Author: info@kruseatdestin.com

First – this blog is not tax advice. Please consult with a tax lawyer or CPA before doing your taxes, and hey, it goes without saying, but always pay your taxes.

One USD dollar invested in Bitcoin in 2010 is now worth 900,000 dollars.  Great news, but how much in taxes do you owe if you sell it?

The news is good if you did not sell and still own it.

Starting in the 2020 tax season, on Schedule 1, every taxpayer has to answer at any time during the year whether you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency as the video above said.

This is an extremely broad question and will require you to check “yes” even if you are just holding crypto in an exchange or wallet. In 2020, the IRS clearly sees noncompliance on virtual currency transactions as a threat to the tax system.

If you mark “yes”, first & foremost, it would signal the IRS to check various forms and schedules of the return for cryptocurrency gains and losses. However, everyone who marks “yes” may not have a reportable taxable event. For example, during 2019, if you just held bitcoin and did not sell, you would not have any taxable amount to report. In these cases, the IRS will use the cryptocurrency question as a way to gather data about US crypto holders and keep an eye on future years for taxable events. HYPERLINK

The IRS sent three different types of notices in the initial phase in 2019:  I know because I got one from them via the Bitstamp exchange.

Letter 6174– this wass a soft notice informing the taxpayer that there is a likelihood that they did not report their virtual currency transactions. The notice asked them to re-check their return and, if necessary, file an amended return to correct the misreporting. The taxpayer is not required to respond to the notice and the IRS intends not to follow up on these notices. In short, this is information only to the taxpayer and education on how they comply.

Letter 6174-A– this was a “not so soft notice” from the IRS. As in Letter 6174, this letter tells the taxpayer that there is potential misreporting of virtual currency transactions. However, this notices stated that the IRS may follow-up with future enforcement action. Again, no response was required if the taxpayer believes that they are in compliance. Taxpayers who received this notice should have been aware that they have been put on “notice” that they have been identified as a noncompliant taxpayer for potential future IRS enforcement (audit)

The last notice required a response – Letter 6173. This notice requested a response from the taxpayer about the alleged noncompliance. The letter provided instructions on responding to the IRS. The IRS intends to follow up on these responses to determine if the taxpayer is in compliance.

The IRS started sending a small number of these notices in June, 2019. Mass mailing of these letters will occur during the week of July 22, 2019, and continue through August. Taxpayers receiving this notice will have a special hotline and address at the IRS for any contacts and responses

Bitcoin however, enjoys a favorable tax treatment from the IRS. This is bullish considering its run in 2019. They key is understanding your tax basis and why it should be held for investing purposes but also for its tax treatment.

Capital gains tax in crypto is especially bad because it is extremely expensive to rotate positions in a bull market. Your next investment needs to outperform your current hold by 30-40% to be in the money net of tax.  This is why I tell everyone never sell once you buy.

Most talk about why you should never sell BTC, but if you do sell you need to know what your tax basis is. As with all financial advice, check with your tax expert before taking any advice from anyone. So what does the IRS say about BTC/GBTC tax basis?

According to the IRS’ official guidance on crypto taxation, crypto is taxed as “property,” which is just a fancy way to say it’s taxed like a stock.

Thank the Bitcoin God!

Now let’s go back in history to 2010 and see what BTC founder had to say about this aspect of BTC:   “Bitcoins have no dividend or poten­tial future dividend, there­fore not like a stock. More like a collectible or commodity.”

–Satoshi Nakamoto

The US government decided to handle BTC differently.  Why?

If you buy bitcoin and hold it for more than a year, you pay long-term capital gains when you sell.  For US federal taxes, that means you pay a 15% tax on any gains, unless you make a lot of money (more than $479,000 (for married couples) or $425,800 (for individuals)), in which case you pay 20%.  That compares favorably with almost every other alternative investment sold on Wall Street exchanges.

I believe there were two main reasons the government did this. The first one is obvious.

1.  Taxing it like a stock makes it very unfavorable to be used as a currency to compete with the US Dollar.  They do not want any competition for the dollar because of how they use the dollar to punish countries politically and exert pressure.

2. The second reason was to use IRS tax law to uncover who holds cryptocurrency so they could tracked and surveilled for tax purposes into the future.

The government knows tracking crypto transactions is difficult for the IRS because of manpower.  They also know that the cell phone is the ideal way to track people who own crypto.  This is one reason why using a VPN on your phone/computer is very wise at the beginning of 2021.   The IRS is telegraphing they intend to have the NSA spy on us through our phones.  Once they find out who admits they have crypto they’ll know who to surveil via technology.  This is why everyone who uses cryptocurrency should consider a VPN for their phone.

Eventually, people will think ‘My phone is spying on me’.” Why are they doing this?  Under observation, we act less free, which means we effectively are less free.  You have to think critically to know what they government will do when the deck is stacked against them in the crypto-world.

For instance: GOLD IS NOT AS BITCOIN FRIENDLY AS BTC when it comes to taxes.

Gold is taxed as a collectible. That means, no matter how long you hold it, the lowest tax you can pay when you sell is 28%.  And yes, this is true even if you hold a gold exchange-traded fund like the SPDR Gold Shares (GLD); there’s nothing magical about wrapping physical gold in an ETF that changes its tax treatment.

Currency is taxed at regular income rates. No matter how long you hold a currency investment like the Invesco CurrencyShares Japanese Yen Trust (FXY), you never qualify for long-term capital gains. Instead, you pay your marginal income tax rate on any gains, up to 37% on federal taxes. This one hurts the pocketbook.

Commodity futures–and ETFs that hold commodity futures like the US Oil Fund (USO)–are what’s called Section 1256 contracts for tax purposes. That means two things, neither of which are good for long-term investors:

1. First, any investment in a Section 1256 contract is “marked to market” at year-end, which means you owe taxes on paper profits at the end of the year even if you don’t sell.
2. Second, regardless of your holding period, 60% of any gains are considered long-term capital gains, and 40% are considered short-term capital gains. That means the blended tax rate for someone in the highest federal income tax bracket is 26.8%.

The relatively high tax rate is unfortunate, but it’s the mark-to-market feature that kills long-term investors. People really don’t like paying taxes on paper profits, and the inability to defer taxation can have a meaningful impact on long-term returns.

Bitcoin futures, for what it’s worth, are considered Section 1256 contracts, so they fall under this tax classification; direct holding of “physical” bitcoin (or investing in a fund that holds bitcoin) does not.

WHAT ABOUT THE TAX BASIS OF AIRDROPS AND HARD FORKS FOR BTC?

An airdrop, in the cryptocurrency business, is a marketing stunt that involves sending coins or tokens to wallet addresses in order to promote awareness of a new virtual currency. A hard fork is a radical change to the protocol of a blockchain network that makes previously invalid blocks/transactions valid (or vice-versa).

A “hard fork” of a cryptocurrency owned by a taxpayer does not result in gross income for a taxpayer if the taxpayer receives no units of the new cryptocurrency, but taxpayers receiving an “airdrop” of units of a new cryptocurrency after a hard fork have ordinary gross income from the airdrop, the IRS ruled in Rev. Rul. 2019-24, issued in October in 2019. The IRS also updated its Virtual Currency Transactions frequently asked questions on its website to reflect the ruling.

The last thought:  the US tax system relies on a voluntary compliance system. This means that the the IRS expects you to report all taxable transactions (whether the IRS knows about those transactions or not)

The IRS is now asking you to self report what crypto transactions on your 1040 return you have made in 2020 because without this information they are flying blind to a degree.  They do get some help however.   If you receive a Form 1099-K or Form 1099-B from a crypto exchange, without any doubt, the IRS knows that you have reportable crypto currency transactions. … If you receive a Form 1099-B and do not report it, the same principles apply. Likewise, Coinbase, Kraken and other US exchanges do report to the IRS.

This is thanks to the “matching” mechanism embedded in the IRS Information Reporting Program (IRP).  During any tax year, if you have more than $20,000 proceeds and 200 transactions in a crypto exchange, you will get a Form 1099-K indicating proceeds for each month. The exchanges are required to create these forms for the users who meet the criteria. A copy of this form is provided to the account holder, and another copy goes to the IRS. If you file a tax return and do not include these amounts, the IRS computer system (Automated Underreporter (AUR)) automatically flags those tax returns for under reporting. This is how you get tax notices like CP2000. If you receive a Form 1099-B and do not report it, the same principles apply.

Over the past few years, the IRS has issued subpoenas to several crypto exchanges ordering them to disclose some user accounts.  Many crypto investors got caught in that web after the 2017 drop because many people sold BTC and did not hold it.  This created huge IRS interest.  Word is this is another reason why IRS decided to treat BTC as a stock to get more tax monies.  Anyone who sold it at a loss would want to offset the loss with a gain so the IRS could find out how many Americans were really holding cryptocurrency.

For example, in 2018, Coinbase had to disclose approximately 13,000 user accounts including taxpayer identification number, name, birth date, address, records of account activity, transaction logs and all periodic statements of account or invoices (or the equivalent) pursuant to John Doe summons. On another occasion, the IRS subpoenaed Bitstamp to release more information about a taxpayer who filed an amended return and requested a $15,475 refund.  Let’s just say I know that taxpayer and how the IRS tracked the person of interest.

A 2020 point:  If you took a crypto loan from an exchange remember the interest is tax deductible but the loan amount can be calculated from the interest paid.  This tells the IRS that a balance had to be present on the exchange at some point to make the collateral based loan.

IS DeFi HANDLED DIFFERENTLY?

That was all Bitcoin, what about Defi crypto transactions on Etherium?

There are three big topics in DeFi to cover for taxes – liquidity pools, staking and yield farming, and NFTs.

Very simply, a liquidity pool, or a DEX, is a smart contract where you can exchange one token for another.  I have written about them already in the BTC series.  Have a look at them.

Trading on a DEX is exactly the same treatment as trading anywhere else. There is one level of complexity which is that Dex’s are 100% token to token trades, as opposed to exchanges where one side of the pair is often a fiat currency.

Liquidity Providing

But, let’s talk about the DeFi part – providing liquidity to a pool. I pick a pair (let’s say the SushiSwap WBTC / WETH) and I deposit 50% value of each asset. For instance, in March that would be around 1 WBTC and 25 WETH. As part of that deposit, I get a token back indicating my ownership percent of the pool. People then trade against that pool, and over time my holding will shift in line with the relative movement of WBTC and WETH. Perhaps in a week my holdings will be with 1.1 WBTC and 24 WETH.

There are a few ways people are treating this for tax purposes. On the one hand, some people treat the initial deposit and token issuance as a trade. That is to say, you’re 100% disposing of the WBTC and WETH, and acquiring a new token with the cost basis of the tokens you disposed of.

For a lot of people, this is a perfectly reasonable treatment, especially if you only recently got into crypto. That’s because you pick up a gain or loss based on that disposition – if you’ve been hodling a month that might be a minor loss. If you’ve been hodling 5 years, you may be creating an enormous tax bill for yourself which would require you to liquidate assets.

To deal with that problem, some tax professionals are recommending you treat this as a containerization – the best analogy is to think of a blind trust. Back in the day, politicians would put their assets into a blind trust when they took office, which is to say they didn’t sell all their stock, but they put it under the care of a professional who would not consult with them on trades. Theoretically, this decreased the chances of the politician making self-enriching policy.

In that case, the transfer to the blind trust was not a taxable event, but every trade that the blind trust executed would be even if you weren’t directing it.

That’s essentially what a liquidity pool is – you deposit some funds, then other people are actually doing the trading on top. So, in a perfect world, you’re not recognizing the transfer into the pool as a taxable event, you’re monitoring the trades and recognizing those on a block by block, day by day, or month by month basis. We build software to automate that, but you can do it yourself by just picking a time once a day to check your underlying asset balance in the liquidity pool, recording that in a spreadsheet, then having a column that tracks the relative deltas of the assets. Turning that into a trade can be simple for a 2 asset pool, perhaps more complex for a pool like Balancer, and you have to follow some rules around multi-asset trades.

In this way, you are essentially only recognizing the change to your holdings, not a full sale of all your deposited crypto. In fact, a similar discussion arises around WBTC and WETH – is the movement from ETH to WETH a sales and acquisition, or a containerization? Some tax professionals are ok with the containerized approach, some aren’t – so, talk to your tax person before you jump into this world!

FOR DeFi TRADING CONSIDER A CORPORATE CRYPTO ACCOUNT

Interestingly, in the eyes of the law, Corporations are afforded similar rights to natural living humans. Corporations have the right to transact, own assets, buy and sell property, and conduct business – as the business deems fit, as a legal person.

Corporations function under what is known as a corporate veil. This is an important distinction that separates the actions of the corporation from the actions of the business owners (shareholders) and it also affords protection to the shareholders from being liable for the corporation’s actions.

A Corporation has many of the same rights as a natural person and more rights than a natural person — under the age of majority (minors are not permitted to enter into legally binding contracts).

Suffice it to say, the legal status given to a corporate entity makes it a very powerful vehicle to conduct business and offers significant tax advantages and asset protection when compared to transacting as a natural person.  Your tax professional can help you figure out how to maximized this option for your needs.

Yield Farming & ETH 2.0

What about staking and yield farming for tax purposes?

There are a lot of great articles about how to do taxes on mining revenue, and for the most part you can follow that guidance for staking and yield farming as well. Let’s take the above example – I want to deposit my SLP token and earn some SUSHI yield on that. Because you retain full control over those staked assets, and can remove them any time, you can really think of this as a bank account that’s earning interest. There is then the same debate about the staking rewards as there already exists about mining – namely, do you treat it as income immediately when it hits your wallet, or do you treat it as a zero-cost basis item, and only pay tax when you sell it. The more conservative treatment is to treat it as income as it hits your wallet (either looking at the balance in the staking contract or when you claim it) – your tax authority wants their money, and they want it now – deferring is usually a more aggressive stance. But, as always, talk to your tax professional.  Your mileage might vary.

This applies to various forms of deposit contracts – Yearn / Harvest vaults, Compound / AAVE deposits, and other instruments that look and smell like interest-bearing accounts.

But, what about something tricky that I know everyone is thinking about – ETH 2.0 staking? Well, that is a lot more complicated. Because you can only deposit into the ETH 2.0 contract right now, and because there’s no concrete plan to enable withdrawals, and it’s up to a bunch of random people with GitHub screen names – this really feels like a non-callable loan. Like a loan to your sister-in-law, you can hope it gets repaid, but you shouldn’t be counting on it. Talk to your tax professional about how to treat it, but many tax professionals in the crypto space are saying not to recognize any of the ETH 2.0 staking rewards until you can actually claim them.

NFTs:  THE SLIPPERY SLOPE OF THE DeFi SPACE

We’ve tackled liquidity pools, we’ve tackled staking and yield farming – how about NFTs? Well – this one is tricky. At a high level, they are an asset like anything else on the blockchain – you want to treat the acquisition of an NFT like other assets (see how we treat multi-asset transactions, for instance, if buying the NFT took some tokens, some WETH, and cost some fees).

But here’s where things get complicated – in the United States (and several other tax jurisdictions), collectibles are taxed differently than stocks and bonds. That is to say, they generally don’t have long term capital gains treatments. What does that mean for you?

Well, and I’m sounding like a broken record, but talk to your tax professional.

The treatment comes down to intent and use – did you buy a Steph Curry TopShot because he’s your favorite player and you loved the 3-pointer he was draining? That feels a lot like collecting. Were you putting money into a crypto bond to earn a yield? Not so much collecting (though, some crypto bonds have really pretty digital designs, which definitely starts to muddy the waters). It gets even more tricky if you’re a business that’s actively trading NFTs, that feels more like normal business operations rather than collecting, but boy does it get gray. Tax professionals are your friends in this chaos!

Finally, if you’re creating NFTs to sell, and selling them for a profit, that’s just like any other artist and you probably need to pay income taxes on them.  My third cite below is a link to DeFi crypto experts to help you along your path.

There are some things I haven’t covered (like lending pools, how to record losses from hacks, and what to do about token vesting periods), but this should get you started down the path of paying your taxes. And please remember – pay your taxes and be honest with the IRS.

Usually, tax resistance is futile.  If you decided to buck the system people receive letters from the IRS stating they owe funds. Also common: having 15% of their social security check or employment check garnished every month to pay the tax debt. More recently, with crypto IRS debt, if someone has a significant tax debt (over $50,000) they may not be allowed to renew their passport.  The IRS knows crypto investors can move their fortunes easy without being detected.

Which brings us to the last taxing question:  Do you know about tax havens?

There are roughly 195 countries in the world and almost 25% (45) of them are considered tax-havens. The more popular tax-havens most people are familiar with are the ones located on small tropical islands, such as the Cayman Islands, Bahamas, St. Martin, St. Lucia, Seychelles, Turks and Caicos, and Bermuda.

There are the lesser-known tax-havens located in key business hubs such as Hong Kong, Panama, and Singapore.

There are also tax havens in well-established and developed countries like Ireland, the United Kingdom, and the Netherlands.

Two jurisdictions worth mentioning for cryptocurrency enthusiasts are The Republic of Malta and Panama.  They offer some interesting options for people.  Research them.

You can now set up an offshore haven easily with the help of a new company, Korporatio.   Blockchain is a perfect ‘use case’ for recording and storing incorporation filings and one such company that has taken this to task is Korporatio, which offers blockchain incorporation for various off-shore jurisdictions starting at just $1,000.  Research them to learn about how to use the rules to favor yourself.

Again, here is the hyperlink for my crypto tax software.

The take home from the IRS:   Don’t sell your crypto if you don’t have to because no taxes become due.

I buy my crypto by depositing USD in the Gemini/BlockFi exchange because they have the low transaction charges.  Then I send the crypto assets to my wallet.

If you have smaller balances and want to Dollar cost average look to Swan Bitcoin:  https://www.swanbitcoin.com/DrJackKruse

If you want the most yield for USD or BTC look here:  https://platform.ledn.io/join/a02c7816be789573a80c8b513395b9fd

Want to earn a safe and easy passive income with your crypto purchases? Then try out Blockfi here:  https://blockfi.com/?ref=34f06254

You can earn: % on your Bitcoin balance

8.6% dollars $USDT

CITES:
https://www.irs.gov/pub/irs-drop/n-14-21.pdf

https://gordonlawltd.com/1040-crypto-question/

https://www.bitwave.io

The podcast, The DeFi Daily.

For context:  Some vegan ex neuroscientist tried to get on stage and tell me that quantum mechanics has no role in biology.  He made and ass of himself and I was happy to see him do it.  First it highlights the limitations of critical thinking on a vegan diet.  Two, it explains why he is an ex scientist.  He failed at critical thinking.

Anyone who tells you quantum entanglement is not operational in Nature needs to be reeducated.

@PaulCapestany is the vegan ex neuroscientist who came on stage in Dennis Porter’s room today and try and dox me.  Here is the paper to refute his premise.  There are hundreds more and books like “Life on the Edge” by Jim Al Khalili that show you the depth of his educational arrogance.

https://phys.org/news/2017-12-quantum-mechanical-effects-biological.html

Nature provides “a why” for things to live, and as such, living things can bear almost any how the Earth can throw at it.  So this raises the difficult question: why don’t humans understand magnetism well?  When you have no framework of understanding a topic, a question of why is fruitless.  This is counterintuitive to most and it is one of the ways a skeptic undresses themselves by showing their ignorance.  Scientists are an interesting breed of people, they are creative, adventurers, critical, and pragmatic. This may not be the initial subset of people you would look to for inspiration. However, think for an instance of the motivation required to tackle the great intellectual challenges of our time. Scientists are driven by constant curiosity and inspired to find truth.  Physicians should be too, but the paradigm today is not about truth, it is built around following evidence they believe on the menu for health.  Magnetism rarely comes up as a topic for wellness in any office.  That is unfortunate.  Paul tried to bring it up in ClubHouse today but he was so ignorant he had no idea how the brains mitochondrial creates its own magnetic field because of the rotating F0 ATPase head that contains an electric current.  Micheal Faraday show the experiments in physics that proved this happens in the 1800s.  James Clerq Maxwell used mathematics to prove Faraday correct.  Today we have MEG machines for the brain and heart that show us our colony of mitochondria create magnetic fields in biologic systems that we can impact with our choices.

The problem with people like Paul is not their ignorance of new data. The issue is being educated just enough to never question what you were taught in the first place.  I even volunteered to give him the data points to study and he was not interested in the least.

What’s even most frustrating is when you literally give someone like Paul the ex-neuroscientist,  the resources to solve their Dunning Kruger moments, but they are unwilling to put the effort in to educate themselves.  That is pathetic.

No scientist was more interesting than Feyman, in my opinion, because of how he understood nature.  Examining nature from his perspective is how I think about her laws.  “Two things are infinite: the universe and human stupidity; and I’m not sure about the universe.”

The “mitochondriac clinician” should be known by having chosen to clash with popular thinking and the limited imagination of fellow scientists, clinicians and the public if we are to ever advance our knowledge in biology.   It is not a popular place to be, but it is the position where ultimate truths will be revealed, in my opinion.  This situation does not bother me as a clinician today.  I realize my professions’ limitations currently, but I am driven to push the boundaries of what is possible for patients by understanding how magnetism affects our cells. The history of medical discovery has taught me to be patient.  For me it was once strange to realize that the history of medicine is littered with stories of extraordinary people who made novel discoveries by asking a question nobody else thought was worthwhile.  Moreover, with time, the world usually seems to awaken to new realities in understanding,  and it then appears so easy and simple for anyone to accept.  The history of science is saturated with stories like this.

What nature does not forbid…….most certainly will happen eventually.  That really is the story behind biological evolution, but not too many see it my way, yet. Our beliefs are still tethered to natural selection by convention.  It follows that in nature and human imagination, anything is possible, and this is why, in nature, there is no law except the law of nature that there is no law.

The problem is not people being uneducated; the problem is that they are educated just enough to believe what they have been taught, but not educated enough to question what they have been taught. It’s easier to fool people “using choice controls” than to convince them that they’ve been fooled.  Who comes up with diagnostic criteria anyway? The paradigm does in healthcare.  Who does this on social media?  In technology, it’s the tech industry.  If you control the choice you control the game.  This is why FB has no dislike buttons.  In case you’re wondering why things built for profit use this ideology, all one needs to do is realize it is a giant sales funnel.   It’s a profiteering scam. Whoever names the game by controlling choices and options, owns the game.  This is why the government wants control of healthcare too.

That’s why mitochondriacs focus on the most fundamental layers of physiologic function: light water and magnetism.  It is also why functional medicine practitioners focus on bio-chemical pathways:  It drives their profits through their testing and supplements.  This is how they make money.  It is time for you to realize that wake up call.   Now we have functional medicine types using healthcare and technology platforms to really control choice of their customers.  They are now using both together.

Consider the technology shell game they employ.  When using technology, we often focus optimistically on all the things it does for us with their products. But I want to show you where it might do the opposite effect on our biology.

Where does technology exploit our minds’ weaknesses?

I learned to think this way when I studied to become a magician as a kid after I saw a magic show at a birthday party. Magicians start by looking for blind spots, edges, vulnerabilities and limits of people’s perception, so they can influence what people do without them even realizing it. Once you know how to push people’s buttons, you can play them like a piano.

And this is exactly what product designers do to your mind. They play your psychological vulnerabilities (consciously and unconsciously) against you in the race to grab your attention.

I want to show you how they do it.

Hijack #1: If You Control the Menu, You Control the Choices

MEDICINE’S MENU FOCUS What is not on the menu but

Should be?  MAGNETISM

Great Option #1

Great Option #2

Great Option #3

Western functional medical culture is built around ideals of individual choice and freedom from the “constraints of allopathic medicine”.  I chuckle when I hear the profiteers speak this way.  They use the techniques far better than allopathic medicine does.   Millions of us fiercely defend our right to make “free” choices, while we ignore how those choices are manipulated upstream by menus we didn’t choose in the first place.  Is medicine’s menu the same one nature used to built wisdom in our cells?  Have you ever thought about health in this way?

This is exactly what magicians do to people.  Many people throughout history have mentioned that when you examine and look at quantum mechanics, it defines what magic really seems to be.  This is the science that forms the basis of reality and all nature and we ignore it.  Magnetism is part of nature’s magic used in every cell.  People like Paul have no idea how factual this statement is.

Using magic trick for your audience is way easier when your target audience has lowered dopamine level in their neural networks.  This is often why hospitals, offices, and casino’s favor artificial blue light frequencies to illuminate environments for the customers.  It makes people more docile and easier to control for the profiteer.  Blue light lowers magnetic flux in our mitochondria.  Paul believes bursting on the scene in ClubHouse can mimic a casino.  It cannot because my job is to educate you about people like Paul.  This is not how people understand magnetism, so that is why they do not understand the why of magnetic effects of different light frequencies on their mitochondria.  In a magic show, magicians give people the illusion of free choice, while architecting the menu so that they win, no matter what you choose. I can’t emphasize enough how deep this insight is when viewing how paradigms operate today.

When people are given a menu of choices, they rarely ask:

1. “what’s not on the menu?”

2. “why am I being given these options and not others?”

3. “do I know the menu provider’s goals?”

4. “is this menu empowering for my original need, or are the choices actually a distraction?” (e.g. an overwhelmingly choice of supplements for example)

For example, imagine you’re out with friends on a week day night and want to keep the conversation going. You open the “Yelp App” to find nearby recommendations and see a list of bars. The group turns into a huddle of faces staring down at their phones comparing bars. They scrutinize the photos of each, comparing cocktail drinks. Is this menu still relevant to the original desire of the group?

It’s not that bars aren’t a good choice, it’s that Yelp substituted the group’s original question (“where can we go to keep talking?”) with a different question (“what’s a bar with good photos of cocktails?”) all by shaping the menu.  This change went below your perceptual abilities because it was done over blue light and a network built of nnEMF.  Both are designed to lower magnetic flux in your mitochondria to lower ATP levels to get you to choose what is good for them and not good for you.  This lessens our ability to think well.  It is part of technology design.

This is what a vegan diet does to human cortex.  The ATPase cannot spin at its highest rate to support cognition in superior fashion.  Do you think Paul knows this?

Think about the video above now.  Feyman had difficulty telling his interviewer why magnets do as they do.  In my example above, you all have had this experience to understand the framework.  None of you realized it was tied to magnetic flux in your mitochondria by the use of light frequencies.

Will this change how you understand how aberrent light frequencies can affect your life?

That is for you to decide.

Let us go back to the Yelp App to make the point clear.

Most people in our group example falls for the illusion that Yelp’s menu represents a complete set of choices for where to go. Is this like what happens in a doctors office or a hospital?  The ER?  In a grocery story?  At college?  At your bank or brokerage house?  I think it is.  The reality of this situation is that when people are looking down at their phones, they don’t see the park across the street with a band playing live music. They miss the pop-up gallery on the other side of the street serving crepes and coffee. Neither of those show up on Yelp’s menu.  Do they mention bitcoin or just assume you’ll pay in fiat?   What isn’t on your health menu where you spend you medical dollars?

There is a pardox of choice………only when we know there is other choices.  So what do healthcare and technology paradigms use in common to win?

They control the choices by controlling the menu of what they think you should know, want or ask.

This is precisely what has happened with COVID.  They assume everyone will want a vaccine after a lockdown for year and they are stunned that vaccine hesitancy exists.  Sometimes vaccine hesitancy can lead to a divorce in a relationship.

The more choices technology or healthcare gives us in nearly every domain of our lives (information, currency, events, places to go, friends, dating, jobs) — the more we assume that our phone is always the most empowering and useful menu to pick from. Is this really factual?  Is it based upon nature’s laws of engagement for cells?

The “most empowering” menu is different than the menu that has the most choices. Nature provides cells with all options.  It is a decentralized network.  All things that at decentralized are thermodynamically most efficient by quantum laws.

The only man made decentralize network I have found in six decades is Bitcoin.

In fact, it gives cells options they are not even optimized for, but they can use them if they change things.  This is what evolution is all about.  Nothing is off the table given the environment on Earth powered by sunlight.  But when we blindly surrender to the menus or currency we’re given in the modern tech world, it’s easy to lose track of the difference in outcomes:

“Who needs their gallbladder removed” becomes a menu of the things published as evidence in a textbook

“Who’s free tonight to hang out?” becomes a menu of most recent people who texted us (who we could ping).

“What’s happening in the world?” becomes a menu of news feed stories from social media.

“Who needs a vaccine” becomes a menu or algorithm set in place by the CDC or government.

“Who only believes fiat is a store of value and a unit of transfer?”

“Who’s single to go on a date?” becomes a menu of faces to swipe on Tinder (instead of local events with friends, or urban adventures nearby).

“I have to respond to this email.” becomes a menu of keys to type a response (instead of empowering ways to communicate with a person).

To every thing there Is a season, but with sunlight there is always some type of modulation that slightly varies its power to allow time to manifest. This is how nature creates a specific variety of frequencies (and magnetic flux) that our cells are rewarded by.  Innovation favors the connected life.  The functional medicine doctors will never get you to this level because it removes the variable rewards they need to thrive in their business.  This problem is not just one in allopathic medicine. I believe it is greater issue in functional medicine.  Why?  Their framework is less understood by the public than allopathic medicine so people rely on their menu of choices even more.  This is why the “bulletproof selection” menu is devastating to many.    What are some of those menu choices doing to us?  Sales of supplements and tests that give partial or variable successes are hugely powerful tools to those involved in the functional medicine business.  Vegans do this to with supplements.  How good can your dietary choice be when you need supplementation to maintain health or your ability to think?

Why do they do this?   The functional medicine paradigm learned this from studying gaming.  They are in a game to try to usurp the power of allopathic medicine.  So they shrewdly went to look at how casino’s separate us best from the money in our wallets.

One major reason why is the #1 psychological ingredient in slot machines: intermittent variable rewards.

If you want to maximize addictiveness (a lowered dopamine effect), all functional medicine needed to do was study what technology designers did in casinos and in Apps we use.  Their business plans only need to link a user’s action (like pulling a lever) with a variable reward attached. If you don’t believe it just sign up for the emails of the “bulletproof executive” for a month and tell me if you do not see this post in every email you get.

The media world today is enveloping man in bullshit. This is especially true in the financial world with Bitcoin deceit uttered by the old vanguards of capitalism who support the Federal Reserve = Charlie Munger & Warren Buffet.  It is no surprise neither support BTC.  Charlie and Warren own banks that launder billions per year and have been charged criminally.  Give me a break.  It reminds me of Upton Sinclair comment:  “It is difficult to get a man to understand something, when his salary depends on his not understanding it.”

His views are not based on knowledge or research – his views are instead an expression of his inability to grasp new concepts, new frontiers and new technological innovation. Not because of his age necessarily – its his attitude where the problem lies.  Paul Capestany, Warren, and Munger all share the same deficits in critical thinking for different reasons.

Some of the misinformation shared is intentionally designed to deceive, and some of it is mouthed by people too ignorant or frightened to distinguish natural truth from falsehood.  I think Paul Capestany of ClubHouse fame represents the latter.

Having an open mind is critical in being a mitochondriac, but we all need to remember in today’s social media empire, having an open mind with no framework of natural understanding, will allow people with profit motives to come in and put many things in your head.  Be mindful of this.

DOCTORING:

Doctor = teacher who uses words, not prescriber. Empowering patients to be informed people and not blind sheep is a sign of a great teacher.

You can lead people to water, and though you can’t make them drink, you *can* give them the awareness that they’re’ thirsty.

That is my post mortem today from ClubHouse.  We have to call out the bull shit artists among our tribe.  They can decide who is right and who is wrong.

CITES

https://royalsocietypublishing.org/doi/10.1098/rspa.2018.0674

https://www.insidescience.org/news/scientists-capture-spooky-action-photosynthesis

https://phys.org/news/2010-05-untangling-quantum-entanglement-photosynthesis.html

https://jackkruse.com/quantum-biology-9-photosynthesis/

https://jackkruse.com/reality-15-animal-photosynthesis/

https://jackkruse.com/ubiquitination-20-linking-light-to-plants-and-animals/

Red, itchy eczema patches may look contagious, but they’re not.  Eczema is basically an altered immunologic disease in the skin that starts out as an itch that turns into a red rash. The itch of eczema can be hard for others to understand. Patients with this disorder say it can feel like poison ivy, chickenpox, and a sunburn rolled into one skin condition.

The skin can also get rough and scaly, with sores that ooze and crust over. To manage the symptoms, some alternate between taking Epsom salt baths and showers.  That is what most physicians tell their patients because that is what is taught in medical school.  Those answers do nothing to get rid of the disease.  They only treat the symptoms on a short term basis.

The answer to reversing the disease is getting solar exposure more frequently to properly program the T cells in your skin to raise the melatonin levels in your skin.  No one learned this in medical school.

Reality alert = Is eczema an allergy to nnEMF or blue light toxicity? 

It might be. Read the below carefully. Is sunlight a wireless vaccine that can help this condition? It might be. Sunlight has so many benefits I might have written volumes about its effect.  There are so many hidden benefits people don’t just get because people are taught these days to bury the sun by my profession.   This is an example of how a centralized curriculum in medical school is really an analogue algorithm of a by gone era.

We, like trees, need physiologic solar exposure. For me, I use it to reduce my overall nnEMF/blue exposure I get in surgery and in my life; in addition, it has massive effects on dopamine, serotonin, histamine, melatonin, sulfation, methylation, and Vitamin D3, gut biome populations, charging my exclusion zones up by raising my DC electric current to lower the work my mitochondria needs to do. No area is difficult to get sun on if you just expose your skin to the problem region. The results of that “wireless vaccine” of light might shock you!!! That is why eczema remains a large problem today. People cover up far too much. If you child has eczema it maybe that pre-pregnancy and during pregnancy your body did not get enough sun and this altered your T cell cells in your skin.  We have more T cells in our skin than in any other organ.  When this occurs this information can be epigenetically transferred to your child via mRNA signaling to change the childs’ skin physiology. This condition might be a baseline acute immune reaction of a de-programming of T-regulator and helper cells from a lack of sunlight!!!!!

STATIC SHOCKS AND ECZEMA

Most people are familiar with electrostatic forces that are weak.  Examples of weak electrostatic force is when humans rub a balloon and the hair on their body stand up on ends or what that some materials, such as amber, attract lightweight particles after rubbing.

Usually insulators, e.g., substances that do not conduct electricity, are good at both generating, and holding, a surface charge. Some examples of these substances are rubber, plastic, glass, and pith. Conductive objects only rarely generate charge imbalance except, for example, when a metal surface is impacted by solid or liquid nonconductors. The charge that is transferred during contact electrification is stored on the surface of each object.

Skin is actually a very good insulator as well so, relative to metal, humans aren’t very good conductors. Because the skin is a good insulator it means Nature engineered it to hold electric charges from sunlight for some reason.  What might those reasons be?

Sunlight create electric fields in our atmosphere every day and that sunlight creates a Coulomb force.  Coulomb force is an electrostatic force.  Electrostatic phenomena arise from the forces that electric charges exert on each other. Such forces are described by Coulomb’s law. Even though electrostatically induced forces seem to be rather weak because of how we experience them in life, when the scale shrinks, as it does in a cell,  the electrostatic force increases tremendously in its power.  For example,  some electrostatic forces such as the one between an electron and a proton, that together make up a hydrogen atom, is about 36 orders of magnitude stronger than the gravitational force acting between them.  The electrostatic force generated in your skin is another example of a strong electrostatic force because the skin, as an insulator can hold large amounts of charge.

People are unaware that this force involved with the biology of melatonin and the function of mitochondria where electrons and protons are the target of this force because they are charged particles.  The same thing is true of T-Regulator cells in the skin.

Although charge exchange happens whenever any two surfaces contact and separate, the effects of charge exchange are usually only noticed when at least one of the surfaces has a high resistance to electrical flow. An alteration in the electrical charge in your skin is one of the major reasons why many people cannot convert cholesterol containing semiconductors in their skin to 25-D-OH Vitamin D.  Tattoos also alter the charge state of the skin because of the atoms in the ink.

This is because the charges that transfer are trapped there for a time long enough for their effects to be observed. These charges then remain on the object until they either bleed off to ground or are quickly neutralized by a discharge: e.g., the familiar phenomenon of a static “shock” is caused by the neutralization of charge built up in the body from contact with insulated surfaces.  With melatonin, T Cell functioning, and skin physiology the charge are rarely seen because charges are transferred to electrons and protons in the chemicals of cells.

Coulomb force, also called electrostatic force or Coulomb interaction, is the attraction or repulsion of particles or objects because of their electric charge. When people get skin outbreaks the charge within the epidermis is a manifestation of charge discharge in the skin.  This is analogous to the static discharge mentioned above.  The redden plaque is the manifestation of a charge transfer problem in the skin.  When electrostatic force cannot be discharged properly it can effect Gauss law in our body.    Gauss’ law states that “the total electric flux through any closed surface in free space of any shape drawn in an electric field is proportional to the total electric charge enclosed by the surface.  Since a mitochondria is a close organelle that contains massive amounts of electrons and protons at a small scale any altered discharge of an electrostatic field causes a change in Gauss’s law with respect to the mitochondria.  What is this a big deal?

Mitochondria make water, CO2, and melatonin.  Melatonin, doc?  Yep.  We now have very new data that shows that mitochondria make the chemical that regulates its ability to transform energy in tissues locally.

This recent paper describes this finding.  We now know mitochondria synthesize and release melatonin.  This occurs via their selective G protein-coupled receptor (GPCR) in the outer membrane of the mitochondria. The paper demonstrated that mitochondrial melatonin type 1 receptors respond to melatonin by activating circadian coupled G proteins located in the intermembrane mitochondrial space.  These proteins, once powered up by the redox potential created in the power plant than become able to inhibit stress-mediated cytochrome c release. Cytochrome C controls water production in the mitochondrial matrix from metabolism and it control autophagy and apoptosis programs in mitochondria which link it to redox power.  Nature’s use of this unique wiring mechanism gives mitochondrial educators insight to how we need to changes our thinking about how humans operate.   The classical understanding of biological GPCR function, taught in a centralized medical curriculum is OUTDATED badly. This has huge implications for how we should be treating diseases.  The new data is telegraphing us that the powerplant of a cell has the ability to synthesize and act as a signaling receptor for a specific ligand.  This ligand is likely tied to the circadian mechanism of the peripheral clock genes present in tissues.  This means the wiring diagram shows mitochondria come built in with a automitocrine signal which creates melatonin locally to prevent degeneration and disease by limiting the downstream effect of cyctochrome C release on caspase activation.  Caspases are a family of protease enzymes playing essential roles in programmed cell death.

Why is this a big deal?  We know that melatonin deficient tissues are more likely to develop cancers. We also know that caspase deficiency has been identified as a cause of tumour development.  This paper now makes the link between these two concepts and explains why skin diseases are harbingers of future cancer risk.

Early mitochondrial damage shows up in people with  Hay Fever & Asthma

People with loss of redox power in their immune systems tend to get mitochondrial diseases earlier in life.  This is why there is a connection between those two conditions and rosacea and atopic dermatitis. If a parent has hay fever or asthma, their children are more likely to have the skin condition. And many children with atopic dermatitis will go on to get hay fever and/or asthma.

Most often the cause of these disorders are due to a change in the semiconductive properties of the skin and the reason is often tied to our light environment. When light hits a semiconductor a DC electric current result in tissue.  We can measure with with surface electrodes and an oscilloscope. Electric charges cause electromagnetic force fields around them. This causes things to do the things they do = physiology of the tissue in question.  When the semiconductor in the system is defected the phenotype of the disease manifests. That is what causes eczema plaques.

Phototherapy:

UV light affects the immune system. In some people, it can improve moderate to severe cases of eczema from atopic dermatitis, rosacea, or contact dermatitis. Usually, these treatments use UVB light. “PUVA” is a UV treatment combined with a drug called psoralen.  I do not like the drug, so I replace it with photobiomodulation and this improves clinical efficiency in therapy.  Skin docs use UV light in an artificial manner by itself.  UV is never present from sunlight without the other frequencies of visible light.  This is why I balance the huge Coulomb force created by UV light with red light.

Coulomb forces must be balanced after daytime and this occurs at night when light is absent. This is why light at night is so bad for us, and why a centralized doc has no ability to figure out why this occurs. It is also why your dermatologist has no clue to the cause of eczema.  You have to understand how Coulomb’s force becomes unbalanced to alter how mitochondria can transform energy. That break in the pathway is the charge on melatonin in the skin which affects the mitochondria in the skin to give a person eczema. Melatonin in mitochondria of tissues are created by the Coulomb forces in AM sunlight. Melatonin levels vary within tissues because of how much light tissues get. As a result, it appears melatonin is a guardian of the Mitochondrial genome (37 genes). Out of the 37 genes, 13 of them are specific to energy-transforming mitochondrial genes. Those 13 genes only code for the proteins that tunnel electrons and spit protons out of the mouth of cytochrome proteins. The mitochondrial genome undergoes 3 times as many genomic mutations as the nuclear genome by design. Melatonin levels are critical in monitoring mitochondrial behavior and light energy transformation by controlling how energy is being transformed from light to create physiologic power.

The major function that melatonin helps smooth-out in mitochondria are

Energy metabolism and flux via control of electron and proton tunneling.

Redox balance within the mitochondria = GSSH (glutathione)

Ion homeostasis = electrostatic controls via Coulomb forces that vary via light

The signaling of cell death and mitophagy = % heteroplasmy in a mitochondrion =  the amount of melatonin your skin makes from its mitochondria = the amount of light energy transformed to physiologic power in the skins component semiconductors.

How Light Treats Acne

Acne forms in pores — the tiny holes in your skin. Each pore contains an oil-producing gland. The oil keeps your skin healthy.

But sometimes the oil, dirt, and dead skin cells can get trapped inside pores and clog them up. Bacteria called Propionibacterium acnes (P. acnes) that live on your skin can also get inside these blocked pores. P. acnes make the clogged pores swell up into bumps called acne.

One way to kill bacteria and clear up pimples is with light. The bacteria in your skin are sensitive to certain types of light. When you shine these lights on your skin, toxic substances form and kill the bacteria. Light therapy also shrinks the oil glands in your skin, so your skin makes less pore-clogging oil.

Doctors used to treat acne with ultraviolet (UV) light.  The smart play is to use full spectrum sunlight to help acne or cystic acne because sunlight has red light in it that help resolve the inflammation in the follicles.

You may get special medicine before your treatment to make your skin more sensitive to the UV light. Doctors call these medicines “photosensitizers.” They include aminolevulinic acid (ALA) and methyl aminolevulinate (MAL).  The smarter play is to use red light therapy to precondition the skin to absorb more UV light and you won’t need the drugs to deal with the acne.

This is why docs cannot solve many skin diseases, but sunlight can and does.  A lack of sunlight or excessive blue or nnEMF causes many skin diseases.

CITES

1. https://www.eurekalert.org/pub_releases/2016-12/gumc-sos121616.php

2. https://www.pnas.org/content/114/38/E7997

Confined placental mosaicism is where patches of the placenta have genomes that don’t match up with that of the fetus, yet the fetus develops naturally even when prenatal testing shows genetic dystopia.  Owning #BTC as an SoV operates the same way allowing us to avoid many dystopian gov’t issues when BTC is on our own profit and loss statement.  This is another way how health and wealth are linked.  BTC acts as a placental filter for dystopia.

It is capable of fixing design problems in money that no one has thought of yet.  How does it do this? The human placentas are filled with 98% HERV viral parts and it routinely consists of a quilt of different genotypes, and this strange heterogeneity plays a role in protecting the fetus from genetic harm.  The placenta provides genetic value for the fetus by subtracting our genetic errors for the fetus. Placental evolution is a master idea of the decentralized web Nature provided =  its presence is an addition by subtraction.

Nature’s placental innovations rely on spare viral parts and UV light. This is how nature use viruses as a business could use Bitcoin in its operations.

Viruses change bacterial cells/mitochondria/chloroplast and eukaryotic cells massively and they do it quickly. I believe this idea is buried in the evolution of the human placenta.  This evolution in mammals began 90 million years ago.  Viruses modulate things by changing deuterium fraction in tissues to alter metabolic rates by controling the flow of resources in metabolic pathways.

Dead hosts can still make viral particles and the dead virus can also make more virus using the host to change more hosts. I have a sense that the viral part of the nuclear genome was critical in sculpting the mitochondrial genome to work with the nuclear genome after the Cambrian explosion. I believe this idea had to be worked out first in the placenta before it could be used in fetal development in mammals.

This makes viruses unique in biology, and it also points out why the “enemy of an enemy is often our friend”. All the viral parts in humans really act like ‘dark matter’ capable of harnessing dark energy to innovate solutions to queer environments. The dark matter of the genome is non-coding DNA and RNA and deuterium is its fuel. What ignites this fuel? Full-spectrum sunlight does because of the non-linear effects of UV light on deuterium pulsing in our arteries. This is why young life is affected massively by deuterium levels and why drinking DDW is not always a wise choice in all parts of your life as your heteroplasmy rate vary. You have to know when to use things by understanding the biophysics and biochemistry at the submolecular level. Few do

During those crucial first weeks, when a single genetic defect could derail the pregnancy, the placenta may also act as a “dumping ground” for aberrations. During early development, when some of the dividing cells randomly develop genetic abnormalities, they might get earmarked for the placenta instead of the fetus.  The earlier you adopt BTC the fewer monetary defects you can expect in your life.

The placenta is not constrained by the necessity to successfully produce an organ that’s going to live for 85 years.   The placenta likely does not have the same genetic checks and balances that other human cells do because of its inherent transience.

Initially, the placenta must outpace the growth of the fetus for the first 16 weeks of human pregnancy, so evolution maybe telegraphing that racking up mutations as it balloons inside the uterus is a benefit. The placenta mimics a blue star in this way, it can “live fast and die young while the fetus mimics the red giant where it is thermodynamically efficient so it can live 70-100 years.

The faster the placental divides relatively to the fetus is a selection feature of evolution.  It is how Nature shrinks time in morphology and in growth.  Since the placenta grows uber-fast it can select the correct cells to amplify in the fetus.  In this way, the placenta is a quantum computer that is a cell selector for the fetus.  Science today believes it is genes that define us but we now have data that refutes this idea.

With the completion of the human genome project now behind us we can really examine the real differences in our molecular biology. At our gene level there is no clarity of what separates us because we share 99.5% of the same coding DNA between primates and humans.  This implied that our differences would not be found in our DNA.  What the placenta does for us maybe the key to understanding our primate tree.

There is radical changes in the X and Y chromosomes of humans. The Y chromosome genes code for few new things yet have a massive expansion of retroposons on it,  and there is one in particular, that made the primate clade more susceptible to latent or persistent infections that were innocuous to our immune systems.  This was called the HERV K virus.  The acronym HERV, stands for human endogenous retrovirus.

You might be asking, what do HERV K do for us?  It is a gene that allows light to sculpt cells.

Evolution made the decision to tote this virus in primate and human genome now for 30 million years, so ask yourself this instead, how might HERV be actually good for us?

This is where thinking like a neurosurgeon paid off for me.  I began to accept their presence and explain it.  HERV K remnants in humans are expressed in massive amounts in pregnant women!  They are specifically tied to the placenta’s energy production and leptin.  This is how energy is transformed from one generation to the next and it uses the light environment to changes the genome from generation to generation.  HERV elements seem to allow women to produce defective viral particles, proteins, and genes, that are apparently incapable of passing to another human host for some reason.  This implied they did not cause any disease but were ‘taxi’d’  through time in our genome for some reason.  That reason is that it can sculpt time and space to control morphology.  Anything that can transform energy is useful to new life forms.

Above are some examples of decentralized networks in Nature.

Now look at the human placenta below.

Doesn’t it look similar?  Nature’s decentralized networks always rhyme because of their fractal design.

Viruses and BTC can shrink time quickly in their ecosystems.  This is why they are favored in the decentralize networks.  Nature and BTC are fully decentralized.

Viruses can evolve so quickly, evolutionary genetic changes are observed during the short duration of individual infections. Viruses clearly represent the leading edge of all evolving biological entities. It would stand to reason than since the fossil record established our presence from ape in record time, that maybe we co-apted this leading edge technology from these retrovirus’s and we used the gut microbiota as a redox agent of change agent in the cause.

After all in life,  a baby co-apts its life form two organisms doesn’t it?  Bacteria gain antibiotic resistance very quickly from epigenetic data and bacteriophage reconstruction of their own genome, so why couldn’t apes do the same?  They had the capability because New World monkeys were chronically infected with HERV K viral parts.

You should infect your finances with BTC for the same reason.  When BTC infects your balance sheet you have acquired term life insurance for your valued assets.  Fiat depreciation causes inflation in fiat premiums, while collapsing the purchasing power of your money.  In finance, the value of your money is your most valuable asset.  I see a brighter bitcoin-powered future for the billions who depend on the BTC  insurance industry.

For evolution no asset is more valuable than a fetus and this is why it relies on the placenta.  This links the function of the human placenta to BTC.

SUMMARY

Regardless of the placenta’s role, the newly uncovered heterogeneity underscores just how miraculous it is that the placenta can evade detection and destruction by the maternal immune system.   #BTC  is miraculous in a monetary network in the same way in how it has avoided destruction by the Federal Reserve.

You would think that the variant genes in the placenta, which differ from the maternal genome, would be recognized by the maternal immune system and be destroyed.  BTC has avoided destruction in the same way.

Many have noted similarities between cancers and the placenta — in how they evade the immune system, their invasion tactics, and the set of chemical tags on their cells’ DNA that direct the activity of their genes. The two behave alike, too.  Bitcoin mimics this in its own ecosystem as well.  It is immune to many of the cancers that altcoins can do to a balance sheet.

For a successful pregnancy, the placenta must invade the uterine lining of the mother, tap into the mother’s blood supply and create its own network of blood vessels — all of which cancerous cells do as well.  BTC creates its own existence in the very same way once you own it in your life.

CITES

https://www.nature.com/articles/s41586-021-03345-1

https://www.sciencedaily.com/releases/2017/01/170112110840.htm

How are health and wealth linked in other bizarre ways?  Isnt that the topic of this series?

How to solve a 2000 year old problem………….

Byzantine Generals’ Problem: How do you make sure that multiple entities, which are separated by distance, are in absolute full agreement before an action is taken?

In other words, how can individual parties find a way to guarantee full consensus?

A Byzantine fault is any failure in the system that presents different symptoms to different observers. It implies no restrictions and makes no assumptions about the kind of behavior a node can have (e.g. a node can generate any kind of arbitrary data while posing as an honest actor).

In the Byzantine General’s Problem, coordination or lack thereof determines the outcome of a situation.

The actual occurrences and taxonomy of Byzantine faults in different systems is a complex and extended topic. However, it’s defined in such a way that results in a formal definition of Byzantine fault tolerance (BFT).

Note that Byzantine faults are the most severe and difficult to deal with. Byzantine fault tolerance has been needed in airplane engine systems, nuclear power plants, and pretty much any system whose actions depend on the results of a large number of sensors.

It turns out it is also used in cells and the use of the circadian mechanism solved the issue for biology eons ago.

Satoshi solved it for money with the BTC algorithm about 13 years ago.

The Byzantine Generals’ Problem is the analogy most often used to illustrate the requirement for consensus for distributed ledger technology (DLT).

The nodes in the distributed system must all agree on a certain set of rules, and be able to move forward by agreeing on a particular assessment of a transaction before it is added to the database.

This is not easy, especially where thousands of nodes exist. In addition to that, each one must agree on the validity of new information to be added, thus preventing bad actors from sabotaging the ledger and rewriting history.

A specific type of consensus algorithm must be adopted to achieve this, enabling the nodes to work together to update the ledger securely.

When a cell’s circadian mechanism is destroyed the end result is catastrophic tissue/organ failure because bad actors influence mitochondrial redox and tissue function.  Before the complete failure occurs, malfunctions exist.  In biology, we call those things illness.

Without proper clock timing set by sunlight, time in your cells is no longer operational and the Byzantine General problem is your main problem in disease.

97 percent of vitamin D comes from the sun striking your skin. It produces a compound that goes to the liver and then it goes to the kidneys. To produce that 97 percent you need that healthy sun from being outside during the appropriate time of day. You also need a healthy liver and healthy kidneys. Sadly blue light, nnEMF, and alien magnetic fields destroy the ability of your liver and kidney to make Vitamin D. Sometimes just going out in the sun is not enough until you realize that your mitochondrial redox in your liver and kidneys must return before you can make and utilize Vitamin D again. This is Black Swan Wisdom.  BTC is like the sun for money.

The sun is the key to wellness in health.

Circadian biology provides the consensus life needs to operate well. In this way, BTC and your cells are linked.  Yet again, more proof that wealth and health are linked in ways most do not understand.

The quantum Zeno effect is a general Rx of nature since it describes the situation in which the time evolution of any quantum system can be slowed by sufficiently frequent “observations.”

The quantum Zeno effect was first proposed as a thought experiment by the British scientist Alan Turing in 1958, although it wasn’t rigorously described until 1977 or observed in the laboratory until 1989.

The link between health and wealth can be described  in this analogy:

Silicon-based technology is a slave to time,  while cells made of hydrate carbon semiconductors allow us to deconstruct time via a decentralized network of proteins that use excitons to slow time down to get the effect that cells need to live.

AKA:  Fiat money is to BTC money as silicon to topologic insulators of carbon.

BTC as an excellent store of value provides freedom to slow time down to use and monetize it.  Fiat uses the anti-Quantum Zeno effect and decreases the value of money quickly.

You’ve probably heard about Schrödinger’s cat, which famously is trapped in a box with a mechanism that is activated if a radioactive atom decays, releasing radiation. The act of looking in the box collapses the atom’s wave function — the mathematical description of its state — from a “superposition” of states to a definite state, which either kills the cat or lets it live another day.

But did you know that if you peek into the cat box frequently — thousands of times a second — you can either delay the fateful choice or, conversely, accelerate it? The delay is known as the quantum Zeno effect and the acceleration as the quantum anti-Zeno effect.

The quantum Zeno effect was named by analogy with the arrow paradox conceived by the Greek philosopher Zeno: At any given instant of time, an arrow in flight is motionless; how then can it move? Similarly, if an atom could be continually measured to see if it is still in its initial state, it would always be found to be in that state.

Both the Zeno and the anti-Zeno effects are real and happen to real atoms. But how does this work?

HYPERLINK VIDEO

My current belief is that all biologic topologic insulators in cells, especially the one buried in mitochondria, are very tiny Maxwell demons that can skirt the second law of thermodynamics by constantly observing the quantum state inside of cells to slow time down giving cells an advantage that have to use the second law of thermodynamics to exist.  They do this by making the “energy ledge” in cells larger in a relative way by shrinking time down using the Quantum Zeno effect.  This effect is something we do not observe, but the things in our cells do the observation for us to slow time down to get the job of living done.

This occurs because of the scale of the changes that increase this energy ledge are much smaller than the macroscopic objects that human can process with their senses.  Recently physicists are now beginning to realize that small quantum systems do not act like a cup of hot cup of coffee or a star in space.  Two recent studies are now aligning with many of the things I teach my members.

HYPERLINK

Your mitochondria and a chlorophyll molecule  are a lot smaller than a cup of coffee and a star

HYPERLINK 2

The second recent study in H-theorem was written that also supports my beliefs.

HOW DO WE USE IT IN OUR CELLS?

Excitons form when sunlight hits chlorophyll or RBCs.  Light creates a quantum hole in both organelles and that hole moves inside the organelle while constantly being observed.  This slows time down inside a cell.

Biology is solely based upon putting these two equations to work in hydrated proteins. If one studies proteins sans the water, the results will not be equivalent.  The study of regular biochemistry in most books is based upon the subtraction of water to study the proteins in isolation.  In science today, this bio-chemical paradigm is being replaced by the new science of topology.  In October of 2016, the Nobel Prize for physics was given for the science of topology.  Molecular biology is really the study of the physics of organisms and how cell organization puts quantum weirdness to work to build life.

It also turns out that the remarkable efficiency of photosynthesis in algae where DHA first Photosynthesis appeared on Earth 650 million years ago,  and their evolutionary descendants plants,  also deploy quantum superposition so that energy can simultaneously travel along all possible paths of the bridging maze of chlorophyll to reach the reaction center.  In fact, experiments have now shown that the exciton always gets to the reaction center before time expires.  In other words, it never fails in experiment because it always slows time down.

This is why it is a basic LAW of nature and quantum mechanics.  It is difficult to accept until your comprehend what Nature is up to.

Excitons can explore all paths to the reaction center, simultaneously,  without any time delay ever occurring.  This trick has also been found in bacteria like Chlorobium tedium.  Science knows bacteria where here before plants and eukaryotes.  It appears this quantum trick has been used by life from genesis 3.8 billion years ago.

It is so exciting because it clearly has now raised the spectre to modern cell biologists that animals, like humans, also can use the very same process in many cell systems.  Biology has yet to realize this, but the new field of quantum biology has found much evidence for the effects in many skin and blood systems.  I believe this process occurs in the skin’s melanin and eumelanin.  It also happens in carotenoids and in the cells suspended in blood.  Once the excitons are collected by these reaction centers the energy is transfered to water where protons tunneling transfers the signal at the speed of light to mitochondria at cytochrome 1.  Here it enters the Q-cycle to affect cytochrome c and the ATPasewhich are both red light chromophores and both tied to ATP production.  Water is also a red light chromophore.  I believe the phosphorus in our skin, proteins, and blood cells is critical to charge separating water into protons cables to transfer the energy and information from our surfaces to the mitochondria below.  This process occurs just as it does in leaves.  The difference is the distance and reaction center in animal cells are the Q-cycle and the the last two cytochromes.

Erwin Schrodinger told us in his 1944 book that life seemed somehow to skirt the second law of thermodynamics.  This flummoxed him because the 2nd law of thermodynamics is axiomatic in its truth.  He was confused by this skirting issue because he also said, despite life’s uncertainty, life is clearly stable or it could not exist.  That is the truth in the reality of life.  Nature uses a decentralized network to create excitons that get constantly observed in the chlorophyll antenna to suspend time before the energy on the electron is thermalized to water in a leaf.

Understanding reality means we have to accept “holes in reality” actually exist in Nature.  Moreover,  there are new things that excitons create that life makes use of.

Life is capable of reproducing offspring who are stable and they appear to transmit their moving subatomic particles in a reliable way to create functional offspring.  In this sense, life appears to skirt the second law by using the subatomic weirdness in leaves, RBCs, and our colony of mitochondria to create a perpetual motion machine for electrons and protons and it all driven by incident sunlight.  He also remarked in his book that in order for life to maintain its stability and sustain the living state without throwing its future into chaos it had to control the flow of heat from hot to cold and cold to hot by being much larger than its constituent parts of atoms and subatomic parts.

Life has to be built on a scale that would hide all these weird quantum effects from our 5 senses.  Life & BTC appears to use the Quantum Zeno effect to hide the truth in Nature from our 5 main sensory receptors that feed data from environmental waves to our thalamus.  The main effect of BTC is not observable because it is buried in the coding of the Satoshi’s algorithm.  When this is hidden, a new reality can exist.  When we observe these quantum effects on a continuous basis time is slowed.

When you realize it only two things in the universe are absolutely scarce – time and bitcoin.  It turns out time is scarce because it is also created by quantum algorithm and its effects can be stretched or slowed down.  Slowing down time is extremely rare in the macroscopic world.  The BTC algorithm is the only situation where a man made algorithm can slow time down to create massive value.  Every thing of value requires humans expend time to get it.  Bitcoin is the first human invention that seems to break this relationship in finance to mimic what nature does in cells.  The shrinkage of time to obtain value defines what economize really means.  Bitcoin is expert at maximizing time by creating value, just as circadian biology is at using dark and light cycles to create health.

Scarcity is the starting point of all economics.  The quantum zeno effect in cells is how Mother Nature slows time to create health.  In the white paper of Satoshi, buried deep inside the algorithm that created Bitcoin was a mechanism that mimics the Quantum Zeno effect to shrink time down to create value. The algorithm does this by constantly observing the hashrate to create the difficulty adjustment. The act of constant observation mimics the Quantum Zeno effect in cells.  This gives Bitcoin its inherent circadian mechanism and it creates its own circadian cycle, of scarcity that manifests in the halving cycles.   In this way, Bitcoin and health are linked by how they slow time down and add value back to the system quickly to create a new reality, health and wealth.

The human allotment of time in our life is a function of our health.  Time & health are as scarce as our lifespan is limited. Interpersonally, time scarcity manifests as the total time we can collectively allocate towards serving one another; whether we are making goods, providing services, or gaining knowledge/wisdom from one another — we have but a finite quantity of hours to commit towards our efforts. In this sense, time scarcity is the immortal quantum tyrant subjugating all of us. Only through cooperative action of constant observation can we break free of the restraints time scarcity clasps upon us.

Schrodinger was fascinated by the size of the first gene extracted from fruit flies in the 1940s.  He guessed that a gene would behave to larger than biologists expected in the 1940s to bury the quantum effects.  The biologists who found the fruit flies ’ gene’s found them to contain only a couple of hundred atoms in diameter and later those genes would be found not exceed a few million atoms in length.  Schrodinger was right in his guess,  but wrong in his reasoning.

He knew that cells had to be much bigger than the genes that controlled them to work on large enough scales to avoid the downsides of quantum theory.  Scale, after all, is the key metric that allows quantum mechanics to perform the queer tasks it does.  However, it never occurred to him, before he died, that the upside of quantum weirdness might actually be quite useful to life.  Photons hit semiconductive proteins to make “holes in reality” that create life using the most counterintuitive parts of quantum theory to create reality and life.

This knowledge must force medicine to change its opinion of how biology operates.  Zeno propounded that knowledge can be attained through the use of reason. Truth can be distinguished from fallacy—even if, in practice, only an approximation can be made. According to the teaching of Zeno, the senses constantly receive sensations: pulsations that pass from objects through the senses to the mind, where they leave an impression in the imagination (phantasiai) In this way, the impression can and should be thought of as a quantum processing effect in the unconscious decentralized network of the neuronal pool, manifesting and arising from the mind was called a phantasm.  That phantasm is a hole a reality called a thought that we can use to change reality.  BTC is a new thought that can be used to change your life. 

The mind has the ability to judge (συγκατάθεσις, synkatathesis)—approve or reject—an impression, enabling it to distinguish a true representation of reality from one that is false. It can process what an exciton means.  Some “quantum impressions” can be assented to immediately, but others can achieve only varying degrees of hesitant approval, which can be labeled belief or opinion (doxa).

In life, we believe it is only through reason that we gain clear comprehension and conviction (katalepsis). Certain and true knowledge (episteme), achievable by the thinking sage, can be attained only by verifying the conviction with the expertise of one’s peers and the collective judgment of humankind.  This verification is best made when the thinking mind is connected to the decentralized network called Nature.

CITES:

https://iopscience.iop.org/article/10.1088/1742-6596/196/1/012018/pdf

Conversions between carbohydrates and lactic acid play an important role in life.  It is the basis of the cycles that operate in mitochondria.   At the end of the 1910s Otto Meyerhof mapped these conversions by measuring heat trends and oxygen consumption in frog muscles. When the muscle is working, lactic acid is formed from carbohydrates, and Otto Meyerhof showed that during recovery, this is followed partly by the oxidation of lactic acid and partly by reprocessing of lactic acid to carbohydrates.

The Embden–Meyerhof–Parnas (EMP) pathway allows the metabolic use of glucose to generate ATP, NADH, and several biosynthetic precursors such as 3-phosphoglycerate or pyruvate.

Most of the metabolic energy derived from glucose comes from the entry of pyruvate into the citric acid cycle and oxidative phosphorylation. These pathways occur under aerobic conditions. Under anaerobic conditions, pyruvate can be converted to lactate in muscle or ethanol in yeast.Among the important findings determined as part of the elucidation of the glycolytic pathway were:The finding by Hans Buchner and Eduard Buchner that fermentation, the conversion of sucrose to ethanol, could occur in the absence of a living cell.
The finding of a hexose bi-phosphate intermediate (fructose 1-6 biphos) in glycolysis
The activities required for the reactions to occur were composed of a heat-labile, non-dialyzable substance (enzymes) and a heat-stable, dialyzable substance (coenzymes).
Many scientists, including Gustav Embden, Otto Meyerhof, Carl Neuberg, Jacob Parnas, Otto Warburg, Gerty Cori, and Carl Cori, contributed to the complete determination of the pathway.
Glycolysis is formally known as the Embden-Meyerhof-Parnas Pathway.

Glycolysis takes place in the cytoplasm of the cell. The goal of the initial reactions of glycolysis is to convert glucose into fructose 1,6-bisphosphate. This traps glucose in the cell as glucose 6-phosphate and forms a phosphorylated compound (fructose 1,6- bisphosphate) that can be cleaved into phosphorylated 3-carbon intermediates – DHAP & 3PGALD. These 3-carbon units can then be used to generate ATP by substrate level phosphorylation and by making pyruvate & NADH for the citric acid cycle and oxidative phosphorylation.The first step in glycolysis is the phosphorylation of glucose by ATP to form glucose 6-phosphate. This reaction, catalyzed by the enzyme hexokinase, traps glucose in the cell.  This glucose was made by the action of sunlight on carbon dioxide and water via photosynthesis.  Our cells have to recapture the glucose so mitochondria can then strip it apart to create CO2 and water to reverse the process of photosynthesis.

What he did not know was that lactic acid concentrations vary with the free radical pulse rate of mitochondria and with the oxidation state of iron in the cytochromes of mitochondrial respiratory proteins.

Meyerhoff won a Nobel Prize for medicine in 1922 for a partial discovery of how a pathway operates related to lactic acid metabolism.  Even today the real actions of this pathway remain unknown because the biophysics of the pathway has not been studied properly.

Sunlight is a small part (visible spectrum) of the electromagnetic spectrum when one looks at it top-down. Photons and electrons make up this spectrum and their energies are the differences within the spectrum. What they both are made from, however, is identical from a subatomic perspective. Sunlight splits water into hydrogen, oxygen, and 4 electrons at a basic level. Hydrogen from water is a proton. Electrons are liberated from both atoms that make up water (I laid this out in the photosynthesis blogs at jackkruse.com). This water is used to grow all aspects of our food supply on planet Earth. Not one food breaks this rule unless man makes it.

This means our food contains information about the electromagnetic spectrum in both photon and electron and proton messages. I told you all food is broken down into electrons in our mitochondria. What I have not mentioned a lot is that long-chain fatty acids crafted from food metabolism provide our mitochondria with protons too. Protons are ripped from foods by mitochondrial dehydrogenase. The protons mitochondrial strip from foods is all protium and not deuterium. This allows the matrix to remain gel like and piezoelectric. When it is squeezed the electric charge in the mitochondrial membranes is harvest like juice is when an orange is squeezed (see my latest Quantum Health TV video for more).

Protons carry a positive charge and electrons carry a negative charge. The electromagnetic force acts with infinite power and range on all CHARGED particles in the universe. This includes your quantum cell and especially your mitochondria. This means they are under the strict control of the electromagnetic force, as electrons (NADH) are from food. These electrons enable us to electronically induce molecular changes in proteins and in our electron transport chain in mitochondria to electrify the hormone cascade in the hypothalamic-pituitary axis when sunlight enters the eye.

Nature is based on probability and not cause and effect. Why?

These electron and proton paths can and should be thought of as possible fates, or even quantum superposition to deal with multiple possible realities food faces in our mitochondria processing plant; their ultimate fates are controlled by the electromagnetic force to perform different actions within the electron transport chain.

The electromagnetic force changes as seasons change as the Earth moves around the sun. Sunlight is the lever that varies the squeeze on our colony of mitochondrial to liberate its current or redox potential. This DC current powers the energies of electrons in foods up or down depending upon the season the food grows in. It turns out this is precisely how insulin evolved and is regulated in our mitochondria by the current it releases in beta cells of the pancreas. It is tied to “where” electrons and protons are being fed into the chain. When electromagnetic energies in the environment are altered, we appear to harbor two basic possible mechanistic states that the electron transport chain can choose between based on the two states we face.

No food and a subsequent lack of electrons and increased protons from fat storage,
or an excess of food, with the result of too many electrons or too much energy from photons and a lot of protons.
Therefore the electron transport chain has to have a built-in mechanism to deal with both situations. This is just like a simple circuit being controlled on a laptop semiconductor chip. When we starve, we have poor electron flow or current, and very few electrons enter cytochrome 1. Insulin’s action would be low during this time because the superoxide pulse is linked to actions of this cyctochrome.

In the mitochondria at complex 1, when the current is low, we deliver plenty of endogenous electrons from FFA to flow through the FADH2 input at cytochrome 2. This happens through the action of an electron transporting flavoprotein dehydrogenase coming from the first step of beta-oxidation of real fats from our fat stores. For example, this could be a fatty acid like palmitic acid.

When food is sparse in winter, the current of flow is low, and it is near impossible to generate reverse electron flow through complex 1, so activation of insulin signaling is rapidly aborted by the continuing action of tyrosine phosphatase. Tyrosine is an aromatic amino acid that absorbs sunlight and acts as a semiconductor to absorb light and emit an electromagnetic pulse that signals a mitochondrion what to do next. Dr. J. Bose showed us this mechanism in crystals in the 1890s. This resonant mechanism of sunlight yokes insulin action to environmental light signals and temperatures. The photoelectric current signals phosphorylation of pathway proteins to change “where electrons” enter our mitochondria.

I told you years ago food clearly has a quantum electron effect because it contains light energy that is unaccounted for in the glycolytic pathway. Most biochemists and those in the paleosphere fail to realize the effect is tied to the electrons’ energy state and nothing else. Foods grown in longer light cycles have higher energized electrons and they are handled very differently than electrons from low light level foods because of where they enter the electron transport chain in our mitochondria. Our mitochondrial cytochromes are proteins that can decipher the differences in energies, and this why they enter the ETC at different cytochromes and provide different levels of ATP and oxygen generation. Here you can begin to see how the electromagnetic force directly impacts the proteins in the insulin signaling pathway.

What few realize:  Diabetics have a dawn phenomenon related to a lack of circadian cycling.  A lack of light cannot be fixed by adding a drug .  For prediabetes and Type-2 diabetes who regularly monitor their blood sugar, there is a well-known issue called the dawn phenomenon. It is characterized by a rise in blood sugar during the early morning hours, despite lifestyle measures and even medication.  Sunlight has massive impacts on many circadian genes that alter mitochondrial biology.  Most mitochondria in humans are in the brain, so the effect of sunlight on these genes should pay off handsomely to clinicians who understand the link. The Rev-erb gene is the gene that the electromagnetic force operates on.

A lack of AM sunlight = a lack of electromagnetic force to activate the Rev-erb gene. An altered daily rhythm of expression of the Rev-erb gene underlies the dawn phenomenon. Future investigations to reverse diabetes must be built around light and not drugs to get a full understanding of the disease. Rev-erb is expressed only during the day but not at night.  In humans, the rev-erb gene is found in GABA neurons and the gene’s expression is highly enriched in a particular brain area called the suprachiasmatic nucleus.  The SCN  is mainly composed of GABA neurons.  Humans have a photopic retina because they are diurnal.  When the body awakes and takes in food, insulin is secreted from the pancreas to signal the body to lower blood sugar. Insulin is more effective in doing this job upon waking than at other times of the day. This high insulin sensitivity is probably because the body is anticipating feeding behaviors upon waking up.  Sunlight alters the daily functioning of rev-erb gene in the brain to control insulin release and action in the gut. Neural Rev-erb must be operational to regulate mitochondria in the liver to control the hepatic insulin sensitivity rhythm.  This quantum controller operates independently of eating behaviors or basal hepatic glucose production.  In humans, we now know the Rev-erb gene in white blood cells, correlates well with the central clock function in the brain.

The nuclear receptors REV-ERB (consisting of REV-ERBα and REV-ERBβ) and retinoic acid receptor-related orphan receptors (RORs; consisting of RORα, RORβ and RORγ) are involved in many physiological processes, including regulation of metabolism, development and immunity as well as the circadian rhythm.  What does this imply?  It means there is a specific part of the AM solar spectrum diabetics lack.  Can you guess which one it is?

Nuclear receptor Rev-erb α: is a heme receptor that coordinates circadian rhythm and metabolism.

For more on that watch the video below.

CITES

https://quantumhealth.tv/programs/quantum-chronicles-episode-3-part-1

Ding, G., Li, X., Hou, X. et al. REV-ERB in GABAergic neurons controls diurnal hepatic insulin sensitivity. Nature (2021). https://doi.org/10.1038/s41586-021-03358-w

Today we begin with the lesson and then we unpack it so you can understand why some people will always be addicted to shitcoins, others will lead a fiat life until they get hit with a tsunami wave and others will understand BTC from the get go.  It has a lot to do with circadian oscillations.

Nature is a decentralized energy network and so is Bitcoin.  This means there are things in the BTC ecosystem that work like the relationship between predator and prey.  It is your job to see and understand this.  Why does this idea persist?  The algorithm that created bitcoin is really an algorithm of time.  It was created to show that timing matters a lot in the coupled system.

FEEDBACK CONTROL OF METCALFE’S LAW: The predatory Bitcoining maximalist act like the predator in this ecosystem.  They provide a valuable feedback service in this ecosytem by turning off people from buying Bitcoin.  The people turned away are non critical thinkers.  Think of them like low dopamine humans in the mitochondrial ecosystem.   People who turn away because of hurt feelings exhibit behaviors that place themselves at the back of the line and allow critical thinkers to front run them. In this way, the people turned off, the low dopamine prey,  wind up supporting the predators in this coupled system by buying Bitcoin a long time after the predator types.  They usually buy into to shitcoins or fiat games before they ever consider buying Bitcoin.  This is a key symptom in this coupled cycle.    This is how the predator consumes its prey.  As a result the price rises for all in the ecosystem.  The predators have more than the prey, but both sides of the oscillating system remain viable and healthy.  One can not exist without the other.   This tide rises all the predators boats as the process evolves and supports the ecosystem expansion.

This predatory oscillation works best on financial journalist, academics, VIPs & think tank types.  Those educated by classical beliefs often are the low dopamine prey in bitcoin.

HOW COUPLED OSCILLATIONS OPERATE IN NATURE

Connect one pendulum to another with a spring, and in time the motions of the two swinging levers will become coordinated.

This behavior of coupled oscillators is long a fascination of physicists and mathematicians also can help biologist seeking to understand such questions as why some locations overflow with plants and animals while others are bereft.   It can also help crypto owners understand why there is an ecosystem of shitcoins and fiat schemes in the Bitcoin ecosystem.  It turns out, the “prey ecosytem” strengthens the Bitcoin network long term.

In nature, we should pay closer attention to coupled oscillations because they determine outcomes.  The ecosystem provides the incentives that determine outcomes.

The basic idea of oscillating populations is not new to ecology of any system, biologic or cryptographic.

If you want to understand the complex interactions of crypto assets and fiat instruments you must understand how they work together with timing.

We know that any predator-prey system, say lions and zebras for example, shows oscillations.

If there are lots of lions preying on zebras, numbers of zebras decline; then because zebras are scarce, lions starve and their numbers dwindle, allowing the zebra population to build up again. You see this oscillation, changing on a regular basis from lots of predators with few prey to lots of prey with few predators. The pattern is like waves or pulsations.

What gets interesting is when two independently oscillating systems, such as lions preying on zebras and cheetahs preying on impalas, become connected through the invasion of a third predator” leopards, for instance.  This is what is happening to the Bitcoin ecosystem now with shitcoins and fiat instruments.

When they become connected, the situation is very much like connecting two springs together,  the ups and downs work in unison to create cyclic patterns who all have a reference to time.  This is best represented in the halving cycle of Bitcoin, the alt coin cycle, and the business cycles of fiat systems.

In the case of lions, cheetahs and leopards, bringing leopards into the system causes lion and cheetah populations to oscillate in phase with each other peaking and declining at the same time.  This is how BTC and altcoins operate in crypto ecosystems.   That works to the leopard’s advantage when both lion and cheetah populations are low, leopards can pounce on the plentiful prey. This is why Bitcoin maximalist focus on alt coins during bull market runs.  But then lions and cheetahs increase again, eventually building up their numbers and combined competitive strength enough to drive out the leopards at least until the next low point in the lions’ and cheetahs’ population cycles.

Predator-prey systems can also become coupled when a new prey species invades and competes for resources with prey species in two previously unconnected predator-prey systems. This is where fiat instruments come to play for crypto.  For example, an extremely fast antelope might begin competing with zebras and impalas for food. Even though neither lion nor cheetah is fast enough to prey on the new antelope, the antelope’s activity links the previously unconnected lion-zebra and cheetah-impala pairs. In such a case, the ups and downs of the two original prey species are thrown into chaotic but coordinated patterns.  Fiat creates the chaos that Bitcoin and altcoins require.

This process is what is known as coordinated chaos a phenomenon that occurs in some physical systems, such as lasers, but hasn’t been pointed out in crypto ecology before this blog.  By oscillating out of phase with the other two grazers” zebras and impalas” the antelope can coexist with them, prospering when their numbers are low.  Fiat instruments feed both systems during crypto bear markets.  

In living systems, considering such scenarios with the aid of mathematical simulations, the models can help address questions biologists have wrestled with for decades, such as how species that appear to be exploiting the same resources can coexist and why some predator-prey systems are particularly resistant to invaders.

In the past, ecologists have taken a traditional Newtonian view of the world, where everything comes into a nice equilibrium.  But oscillations sometimes destroy that equilibrium, by design. What I’m suggesting is that we crypto ecologists need to acknowledge the inherent oscillation in consumer-resource systems, such as predator-prey, BTC-shotcoin, herbivore-plant and parasite-host systems, and start approaching these old ecological issues in terms of coupled oscillators.  Then and only then will you see the forrest through the trees and understand the ecosystem of Bitcoin, alt coins, and fiat systems for what they are.

HOW TO MAKE SENSE OF THIS FOR BITCOIN

Why do some go irresponsibly long in #BTC? BTC is the only asset that has a Sharpe ratio of greater than 1. The Sharpe ratio describes the increased rate of return received for the extra volatility sustained when holding a riskier type of asset. To understand the Sharpe ratio, one must take into consideration the returns of holding a risk-free asset, compared to holding a riskier asset with higher returns. In this case, a risk-free asset is considered something like a US treasury T-Bill, which is backed by the full faith and credit of the US government, along with the world’s largest economy. This includes FAANG = FB, Apple, Amazon, Netflix, Google. None equal BTC Sharpe ratio.

From 2015-2019 Bitcoin’s 4-year Sharpe ratio was constantly above 2.0, and it has reached above 3.0 in 2019 and was 2.65 for 2020. So far in 2021, BTC is above 3. this defines the parabolic wall of the bull market where Bitcoin dominates as a predator should.

How to interpret a Sharpe ratio?
A ratio higher than 1.0 is considered acceptable.
A ratio higher than 2.0 is considered very good.
A ratio of 3.0 or higher is considered excellent.
A ratio under 1.0 is considered suboptimal.

The negative Sharpe ratio means the risk-free rate is greater than the portfolio’s return, or the portfolio’s return is expected to be negative.

The Sharpe ratio is the difference between the returns of the higher-returning, more volatile assets when compared to the risk-free, much lower returns of a safer asset like US T-Bills. It is important to note that Sharpe ratios only measure the returns based on the amount of risk and the ratio doesn’t actually measure the volatility of the underlying asset itself.

The Sharpe ratio filters out the noise of investor psychology to find the nuances of Bitcoin risk

The Sharpe ratio filters out the noise of investor psychology to find the nuances of Bitcoin risk and reward at different stages of its macrocycle. This can be done by using a simple rolling Sharpe Ratio that analyzes Bitcoin risk-adjusted returns over time.

Ultimately, with respect to BTC timing is critical. Timing is a key feature of coupled oscillating systems.  Correct timing matters deeply: while the individual investor may be satisfied with long-run outperformance, Bitcoin’s macrocycles urge further nuance.

Historically, the trade following the Halving represented the most attractive risk-adjusted opportunity in BTCs history. May 11, 2020, was the most recent Halving. Investors with personal savings and unconstrained time horizons will find comfort in the story of Bitcoin’s long-run outperformance. 90% of days BTC has been higher. This is an astounding ratio. Bitcoin returns are disproportionately skewed to the upside, timing matters.

Much like a call option, Bitcoin risk-adjusted returns rapidly decay or improve depending on market timing. The implication of this record? Over any rolling four-year period of BTC history, Bitcoin’s Sharpe Ratio historically outperformed virtually every other asset class. If an investor had held for at least four years during any point in Bitcoin’s history, they would have demonstrated superior risk-adjusted returns relative to almost all other investment opportunities. Nothing is better than it.  This defines predatory behavior.

Thinking about Bitcoin’s Sharpe Ratio over four-year intervals may be correct in theory, but it is limited in practice. In reality, markets are governed by animal spirits – the swings of fear and greed – This is how alt coins and fiat fears feed the Bitcoin chaos ecosystem.  This is why most “prey investors” are more likely to enter the market after periods of non-linear growth.  Altcoiners and fiat players buy after the top because they do not understand the coupling in the Bitcoin system.

BTC is like sunlight, Altcoins are like blue light, and fiat is like gold in this mitochondrial energy analogy.  Great quotes do not come from great people. They come from ordinary people who think differently about ecosystems.

Many new entrants are thus destined to enter mid to late-cycle, fated to experience grueling drawdowns after buying local or even global highs. The assumption that investors can and will HODL underwater positions for multiple years is unfeasible, especially with the prospect of underperformance relative to other asset classes. The financial and emotional burden of drawdown will likely lead many to capitulate their positions before they are able to realize an entire four-year cycle.  This is why predatory Bitcoiners feed on shitcoiners in bull runs.  It is happening as I type this in this halving cycle.

Given the path dependence of returns, the long-term Sharpe Ratio fails to adequately capture Bitcoin risk.

Oscillating around a value of 1, the one-year forward-looking Sharpe Ratio peaks at the beginning of

Oscillating around a value of 1, the one-year forward-looking Sharpe Ratio peaks at the beginning of Bitcoin’s price inception, 2012 Halving, and several months following 2016 Halving. After these three periods, an interesting dynamic at play: aggressive Sharpe Ratio decay from a high of 3 (spectacular) to a low of −1 (abysmal).

Further, examining the 1-4 year forward-looking Sharpe Ratio for Bitcoin from the Halvings (see pic above), we find a similar effect:

• Exposure to Bitcoin for 1 year after the 2012 Halving nets a Sharpe Ratio of over 3, and holding for an additional 3 years degrades this to approximately 1. From a spectacular investment to a “good” investment.
• Exposure to Bitcoin for 1 year after the 2016 Halving nets a Sharpe Ratio of over 2, and holding for an additional 3 years degrades this to less than 1. From a great investment to a sub-standard investment.

How important is market timing when managing Bitcoin risk?
Analyzing Sharpe Ratio decay gives us a powerful risk framework for BTC. Not all Bitcoin investments are made equal: Bitcoin acquired at different points in a macrocycle should be treated differently as part of a diversified portfolio. To illustrate this concept, consider the idea of “time-to-profitability” (TTP) demonstrated in the picture below:

• Bitcoin acquired at the 2011 high has a ≈2 year TTP
• Bitcoin acquired at the late 2013 high has a ≈3 year TTP
• Bitcoin acquired at 2017 high achieved profitability in November/Dec of 2020.

Not only were investors who purchased Bitcoin at these highs faced with absolute drawdown, but they were also faced with relative underperformance against worldwide equity indices (and possibly other asset classes). Bitcoin can be an excellent tool within a diversified portfolio, but most professional investors cannot simply buy and HODL for extremely long periods of time if they are likely to face both absolute and relative underperformance. Regular investors can if they can handle the tax consequences.  This idea is critical in trading within an IRA account.

The legacy wisdom of financial markets sometimes cautions investors against market timing, captured by the dominance of indexing strategies and the underwhelming reputation of the modern hedge fund. Whatever the merits of this argument in traditional markets, the wise Black Swan will find a fundamentally different heuristic exists for Bitcoin.

This doesn’t mean that other strategies like buy and HODL are not valid. They are over 4 year periods, but within the coupled system Bitcoin is very asymetric and responds to its main oscilator:  Time.

Time in the BTC system is monitored by the difficulty adjustment.  The difficulty is a measure of how difficult it is to mine a Bitcoin block, or in more technical terms, to find a hash below a given target. A high difficulty means that it will take more computing power to mine the same number of blocks, making the network more secure against attacks. The difficulty adjustment is directly related to the total estimated mining power estimated in the Total Hash Rate (TH/s) chart.

The difficulty is adjusted every 2016 blocks (every 2 weeks approximately) so that the average time between each block remains 10 minutes.  This is one of the most important vital signs I monitor in Bitcoin price.  

The difficulty comes directly from the confirmed blocks data in the Bitcoin network.  Price falls can be very accurately predicted when you understand how important timing is in this algorithm.  Just as sunlight is the key variable for life, the difficulty adjustment is the life blood of BTC pricing.  

The bottom-line explanation of difficulty adjustment is that every time a mining rig is shut down, the bitcoin protocol increases the incentive for other miners to stay online to run the network. It’s as if every time a Walmart shuts down, all the remaining stores became more profitable.

Gazed upon long enough, difficulty adjustment can take on a kind of transcendental religious quality. It’s not the reason bitcoin is useful day-to-day, but it is the reason that bitcoin (like other true blockchains, and very much unlike centralized stores) is nearly immune to true destruction, whether by state regulation or market fluctuations. It’s the reason bitcoin is superior to a centralized digital currency system like Gold, even if bitcoin is more expensive to run in aggregate. It’s what makes blockchains more persistently “real” than mere data saved to a hard drive, or even, arguably, to a Google cloud server farm.

This mining process used in Bitcoin, is formally known as Proof of Work. It is also sometimes referred to as “solving a cryptographic puzzle.” Calling this a ‘puzzle’ or ‘problem,’ though, is fairly misleading; solving a “puzzle” often relies on some sort of logical reasoning, but the solution to a bitcoin block is essentially randomly generated by the bitcoin protocol. Mining rigs are making very complicated, equation-backed guesses as fast as possible, in the hope that they’ll be the first to hit the random solution and reap that sweet, sweet, reward, a Bitcoin.

This randomness is key to understanding the difficulty adjustment, just as sunlight is key inside of cells to understand how sunlight creates order out of chaos every day to lead to circadian control of biologic processes inside of us.

Time was built into the BTC monetary network by design using the difficulty correction.   It is simply to say that for investors focused on managing risk, timing really matters in the Bitcoin ecosystem because of the difficlty adjustment in the BTC algorithm.  The difficulty adjustment mimics the role of the sun in biology.   In this way, BTC mimics the Leptin Rx.   BTC does this because Nature and BTC both use decentralized network effects to dominate their ecosystems.

A once-in-cycle trade, but don’t forget to expect the unexpected
The historical analysis of BTC behavior leads me to conclude that, historically, the best risk-adjusted entry existed at or within several months following a Bitcoin Halving. The Sharpe ratio remains at plus 3 200-400 days post Halving. Today we have 93 days left in the halving cycle.  Each day is worth a lot because the Sharpe ratio is now above three and this is where massive price gains are found.  After this time, the Sharpe ratio falls off a cliff.

How institutional investors will change this cycle is now the biggest mystery in my mind.  believe the curves will be right shifted for returns and price, just as metabolism is changed by sunlight in spring and summer.

This post-Halving window, when combined with hedging practices like protective puts or a managed stop loss, helps build a case that, on a risk-adjusted basis, Bitcoin will usually outperform other asset classes.

THE KEY PROBLEM IN THE CURRENT HALVING CYCLE:
As Bitcoin has sprung to new highs in 2021, the current reality is that investors will eventually demand exposure to this asset. Ironically, as these requests pile in mid to late-cycle in 2021, money managers and individual investors will be faced with a dicey dilemma: remain on zero as Bitcoin makes weekly headlines or enter a drawdown-prone asset at local or absolute highs. C goes up in 2021 the risk ratio rises as the market comes to a top. Rather than enter as greed floods the market (next few months), the post-Halving window (April 2020- Sept 2020) granted investors an early window to incorporate Bitcoin into their broader macro strategy. This is why the member event on July 4th, 2020 was critical. IT WAS THE BEST TIME TO GET IN.  Where are we now?  We likely are in the middle of this bull run.  I expect it to last into October of 2021 and not just July of 2021.

What drives this cycle? It is the supply and demand curves buoyed by Metcalfe’s law and sculpted by the current difficulty cycle.  I think the difficulty cycle adjustments will tell me when the top is in.  Price in the Bitcoin ecosystem is wholly determined by these two effects, but timing adjustments will define this halving’s outcome.   And the supply and demand curve has an unusual twist in this current halving due to a severely curtailed supply of BTC marked by increasing institutional demand. The current post-Halving window is upon is now as BTC#18 laid out and represents a rare time to add high expectancy, low-downside Bitcoin exposure. That window will only be open for the next few months until the Sharpe ratio begins its cyclic fall. In this cycle, based upon the historical past of BTC, that fall will approximately happen August -November of 2021.

TIMING IS THE KEY FEATURE OF NAKAMOTO PUT INTO THE BTC ALGORITHM TO DRIVE ITS VALUE

If people choose to store their wealth in a monetary good which exhibits less hardness, then the producers of this monetary good are incentivized to produce more monetary units, which expropriates the wealth of existing unit holders and destroys the monetary good’s salability across time.

This is the fatal flaw of soft fiat/gold money: anything used as a store of value that can have its supply increased will have its supply increased, as producers seek to steal the value stored within the soft monetary units and store it in a harder form of money.  In this way, over time both instruments act like a negatively yielding bond.  Your returns on value diminish by the design of the instrument.  Bitcoin solved this problem in its White paper.

The difficulty adjustment in the White paper made Bitcoin responsive to time and that set it up to be the predator to fiat, gold, and now altcoins in the current ecosystem.  This has big implications for people who do not understand it.  It has bigger implications for nations for do not accept it.

Now are you predator or prey in the Bitcoin ecosystem, right now?

Example Questions to Change Focus from FIAT TO BITCOIN

Here is a starter set of questions to help you change your fiat focus and make the most of what you can get from #BTC:

• What do I want my money to accomplish for me?
• What’s my next best move with my money given my current context?
• How can I make the most of this new monetary network in my life?
• How can I solve my fiat problems? If I knew how to solve my fiat problem, what might I do with my money?
• Who can I learn from about this new monetary network?
• Who can I team up with to maximize the use of this monetary network?
• What’s unique that I can bring to the table for my health when I use BTC?
• What’s the ideal solution in how to use this idea?  What’s the minimum solution for my applications?
• What would good look like after I use this Rx?
• What can I learn from this use case?

Change has a perspective which is relative. Close up, change appears to unfold slowly. At a distance, change appears destructive. In between the worms eye view and the birds eye view lies reality.  Changing your focus is a skill you can use to improve your results in any situation. How do you change your focus? … Change the question. It’s that simple. For me embracing Nature was a nudge to rejecting my fiat education. When I was up against a wall in my medical career or when my personal life’s was dragging me down or when I was facing the unexpected, I learned I need a way to change my focus. Asking myself the right questions was the solution. I stopped focusing in on food and biochemistry and embraced Nature’s decentalized algorithms. My life changed. In my personal life, I embraced the suck of the relationships I had created and thought about them in a different way and asked myself new questions. Why did I allow things persist this way, when I could alter them? This process works because thinking is just asking and answering questions. It forces you to stop looking at your life from your default perspective and makes you see your actions in a new way by asking new questions. If you ask yourself better questions, you get better answers. If you want to change your focus, change the questions you ask yourself.

By changing the questions, you change your focus, which improves your results.  If you just tell yourself to focus on something else, that doesn’t work. In fact, the more you tell yourself not to focus on something, the more you end up focusing on the wrong things. Instead, you can put your brain into a fully resourceful state, simply by asking the right questions. Your brain is great at solving problems, but you need to ask the right way. You’ll also find that as you improve the questions you ask yourself, you’ll improve your energy.

The ultimate cheat code of our time: having your debt denominated in fiat and your savings denominated in #BTC

This was my first crypto podcast after over 500 podcasts on quantum biology.  

Governments are massive borrowers world over. US lately talked about another $1.9T stimulus. Such massive fiat borrowing leads to rise in yields of bonds.  Stocks don’t like rising bond yields. The most expensive stocks become the most sensitive stocks to the rising yield. Those are the FAANG stocks. Yield curve control (YCC) occurs when a central bank publicly announces and executes purchases of government bonds at a specific maturity to ensure that yields are maintained at the desired level. Because bond prices are inversely related to their yields, buying bonds and pushing up their price leads to lower rates.

The Australian Central Bank just began Yield Curve Control by buying their own debt last night in 2/28/2021. By keeping yield artificially low, YCC weakens the value of a currency more drastically than QE . When YCC is placed on the bond market, hard assets and commodities usually spike. Things like BTC and gold should go up. Interestingly gold is not reacting this way, and BTC is already rallying strongly today. The longer the YCC is kept, BTC should skyrocket. The Fed is using the Central Banks of Japan and Australia as their test cases to see how markets react to these experiments. My prediction is by summer as yields rise and the cost of funding government rises, the Fed will enact YCC to cool off the risks of a higher bond yield. Real rates in the bond market are already negactive according to Black Rock’s CIO. Later in 2021 , when rates become obvious negative rates it will like pouring jet fueld on BTC price. I will bet that gold lags because it is a dead monetary system compared to the living organism that is BTC.

Collateral effects:  it’s like if they’re coordinating all around the World for the YCC so that when the worlds’ CDBC are ready and in place, they’ll drop directly to NIRP and implement depletion of your bank account if currency isn’t used before a certain date. China’s CCP has already done this with the digital yuan. Pretty totalitarian approach is what I believe governments will take. you’re not using your currency : that money will go to the gvnt accounts so they’ll pay off their debt

If you’re using your currency: velocity could kickout quickly, inflation could take off, real economy will rapidly crash/deflate and government will pay their debts off with all the confiscated money using cheaper dollar & more taxations. All nations are on schedule for the great reset using the Great Facade of COVID. COVID IS THE POLITICAL COVER TO AVOID A PUBLIC REVOLUTION.

In May of 2020 the Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation (collectively, the agencies) approved an interim final rule that permits depository institutions subject to the supplementary leverage ratio (SLR) to elect to temporarily exclude U.S. Treasury securities and deposits at Federal Reserve Banks from the SLR denominator. The interim final rule strengthens the ability of electing depository institutions to continue taking deposits, lending, and conducting other financial intermediation activities during this period of stress caused by the coronavirus, also known as COVID-19. The interim final rule is in effect through March 31, 2021.

Things will get more exciting this year if SLR change is not extended by 3/31/2021.  Powell announced yesterday that he will make a decision on the SLR on 3/17/21.  This is what is holding the stock market and BTC price in check for the last two weeks.

Treasuries held by US banks:

Consider what JP Morgan said recently:

I said it last year, this change in SLR and YCC will be permanent until they totally devalue fiat money and get CBDC as their currency. It will not be a temporary patch.

Why do I think this devaluation is closer than Wall Street thinks?

Gold is acting opposite to how it should. And the Fed cannot just use SLR or YCC because when employing yield curve control isn’t capable of exercising as much control as they will need with a hyperinflating currency while employment is in the tank. Why?  In the US, the Fed already owns 40% of all 10-year Treasuries. So they will have to revert to the permanent peg they used in WW2. We also have record debt (30T) and massive unemployment from COVID (30M).

Quantitative easing has either be continued for ever or the economic system including the currencies will collapse. In both cases the winner is Bitcoin. That is why I am very bullish. BTC is like the bankers in WW2. They were selling to both sides as the fought each other.

In addition to discussing SLR extension to assist the Treasury market, Zoltan Pozsar on Operation Twist or a weaker USD:

If Fed is proactive to gain control until their CBDC is ready, they might try to do another Operation Twist, where they sell some short-end Treasuries to provide the needed collateral and buy additional long-end Treasuries, within the context of their otherwise automatic $80B/month Treasury buying plan. Otherwise, we could see T-bill rates go lower or even mildly negative in the months ahead as T-bond rates continue to push up higher, and cause financial plumbing issues.

Lots of moving parts here because a TGA drawdown of this size would be a first. Operation twist ended the gold market rally in 2011. Interesting times to own Gold and BTC.

SUMMARY:

I have been in Clubhouse for two weeks discussing the issues in this blog.  The consequences of the 3/17/21 Fed decision on the SLR is massive.

The Federal Reserve can create base money out of thin air in a process they call “quantitative easing” or QE for short, but has very limited methods to inject it into the broad money supply. They can only buy bonds and certain other assets with it. They have no way to send money to real people and businesses in the economy, outside of financial markets.

The Treasury Department, on behalf of Congress and the President, can send money out to people and businesses, but needs to issue bonds associated with that spending, which just moves money around. The bonds pull capital out from one place (the lenders) and puts it in another place (where it is spent). Therefore, the government also doesn’t have many ways to directly increase the broad money supply within the context of the existing legal structure.

However, the combination of the Treasury Department and the Fed working together, with the Treasury Department sending checks out into the broad money supply and the Fed creating new base money to buy the bonds associated with that spending (rather than extracting that money from real lenders buying the bonds with existing money), outright increases the broad money supply,If the do not extend the SLR this might be our reality below.

Living the dream is not about living the fiat dream.

It’s about avoiding the fiat nightmare by banking on yourself using BTC as your bank.