Crypto-Currency Updates

The Future of Money

Long-term Asset Preservation

Ben Best
Past President – Cryonics Institute
Employee – Biomedical Research &
Longevity Society
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 Wealth Preservation
 What assets will have value in 50-100 years?
 What crypto-currencies will have value in 50-
100 years?
 What fiat currencies (government money) will
have value in 50-100 years?
 The best wealth preservation asset would be an
asset that greatly increases in value (i.e., is also
a good investment)
 Many assets and currencies will disappear, but
others will appreciate in the next 50-100 years
 Prediction is hard, especially about the future
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 What is FIAT?
 Government money has not been backed by gold or
anything else (other than guns and jails) for many
decades
 Governments have declared non-government
money to be illegal, and have declared government
money to be “legal tender”
 Government money is called FIAT, which is Latin
for “it shall be” – money created by command or
decree

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 What is the future value of FIAT?
 Fiat from countries with the highest
annualized inflation rate cannot be
expected to have much future value
 Venezuela 1,623,656 %
 Zimbabwe 67 %
 Argentina 55 %
 Iran 48 %

 Countries with the highest fiat inflation rate

have the highest use of crypto-currency
 Funding of cryonics contracts with insurance policies
is probably rare in those countries
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 What is the future value of FIAT?
 Governments have little inhibition about
printing money, but some are less inhibited
than others
 Since the Federal Reserve took-over US
Dollar issuance in 1913, US Dollars have
lost 98% of their value
 Dollar value appreciated in the 1800s when backed
by gold
 Crypto-currency prices are currently very
volatile, but could become more stable
than fiat
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 What is the future value of FIAT?
 CI Member had French Francs in a safe deposit box that
became worthless after the adoption of the Euro
 Banks dealing in foreign exchange formerly only held
gold in reserves, but now mostly hold reserve currencies
 62% of reserve currency held is US Dollars
 21% of reserve currency held is Euros
 5% of reserve currency held is Japanese Yen
 The US Dollar is the world’s leading reserve currency,
allowing the USA to flood the world with its money
 If the US Dollar ceased to be a reserve currency, Dollars
would flood into the US, with huge loss of value
 China, Russia, India, and many other countries want a
world reserve currency that is not the US Dollar
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 Why have crypto-currencies had
value?
 A cash register has value because it
facilitates monetary transactions
 If money did not exist, cash registers would
have no value
 Crypto-currency has had value by
facilitating monetary transactions
 Sending money to a different country through
banks can take many days and cost up to 10%
 Bitcoin could send money to a different country
nearly as fast as email with minimal cost 7
 SWIFT for FIAT transfer to other

countries
SWIFT : Society for Worldwide Interbank
Financial Telecommunications
 Headquarters in Belgium
 Links to over 11,000 financial institutions in over
200 countries
 Until recently, SWIFT took many days with fees
up to 10% of amount sent
 Edward Snowdon revealed that the National Security
Administration (NSA) spied on SWIFT
 SWIFT has been pressured by US Government to exclude
Iran and Russia as part of sanctions
 US Treasury used SWIFT to seize assets of a Danish
businessman accused of violating the embargo against Cuba

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 SWIFT for FIAT transfer to other
countries

 SWIFT was hacked twice in 2016, losing $12 million

and $81 million to different hackers
 In 2018 Iran, Russia, China, Germany, France, and
other countries proposed to develop an alternative
FIAT transfer agency rather than SWIFT
 SWIFT’s new Global Payments Initiative (gpi)
reduces transaction times to under 24 hours in
response to challenges from Ripple and
JP Morgan Coin

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 Digital money and cryptography
 Coins and paper currency are becoming obsolete.
 Cryptography is the only way to protect privacy and
digital money on the internet
 Prior the 1990s (and “cypherpunks”) the US
government classified cryptography as a “munition”
 If you don’t want the world to know your SSN, bank
account or credit card info, you must be a spy,
terrorist, drug dealer or child pornographer
 In 1991 Phil Zimmermann distributed his software
“Pretty Good Privacy” (PGP) free on the internet
 In 1995 the Electronic Frontier Foundation defended
encryption publication as a First Amendment right –
winning the case in 2003 10
Not all cryptography is created equal
 In 2013 the Target retail store chain had about
40 million debit and credit cards accessed by hackers,
who obtained expiration dates and CVV codes. Target
did not have good encryption.
 Hackers can only steal crypto-currency if the private key
is being stored at a crypto-currency exchange rather than
on a hardware or paper wallet
 In the 20 months following January 2017, a specialized
unit of the North Korean military hacked at least half-a-
billion dollars from crypto-currency exchanges
 International Monetary Fund (IMF) head Christine
Lagarde has urged central banks to issue government-
backed crypto-currencies to make transactions more
secure. 11
What does cryptocurrency encrypt?
 Crypto-currency encrypts the “privatekey” of the
crypto-currency owner, giving the owner
exclusive control of the money. A “public key”
corresponds to an address, which anyone can see,
and which corresponds to the “private key”,
which only the owner can see.

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 Short review of how Bitcoin works,
beginning with a Ben Best bitcoin address

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A Bitcoin transaction
(technical version)

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 Transactions are collected together into
“blocks”. The miner who first solves a
puzzle adding a block of transactions to the
blockchain and is rewarded with 12.5 newly
“mined” bitcoins
(reward decreases to 6.25 BTC in May
2020)
A new block is “mined” every 10 minutes
“Mining” with computers consumes
considerable electricity, but mostly
excess electricity from renewable sources
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 The miner whose first solves the
cryptographic puzzle adds his/her block,
which is chained to the previous block

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 Transactions are collected by
“miners” in a distributed network

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Bitcoin blockchain has accumulated half-
a-million blocks since January 2009

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 How bitcoin and other
crypto-currencies are secure
 The bitcoin blockchain is copied on nearly 10,000
nodes worldwide
 There is no single central database that can be attacked
or altered
 Data on a secure blockchain is permanent and becomes
essentially impossible to erase after several blocks
 Crypto-currency on the blockchain can only be spent by
the owner/possessor of the private key

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Danger of quantum computers?
 The crypto-currency IOTA is already quantum-safe
because IOTA uses a directed acyclic graph rather than
a blockchain, and because IOTA generates new private
keys after each send transaction
 Other crypto-currencies could be made safe from
quantum computers by doubling the private and public
key size, but this would greatly reduce efficiency. Most
crypto-currencies are already struggling to scale (handle
more transactions, faster).
 Currently, even bitcoin “deposits” to the blockchain can
be secure against quantum computers as long as bitcoin
is never sent from that address (which would give clues
about the private key)
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 What cryoptocurrencies will have
value for many decades?
 Will crypto-currency innovations
continue to disrupt and replace existing
crypto-currencies?
 Bitcoin has 10-minute confirmation times,
blocks can only store 2 Megabytes of
data, and Bitcoin blockchain data is
public, not private. Bitcoin does not scale.
Despite being so inefficient, bitcoin has a
larger market capitalization than all other
2,149 crypto-currncies combined.
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 May 2018 Top 8 Cryptocurrencies
by Market Capitalization
Name Market Capitalization Price
Bitcoin $146 Billion $8,570
Ethereum (Ether) $71.6 Billion $720
Ripple $28.2 Billion $0.72
Bitcoin Cash $23.9 Billion $1,393
EOS $11.3 Billion $13.2
Litecoin $7.97 Billion $141
Cardano $6.90 Billion $0.266
Stellar $6.65 Billion $0.358

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 May 2019 Top 8 Cryptocurrencies
by Market Capitalization
Name Market Capitalization Price
Bitcoin $102 Billion $5,795
Ethereum (Ether) $17.6 Billion $166
Ripple $12.9 Billion $0.306
Bitcoin Cash $5.09 Billion $287
Litecoin $4.80 Billion $77.9
EOS $4.66 Billion $4.94
Binance Coin $3.29 Billion $23.3
Tether $2.79 Billion $1.00

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 May 2014 Top 8 Cryptocurrencies
by Market Capitalization
Name Market Capitalization Price
Bitcoin $5.625 Billion $440.73
Litecoin $295 Million $10.40
Ripple $46 Million $0.006
Peercoin $44 Million $2.08
Dogecoin $35 Million $0.00045
Nxt $32 Million $0.032
Namecoin $18 Million $2.05
Mastercoin $17 Million $29.28

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 May 2016 Top 8 Cryptocurrencies
by Market Capitalization
Name Market Capitalization Price
Bitcoin $7.042 Billion $453.32
Ethereum $797 Million $9.98
Ripple $216 Million $0.006
Litecoin $177 Million $3.87
Dash $44 Million $6.76
DigixDAO $28 Million $14.22
MadeSafeCoin $24 Million $0.053
Dogecoin $23 Million $0.00022

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 The Lindy Effect
 The Lindy Effect predicts that the longer a non-
perishable thing has survived, the longer it will survive
 The Lindy Effect predicts that a book that has been in
print for 40 years can be expected to remain in print
longer than a book that has been in print for 20 years
 That the top 6 of the top 8 cryopto-currencies have
remained in the top 6 for the past year is a positive sign
for their continued survival
 Versus disruptive technologies?
 Disruptive technologies replaced Polaroid cameras
and Blockbuster video
 New crypto-currencies may be disruptive not only
to fiat currencies, but to other crypto-currencies
 Prediction is hard, especially about the future
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 Bitcoin
 Bitcoin is the only crypto-currency in the USA that the
SEC clearly defines as a commodity, not a security.
 The bitcoin network is secured by being so much
larger than any other crypo network, with no mining
pool having over 20% of the hashrate
 Bitcoin is limited by a ten minute block confirmation
time, 2 megabyte block size limit
 Bitcoin is a store of value, not a medium of exchange
(proven by the Bitcoin Cash fork).
 Bitcoin has more name recognition than any other
cryptocurrency, and has a market capitalization larger
than all the other 2,149 cryoptocurrencies listed on
coinmarketcap.com, combined.
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 Ethereum (Ether)
 The Ethereum network has an order of
magnitude more developers than any other
crypto, and will continue to innovate to produce
more scalability, speed, privacy, and quantum
computer resistance, among other features.
 Ethereum has the most powerful developer
toolkit of any crypto-currency network
 Ether is not simply a crypto-currency
 The Ethereum network provides a Turing-

complete platform for smart contracts

(Dapps, decentralized exchanges, etc.)
 Ethereum is the ultimate disruptive crypto
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 Ripple
 Challenging SWIFT with a capacity for
international bank transfers within seconds
rather than days at minimal cost
 Used by over a hundred banks (versus SWIFT,
over eleven thousand financial institutions)
 Works with government regulators
 Uses a corporate (not public) blockchain or
uses “chains of trust”
 Ripple owns 60% of all XRP (Ripple coins)

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 Bitcoin Cash
 Bitcoin Cash hard-forked from Bitcoin on August 1,
2017 to be a medium of exchange (a disruptive
technology that failed to disrupt bitcoin)
 Bitcoin Cash hard-forked again into two coins on
November 15, 2018 in a bitter hash-war, each side
attempting to eliminate the other, each spending
$12 million in first week in mining power drawn from
other crypto-currencies
 The hash-war ended November 23, 2018 after causing
the bitcoin price to fall from $6,500 to $3,100
 The two new coins are BCH and BSV
 BCH is #7 and BSV is #14 by market cap

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 Litecoin
 Hard-fork from Bitcoin in 2011 by Charles Lee
 Transaction confirmation time 2.5 minutes
 Smaller network similar to Bitcoin has
spearheaded Bitcoin innovations (Segregated
Witness, Lightning Network)
 Plans to become private and fungible some
time in 2019 (using the same software as the
Monero privacy coin)

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 EOS.IO (EOS)
 Competitor with Ethereum for Dapps
(distributed applications)
 March 2019, EOS had six times as many Dapps as
are on the Ethererum network
 Transaction confirmation speed average 67 per
second (maximum nearly 4000 per second)
 Centralized: 21 “Block Producers” with power
to reverse transactions and freeze accounts
 Accused of mis-governance (“vote-buying”)
 Plans to host a blockchain-based Wikipedia
(Everipedia) that Iran or Turkey can’t block
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 Binance Coin
 Binance is the largest cryopto-currency
exchange in the world (moved to Malta from
Hong Kong)
 Owners of Binance Coin have reduced fees
when trading on the Binance exchange
 Binance Coin has been on the Ethereum
network, but is moving to its own blockchain
(Binance Chain) where it will fuel transactions
and be the basis for a decentalized crypto-
currency exchange
 Binance Coin price was about $6 in early
January 2019 and is now nearly $24 33
 Tether
 Tether is a so-called “stablecoin” priced at about $1 on
the Ethereum blockchain, backed by US Dollars
 Tether has 10 times the market capitalization of the next
largest stablecoin based on US Dollars (USD Coin)
 Tether is owned by iFinex, Inc (registered in British
Virgin Islands), which also owns the Hong Kong based
crypto-currency exchange Bitfinex
 Provides a more stable price than other cryopto-
currencies
 Has the liquidity advantages of other crypto-currencies
on crypto-currency exchanges
 It often takes days to purchase cryopto-currency with fiat on
crypto-currency exchanges
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 Tether
 Tether is required to have $2.79 billion in bank deposits
to match its $2.79 billion market capitalization
 No insurance can cover such a large deposit, and no
major auditing firm will take the risk of auditing the
deposits (although Bloomberg reviewed the bank
statements in December 2018, confirming balances)
 Deposits are held at Deltec Bank and Trust (Bahamas)
 The crypto-currency market tumbled on April 25, 2019
on charges that $850 million of Tether backing is a
“loan” to Bitfinex
 Despite the allegations, Tether still tracks the US
Dollar, is still the most-used stablecoin and is still the
8th largest crypto-currency by market capitalization
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 Dai Coin (GREATLY OVERSIMPLIFIED)
 Dai is a “stablecoin” on the Ethereum blockchain that
maintains a price of $1.00
 Dai can be created as a loan by depositing Ether in
excess of the value of the Dai
 If Dai drops below $1.00, borrowers will pay off their
debt at a cheaper price removing Dai from the system
and elevating the price
 If Dai rises in value, borrowers can create more Dai and
sell it for more than $1.00, increasing supply and
thereby lowering price
 The price of Dai has remained close to $1.00 since
December 2017, without requiring the bank deposits
used by Tether and other US$-based “stablecoins”
 For more detailed explanation, Google “Dai stablecoin”
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 Bitcoin Price in US$
DATE PRICE
October 5, 2009 $0.000764
July 22, 2010 $0.05
December 24, 2010 $0.25
June 2, 2011 $10.60
August 1, 2013 $97.08
November 20, 2013 $1,151
December 18, 2013 $537.85
May 9, 2014 $445.06
May 11, 2016 $450.00
April 7, 2017 $1,186

December 15, 2017 $19,499

May 19, 2018 $8,372
May 4, 2019 $5,795 37
Major bitcoin price drops since 2010
 Bitcoin has had several major percentage
price drops since 2010 (“bubbles”)
 2011 dropped from $39 to $2
 2013/2014 dropped from $1,151 to $177

 Bitcoin buyers, more than other investors

have a get-rich quick attitude
 Many buy when the price rises and sell when
the price drops
 Buy high, sell low is a formula for losing
money
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US$ Bitcoin Price from
May 2014 to May 2016

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 Initial Coin Offerings (ICOs)
 Much of the boom in cryptocurrencies in 2017 was driven
by the creation of new cryptocurrencies , i.e. ICOs
 ICOs are a means of “crowdfunding”, avoiding the
regulations and intermediary costs of IPOs – good for
start-up companies short on cash
 Nearly half of ICOs sold in 2017 had failed by February
2018, and about 10% were fraudulent
 80% of ICOs have been on the Ethereum network
 In September 2017 the Chinese government declared ICOs
illegal, and demanded that all ICO sale proceeds be
refunded
 South Korea soon after also declared ICOs illegal
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 Initial Coin Offerings (ICOs)
 The US Securities Exchange Commission (SEC) declared
most ICOs to be securities, requiring SEC regulation
 The SEC has prosecuted and fined many companies
behind ICOs, and fined several celebrities who had
promoted ICOs
 $6.9 billion had been raised by ICOs in the first quarter of
2018, but only $118 million was raised by ICOs in the
first quarter of 2019
 Funds raised by ICOs were primarily in Ether, and selling
of Ether for fiat money by ICO companies has contributed
to the Ether price decline
 Ether price dropped to less than 1/15 of the 2017/2018 high,
compared to Bitcoin, which dropped to about 1/7 of the high

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Predictions for the next 50-100 years
 The US Dollar will cease to be the leading world reserve
currency, and will greatly lose value
 SWIFT will cease to be the major means of international
money transfer
 The leading world reserve currency and means of
international money transfer will be a crypto-currency,
likely a Dai-like stablecoin reflecting a basket of
commodity prices on the Ethereum network
 Crypto-currency friendly countries like Malta, Singapore,
and Switzerland will attract more capital and software
experts than the USA or China, which will “brain drain”
 The price of Bitcoin and Ether will become the
equivalent of many millions of dollars or more
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 Qualifying Predictions
 Violations of the Lindy Effect
 The US Dollar would be expected to continue to be the leading
world reserve currency
 SWIFT would be expected to continue to be the major means
of international money transfer
 Prediction is hard, especially about the future
 BREAKING NEWS: Facebook is planning to have a
US Dollar-based stablecoin, but can it overcome the
problems faced by Tether?

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 Recommendations for asset
preservation for the next 50-100 years
 Have a diversified portfolio of fiat, jewelry,
precious metals, and crypto-currency
 Deposit at least 5-10% of assets onto a
Bitcoin and Ether address from which there is
no spending (to be Quantum-Computer safe)
 No trust is required if you save your private key
 BUY AND HOLD until reanimation
 Keep up-to-date on cryopto-currency news

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Cryptocurrency news
COIN TELEGRAPH
www.cointelegraph.com

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