At 1:30 the CNBC reporter asks
“Is there not a world Roger where both Bitcoin and Bitcoin Cash can exist?”
To which he replies to by saying it’s really dangerous for Bitcoin Core holders on the basis that if in a short space of time Bitcoin Cash price goes up significantly and poaches a lot of mining power, the Bitcoin network would come to a screeching halt.
He then says in the 7 years he has been involved in Bitcoin he has always encouraged people to hold their Bitcoin in a wallet that you control the keys to, however right now he says it might be a good idea to move your Bitcoin and hold it on an exchange in case there is a sudden panic sell.
He says if your coins are in your private wallet and you can’t transfer them to an exchange because of a transaction backlog, by the time you manage to sell your coins they may be worth nothing.
He says all this in the context of their being a mass exodus of people from Bitcoin to Bitcoin Cash.
When he says “if”, he may well be saying such things to trigger the very hypothetical exodus he is talking about.
While he may well be exaggerating to push the Bitcoin Cash agenda it did make me think about you guys who tune in to The Cryptoverse for tips on making money and then protecting that money.
Roger may get in your head a little bit because one of the things we love about Bitcoin as an investment is that it’s fully liquid, meaning no matter how much of it you have, you can sell it all in one go without really affecting the price.
The question is whether we can still consider Bitcoin a fully liquid asset if it takes days to move it from a private wallet to an exchange?
So I did a quick experiment and I proposed a transaction to send all of my Bitcoin from a Ledger Nano S SegWit address to an exchange, and the fee was quoted at $92.
If Roger’s panic scenario materialised, I would have no problem paying that kind of transaction fee to get it included in the next block, although I know his counter argument to that.
He would say “what if the mining power has moved over to Bitcoin Cash by then and the next block takes an hour”.
My response to that would be “That’s a lot of ifs”.
I’ve learned a lot from Stefan Molyneux the author of the book The Art Of The Argument and he often cites what he calls “An argument from consequence” to be invalid.
In Roger’s case this is “You should move your money into Bitcoin Cash because if people don’t move their money into Bitcoin Cash they won’t be able to move it if the Bitcoin price crashes”.
The problem with that advice is that if enough people move their money from Bitcoin to Bitcoin Cash that will actually cause the Bitcoin price to crash, the Bitcoin Cash price to rise and the mining power to move over to Bitcoin Cash, making the Bitcoin more difficult to move.
So in that way he is speaking it into being true, rather than it being true now.
Part of my job is to reduce the anxiety of you dear viewers and replace it with confidence.
So if you watch this interview with Roger and he gets into your head and frightens you then there is a hedging strategy you can employ.
My approach is more often than not to find what the Buddha called “the middle way” which many regular viewers will have heard me talk about before.
This means I’m not going to help you figure out whether what Roger is saying is true or false, likely to happen or not likely to happen.
I’m going to suggest a strategy that means it doesn’t matter which way it goes, you have some protection in place.
My strategy would be to transfer half of my Bitcoin holdings to an exchange and leave the other half in my hardware wallet.
That way if there was a sudden price crash and a drop in mining power, yes the Bitcoin in my hardware wallet would be stuck but I’d instantly be able to sell the Bitcoin I put on the exchange.
This limits my losses while at the same time limits my risk of holding money on an exchange.
I’m not recommending anyone do this, it’s just a philosophical thought experiment for the purposes of intellectual stimulation.
One thing I will advise you to do is somehow come to terms with the fact that none of us can gain absolute certainty that we won’t lose money in this game, nor can we gain absolute certainty about security.
That is a quest you will never complete.
Instead, we must do everything within our power to lower the risks to an absolute minimum and then fully accept whatever risks remain.
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