The Death Knell of Crypto!

[Longnose]

32 minutes ago, rkbabang said:

 

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

 

No, But ill happily send you my metamask address and you can send me any ETH based currencies you want

[JRM]

50 minutes ago, rkbabang said:

 

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

You can feel free to mail me any of this worthless metal you may have.  Will pay for shipping.

[bargainman]

Anyone here know what the state of crypto and transactions is?  Last I read Bitcoin and Ethereum had major transaction issues, meaning the scale of the system had not gotten there.  Ie the requirement to get the blockchain updated was a costly and major impediment to someone 'paying for coffee w/ crypto'.  

[Longnose]

16 hours ago, bargainman said:

Anyone here know what the state of crypto and transactions is?  Last I read Bitcoin and Ethereum had major transaction issues, meaning the scale of the system had not gotten there.  Ie the requirement to get the blockchain updated was a costly and major impediment to someone 'paying for coffee w/ crypto'.  

 

BTC isn't efficient for payments without usage of the lightning network. On that note, the lightning network is being built out aggressively and will enable small instantaneous (nearly free, fractions of cents) transactions.

 

ETH is still expensive as F to do transactions on. There are several other chains that have been trying to infringe on ETH's dominancy addressing the transaction times and costs of transactions (AVAX, SOL, MATIC, & several others). ETH based cryptos are stronger suited in the world of smart contracts that payment systems. 

[TwoCitiesCapital]

2 hours ago, Longnose said:

 

BTC isn't efficient for payments without usage of the lightning network. On that note, the lightning network is being built out aggressively and will enable small instantaneous (nearly free, fractions of cents) transactions.

 

ETH is still expensive as F to do transactions on. There are several other chains that have been trying to infringe on ETH's dominancy addressing the transaction times and costs of transactions (AVAX, SOL, MATIC, & several others). ETH based cryptos are stronger suited in the world of smart contracts that payment systems. 

 

Excessive fees is relative to value. It costs me a few dollars to send my BTC around from exchange to wallet etc. It's still way less than a wire, way faster than ACH, and I'm moving sums large enough where the fee is only a fraction of a percent of the value. 

 

I'd say it's still super efficient form for moving amounts in excess of 10k, but lightning network will prove to be better for microtransactions. 

 

ETH is launching second level solutions similar to lightning network to increase scale and lower costs. But it's not there yet. There are still excessive fees to get onto, and off of, L2 solutions. It also can take a week or more in some instances to withdraw off of L2 back onto main chain. 

 

Also, having various L2s (Optimism, zkRollups, Arbitrum, etc) will lower the composability of the network until all of the L2s play nicely with one another or all dAppa launch on multiple L2s.  

 

So it's definitely a problem and not ready for mainstream acceptance yet. That being said, the primary competitors to ETH only have lower fees because 1) no one is using them or 2) they're centralized and bypass the decentralized network for computing.

 

Both of these severely limit the value add that crypto is supposed to provide so I doubt they'll permanently supplant Ethereum or draw away it's developer base. 

 

Now that Bitcoin has a better developed base around smart contracts, and a workable L2 already in place, it will be interesting to see if BTC is able to supplant ETH there.

 

 

[bargainman]

Interesting that Bitcoin seems better than ETH now, I thought it was the opposite before.

 

What's the state of Bitcoin cash?  Wasn't that supposed to solve this issue?

 

Also how about all the mining/climate/carbon impact?  Are any strategies to mitigate that panning out?

[TwoCitiesCapital]

8 hours ago, bargainman said:

Interesting that Bitcoin seems better than ETH now, I thought it was the opposite before.

 

What's the state of Bitcoin cash?  Wasn't that supposed to solve this issue?

 

Also how about all the mining/climate/carbon impact?  Are any strategies to mitigate that panning out?

 

Bitcoin cash solved it with the same concessions Ethereum competition is using - centralization and a lack of security. It was "hacked" multiple times last year with malicious parties achieving over 50% of the hashrate. 

 

It may end up being useful for some use-cases, but money/payments won't be one of them IMO. There's a reason all Bitcoin forks have trailed Bitcoin massively. 

Edited March 15, 2022 by TwoCitiesCapital

[rkbabang]

2 hours ago, TwoCitiesCapital said:

 

Bitcoin cash solved it with the same concessions Ethereum competition is using - centralization and a lack of security. It was "hacked" multiple times last year with malicious parties achieving over 50% of the hashrate. 

 

It may end up being useful for some use-cases, but money/payments won't be one of them IMO. There's a reason all Bitcoin forks have trailed Bitcoin massively. 

 

Exactly.  Bitcoin has been about security first, with no compromises. This is why it is #1 by far.  Speed / functionality can be handled off chain by other tools/addons if they would compromise security being on chain. You don't need the same level of security to buy a coffee or your groceries for the week as you do to buy a house or store a measurable percentage of your net-worth.  There will be a speed/security tradeoff, at least for the foreseeable future.

[Dave86ch]

 

"During his time at Stanford University, Thiel attended a lecture given by René Girard. Girard, a Catholic, explained the role of sacrifice and the scapegoat mechanism in resolving social conflict" wiki
He is applying the lession, bright.

Edited April 9, 2022 by Dave86ch

[SharperDingaan]

BTC has many attractions, beyond just the functions of money. Similar to venereal disease (Impossible to kill), and the very robust de-facto counterpoint to capital controls and central bank digital currency. Both security and decentralization are king; all that is required is internet, and a local currency/BTC exchange rate.  

 

Forking, shards, lightning networks, etc. is simply batch processing.

Process thousands of transactions/second, net them off, and buy/sell the BTC difference once every few minutes. No different to what most GSIB's and DSIB's already routinely do with settlements, multiple times a day. Security and Decentralization at the BTC level, Centralization and Scalability at the batch processing level. A work-around solution.

 

The more batch processing the more net settlement demand for BTC, as crypto becomes more mainstream. The more global disruption, driving payment via BTC, the more transactional demand. And the higher the total transactional demand for BTC is, the sooner the 21M coin release is achieved. At which point BTC demand/supply settles on the price of the Satoshi needed to pay the miner, and a BTC trades at 100M x the price of a Satoshi. 

 

BTC inflation  'value' is predicated on a maximum 21M coin. That 1M+ of lost and/or 'frozen' coin along the miner distribution phase, remain lost 'forever' - really? Or is it much more likely that it is < 20M of BTC coin, and 1M+ of BTC naked derivatives? ('theoretically' supported by the coin in those lost and/or frozen wallets)

 

Point? It is pretty hard to see how BTC doesn't move higher over time.

You can choose to be road kill, or get with the program.

 

SD

 

 

 

 

Edited April 10, 2022 by SharperDingaan

[Longnose]

I have been slowly adding to my BTC position. I have a side project where Ive been exploring using crypto as a rewards program for small brands that dont / cant invest in the infrastructure to support an inhouse rewards program. While I was doing that I went to Overstock since they have been accepting payments in BTC for years now. It was kind of cool to toy with purchasing real products and services with BTC. 

 

I was reading some articles about SQ - Block as they are starting to invest very heavily in BTC. There was a statement about BTC becoming the currency of the internet. To me this makes more and more sense. The more layer2 networks that get developed to support and reduce frictional costs BTC's ease will be incredible. Lots of ecommerce will gravitate as they get tired of paying 3% to Visa/MC. BTC is virtual gold. 

 

Personally, I find the Ethereum based smart contract stuff more interesting. But BTC is becoming a clear winner from adoption, security, and infrastructure when it comes to something that could be considered a currency or asset. 

[Parsad]

The fastest way for a billionaire to become a millionaire:

 

https://finance.yahoo.com/news/guy-buys-nft-2-9-005000804.html

 

Cheers!

[Dave86ch]

"The collective existence of both digital commodities (PoW) and digital equities (PoS) in my view represents a novel new era for asset classes, and we’ll see where they may be successfully applied."

 

https://www.lynalden.com/what-is-money/#final

[SharperDingaan]

'I have been slowly adding to my BTC position.'

For us, it's new investment via purely passive ETF's, set at 25% of all realized oil/gas net gains. Old BTC investments remaining both experimental, and as a side-car - to contain risk.  

 

We're doing a deep dive in/around NFT, and have a nephew looking to spend some time in Estonia. Early days yet, and we need the Ukraine thing to resolve itself first; but we see some real possibilities. Hopefully, he eventually gets to talk shop with some of the original crew..

 

SD

[fareastwarriors]

Seems like a big deal if 401k providers start to offer BTC and cryptos into their lineup. 

 

NY Times: Fidelity’s New 401(k) Offering Will Invest in Bitcoin

 

 

Edited April 26, 2022 by fareastwarriors

[SharperDingaan]

Keep in mind that 'Bitcoin' is actually crypto as an 'investment class'; which reporters just don't 'get'.

BTC, ETH, CME BTC/ETH futures/options, NFT, Stable Coin, CBDC, carbon/pollution trading, and crypto exchanges. A wide enough class to enable reasonable internal diversification, that improves as liquidity improves.

 

It is pretty hard to see how these assets don't increase in value over time at a significant CAGR. It is also a given that there will be significant volatility along the way. WEB's 'buy/hold forever' is all about buying < IV, selling > IV, and continuing to hold the underlying over time; IV is simply whatever you think the stock is worth at the time. When WEB was young the choice was industrials, in 2022 it's 'crypto'; same approach, just different times.

 

Too large a stretch for grandpa, hence 'too hard'. A stretch for mom/dad as well - if they need stability to keep making the mortgage, car payments, school fees, etc. But to a young person, not yet 'encumbered' by life responsibilities? this is as obvious an approach as breathing.

 

Hence, these funds should do well over time; if only because as everyone ages, they accumulate greater numbers of people comfortable with the asset class.

 

SD

 

 

 

[ValueArb]

On 4/26/2022 at 6:24 AM, SharperDingaan said:

Keep in mind that 'Bitcoin' is actually crypto as an 'investment class'; which reporters just don't 'get'.

BTC, ETH, CME BTC/ETH futures/options, NFT, Stable Coin, CBDC, carbon/pollution trading, and crypto exchanges. A wide enough class to enable reasonable internal diversification, that improves as liquidity improves.

 

It is pretty hard to see how these assets don't increase in value over time at a significant CAGR. It is also a given that there will be significant volatility along the way. WEB's 'buy/hold forever' is all about buying < IV, selling > IV, and continuing to hold the underlying over time; IV is simply whatever you think the stock is worth at the time. When WEB was young the choice was industrials, in 2022 it's 'crypto'; same approach, just different times.

 

Too large a stretch for grandpa, hence 'too hard'. A stretch for mom/dad as well - if they need stability to keep making the mortgage, car payments, school fees, etc. But to a young person, not yet 'encumbered' by life responsibilities? this is as obvious an approach as breathing.

 

Hence, these funds should do well over time; if only because as everyone ages, they accumulate greater numbers of people comfortable with the asset class.

 

SD

 

 

 

 

Whats the total of outstanding loans against BTC?

[JRM]

https://concoda.substack.com/p/the-crypto-elites-are-plotting-a?s=r

[Dave86ch]

51 minutes ago, JRM said:

https://concoda.substack.com/p/the-crypto-elites-are-plotting-a?s=r

 

Shallow counter arguments tbh

[berkshiremystery]

On 2/14/2022 at 7:54 AM, mcliu said:

Question about crypto. Blockchain tech seems very interesting, but how do we know it's not in the dot-com phase where even if it'll be valuable, the impact won't be felt for another 20 years? Also, for the experts, is there a Versign equivalent company/coin in the crypto space that's worth investing in? Thanks!

 

 

Thanks for sharing this Versign graphic. Buffett/Berkshire bought Versign in 2012. It´s mind-boggling and very insightful, many thanks for this chart.

Edited May 4, 2022 by berkshiremystery

[rkbabang]

2 hours ago, berkshiremystery said:

 

Thanks for sharing this Versign graphic. Buffett/Berkshire bought Versign in 2012. It´s mind-boggling and very insightful, many thanks for this chart.

 

I suspect there is a dotcom-like bubble in crypto, but remember that there are the Versign types which took decades to come back, the toys.com types who were destroyed, and then there were the Amazon.com types which came back much quicker and rose like rockets to the tops of their industries far above their dotcom bubbly highs in 2000.

 

 

[ValueArb]

5 minutes ago, rkbabang said:

 

I suspect there is a dotcom-like bubble in crypto, but remember that there are the Versign types which took decades to come back, the toys.com types who were destroyed, and then there were the Amazon.com types which came back much quicker and rose like rockets to the tops of their industries far above their dotcom bubbly highs in 2000.

 

 

 

Lets not forget that AMZN dropped 95% after 1999 and didn't get back to even until 2009. Even when you see the far future correctly, the volatility can make it impossible to hold on to your bets.

[JRM]

3 hours ago, Dave86ch said:

 

Shallow counter arguments tbh

I guess.  You could spend hours going down the Tether rabbit hole.  That alone is enough to give me pause.  The asymmetric upside case for Bitcoin stands on a fragile house of cards that could collapse.  Will it collapse?  Who knows. I'd rather wait to buy Amazon after the 90% drop (after the .com bubble collapse).

Edited May 4, 2022 by JRM

[TwoCitiesCapital]

10 minutes ago, JRM said:

I guess.  You could spend hours going down the Tether rabbit hole.  That alone is enough to give me pause.  The asymmetric upside case for Bitcoin stands on a fragile house of cards that could collapse.  Will it collapse?  Who knows. I'd rather wait to buy Amazon after the 90% drop (after the .com bubble collapse).

 

So were you buying in 2018 the last time it considered by ~90% or nah? 

 

Because it's easy to say that, but typically people find excuses to NOT buy once something is down 90%. 

[rkbabang]

15 minutes ago, TwoCitiesCapital said:

 

So were you buying in 2018 the last time it considered by ~90% or nah? 

 

Because it's easy to say that, but typically people find excuses to NOT buy once something is down 90%. 

 

 

Exactly.  That will be considered proof that they were correct, not an opportunity of a lifetime for them to buy.  I will be buying when BTC is 90% off its highs this time (if it comes to that), just as I did in 2018 (although I don't think it quite hit 90% down in 2018 more like 80% IIRC).  I suspect many here will not.