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Thursday, 26 February 2015 00:00

Why Almost Nobody (and I mean ALMOST NOBODY) Gets Bitcoin: Part 1 - the Definition Featured

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Who Am I and Why Should You Listen to Me?

If you Google (“Who is Reggie Middleton?”) you’ll see I made my name accurately calling contrarian booms and busts, specifically fundamental and forensic outliers such as the housing crash, Bear Stearns and Lehman collapse, European sovereign debt crisis, Apple share price halving, Blackberry collapsing, Google popping through Android, etc. In short, I’ve developed a knack for seeing things very differently from most other renowned “industry professionals”, and being right more often then I’m not.

All of the calls mentioned above (among about 80 others) were highly contrarian. This means that just before Bear Stearns collapsed, it was trading over $100 per share and had buy recommendations and investment grade ratings from all of the big Wall Street banks and ratings agencies. Ditto for all of the other calls. I say the things people don’t want to hear, make the trades that no one wants to make, and take (financial) positions that the “smart guys in the room” consider absurd and amateurish—until the following year.

After being “absurd and amateurish” through two global crashes, the near collapse of the banking system, a real estate black hole, and the birth of an entirely new way of computing and communicating, I’ve developed a small, but loyal following as a trends “seer” in the media.

So, What’s My Beef with Bitcoin?

In October of 2013 I finally succumbed to the requests of my clients to look into Bitcoin. Rather than read other people’s takes, I went straight to the heart of the matter—the 8-page Nakamoto Satoshi bitcoin white paper and the Bitcoin wiki.

Within minutes, my jaw dropped out of excitement and awe, particularly when I read about smart contracts. My first thought was, “Wow, I really missed the boat on this one.” While I stood by during bitcoin’s dramatic price increase, I feared I had missed a much more significant opportunity in building the next wave of social computing architecture.

Old habits die hard. I started performing my due diligence to find out who was first to market, and whether there were worthwhile investment opportunities. Shockingly, I couldn’t find a single person or company that had a viable commercial application for creating and delivering smart contracts. We have a paradigm shift that nobody was taking advantage of, while the media focused almost exclusively on red herrings like coins, Gox, and Silk Road.

I hadn’t missed the boat. It hadn’t even arrived in port yet.

Now, to save time for those who haven’t read through the links above, I will summarize it in the next section which also encapsulates the problem with Bitcoin, its supporters, and detractors today.

What is Bitcoin?

Bitcoin is likely among the most popular topics ever that practically no one knows anything about. All it takes is about 10 to 15 minutes of reading—and an additional 2 to 3 minutes of further contemplation—to start to understand its true value potential.

Ask almost anybody what Bitcoin is and you will nearly always get something inaccurate or incomplete. Responses range from Bitoin is a ponzi scheme to worthless digital currency because it’s not backed by a sovereign nation, to Bitcoin is a failed experiment because it doesn’t have a central bank. None of this is true, but where does this come from?

To find out, let’s Google the term, “What is Bitcoin?”

What is Bitcoin

Let’s start by discussing what Bitcoin is not. Bitcoin is not a digital currency. Bitcoin (with a capital “B”) is a protocol driven network and platform for programmatic value transfer and consensus-based decision making (as opposed to bitcoin with a lowercase “b”, which comprise the individual accounts of value known as the digital currency or coins). A useful synonomous descriptor would be IP (the base-level Internet Protocol), a protocal driven network and platform for programmatic data transfer. On top of the Internet Protocol are other protocol-based systems and full blown applications that rely upon them. A brief list of these can include:

  1. the World Wide Web (HTML, CSS, Javascript, etc.);
  2. e-mail (SMTP, POP, IMAP, etc.);
  3. file sharing (FTP, bittorent, etc.);
  4. YouTube, Facebook, Netflix, Amazon, Dropbox, Google Docs/Drive, etc.

The Internet is not a digital file or a digital file system. That trivializes its potential. It is a foundation for an extremely rich and diverse set of funtionality layered on top of it. That functionality constitutes a data ecosystem. Bitcoin is no less than a foundation on which can be built an extremely rich and diverse value and decision making ecosystem.

This cannot be stressed enough. Bitcoin is not merely a currency. Like packet routing in IP, the currency of bitcoins is merely one integral, but very basic application of the Bitcoin protocol. But it is capable of much, much more. For those of you who think Bitcoin is about Silk Road, Mt. Gox and Western Union payments, I’m about to blow your mind.

This is my company’s, Veritaseum, launch product—UtlraCoin. It is the world's most powerful Bitcoin wallet - yes, pure BItcoin. It is a smart contracts-based, P2P, counterparty risk free, financial asset creator, trader, and exchange—complete with leverage available of over 1000:1, with no risk of negative equity or margin calls. This product was put together by my team at Veritaseum, consisting of IP/patent attorneys, software engineers, developers, financial engineers, and financial analysts. Our team is a bit more diverse than the typical Bitcoin start-up addressing a $220+ trillion market. That's not a typo. It's trillion. With a “T”. Add up the forex, derivatives, equity, commodity, and fixed income markets daily and annual turnover, and you have captured phase 1 of our project (we have 12 other phases planned).

For the financial types among you, tell any friends you know who has read this article what the liklihood of getting a swap like this from your local broker or investment bank, whether it be Goldman, Morgan(s), or Merrill. It’s already out of their league, and we’re just getting started.

Veritaseum’s UltraCoin Wallet (pictured below) is a 100% Bitcoin-based, peer-to-peer (P2P), over the counter (OTC), financial asset trading desk, financial asset creator, and smart contract designing center. Users can trade exposure to over 45,000 tickers in all asset clases (stocks, bonds, forex, and commodities) from all major exchanges. It offers up to 10,000× leverage.

thumb What is Bitcoin - Financial Asset Trading Desk  Smart Contract

The UltraCoin Wallet allows users to swap highly customized financial exposures directly with each other with no middlemen. This smells ripe for disintermediating the Wall Street crowd, doesn’t it? No centalized exchanges, no brokers, no investment banks, no prime brokers, no clearing houses. This is just scratching the surface of the power of the Bitcoin protocol.

In addition, there are no counterparty, credit, or default risks (meaning no Bear Stearns, Lehman Brothers, Man Financials). You are never exposed to any financial entity’s balance sheet (unless you want to be by way of creating your own swap for it). Veritaseum is a software company, not a financial concern. All of your capital is either directly in your possession, or in-contract, locked in the blockchain. Veritaseum never has control, possession, or custody at any time. Press the “Track Transaction” button in the UltraCoin Wallet application and you can instantantly confirm with a third party the state of your funds any time from any location that has Internet access.

Yes, everything just stated is factual! There are bound to be many of the “smartest guys in the room” who assert that these claims are not possible. They are likely to be the same crew that allege Bitcoin is a payments system, a digital currency, or a ponzi scheme as well.

thumb What is Bitcoin - P2P Financial Asset Exchange

Below is what the fee revenue looks like upon launching the prototype, beta 1, and beta 2. The fees are small (starting from a base of zero; this not a representation that we are making a lot of money, or even any real money at all yet), but I want to illustrate what the proverbial hockey stick looks like and how this can ramp up once it really gets going.

beta revenue chart

If you’re like me, curves like that get you...excited.

Like the layers and layers built on top of the Internet Protocol, these “smart contracts” can do some rather fantastic things. If you have a couple silver hairs, you probably remember the skepticism many pundits and investors had of the Internet back in 1993. You’ve probably also guessed at how much money you would have made if you invested in the right companies back then.

Here’s a truly tough question: How much would a start-up be worth now if it patented commerce and methodogies over the Internet. My guess would be a lot. There are not a lot of guys doing this stuff now, and we believe we are the first to launch a product such as this. As businessmen, the first thing we did was to create not just one, but a portfolio of patents (pending) covering all types of higher-end methodologies using consensus algorithms, blockchain-like technologies, and smart contracts. We did this a long time ago (in tech time, that is) and are confident that not only are our applications comprehensive and solid, but quite early relative to the rest of the bitcoin is a digital currency crowd. 

There is no reason to take my word for anything. Our application is available for download now. Liquidity is low because we just launched in beta, but the screen shots that you see above are not demos. They are grabbed from my desktop running live trades with other traders right now. Get the UltraCoin Wallet for PC or Mac/Linux, the tutorial, and the UltraCoin trade designer spreadsheet for free, with no registration, account openings, muss or fuss. We don’t even ask for your e-mail address. Start trading within minutes of clicking download. No whitepapers, concepts, or theory speeches needed.

What can this Bitcoin stuff do? Well take a look at what we’ve come up with thus far:

  1. Ukraine Enters HYPERINFLATION! See How UltraCoin Smart Contracts Protect Individuals and Enable Speculators
  2. Scarily Prescient Analysis of @Grexit and the Most Advanced Application of Blockchain Tech Ever Seen As Strategy To Hedge Against It
  3. How To Apply 55x Leverage To A Bitcoin Trade Without Losing Your Shirt
  4. Translating Goldman Sachs 2015 Recommendations As UltraCoin Trade Setups pt 3
  5. Using UltraCoin to Monetize the Repercussions of Russia’s Interactions with EU & US Economic Sanctions
  6. If You Believe The Oil Bull Market Is Over, This Is How To Monetize It Through
  7. Using Veritaseum’s UltraCoin To Take Direct, Specific Positions On The Argentine Default For As Little As $5!
  8.  Banking Risks, Rewards & Demise: The Rise of Programmable Currencies & Smart Contracts
  9.  How Veritaseum’s UltraCoin Could Have Saved Harvard Over $1 Billion!

This is just a sampling. I want you to digest this as I prep part two of this series. It will tell the story of how we could not get professional investors to give us capital to date. Why you may wonder? That’s a good question, but I have some theories. If you can’t wait for part 2 and want to invest, e-mail me.

Otherwise, stay tuned in a few hours for “Why Almost Nobody (and I mean ALMOST NOBODY) Gets Bitcoin, Part 2 – Why Are You Pushing a Ferrari Down the Street?”


Reggie Middleton has spent the last year bringing to market a peer to peer swap platform called Ultra-Coin based completely off of the bitcoin blockchain. The platform provides an opportunity for any two parties to speculate on any publicly traded financial asset, denominated in any currency, currency pair or even in another asset as well as setting their own rules for notional amounts and time to expiration. The collateral used in trades is held in the bitcoin blockchain, thus the platform can function independently without any middlemen standing in the way of financial transaction while eliminating counterparty, default and credit risk – all while offering up to 10,000x digital leverage. Prior to working on Ultra-Coin Reggie maintained a very popular fundamental, forensic and macro analysis research blog called BoomBustBlog. The early, and very popular Research arm serviced thousands of investors and traders – both retail and institutional and has included nearly all of the global money center banks and several central banks. As an entrepreneurial investor and Financial Analyst Reggie has won all of CNBC’s stock draft competitions winning in both 2013 and 2014. He is often seen interviewed on all the major financial shows like Keiser Report, Boom Bust, Bloomberg and CNBC, and is on record for perfectly calling turning points such as the fall of Bear Stearns, Lehman Brothers, GGP, Research in Motion (now Blackberry), the housing and CRE crisis in 2007, the pan-European sovereign debt crisis and a contrarian 50% fall in Apple’s stock price as it hit $700 in 2012 – among roughly 80 other notable calls over a 7 year period.

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