Bear Market Diaries 2022: Fractal Encrypt Interview
By @piratebeachbum - Analyzing The Bitcoin Bear Market Series - Volume 9
Name: FractalEncrypt
Country: N/A
How do people know you? Probably through my bitcoin art.
How long have you been into Bitcoin? Came across it during the early Silk Road days as I was a moderator on the forum it was first announced, the Shroomery. It was pretty common knowledge 2011-2013, but I had no idea that people were interested in bitcoin as anything other than a method to pay on darknet markets. I even had someone pay me for art in 2015 a few times, totaling about 3.1 BTC, but still had no idea it was anything different than “a dollar.” Things started to click for me around mid-2017, and by late 2017, I started to pay attention. Wasted a year and a half shitcoining, lost all kinds of bitcoin to failures trading, shitcoining, and even lost BTC from exit scamming exchanges! (Coinsmarket)
What an idiot!
How many Bitcoin market cycles have you been through?
I remember the crash from $70 to $7 due to the Gawker article. Maybe 2102-2013ish? I was moderating the new forum on the Shroomery when this came up, was a relatively big deal, but I always stayed clear of dark market stuff, so I never got directly involved in those early days, more just watching from the sidelines. When I was paid in later 2015 for my art, my first bitcoin came during a bear market, but I was so oblivious, I had no idea the price of bitcoin changed relative to USD, or why that would be important. I basically put it in a wallet, and forgot about it. Then a year later a friend wanted bitcoin to buy some LSD on the darknet, so I was like, “Hey, I need to pay rent, so I have 3 bitcoin!” He gave me the cash for one or two, it was $600, my brain still is not really registering that the price moved from $250 each to $600 each…I sent the bitcoin to the address he gave me, and all was good. Then a few weeks later, he needed me to send another bitcoin somewhere else. He paid me, I sent the bitcoin, and then he calls, saying his guy never received it. I check, and somehow the bitcoin.info wallet saved my last address I sent to and it went to the first person I paid, and not to this new person…oh shit! So he contacts the first guy to see if he still has the keys, he tells me sometimes these guys just use burner wallets and it could be gone forever…but no, it’s all good, guy sends back the 1 BTC. I send it over to the correct person now. Nice intro huh!?!?! Then in 2017, this same guy who bought my 3 bitcoin calls me and says, “hey you remember that $10 of bitcoin you didn’t sell me? Well you need to check your account, because bitcoin is now worth $4,000 each!” I’m like no way…I check, my 0.1BTC is worth $400! I immediately try to give it to my weed dealer for weed (ZERO clue!) he’s too lazy to set up a wallet, so I hold it through the move from $4k to $20k and now the opportunity cost of my mistakes hits me…that $1800 I got to pay rent in 2016 would’ve been $60,000 fucking dollars. Whelp, you gotta learn some lessons the hard way right? This gave a lot of resilience through the bear market of 2018/19 and I began accumulating immediately. I knew I’d probably never get back to the amount I once had, but I was going to try to get as much as I could, and this time, I’m not fucking selling!
What are you optimistic about in this space despite the current state of the market?
I am optimistic that more and more people are coming to the realizations about sound money every day. I see a great strengthening of understanding, a blossoming of more-solid information for new-comers, and a current of self-reflection running through the culture. The culture itself is something I am optimistic about. It a living culture that we’re reweaving every day.
What tips do you have to those who are new to this or who might be upside down?
Bitcoin markets, like life, are cyclical. When the cycle swings up, you’re doing good, all is well, but you have to understand that it’s temporary, and the downswing is not only inevitable, but it is coming soon. When things are down, life is bleak, just know that holding on - the only way out is through it, soon the cycle will swing back and you’ll be on top again soon. But when that happens, remember the downswing isn’t far away, so be humble, be grateful for those good times.
Biggest regret during the last bull market?
My permabull mindset has taught me a few lessons about financial fluctuations, and some of these lessons have been very hard. However I am grateful for them all, and I won’t make the same mistakes in the future. I’m plenty good at making new ones.
What have you learned so far in this bear market?
Things take 2-3 times as long as you think they will, and cost quite a bit more than you planned as well. That’s okay. I thought at some point about taking out loans to get new equipment, or property I thought might be citadel quality. But then saw all the carnage from this year, and realized I need to scale back any expectations to what I can afford on my own without taking on any debts to anyone else. It means I pay more now, and some of that hurts, but later, I don’t owe anyone, and my vision is not compromised in any way by being enslaved to others through debt or obligation. It gave me resolve to work harder, and reach my goals. I just finished a 3 year art project, and an beginning the next. It’s a long slow process, but if I do a good job, maybe I can create abundance for myself and my family through turning my imagination into physical reality, this is beautiful and worth fighting for in my opinion.
What is the biggest fail you have seen during the last bull cycle?
Nic Carter, right? Gotta be Nic…but not sure if it’s his hair or his comments that are worse fails…
What do you think helped trigger the current bear market?
Shitcoins and shitcoining
Who was most exposed during this last market meltdown?
Everyone is a scammer…they all want your bitcoin
What are your thoughts on Bitcoin Maximalism?
It is our salvation.
Why do you think there is an emerging narrative to demonize Bitcoin Maximalists?
Yes and it’s so weak. We’re lucky for that, and should expect better, more precise attacks as time goes on.
What kind of damage do you think the latest price drop has done to buyer sentiment?
I think people get Bitcoin at the price they deserve. The people with the most bitcoin are usually those who took the most risk.
What is it going to take to turn this around?
Fuck if I know. Cycles just seem to happen, there’s an ebb and flow to all of reality, I just don’t think we’re very expert at locating the patterns yet. Not sure we ever will be.
What type of carnage do you expect to see in Bitcoin startups?
Massive, meme-quality carnage!
What are your tips for HODLing Bitcoin through downturns?
To me, bitcoin is a savings technology rather than an investment. An investment implies that you expect to exit at some future time, while savings implies just that, you’re saving. You are storing the value you created by expending your time and energy. You’ve already created the value, so do you want to store that in a currency that others can print infinite amounts of, or d you want to store it in an absolutely mathematically scarce currency that no one can print infinite amounts of? Any bitcoin you acquire, you should ave a minimum of 5 year horizon before you plan to spend it, or better 10 years. Shorter timescales are recipes for trouble.
How do you feel about alt-coins and NFT’s and stable coins?
Someone once asked me if I was tempted to make NFTs from my art and I wrote this response -
- Are you tempted to release an NFT of your art? If yes/no, why?
Absolutely not.
I created NFTs in 2017/18 and the deeper I investigated them, the more disillusioned I became. They felt inherently scammy, and me continuing down that path would make me a scammer in my eyes.
The art is almost never “on chain” so the links between my art and the token were ephemeral at best and an outright misrepresentation/fraud at worst.
At a very base level, this is very disturbing as an artist
Selling something as my art, that doesn’t even have “my art” in it in any way seemed downright dishonest.
The issuance of a token in the hopes to take others' bitcoin is the essence of shitcoinery
“I like bitcoin, buy my shitcoin”
An artist issuing an NFT token and selling it to others in the hope that it may appreciate in value puts the artist in the situation of possibly issuing securities.
There’s almost no difference between a centralized group of shitcoiners releasing a shitcoin, then there is with an artist releasing tokens to sell.
NFTs are ICOs created with pixels instead of code.
The entire enterprise rests on the buyer trusting the artist not to re-release, or over-release an NFT.
This is anathema to the bitcoin ethos of not having to trust third parties, especially in regard to the wealth you store in cryptographic assets.
An artist easily COULD re-issue the token on the same exact blockchain, or an entirely different shitcoin chain.
A scammer can EASILY upload any JPEG of your art and try to sell it as an “authentic” artist released NFT
The non-fungibility is pure-theater
The art hosting on IPFS or bittorrent-type mechanisms by their very nature are impermanent.
So any claim that your art is “on the blockchain forever” is deceptive theater.
If your art is no longer seeded, it is no longer “online”
And once you and your collectors die, who is going to care enough to host your crappy JPEGs?
There is a very high-time-preference culture in NFTs.
The market incentivizes artists to make more art quicker.
This leads to lease thoughtful, crappier art
Because it pays, so it creates a distorted feedback loop.
Let’s talk about the buyers of NFTs.
Many times these are the beneficiaries of shitcoin cantillionaire effects. The premine holders who got in before anyone else
This easy money can be used at almost no cost to the cantillionaires to pay artists
These payments are like bribes to creatives to put their time and energy into promoting their shitcoin.
So artists are being tricked into working for this easy money.
They become beholden to it, as they perceive it to be helping them and their families create abundance through art.
This becomes a gilded cage the artists build around themselves under the patronage of premine scammers.
Now let’s look at the smart contracts
The NFTs are issued via smart contract
Almost all smart contracts have a “pause” feature. This allows the holder of the admin keys to have god-mode level control, and can even reassign rights to tokens issued via the smart contract, issue new tokens - this totally absolves the artist of any self-sovereignty over their own art and the tokens supposedly tied to the art.
What about perpetual artist royalties?
Also bullshit.
This only works in the walled gardens of the smart contracts
For example, if you have an NFT token on SuperRare, and it sells within the SuperRare website and smartcontract, the artist gets 10% royalties on each sale forever.
However this ONLY works if you keep the tokens within the walled garden of SuperRare’s clutches.
What kind of impact do you think the radical drop in alt-coins and NFT’s will have on their future?
I think these things are vehicles for some people to scam others. Therefore they will be around as long as human nature. People always want to scam others. As long as mechanisms to do that exist, people will exploit and leverage them for their own gain, with zero regard to the collateral damage done to others’ lives. I wish it weren’t true, but it’s what I think…
What do you think about shitcoin implosions like Luna, Celsus and the Solana hack?
Insert <<LaughingLiotta.gif>>
What is your take on FTX buying up distressed Bitcoin companies like Blockfi?
I have not given this enough thought to give you a valuable answer. But FTX is a shitcoin, so my take, is its probably some ploy to orangewash themselves a patina of legitimacy…
What is the best way to accumulate Bitcoin during a down market?
Work for it. Seriously. If you can work directly for bitcoin, this is the way. What skills do you have? Can you use those, enjoy it, and also get paid in bitcoin to do it? Probably!
How bullish are you on Bitcoin despite this recent pullback?
Wut pullback? LFG!
Any tips you want to give to people new to Bitcoin?
Involve yourself in deep study of bitcoin, and use it. Download bitcoin core, and install it. Learn how to open it in testnet mode. Learn how to get some testnet bitcoin. Send and receive some bitcoin. (all this is free to do!)
You can’t get the benefits of this technology without understanding it deeply, and also using it! Get your hands dirty. Testnet is very good because you can learn how this all works, without fearing you’ll cause expensive, public, and permanently recorded accidents.
If you want to really get under the hood and see how it all works, next, go watch my series on creating DIY coinjoins. Some of the theory could use updating, but ALL the mechanics of bitcoin work just as you’ll see in the videos -
Any last words of wisdom?
Search out the real, reject the fake. Don’t trust verify.
Pleb Underground is powered by a collective of Bitcoin pleb content creators. Thank you to everyone who contributes, supports us and shares our content. Follow us on twitter @plebunderground