Is it time to invest in crypto?

Jessica Rose, Joe Mercola, the truckers, Ernest Ramirez, Epoch Times, The Expose, and many others have been screwed by traditional financial systems. Here what you can do about it.

I’ve been absolutely appalled by what has been happening to people on the right side of the false narrative. People I know have had bank accounts closed (Mercola), accounts frozen (Jessica Rose), or money confiscated (Truckers and Ernest Ramirez).

There are now fast and efficient alternatives to using legacy financial rails, but most people aren’t aware of them. After Jessica Rose asked me what she should do to allow people to send her money but avoid her account being frozen again, I decided to write this document. 

With the issuance of the latest DHS memo, I and all of my colleagues, could be considered to be domestic terrorists for speaking the truth when that truth does not align with statements made by US government agencies. Our funds could be frozen for years to come.

Fortunately for us, crypto has come a long way in the last few years. So now, if you read the information below, you can use a new blockchain called Solana to transmit USD from person to person instantly 24x7 for a fraction of a penny as well as protect your assets from being unethically seized by a misguided government. That beats the $4 to send some ETH and $10 to send anything via USDC on ETH. 

WARNING

If you don’t understand anything I’ve written below, don’t worry. It’s pretty esoteric. It’s beyond the scope of this article to do a crypto tutorial. This article is written for people who are familiar with crypto already or who have a local crypto tutor. There is a learning curve associated with all of this. I’ll leave it to others to provide the education. Find a friendly crypto expert and they can help you. 

The second thing is that this article is simply my current thinking. You should seek alternate points of view and after doing that you may not agree with me. That’s fine. I’m simply proposing this as a perspective to consider. Read the comments and you’ll see the variety of perspectives on this.

My current thinking

In a nutshell, I think the best approach to protect your assets from irresponsible government actions enforced by legacy financial actors is the following:

1. Diversify a reasonable chunk of your assets (say 25%) into decentralized crypto vehicles that cannot be seized or frozen such as Bitcoin (BTC), Ethereum (ETH), and Solana (SOL). Polygon (MATIC) and Avalanche (AVAX) are also possible choices. The asset allocation is subject to opinion.

2. Avoid storing sizable assets (for any length of time) in any stablecoin tied to the USD (such as USDC and USDT) or any other fiat currency. These assets can be (and have been) frozen by order of the US government. USDT has frozen over $1M and USDC has frozen $100K. 

3. If you have a lot of money, you should have two distinct wallets: one for day to day use, e.g., a self-custody wallet app like Phantom and one used for storing savings that you never carry with you (e.g., stored on a Ledger Nano X stored in a secret secure location). That way, if your app is ever compromised, you won’t lose all your money.

4. Typically, the one for daily use will be a 12 word seed; the Ledger X will create a 24 word seed. 12 words is more than sufficient security for now; it’s basically uncrackable for all practical purposes even with massive compute power.

5. Keep the backup of both private keys (i.e., two word lists) in multiple safe places (including places out of state) so no matter what happens, only you (and those you authorize) can retrieve the keys to recreate your wallets. For example, you can put your keys on a USB stick encrypted using AxCrypt. That way, in the unlikely event someone finds the USB stick, it’s useless to them. Your data is always available to you even if you are deplatformed. You can also store that data in the cloud if your passphrase is sufficiently long.

6. For doing day-to-day transactions, USDC on Solana is the way to go as long as your counterparty has a capable wallet that supports USDC SPL tokens on Solana. You can pay people in <1 second for a near zero transaction fee (far less than 1 cent). This should be the standard for paying people.

7. You’ll likely want to create an account at FTX to enable you to buy/sell crypto and interface to the legacy banking system as well as to be able to pay someone in legacy USDC (on ETH). I’ve previously used Coinbase and Coinbase Pro and FTX is really impressive.

8. Don’t leave any sizable assets sitting at crypto exchanges for any length of time: they can be seized.

Recommended Checklist:

1. An account at FTX for in/out at your bank, trading cryptos, moving USDC from Solana to Ethereum blockchains if needed to pay someone the slow, expensive way. When you withdraw USDC, for example, you select Withdrawal method: Solana SPL. If you keep Wrapped Bitcoin (Sollet) and Wrapped Ethereum (Sollet) in your crypto wallet, you can instantly and cheaply move ETH and BTC from the exchange to/from your self-custody wallet and FTX instantly for near zero fees. That’s the way to go for the small value wallet. Those tokens are more risky.

   

2. A self-custody wallet iPhone app like Phantom that supports Solana USDC-SPL, instant swaps, staking (see also this video), and interface to Ledger. This enables you to instantly move between SOL and USDC-SPL when you need funds and enables you to pay others using USDC-SPL so you can pay in USD instantly with no fees.

3. Ledger Nano X. Manage your major holdings using Ledger Live. This is recommended if you have a lot of money and are worried about your iPhone being hacked or worry about someone forcing you to transfer funds at gunpoint. This is essentially your “off-line” wallet. Solana isn’t natively supported yet. See this article.

4. I use Encipher It to encrypt all my seed phrases and then store the result on a variety of online services. It would take centuries to decrypt the single decryption key that I use. The beauty of storing it online is if my house burns down, I can still access my keys. I don’t have a paper copy in my bank safety deposit box anymore since that could be seized.

Canada’s attempt to ban 34 crypto wallets

This story says Canada is trying to ban 34 crypto wallets. They can’t ban them directly, but they can make it illegal for exchanges to accept funds from those wallets, making it hard to cash out. Seriously?!?! Good luck with that one.

Here’s the relevant part:

$1.4 Million of Crypto Could Be Halted

Canadian Prime Minister Justin Trudeau invoked the Emergencies Act on Monday, allowing the government to freeze bank accounts funding the protestors without needing to obtain a court order.

Now, according to reports from Keann Bexte of the Counter Signal, the Royal Canadian Mounted Police (RCMP) and the Ontario Provincial Police are attempting to freeze transactions from 34 crypto wallets associated with the Freedom Convoy.

The list purportedly includes 29 Bitcoin wallets, two Ethereum wallets, as well Litecoin, Monero, and Cardano wallets. The wallets are said to contain about 25 BTC worth $1.4 million.

The order says that Canadian authorities have been “investigating cryptocurrency donations being collected in relation to illegal acts falling under the scope of the Emergency Measures Act.”

The police order does not suggest that the authorities can freeze the wallets directly. Rather, it aims to prevent FINTRAC-regulated companies from accepting funds from those wallets, thereby preventing the holders from cashing out their crypto via exchanges.

All I can say is “good luck with that.” In other words, it isn’t going to work.

Shame on them for using such tactics against citizens who are protesting oppression by their own government.

See also: FBI to form new digital currency unit as Justice Dept taps new crypto czar. Most of the transactions are traceable but hopefully they spend their time going after people who are dangerous to society rather than people who are trying to expose government corruption.