KJP

Sold Lockheed Martin. Proceeds used to add to: Leatt Corp. SNC-Lavalin Hill International American Outdoor Brands Turning Point Brands

I've been poking around to find out more about USDC. As far as I can tell, small dollar USDC transfers on the Ethereum chain are expensive. For example, here are some transfers in the last hour, with USD cost derived from current ETH price: $39.52 fee to transfer $175 USDC: https://etherscan.io/tx/0xb59571d03f1d3f1f6549f121786f82dfe972558890059488473e3f5609778cc3 $42.00 fee to transfer $338 USDC: https://etherscan.io/tx/0x952f0e5cf1502f3c047890abacbe2119c96182df7d46c6873eb21c5e760cf569 $36.83 fee to transfer $821 USDC: https://etherscan.io/tx/0x13879fb45cfb6c470d1d8de4cf7ab17bb633dd79333516178c82aec7423a6300 Ethereum currently seems far too expensive for small value USDC transactions until gas fees come way down. USDC transfers on other chains appear much cheaper. For example, 15 cents to transfer $250 USDC on Avalanche: https://snowtrace.io/tx/0x0f21d42026b6f9efd0be2515e4c1a30297787418ca1c0996859ad7d3a5f916ee

At a minimum, USDC is connected to the traditional banking system at creation and redemption. See S-4 quote below. In between, they can be transferred between blockchain-compatible digital wallets. Hopefully someone else can explain the transaction fees for (i) creation and withdrawal, (ii) transfers between Circle accounts, and (iii) transfers between a Circle account and a non-Circle digital wallet. If you start with a non-USD currency, I assume you have additional conversion costs. From the S-4: Issuing and redeeming USDC from our platform involves risks, which could result in loss of customer assets, customer disputes and other liabilities, which could adversely impact our business. To receive USDC a customer must deposit, via credit or debit card, ACH or wire transfer, to a Circle bank account, U.S. dollars corresponding to the amount of desired USDC tokens. Once the credit is made to the Circle bank account, USDC tokens are issued to the customer’s digital wallet (the “Circle Account”), effectively increasing the USDC in circulation. Likewise, customers with USDC in their Circle Account can redeem USDC so that the system cancels the USDC tokens and transfers U.S. dollar funds out of reserve and into a customer’s linked bank account, effectively reducing the USDC in circulation.

I assume you're asking about sending a portion of wages back to Bangladesh. How does this hypothetical worker get paid? Direct deposit of riyals into a Saudi bank account?

Interesting. Here is the S-4 for those reading along: https://www.sec.gov/Archives/edgar/data/0001876042/000110465921153174/tm2124445-4_s4a.htm

Doesn't USDC have same issue as Tether: What exactly is the collateral? Are they currencies or units in some type of opaque money market/bond fund? Another potential stablecoin: https://www.coindesk.com/business/2022/01/12/us-banks-form-group-to-offer-usdf-stablecoin/

Isn't the blockchain the rail and the Bitcoin/token both the unit of value that can move across the rail and the unit of value that must be used to pay to transfer value on the rail? That's why blockchains have always seemed to me to be bad fits for combining (i) store of value/investment, and (ii) payment rail, because as the value of the token goes up, the usefulness of the system as a payment rail goes down because transaction fees go up. I realize there are layer 2 efforts to address this, but if BTC goes to $1 million, as some suggest may happen, can the Bitcoin blockchain be a useful payment rail for anything but very high value transactions?

I took a look at the Mirror white paper. In Section C.2.4 on page 9, the creators listed six advantages to asset tokenization: https://docs.mirror.finance/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F-MLRzugf7mxc4ryNhTuq%2Fuploads%2F0t3znySsjF6CiLrcT0mI%2FMirror_Protocol_V2.pdf?alt=media&token=b5728c7d-7f12-4f41-8ce6-8347da02b9ff Very few, if any, of them apply to US investors trading in liquid securities listed on US exchanges. But you could see the value for someone who lives in a geography in which it is very difficult to access US exchanges. I'm also skeptical of the mechanics of applying the Mirror model to physical world assets like an apartment building, the example used on page 8 of the white paper. How do you connect the physical world operation and management of the apartment building to a self-contained blockchain smart contract?

It's not just the technical aspects of self-custody, but the risks as well. Of course, there are also risks to third-party custodians.

A response from Buterin:

Interesting essay on some highly centralized aspects of the current state of Web3: https://moxie.org/2022/01/07/web3-first-impressions.html In the context of DeFi, I think the maxim "people don't want to run their own server" can be translated to "people don't want to be their own custodian." That's not universally true, but I think it's generally true in Western countries and will continue to be unless there are major failures of traditional custodians or people get sufficiently concerned that their government can (and would) lock them out of the financial system, a la what happened to women once the Sons of Jacob took over in The Handmaid's Tale.

Yes, this is the issue I was getting it. Non-blockchain solutions have economies of scale. Decentralized blockchain solutions appear to have diseconomies of scale that are solved by centralization. But then what is the point of them in the first place? Do they all transition from virtual machines/smart contracts/transaction processors to crypto stores of value with attached ledger, and we just continually create new chains to do the transactional work? I realize that this is pretty unfair given that the tech is very new and alot of experimentation and trial and error needs to happen to figure out how to use the tech. But I still like to think through these issues just to see whether my 50,000 foot view of the current state of play is correct.

That is another issue I've tried to think through. I realize people are trying to build solutions to lower transaction costs and improve speed, and other chains are designed for higher throughput (e.g., Solana), but from a dapp designer/user perspective, don't they all have diseconomies of scale, because more usage will always lead to higher gas fees? Or put another way, doesn't an increasing amount of value over time flow to the protocol layer, rather than the dapp ecosystem?

But this example requires some off-chain authority to assert/decide that "ethical" gold was used to make the wafer. Who is doing that? Isn't that antithetical to the entire notion of decentralization?

Medical records, collectively, represent a very large amount of data (I assume). Is all of that data a candidate for storage on a blockchain? If so, how could that much data ever be stored on something like Ethereum?

I know you know this, but just for others reading, the "Commerce Clause" refers to Article I, Section 8, Clause 3 of the U.S. Constitution, which gives the federal government (specifically Congress) the power to "regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes." The courts have inferred from this enumerated federal power a limit on the authority of states to act in certain ways even when Congress has not acted. To simplify (a lot), the courts have held that states generally cannot engage in protectionist legislation that is meant to protect their own industries over the industries of other states. This doctrine is referred to as the "dormant" Commerce Clause, because courts invoke it even when Congress has not acted at all on the issue. But when Congress does act and expressly legislates on what states can and cannot do in a particular area, then there is no more scope for this "dormant" Commerce Clause doctrine. Instead, the express language of federal statutory law controls. And as part of its express power to "regulate Commerce . . . among the several States," Congress may expressly permit States to favor their own domestic industry and engage in protectionist regulation. Turning back to cannabis, if all Congress did was drop all federal restrictions on cannabis, the dormant Commerce Clause would then kick in and I doubt states would be permitted to, for example, require all cannabis sold in the state to be grown in the state. But in any legalization legislation, Congress could permit states to continue to do that. I cannot predict what form any federal legalization would take. But, as one example, I'd be nervous about companies whose economics depend on the fact that they have one of a very limited number of state cultivation licenses.

How do you solve the problem that most business transactions involve physical world activity? How can a blockchain-based smart contract deal with that? I don't see how oracles get you there. Or am I misunderstanding the types of business transactions you're talking about?

Maybe, maybe not. The Commerce Clause is only "dormant" when Congress doesn't act. But when Congress uses its Commerce Clause power, it can create (or accept from the states) restrictions on interstate commerce that would be unlawful for the states to impose on their own.

This is a big question mark with federal legalization: What form will it take? Will a federal legalization continue to permit states to require all cannabis sold in the state to be grown in the state? What about online purchasing?

Houghton Mifflin Harcourt

Permian Basin Royalty Trust. See @broncho24 for thesis. Not getting cash flow from biggest asset due to big (and apparently successful) 2021 drilling program that must be paid off first. Assuming oil prices stay roughly the same, payoff of drilling CapEx should happen in Q1 and then monthly distribution may 10x. I have checked his math and it looks right as far as it goes. But there appears a greater fool theory underlying at least part of the thesis -- wells decline so should be DCF'd, not valued on current production/cash flow/distributions alone.

Hill International IDW Media Holdings Yes, this is dumpster diving.

Hill International

That would be quite a run. What is your view on the trajectory of (i) rent/cap rates on these assets, (ii) real estate financing rates over the same three-year time period, and (iii) wages? I assume your view is that rates stay where they are and cap rates continue to compress. If they did not, would there be sufficient wage growth to pay for the implied rise in rents?

Pre-tax, in USD: 2021: 11% Biggest winner: Leatt Corp. Biggest loser: Altice USA Historical 2020: 14% 2019: 31% 2018: 11% 2017: 10% 2016: 22%