Joshua Henslee spoke to SLictionary founder John “Jack” Pitts recently about BSV and dedicating the next 20 years to BSV. Watch it directly via the link above or read the summary below.
Introducing John “Jack” Pitts
Jack is one of the earliest adopters of BSV. He released a Wikipedia competitor based on BSV micropayments called SLictionary.
Jack says that he ignored Bitcoin in the beginning until he read an article about it, and then a colleague asked him about the technology. Being the tech analyst at his hedge fund at the time, he realized he had a duty to at least understand Bitcoin.
After dismissing most digital currencies, including BTC, Jack discovered BSV in 2019. At this stage, he became convinced that Bitcoin is a computational commodity. He sees a future where CBDCs will be exchangeable for a specific number of satoshis at a fixed exchange rate.
What made Jack Pitts take such a large gamble on BSV?
Joshua asks Jack why he has taken such a significant gamble on BSV. He has said he’ll dedicate the next 20 years to BSV, and Joshua wants to know more about what led him to have so much conviction.
Jack begins by explaining his interpretation of the famous biblical parable of the rich man. In it, Jesus Christ tells a rich man that he’ll have to give up all of his wealth to join his ministry. The rich man scoffs at the idea, and Jesus tells him that it’s incredibly difficult for a rich man to enter the kingdom of heaven. This has been interpreted many different ways, but Jack interprets it as meaning that it’s impossible to gain wisdom in a new area if you’re so focused on an old one because it’s making you so much money.
Jack’s interpretation of this parable, combined with his previous career hitting a roadblock, led him to go all-in on BSV. He says Jeff Bezos inspires him; he too was an analyst who quit to form a business in the new frontier. Back then, the frontier was the internet, and today it’s BSV.
Why does Jack have so much confidence in BSV specifically?
Drilling deeper, Joshua wants to know more about Jack’s confidence in BSV.
Jack says he is only confident if Bitcoin is a computational commodity. If it’s not, he says he will be wrong. He says that a commodity needs to have utility and a value that is self-correcting.
Giving the example of oil, Jack says that when a commodity price falls, people find new use cases for it, creating the demand necessary to correct the price trend back upwards. However, Bitcoin is slightly different because of its fixed supply. Therefore, Jack likens it to island city real estate.
With all that said, Jack says he’s “somewhere in the nineties” when it comes to his confidence level in Bitcoin. However, he’s 100% confident that proof of stake doesn’t work, and high prices on most other blockchains aren’t suitable.
Why is Jack so able to dismiss Ethereum and other protocols?
Joshua notes that while he and Jack are extremely bullish on BSV’s future as a payment system, many others aren’t. He wants to know why Jack easily dismisses BSV alternatives.
Stating it simply, Jack says that Ethereum doesn’t work, and one maxim of tech is that you shouldn’t try to create something when something better already exists. He doesn’t have time to wait and see if the protocol finally works in 18 months when he can just use BSV today. Transaction fees are another problem for most platforms, including Ethereum, Avalanche, and others.
“Vitalik is just not a very good engineer. If he was, he would have figured out that Bitcoin was Turing complete,” he says. “If he was smart, he would have forked Bitcoin, restored the scripting language, and called it Ethereum.”
Talking more about Solana, Jack says that proof-of-stake is an improper incentive system because you don’t get paid for verifying transactions. People don’t understand that this is the real work yet because there still aren’t that many transactions. However, that will all change in 10 years when there are a billion transactions per second, and the block subsidy has significantly diminished. “The system is built to fail at peak load,” he says, “nobody is incentivized to handle peak load.”
The Dot Com bubble and the current digital currency markets
Jack was around for the Dot Com bubble and subsequent crash and witnessed it play out. Joshua asks him to elaborate on what he has previously written about the parallels between that bubble and digital currency markets.
Jack describes himself as a cycle theorist. The idea is to ride good waves and avoid bad ones. This has caused him to be able to spot patterns in markets and understand when we’re in a bubble.
He refers to the book Popular Delusions and the Madness of Crowds which explores many different historical bubbles. He most likens the BTC bubble to the South Sea Company bubble, where Europeans explored North America for a profit. Even Isaac Newton, arguably the smartest man of his era, got caught up in this bubble and lost lots of money. “The lead-up looks very similar,” he says.
However, he also says that the current digital currency bubble is a lot like the Dot Com bubble that burst in 2001. He remembers how AOL and Yahoo were the big things back then. AOL was acquired for hundreds of billions of dollars by Time Warner, and everyone believed that the internet had finally arrived. However, those same smart, super-wealthy people, including Microsoft’s Paul Allen, got it wrong. Likewise, in the following years, there were many search engines that were touted as Google killers, but they all failed. All of this should sound familiar to anyone involved in today’s digital currency markets.
Reflecting on why so many ‘big tech’ players don’t get BSV, Jack goes back to the parable of the rich man. While these people make their money from ads and subscriptions, BSV provides a revenue model that is neither. He describes this revenue model as revolutionary.
On the current state of BSV and naked shorting of the token
Joshua notes that lots of big players in the digital currency ecosystem recognize that BSV is a threat and do everything in their power to discourage development on it as well as naked short the price. He asks Jack for his thoughts on both.
Jack points out both that the market is not fair and that this rewards bad behavior. For example, when faced with a choice between slogging it out and building real applications on BSV that might take ten years to take off or taking $50 million in VC money to build on Ethereum, most people will take the easy route that’s more rewarding in the short term. However, it’s the people who do the hard work now that will reap the rewards in the long run.
As for the naked shorting that crushes BSVs’ price despite increasing transactions, Jack recommends looking into the history of Overstock.com and its founder Patrick Byrne. He maintained a fixed number of shares and eventually got to know everyone who owned the entire $17 million shares. He knew that they weren’t selling but that the stock was still going down. He figured out that the banks were using derivatives to naked short the stock. This stopped when Byrne exposed it, but nobody really got punished for it, and so it’s happening again in this market.
Jack says that with all of the regulators circling Binance, FTX, Tether, and others, more of what they’re doing will come to light. He believes it will be discovered that some of the shadier entities are naked shorting. He also believes that if one fair market sold BSV (the actual coin), the price would be multiples higher than it is today.
“There are some shenanigans going on,” Jack says. He wants to write an article on it but would rather focus on the positives for now. That said, he acknowledges that BSVers having added capital would help a lot.
How will all of the rogue actors in the industry be brought to justice?
Joshua notes that while regulators are looking into the behavior of some rogue actors, nobody seems to be seriously punishing them. He wonders how it will all come to a head.
Jack says that this is always the same. Governments don’t like to rain on the parade of emerging industries and roaring markets. However, when enough people lose money from their retirement accounts, etc., they complain, and something gets done about it. Everything looks different when the prices crash, including people’s perception of the people operating in the space. Jack notes that it was after the Dot Com crash that Bernie Ebbers and others were sent to prison.
“When everybody jumps off the cliff, and you’re looking at all the dead bodies, that’s when the blame game starts,” Jack says.
With that said, he does believe the ball is rolling, and the worst offenders are already being investigated. One thing will lead them to another, and it will all eventually get cleaned up.
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