The Death Knell of Crypto!

[rkbabang]

2 hours ago, Spekulatius said:

If you live in Russia right now, owning crypto is not the worst thing in the world. Pretty much everything else would have gone to hell. I bet a lot of Russian money went into crypto.

 

I agree.  I think the recent events in Canada and Russia illustrate clearly why a corporate coin or a Central Bank coin will never be a good idea.  If governments or corporations can cut you off, then you do not really own what you think you do.

[StubbleJumper]

2 hours ago, Spekulatius said:

If you live in Russia right now, owning crypto is not the worst thing in the world. Pretty much everything else would have gone to hell. I bet a lot of Russian money went into crypto.

 

If you lived in Russia for any length of time, you would know that stability of constitutional government and predictable valuation of the currency was, at best doubtful.  Owning *anything* other than just roubles wouldn't be the worst thing in the world.  Euros, dollars, physical gold stored under your mattress would look pretty good about now.

 

 

SJ

[StubbleJumper]

7 minutes ago, rkbabang said:

 

I agree.  I think the recent events in Canada and Russia illustrate clearly why a corporate coin or a Central Bank coin will never be a good idea.  If governments or corporations can cut you off, then you do not really own what you think you do.

 

And that's also why crypto doesn't work at all if you seriously hope to protect yourself from hypothetical government overreach.  You cannot spend crypto at the supermarket, you cannot use it to pay your phone bill and you can't use it to fill your tank with gas because it is not accepted anywhere. To spend your crypto, you must first convert it to actual currency, and that is exactly how the Canadian government was able to freeze those assets.

 

You are far better off to have a foreign domiciled account as that remains out of reach of your domestic government and then you can actually use your foreign bank card or credit card to buy the things you need. 

 

 

SJ

[rkbabang]

19 minutes ago, StubbleJumper said:

 

And that's also why crypto doesn't work at all if you seriously hope to protect yourself from hypothetical government overreach.  You cannot spend crypto at the supermarket, you cannot use it to pay your phone bill and you can't use it to fill your tank with gas because it is not accepted anywhere. To spend your crypto, you must first convert it to actual currency, and that is exactly how the Canadian government was able to freeze those assets.

 

You are far better off to have a foreign domiciled account as that remains out of reach of your domestic government and then you can actually use your foreign bank card or credit card to buy the things you need. 

 

 

SJ

 

 

Ask people in Russia if their foreign bank cards all work.   You didn't used to be able to buy your groceries with a credit card either in most places.  I think the problems you are pointing out are going to change sooner rather than later.

 

[Parsad]

1 hour ago, rkbabang said:

 

 

Ask people in Russia if their foreign bank cards all work.   You didn't used to be able to buy your groceries with a credit card either in most places.  I think the problems you are pointing out are going to change sooner rather than later.

 

 

How is crypto (in its present form) any different than a Monet or Ferrari in Russia?  You cannot use it at the local Perekrestok to buy bread.  You may be able to trade one or the other for some gas at your local Lukoil station!  Store of value and tradeable currency are two very different things.  Crypto will have a place in the future...but as I said before, just not as it is now.  Cheers!

[Spekulatius]

1 hour ago, Parsad said:

 

How is crypto (in its present form) any different than a Monet or Ferrari in Russia?  You cannot use it at the local Perekrestok to buy bread.  You may be able to trade one or the other for some gas at your local Lukoil station!  Store of value and tradeable currency are two very different things.  Crypto will have a place in the future...but as I said before, just not as it is now.  Cheers!

It is easier to keep crypto hidden and move it with you out of the country than a Monet or a Ferrari or even gold. All these things draw a lot of attention if you pack them on an airplane when you want to get out.

 

Dont shoot the messenger, I am certainly not a laser eye guy. I am just stating that owning crypto if you live in these countries does make some sense.

[matthew2129]

3 hours ago, StubbleJumper said:

 

And that's also why crypto doesn't work at all if you seriously hope to protect yourself from hypothetical government overreach.  You cannot spend crypto at the supermarket, you cannot use it to pay your phone bill and you can't use it to fill your tank with gas because it is not accepted anywhere. To spend your crypto, you must first convert it to actual currency, and that is exactly how the Canadian government was able to freeze those assets.

 

You are far better off to have a foreign domiciled account as that remains out of reach of your domestic government and then you can actually use your foreign bank card or credit card to buy the things you need. 

 

 

SJ

A growing number of in-person and online shops are starting to accept USDC. It's really a no-brainer from the merchant perspective; it's certainly better than accepting credit. Once USDC is ubiquitous, fiat off-ramps won't be necessary. Don't think we're far away (couple years, not decades)  

[Longnose]

My father used to work for Overstock. Patrick Burns former CEO was a nut over crypto/blockchain. He was reinvesting all of Overstocks profits into crypto/blockchain side projects. He was absolutely convinced that crypto technology was going to unlock the potential of 3rd world countries. The more I use it the more I am convinced as well and situations like Canada and Russia may provide catalysts for change. The real value of crypto's is ownership. While the citizen in Russia cant trade his BTC for groceries today. The Grocer will have a hard time paying his suppliers. What's to stop them all from saying here's my BTC wallet address send me your funds here? BTC definitely has a worldwide value. I firmly believe that BTC will lay the foundation of currency/finance and ETH based tokens will lay the foundation of smart contracts. 

 

The ability to own my tokens in my wallet and transfer them to anyone I choose without an intermediary will be life changing especially to countries that don't have the stability that we enjoy in North America. 

[Blugolds11]

Is it possible that countries start to limit or even outlaw the use of crypto? Article I read today about the EU concerned that Russian Oli’s may yse crypto to bypass sanctions…

 

Just a thought, is this a positive or negative for crypto..My main concern for crypto has always been that it appeals most to those who don’t want to be tracked, on the system..I.e terrorists, drug dealers, Russian billionaires etc and the gov not wanting to allow that and possibly saying that they will ban its acceptance as it supports these activities. 

 

https://www.reuters.com/world/europe/eu-make-sure-russia-cannot-circumvent-sanctions-with-crypto-assets-le-maire-2022-03-02/

[Parsad]

5 hours ago, Spekulatius said:

It is easier to keep crypto hidden and move it with you out of the country than a Monet or a Ferrari or even gold. All these things draw a lot of attention if you pack them on an airplane when you want to get out.

 

Dont shoot the messenger, I am certainly not a laser eye guy. I am just stating that owning crypto if you live in these countries does make some sense.

 

You guys are confusing two things:  The current crypto batch and portability of assets. 

 

Yes, it's easier in terms of portability presently, while investors have faith in it.  It doesn't mean that the current batch of crypto can hold their value long-term...as we've seen from their volatility and lack of usability as a currency. 

 

I fully agree that future crypto backed by some sort of asset (gold in vaults, land, resources, tax revenue, operating revenues, etc) will work both as a store of value and currency...and will be easily portable.  Cheers!  

[Parsad]

4 hours ago, matthew2129 said:

A growing number of in-person and online shops are starting to accept USDC. It's really a no-brainer from the merchant perspective; it's certainly better than accepting credit. Once USDC is ubiquitous, fiat off-ramps won't be necessary. Don't think we're far away (couple years, not decades)  

 

Agree with that.  A few years from adoption and a decade or so from ubiquity.  Cheers!

[Parsad]

4 hours ago, Longnose said:

My father used to work for Overstock. Patrick Burns former CEO was a nut over crypto/blockchain. He was reinvesting all of Overstocks profits into crypto/blockchain side projects. He was absolutely convinced that crypto technology was going to unlock the potential of 3rd world countries. The more I use it the more I am convinced as well and situations like Canada and Russia may provide catalysts for change. The real value of crypto's is ownership. While the citizen in Russia cant trade his BTC for groceries today. The Grocer will have a hard time paying his suppliers. What's to stop them all from saying here's my BTC wallet address send me your funds here? BTC definitely has a worldwide value. I firmly believe that BTC will lay the foundation of currency/finance and ETH based tokens will lay the foundation of smart contracts. 

 

The ability to own my tokens in my wallet and transfer them to anyone I choose without an intermediary will be life changing especially to countries that don't have the stability that we enjoy in North America. 

 

I know Patrick.  I also know Jonathan Johnson who runs Overstock now and is overseeing Medici Ventures which owns all of the blockchain technology companies they invested in.  I'm also an Overstock shareholder and have followed the company and owned the stock on and off for nearly 20 years!  I've made more money buying and selling Overstock.com than any other stock or idea.

 

Patrick was 100% correct about crypto and blockchain.  But it won't be BTC that leads the way.  ETH has a place in all of this...but not as a leader. 

 

It will be stablecoins backed by actual assets or revenues that will become mainstream and pave a new way for financial transactions.  Blockchain will also create instantaneous one-to-one title transactions...essentially eliminating most, if not all, intermediary institutions...think Visa, Mastercard, American Express, Paypal, etc, as well as bank tellers, real estate brokers, ticket stations/vendors, etc!  Those institutions will have to figure out a way to remain intermediaries or create their own stablecoins to conduct transactions for a fee.  Cheers!

[TwoCitiesCapital]

14 hours ago, rkbabang said:

 

 

Ask people in Russia if their foreign bank cards all work.   You didn't used to be able to buy your groceries with a credit card either in most places.  I think the problems you are pointing out are going to change sooner rather than later.

 

 

+1

 

Same with dollars. Sure, you can spend them on the black market in Russia, but can't put them in your bank or use for online purchases. Gold? Do you really want that in the custody of a bank in a country that might be incentivized to nationalize those holdings to stabilize the currency?

 

I'm sure if they don't have them already, Russia could have an intermediary like Square where any buyer/seller can pay/receive in crypto if they want. At one time, nobody accepted Visa either. 

 

The savvier ones will be using lightning network or transacting on the Blockchain directly. As a result of the ruble depreciation, I'm sure more businesses will be open to alternatives as well so you'll likely see adoption grow. 

 

Could that be why BTC is up like 15-20% whole the NASDAQ is negative breaking months and months of positive correlation? 

 

Bitcoin is helpful for both Ukrainians and Russians in this situation. 

Edited March 3, 2022 by TwoCitiesCapital

[K2SO]

19 hours ago, Spekulatius said:

Pretty much everything else would have gone to hell.

Well a globally diversified stock portfolio would be holding up equally well. And longer term, that's a productive asset that produces cash flows and has a non-zero intrinsic value. 

[K2SO]

19 hours ago, Spekulatius said:

Pretty much everything else would have gone to hell.

Well a globally diversified stock portfolio would be holding up equally well. And longer term, that's a productive asset that produces cash flows and has a non-zero intrinsic value. 

[Spekulatius]

1 hour ago, K2SO said:

Well a globally diversified stock portfolio would be holding up equally well. And longer term, that's a productive asset that produces cash flows and has a non-zero intrinsic value. 

Certainly. An US centric portfolio holds up even better than a globally diversified one. Every time there is an calamity of any sorts somewhere, the save heaven aspect of the US comes into play and both USD and US equities generally outperform the rest of the world. This is true even if the calamity initiates in the US  (like the GFC).

[changegonnacome]

 

 

rings true to me from my own personal/professional life…..

Edited March 5, 2022 by changegonnacome
Added actual tweet attribution

[changegonnacome]

On 3/3/2022 at 2:36 AM, Parsad said:

I know Patrick.  I also know Jonathan Johnson who runs Overstock now and is overseeing Medici Ventures which owns all of the blockchain technology companies they invested in. 

Nice to see Medici mentioned. My blockchain/crytpo-esque investment (as small as it is) are invested in tZero….TZROP security tokens to be exact…..if there is any there there in this space…..tZero’s ATS is going to be the destination where legitimate tokens / NFT’s have to go ‘on exchange” if SEC ever gets it finger out and starts bashing heads (and it should). The level of securities fraud being permitted out in the daylight hasn’t existed since the ‘blue sky securities’ of the 1920’s…..as a I think Charlie Munger would say you can’t run a coherent civilization with so much fraud happening in plain sight……….it gnaws away at the social contract.

 

My two cents.

Edited March 5, 2022 by changegonnacome

[rkbabang]

On 3/2/2022 at 5:57 PM, StubbleJumper said:

You are far better off to have a foreign domiciled account as that remains out of reach of your domestic government and then you can actually use your foreign bank card or credit card to buy the things you need. 

 

https://www.nbcboston.com/news/national-international/mastercard-visa-suspend-operations-in-russia-after-invasion/2661916/

[TwoCitiesCapital]

8 hours ago, rkbabang said:

 

https://www.nbcboston.com/news/national-international/mastercard-visa-suspend-operations-in-russia-after-invasion/2661916/

 

AmEx announced the same thing. 

[StubbleJumper]

10 hours ago, rkbabang said:

 

https://www.nbcboston.com/news/national-international/mastercard-visa-suspend-operations-in-russia-after-invasion/2661916/

 

Yep.   Now if you want to use your foreign domiciled assets, you actually need to leave Russia.

 

 

SJ

[rkbabang]

1 minute ago, StubbleJumper said:

 

Yep.   Now if you want to use your foreign domiciled assets, you actually need to leave Russia.

 

 

What's the population of Russia 150M?   150M people could use crypto, but it wouldn't be easy for 150M people to get up leave Russia today.

 

[StubbleJumper]

4 minutes ago, rkbabang said:

 

What's the population of Russia 150M?   150M people could use crypto, but it wouldn't be easy for 150M people to get up leave Russia today.

 

 

Yeah, 150m people could also have physical Euros/dollars/gold stored under their mattress and that would be even easier.

 

 

SJ

[TwoCitiesCapital]

52 minutes ago, StubbleJumper said:

 

Yeah, 150m people could also have physical Euros/dollars/gold stored under their mattress and that would be even easier.

 

 

SJ

 

Not enough - otherwise every household in the country is a target for theft.

 

At some point, people will just have to admit crypto is better for these circumstances - particularly once the infrastructure and education are in place which are the only limiting factors here for Russia's adoption. 

 

It's censorship resistant, sanction resistant, highly transportable, more easily secured, has value in self-custody (not worried about bank failures), and can still offer near instantaneous electronic payments.

 

Cash/gold under your mattress is difficult to secure, can't be safely custodied with a third party (as seen by the expected bank failures in Russia or the seizure of foreign denominations we've seen in other countries), difficult to transport in large quantities, and can't be used for electronic purchases. 

 

 

[rkbabang]

 

Yes, I'd like to pay for my coffee with these which I've stored under my mattress do you have change?