2) Secure profits along the way, cash out your initial investment as soon as you are able, and that way you’ll never lose.

But, most of all…

3) While seizing opportunity, always be aware of the risks and never EVER use money you need very soon.

Still, with those warnings out of the way, I believe cryptocurrency is here to stay and will be a rare opportunity for many early adopters to see tremendous gains.  It doesn’t matter what the skeptics say, what matters is that a billion people in the world (like me) do see the value of this, we don’t want to see our hard earned savings ruined by hyperinflation, and will continue to pour money into this decentralized bank of the future. 

So, dip a toe, then jump on in, the water is great, and the tide is rising!

Tesla’s Cybertruck Is Already A Huge Success, Here’s Why…

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Did you hear the news?

Tesla is making a pickup truck!

Of course, I doubt anyone who pays a slight bit of attention on social media missed the debut of Cybertruck. I mean, who could miss such a disaster of epic proportions, right?

At first glance, Elon Musk blew it. The truck looks absolutely hideous to your typical truck buyer, like something off a Blade Runner movie set, a future that never will be and never meant to ever reflect what consumers actually want in a vehicle.

But the reality is that Tesla just scored a huge marketing win. Those of you who hate the design, you are not in the actual target audience. A traditional truck buyer isn’t really interested in anything Tesla is offering and taking sledgehammers to windows won’t change that. However, if you have joined those talking about this awful truck then you are doing exactly what Musk’s rollout was intended to do and that is you are providing free-advertising for Tesla.

You might say, “But, wait a minute, everyone is ridiculing this design, laughing about the broken glass, how is that a good thing?”

It doesn’t make sense that what appears to be a failure is anything but a failure, right?

However, there is one thing I’ve discovered in the past few years and that is that almost all publicity is good publicity for those who know how to leverage it. From Miley Cyrus selling albums by twerking awkwardly like an ex-Mennonite ‘woke’ feminist-wannabe still angry at her parents—to Trump winning the White House by offending “libtards” (a term I’m borrowing from a smart liberal friend) with his strategically insensitive Tweets—bad press can most certainly be turned into bankable success.

Sure, you might never, in a million years, buy a Cybertruck. But, who cares? I can about guarantee some version of this truck will be hitting the road in the next few years and now everyone that could possibly want one knows about it.

Musk gets it.

Musk, love him or hate him, understands that people aren’t only buying transportation.

No, ever since Chevy coupes could be bought in more than one color (and much to the chargin’ of Henry Ford and his venerable Model T that was available in any color you want—so long as that color is black), consumers are buying an image as much as anything else. Image trumps practicality at every turn in this age of consumerism.

Musk, for his part, is in the business of creating image and, on this front, has delivered before…

Tesla Successfully Changed What it Means To Be Green

When electric vehicles were first introduced by established carmakers (or rather reintroduced after a century-long hiatus) they were always sold as being ‘green’ and a compromise. The EV1, for example, that billion dollar General Motors boondoggle, while winning a cult of leftist conspiracy theorists, failed to inspire the car buying masses.

And, sure, you can find enough virtue-signaling professor types or too practical appliance-car buyers to purchase a Toyota Prius. But, for the simple reason that it is boring as Al Gore’s personality, you’ll never convince the general public that this should be their next vehicle . Nobody wants to settle, every big-ticket item we buy is an extension of us, shows our personality, and an electric Toyota has all the excitement of a tweed sweater.

Musk changed the game. He changed the focus from economy and compromise (for sake of some hypothetical greater good abstraction) to real luxury and serious power. There was really nothing that new or innovative about his designs. In a sense, all Telsa cars (at least up until the Cybertruck) had styling cues that belonged next to a 1990s Ford Taurus or Chevy Caprice of the bubble car era. But the marketing strategy worked.

Telsa made electric cars something relevant and cool.

To the target demographic Model S and subsequent offerings have looked sleek and sophisticated. They also offer real-world performance, exclusivity, and appearances of eco-friendliness on top of that. They pretty much bested the existing offerings of BMW, Lexus, Audi and Mercedes Benz in every metric that mattered to that demographic.

So what happened???

How did we go from that to Cybertruck?!?

But, first…

Why Does Anyone Buy a Pick-up Truck?

Truck buyers might claim to be practical. And that may be the case if you have an old Ford Ranger in your driveway, farm or hang drywall for a living. But most people do not need a pick-up truck any more than I need a Shelby GT-350.

With a pick-up truck you are buying an image.

Sure, pick-up trucks are often sold for their utility, for their ability to tow a trailer full of excavating equipment up a rocky cliff, and some do get used for this purpose, but let’s be real: The reality is that many of these two-ton behemoths (if not most) are used primarily as grocery getters, are not very practical for that task and that’s the point.

Come on, do you really think that guy (waking you up at an ungodly hour) put those obnoxious straight pipes on his Dodge Ram to uncork a little more power?

Is that six-foot lift kit on a late-model Duramax really about ground clearance and rock-climbing ability?

Don’t kid yourself, the jacked-up smoke-spewing monstrosity is all about trying to get you to notice and that goon behind the wheel will enjoy your disgust as much as your approval.

What we purchase is never only about the real-world utility of the thing. It is also to make a statement of some kind and trucks to make a statement. Owning a truck is often about getting noticed, it is a status symbol, it is a projection of strength, security and good ol’ American independence.

It is about possessing capabilities (real or imagined) that others do not have with their wimpy cars. And that’s generally why people prefer trucks over the alternatives.

Tesla’s Cybertruck Is Already A Huge Success

Believe it or not, Musk’s marketing plan was executed perfectly broken glass and all.

How do I know this to be the case?

Well, everyone is talking about it, even people who aren’t normally truck buyers or very interested in automotive news period are talking about Tesla’s hideous new Cybertruck creation, laughing about the busted window, making videos about the tug-of-war, etc.

Meanwhile, amid this free publicity is a subliminal message: If you want to be truly different, if you want to really stick it to the status quo, then buying the most loathed vehicle on the planet will give you that notoriety and the attention you want.

Call the Cybertruck ugly, but since when is a pick-up truck supposed to be pretty, dainty and delicate?

Laugh about a broken window, but since when have you seen someone dare to throw a steel ball at their shiny new F-150 or Silverado?

Say that the tug-of-war test is meaningless (and it is as far as something of practical value) and yet who hasn’t seen the videos online of similar contests between trucks?

Musk understands the average truck buyer better than they understand themselves. He also already knows that he’s not going to attract the traditional truck buyer.

Bubba ain’t giving up his “square body” Chevy even if you gave him ten Teslas and Billy Bob will be tweaking his “first-gen” Cummins until the thing dissolves entirely into a heap of rust and accumulated soot.

Likewise, pappy will continue to buy his overpriced four-wheel drive luxury barge, from a traditional brand, because new cars aren’t ‘safe’ like his 1960’s Oldsmobile.

The traditional truck buyer is not the target audience of Telsa’s campaign.

No, Tesla has, in effect, created the parody of a pick-up truck, the one that takes the increasingly squared shoulder look of pick-up trucks and goes straight-up box on wheels.

Cybertruck is extreme, it defies convention, which has been what the “big three” (if you can still call them that) have been doing for years. I mean, have you seen the new Silverados? The things are extremely exaggerated compared to the designs they replaced, almost cartoonish, and that has been the design direction for all full-size trucks, bigger, more aggressive, etc.

In reality, the Cybertruck is brilliant because it is the only way you can go to be more rugged, more independent and different.

It is a design that says, “I don’t care about you being offended.”

The only thing different is that the target demographic is not some redneck “rolling coal” in Arkansas who doesn’t want an electric truck, period, and never will.

Rather Musk’s target is someone like Arnold Swartzeneggar in Hollywood who in times past would’ve bought a Hummer to make a display of his unbridled masculinity, is desperate to be unique and yet now, to win female attention in his social strata, has to also signal his eco-consciousness.

There will be many out there who will emulate the boldness of their celebrity idols. Many who would enjoy irritating everyone else on the road with their annoying tastes and will especially enjoy the ire of the traditional truck buyers.

A successful product doesn’t need to be liked by everyone. In fact, when it comes to vehicles, it is better to have a specific group in mind and not to worry about what those outside that particular target group think.

Bad publicity isn’t bad if it gets your message to those who would potentially buy your product. The negative buzz can turn into a positive.

But will it work?

The Problem with Shock and Awe

Trump might win by a wider margin in 2020.

Tesla may have as much success with the Cybertruck as they have with their other vehicles.

However, people are fickle and the fresh direction that worked before might become old news and the next Edsel on the second go around.

Tesla (unlike Trump) also has some serious competition. Not only is Ford translating their proven F-150 platform into electric, but there is also the up and coming Rivian R1T that looks a little more thought out and has some traditional cues despite being differentiated.

It could be that most of Tesla’s target demographic consumers would settle for something a bit less radical and a bit more refined in appearance. The Cybertruck may simply be too silly to be taken seriously in the very competitive truck market—it may need to be tweaked towards a more traditional design.

There is a point when being controversial ceases to be appealing to anyone, goes full-on Aztec, and alienates everyone. (It didn’t work for Trump’s opponents who tried to adopt his brash style either, it completely backfired, it made them look even more lacking in authenticity than they did before.) And time will tell if Musk’s successful marketing of Cybertruck will turn into an actual sales success. But he did get our attention, that’s for sure, and that is half the game!

Musk, like Trump, has mobilized his haters and used them as a hugely successful marketing campaign.

Tesla’s Uphill Battle in the Trucking Industry…

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There is no question that Elon Musk has changed the conversation as far as electric vehicles.  Musk, unlike his predecessors, focused on building an image of luxury and performance.

Electric powered vehicles, until the Tesla Model S arrived as an option, were boring, slow and impractical.  Now, while Musk’s cars still remain impractical for most people (both in terms of range and price) and while it remains to be seen whether or not his company could survive without corporate welfare, Tesla has at least undone some of the negative image of electric vehicles.

Tesla seems to be taking one more step in the direction of practicality with the introduction of commercial vehicle.  Semi, this latest opportunity for Musk to attract media attention, reminds me of something I would’ve drawn up in a middle school daydream: It has a sleek exterior, it is loaded up with LCD screens, it promises to perform at a level one would expect from a sports car, it is priced similar to other Class 8 trucks, and yet also makes me question if any experienced truck drivers were consulted in the design process…

Sure, middle school me would be salivating over this technological wonder.  However now, as one having had years of experience behind the wheel of a big rig, the center seating position, glare of screens, wheel fenders and charging times make it totally unappealing to me.

The ergonomic and design issues, obvious from a driver’s perspective, are covered in another former trucker’s article (click here if you want to know more about them) but there are more serious matters and practical concerns yet to be addressed.  Acceleration numbers and having the fastest truck on the road might increase coolness factor, but it might also leave all of your cargo on the road (or like the unmitigated disaster recalled unfondly from my days unloading trucks at the paint store) and distracts from questions of actual viability in the real world.

To many the promised 300-500 mile range and 30 minute recharging may seem wonderful. But, from a trucking industry standard, it is truly abysmal and completely impractical.  The range of an over-the-road diesel truck, with 250 gallons of fuel, is anywhere from 1000 to 2000 miles and it only takes fifteen minutes every other day to refill the tanks—multiple extra stops per day is intolerable given the current hours of service requirements.  

And, that’s assuming good conditions, what happens in cold weather when battery capacity is reduced by 40-50% like owners of other Telsa products have experienced?

It is no big secret that fossil fuels carry a greater amount of energy per pound than the alternatives currently available. This energy density is especially important in commercial trucking where every ounce of extra weight takes away from payload.  Batteries with the range Telsa has promised will certainly be very heavy and that will be a huge competive disadvantage.  It means you might need an additional Tesla truck to do what one diesel truck does—which wipes out any illusion of energy savings and cost effectiveness.

Then there is the question of longevity and servicing the truck.  It could very well be that the Tesla Semi will be completely reliable and go a million miles like a diesel truck.  But, even assuming that is the case, what sort of maintenance program and roadside assistance will they offer when things do inevitably go wrong?  Service infrastructure is a more significant in commercial trucking than it is in general.  Diesels are relatively easy to work on and the network is already established—those are questions that must be answered.

My own back-of-the-napkin analysis, based in what has already been said and can be reasonably assumed, is that this new Tesla offering will have the same liabilities of other battery electric vehicles except on a far larger scale.  The question of Tesla being the future of trucking (or is simply a niché vehicle for those who can afford the unavoidable range and weight disadvantages, as well as potential maintenance issues) is not answered.

Trucking companies, unlike wealthy luxury car buyers aided by government subsidies, need to be profitable and competive to survive.

What do my trucker friends think?