Cryptocurrencies

[Cigarbutt]

2 hours ago, Dave86ch said:

It will absorb the excess liquidity and deflationary forces, reintroducing a healthy market for investing, in contrast to the current state where speculation has become the only means to preserve wealth due to the Cantillon effect, which is undermining price discovery

Interesting. Please help if the thesis is not beyond criticism.

Having limited cognition, i don't along first principles and tend to cling to analogies, links, comparisons etc

-i read this recently

https://www.linkedin.com/pulse/can-crypto-flip-script-cantillon-effect-ckc-fund

From the article:

"Several cryptocurrencies and digital assets seek to separate new money creation from politics and the state."

i work under the assumptions that:

-money creation will remain tied to politics and the state

-'we' will learn and won't repeat the Cantillon effect mistake that has shown up in financial and main street inflation numbers since 2020.

Where am i wrong?

[wachtwoord]

9 hours ago, jfan said:

I think this might be a very good point. There can be things that add alot of value but can't capture any of it. Just off the top of my head, businesses such as WhatsApp and Spotify, add value but can't capture it. 

 

Meta paid >$20 billion for WhatsApp in 2014 but it has not been successful thus far in generating revenue, free cash flows, etc. But with a 1.5 billion users, this messaging network is undoubtedly created lots of value but what is the right monetary premium?

 

The BTC network scales as people find it useful to store/transfer wealth relative to other monies that they have access too. Will this increasing demand necessarily the monetary premium? 

 

I'm not sure that there is necessarily a linear relationship here, as it will depend on the prices of commodity inputs necessary to secure the network and the progressive energy efficiencies of the technology. I could imagine that if there was a sudden abundance of cheap energy, silicon, and step change in mining efficiencies, despite increased demand, the prices could drop or moderate downward. 

 

 

 

I disagree. If it's impossible to capture tge value now or in the future the only correct conclusion is that there was never any value to begin with.

 

Wrt Whatsapp, if no-one, neither customers nor advertises nor governments are willing to pay for the service in the long term and it also does not provide utility to the company owning it itself, the service has no value as it has no utility.

 

I think Whatsapp has utility but it's marginal as it's extremely easy to compete with. Open source Signal is superior. Buying it for 20B was madness imo. I think FB itself thought and perhaps thinks the transaction was beneficial because of increased users of its core products. I really doubt that's true.

 

Besides that they took out a competitor of their messenger product. Similar to their insane buyout of Instagram (a very simple image sharing site which happens to have many users with larger perceived hurdles to switch to a similar service. Buying users and taking out competitors).

[TwoCitiesCapital]

What's everyone's thoughts on BTC's rally this year despite the liquidity drain globally? 

 

Historically, BTC price was highly correlated with global liquidity. This was a much better predictor of its price than even the years where it was highly correlated with the NASDAQ. But here we are in 2022/2023 where there has been consistent contraction in global liquidity and yet BTC bottomed and doubled. 

 

Thoughts on what might be driving that and how sustainable it is? 

[alxcii]

36 minutes ago, TwoCitiesCapital said:

What's everyone's thoughts on BTC's rally this year despite the liquidity drain globally? 

 

Historically, BTC price was highly correlated with global liquidity. This was a much better predictor of its price than even the years where it was highly correlated with the NASDAQ. But here we are in 2022/2023 where there has been consistent contraction in global liquidity and yet BTC bottomed and doubled. 

 

Thoughts on what might be driving that and how sustainable it is? 

 

ETF speculation and upcoming halving are the two big narratives. I think the next cycle is upon us and we're looking real good if the SEC approves.

[rkbabang]

Say what you want about Bitcoin, but you have to admit the Bitcoin community has the best holidays.

 

 

[ValueArb]

On 11/10/2023 at 6:35 PM, wachtwoord said:

Higher value yes, higher price no, not directly at least. If it wouldn't give any value it wouldn't be utility. Utility is worth something (of value) by very definition.

 

Considering your guesses for current value it's obvious you just get glued to whatever the market price seems to be at a time. When the price was in the tens you thought it was around that, same with the hundreds the thousands and now the tens of thousands. When it's in the hundred thousands you'll think that's the right range. This is exactly the psychology which explains why price gets stuck in ranges until is violently moves to a new range: price stickiness in the individual translates to price stickiness in the market.

 

I try to never reference current price when I'm estimating a value, to the point that I won't look at a stock's price until I've finished reading all their financial filings. When I did it for BTC, I came up with a value of $100B to $200B seemed like a reasonable amount of liquidity for the world wide market, at a time it's total value was around $9B. You can criticize my methodology, and even more easily my decision not to follow through and load up on BTC. But market price had nothing to do with my analysis. 

[ValueArb]

On 11/10/2023 at 9:21 PM, jfan said:

@ValueArb Thanks for elaborating on your experience wrt to your bitcoin transactions, and perspective. Initially, it seemed that your posts had an adversarial edge to them but your later posts were much more helpful understanding your point of view. I really do appreciate having a healthy genuine debate helps get to the truth of a matter. 

 

I thought I might include a couple quotes from Ben Graham about speculation and investing. 

 

According to Devil takes the Hindmost, Chancellor describes how pre-1920s, bonds were considered investments and stocks were speculative. When stocks became more accepted, the yardstick of valuation hinged on 10x earnings and expected dividend yields. Around mid-1920, Edgar Lawrence Smith published a statistical analysis of investment returns for stocks vs bonds from the mid-19th century onward dispelling the myth that stocks were not investment worth relative to bonds. This changed the feeling of market participants, allowing them to perceive that stocks could be viewed as investments. Around this time, the concept of discounting future earnings was the new way of valuing stocks. 

 

Ben Graham is quoted to have said: "the concept of future prospects, and particularly of continued growth in the future, invites the application of formulas out of higher mathematics to establish the present value of the favored issues. But the combination of precise formulas with highly imprecise assumptions can be used to establish, or rather to justify, practically any value one wishes, however high, for a really outstanding issue....The more important the good will or future earning-power factor the more uncertain becomes the true value of the enterprise and therefore the more speculative inherently the company stock...Mathematics is ordinarily considered as producing precise and dependable results: but in the stock market the more elaborate and abstruse the mathematics the more uncertain and speculative are the conclusions we draw from them."

 

From read these quotes, it seems that Graham thought that trying to estimate future cash flows was a risky and speculative endeavour. But in today's conventional understanding, valuation is all about discounted free cash flows and very little else. Perhaps it is better to utilize Graham's above definition of speculation as it seems there are many on this board that would disagree that commodities (precious and base metals), land and other assets with no immediately visible cash flows, can't have an intrinsic value. 

 

Perhaps I'll leave a couple other quotes to consider:

"Strong Opinions Weakly Held" - Paul Saffro

"The smartest people are constantly revising their understanding, reconsidering a problem they though they'd already solved." - Jeff Bezo

 

Yes, Graham knew that value is based on a DCF of future cash flows but was wisely skeptical of using DCFs to make valuation decisions. He preferred focusing on finding value in the balance sheet because it could be liquidated in emergencies, which is an understandable mind-set after working five years in near poverty to return his clients holdings to their high water mark after the great crash. There is even a famous (apocryphal?) story that his partner had to physically drag Ben to the signing meeting for Geico (by far their most successful investment), because he was so averse to buying a business on cash flow instead of assets. He gritted his teeth and paid a sky high price of 90% of book value. A year later Geico earned more in profit than he had paid for his 50% share.  

 

The problem with DCFs is that tweaking a few assumptions can yield a wide range of values. Cathie Woods can value Tesla for trillions just by adding millions of robotaxis or her forecast (always perpetually two years away). That's why Buffett doesn't do DCFs for individual investments, but he does make valuation decisions on his estimates of their future earnings growth. But only when the business has a strong moat that makes its earnings relatively predictable over time. It was the concept of moats that brought Buffett out of the Ben Graham assets are the only safe valuation mentality.

[Parsad]

Another one bites the dust...and another ones gone, and another ones gone...another one bites the dust!  Cheers!

 

https://finance.yahoo.com/news/binance-pay-4-3b-fines-173432179.html

[ValueArb]

19 minutes ago, Parsad said:

Another one bites the dust...and another ones gone, and another ones gone...another one bites the dust!  Cheers!

 

https://finance.yahoo.com/news/binance-pay-4-3b-fines-173432179.html

 

It would seem the market for a trustworthy law abiding exchange should be huge. If SBF just let Alameda die and didn't steal from FTX to fund Alameda losses he'd be a rich (and free man) today. If CZ had refused to allow terrorist and criminal transactions wouldn't he be worth more today (and not facing possible jail time)?

[giulio]

21 minutes ago, ValueArb said:

 

It would seem the market for a trustworthy law abiding exchange should be huge. If SBF just let Alameda die and didn't steal from FTX to fund Alameda losses he'd be a rich (and free man) today. If CZ had refused to allow terrorist and criminal transactions wouldn't he be worth more today (and not facing possible jail time)?

Sure...

In Italy we say "if my grandma had wheels she would have been a bike"...

 

This non-sense crypto world is so funny. Looking back at the forbes covers...great memories 

 

Not taking shots at your post BTW. The "belivers" market is huge...just ask Chamath for proof!

[changegonnacome]

The monitorship of Binance will be interesting to watch.........they've basically agreed to have the US Government sit inside Binance offices watching everything......they may have the $4.2bn to pay the fine...............but were about to find out how many of Binance's customer really liked the UX/UI & CX........and how many REALLY liked the lack of AML, KYC etc........that number will be the number of accounts that are about to go dark on the platform.

 

Strangely this judgement actually increases the likelihood, over time, that a spot bitcoin ETF could be approved......if the Binance platform comes under deep monitorship of US authorities...........you might actually have something with an underlying spot market that has some fidelity to it.....versus the status quo today.

 

Based on CZ's net worth & likely paltry jail sentence - this might be a case of crime actually paying. I'm sure SBF cant believe what CZ has gotten away with.

 

[backtothebeach]

Wikipedia (yes, that Sam Altman currently in the news):

 

Worldcoin

Altman co-founded Tools For Humanity in 2019,[25] a company building a global iris-based biometric system using cryptocurrency, called Worldcoin. Worldcoin aims to provide a reliable way to authenticate humans online,[26] to counter bots and fake virtual identities facilitated by artificial intelligence.[27] Using a distribution mechanism for its cryptocurrency similar to UBI, Worldcoin attempts to incentivize users[28] to join its network by getting their iris scanned using Worldcoin's orb-shaped iris scanner.[29]

...

In August 2023, Kenya, one of the first countries where Worldcoin was launched, suspended its enrollment in the country, citing security, privacy and financial concerns.[15][16] Worldcoin was previously ordered to stop collecting personal data by the Kenyan Office of the Data Protection Commissioner, but did not comply.[17]

 

---

 

Digital currency, iris scans, AI ... what could possibly go wrong?

[UK]

51 minutes ago, backtothebeach said:

Digital currency, iris scans, AI ... what could possibly go wrong?

 

Edited November 22, 2023 by UK

[ValueArb]

15 hours ago, changegonnacome said:

Based on CZ's net worth & likely paltry jail sentence - this might be a case of crime actually paying. I'm sure SBF cant believe what CZ has gotten away with.

 

 

I was going to say SBF should be realizing the benefits of cooperating, but in reality they are two different cases. SBF committed fraud, he didn't break money laundering regulations.

 

SBF never had the funds to restore customer deposits, so I think his only solution was to keep FTX going until magically it earned back all its losses. Approaching the government mid-fraud to say hey, "I'm stealing from customers, please stop me and give me a light sentence" would not have gone well. Even when it blew up he couldn't bring himself to admit his role in the fraud, and if he did probably would not have gotten much of a reduction.

 

CZ was fortunate that his business was solvent and he had something to offer the government to lighten his sentence. And that he was smart enough to get lawyers and negotiate all of this before he was arrested and extradited, which would have reduced his leverage quite a bit.

[changegonnacome]

25 minutes ago, ValueArb said:

CZ was fortunate that his business was solvent and he had something to offer the government to lighten his sentence. And that he was smart enough to get lawyers and negotiate all of this before he was arrested and extradited, which would have reduced his leverage quite a bit.

 

Yep - I've read the various documents - and whats clear now if you read them- is that CZ has effectively thrown his customers under a bus and thrown B2B partners of Binance like Tether under the bus to save himself. The Binance kimono past and present is being opened up to DOJ, OFAC, CIA to review. Its a treasure trove of nefarious activity.

 

The social contract if you were a nefarious binance customer overseas or using the platform using a VPN in the US to fund Hamas, Al Qaeda, Iran etc. was that they would protect your identity......that they were outlaws too, Binance was your partner in crime.......in that sense they became the rails for lots of global illegal activity (terrorism funding, child porn, extortion, ransomware etc.).

 

You should see the agreement CZ and Binance have made with the US Gov. as effectively a rat throwing a bunch of folks under the bus......IMO state level actors (iran, russia) and terrorist groups (Hamas, Al Queda).

 

I'll make a bold prediction based on this -  CZ will be dead within five years. He has double crossed too many scumbags globally with this move.

 

There were lots of sleepless nights last night on foot of this binance news......at best a bunch of folks are worried about the IRS seeing their cap gains on Binance over the last few years that they didnt report......at worst criminal prosecutions will tumble out of the information Binance is handing over.

Edited November 22, 2023 by changegonnacome

[ValueArb]

If thats all true then its really bad for crypto in the short run. Sounds like a lot of liquidation to pay back taxes, fines, or to get criminal wealth off the blockchain before it can be seized. But so far BTC  and ETH has mostly shrugged off the news. BNB is down 8% the last week but probably because of the fines. XRP and Solana are down as much as 10% but I don't know how we could connect that, there are a lot of coins trading slightly up or near even too.

 

Probably a headwind for the next few months though.

[SharperDingaan]

1 hour ago, changegonnacome said:

 

Yep - I've read the various documents - and whats clear now if you read them- is that CZ has effectively thrown his customers under a bus and thrown B2B partners of Binance like Tether under the bus to save himself. The Binance kimono past and present is being opened up to DOJ, OFAC, CIA to review. Its a treasure trove of nefarious activity.

 

The social contract if you were a nefarious binance customer overseas or using the platform using a VPN in the US to fund Hamas, Al Qaeda, Iran etc. was that they would protect your identity......that they were outlaws too, Binance was your partner in crime.......in that sense they became the rails for lots of global illegal activity (terrorism funding, child porn, extortion, ransomware etc.).

 

You should see the agreement CZ and Binance have made with the US Gov. as effectively a rat throwing a bunch of folks under the bus......IMO state level actors (iran, russia) and terrorist groups (Hamas, Al Queda).

 

I'll make a bold prediction based on this -  CZ will be dead within five years. He has double crossed too many scumbags globally with this move.

 

There were lots of sleepless nights last night on foot of this binance news......at best a bunch of folks are worried about the IRS seeing their cap gains on Binance over the last few years that they didnt report......at worst criminal prosecutions will tumble out of the information Binance is handing over.

 

It is much more likely he eats/drinks something that disagrees with him; some of his friends catching a similar bug at around the same time. Dictators handbook.

 

SD  

[changegonnacome]

1 hour ago, SharperDingaan said:

It is much more likely he eats/drinks something that disagrees with him; some of his friends catching a similar bug at around the same time. Dictators handbook.

 

SD  

Yep his next initial coin offering - is the Pearly Gates Coin

[Parsad]

10 hours ago, backtothebeach said:

Wikipedia (yes, that Sam Altman currently in the news):

 

Worldcoin

Altman co-founded Tools For Humanity in 2019,[25] a company building a global iris-based biometric system using cryptocurrency, called Worldcoin. Worldcoin aims to provide a reliable way to authenticate humans online,[26] to counter bots and fake virtual identities facilitated by artificial intelligence.[27] Using a distribution mechanism for its cryptocurrency similar to UBI, Worldcoin attempts to incentivize users[28] to join its network by getting their iris scanned using Worldcoin's orb-shaped iris scanner.[29]

...

In August 2023, Kenya, one of the first countries where Worldcoin was launched, suspended its enrollment in the country, citing security, privacy and financial concerns.[15][16] Worldcoin was previously ordered to stop collecting personal data by the Kenyan Office of the Data Protection Commissioner, but did not comply.[17]

 

---

 

Digital currency, iris scans, AI ... what could possibly go wrong?

 

LOL!  Cheers!

[Parsad]

Wonder how many small fry frauds are out there in crypto!  Cheers!

 

B.C. cryptocurrency exchange NetCents faces securities hearing - Economy, Law & Politics | Business in Vancouver (biv.com)

[wachtwoord]

On 11/22/2023 at 12:53 PM, backtothebeach said:

Wikipedia (yes, that Sam Altman currently in the news):

 

Worldcoin

Altman co-founded Tools For Humanity in 2019,[25] a company building a global iris-based biometric system using cryptocurrency, called Worldcoin. Worldcoin aims to provide a reliable way to authenticate humans online,[26] to counter bots and fake virtual identities facilitated by artificial intelligence.[27] Using a distribution mechanism for its cryptocurrency similar to UBI, Worldcoin attempts to incentivize users[28] to join its network by getting their iris scanned using Worldcoin's orb-shaped iris scanner.[29]

...

In August 2023, Kenya, one of the first countries where Worldcoin was launched, suspended its enrollment in the country, citing security, privacy and financial concerns.[15][16] Worldcoin was previously ordered to stop collecting personal data by the Kenyan Office of the Data Protection Commissioner, but did not comply.[17]

 

---

 

Digital currency, iris scans, AI ... what could possibly go wrong?

 

The actual fuck I never knew Altman was behind the Worldcoin scam .....

 

That's really bad as his work at OpenAI is likely to be extremely impactful. If his morals are really that shady that's unfortunate for nearly everyone ....

[rkbabang]

12 hours ago, wachtwoord said:

 

The actual fuck I never knew Altman was behind the Worldcoin scam .....

 

That's really bad as his work at OpenAI is likely to be extremely impactful. If his morals are really that shady that's unfortunate for nearly everyone ....

That is ominous. I had no idea he was behind that either. That eye-scanning orb was creepy AF, I can’t believe people lined up to be scanned.  I wouldn’t trust this guy as far as I could throw him.

[SharperDingaan]

21 hours ago, rkbabang said:

That is ominous. I had no idea he was behind that either. That eye-scanning orb was creepy AF, I can’t believe people lined up to be scanned.  I wouldn’t trust this guy as far as I could throw him.

 

You might also want to keep in mind where your bio-metric scans are, if you have a US NEXUS card. And who is selling/benefiting from your DNA data .... were you fool enough to send it in to an ancestry.com etc.

 

All that you have to do is offer a 'perceived benefit', make it socially popular (social media), and charge a modest sum to process (validates the 'perceived benefit'). 'Somewhat' deliver on the benefit, and the data is yours; no paying people to give it, finding them, legal hassles,  etc. ... and all the lemmings rushing to your door. Dictators feed stock.

 

Always a need for good anarchists! 

 

SD

 

 

Edited November 26, 2023 by SharperDingaan

[wachtwoord]

On 11/25/2023 at 3:17 PM, rkbabang said:

That is ominous. I had no idea he was behind that either. That eye-scanning orb was creepy AF, I can’t believe people lined up to be scanned.  I wouldn’t trust this guy as far as I could throw him.

 

It seems to me he certainly has double digit influence on what the world will turn into over the next few years, and  likely even double digits. 

 

Try to read up on the AI developments especially if you have sufficient scientific background. This is the biggest thing that ever happened in human development. On par with from going from single cell to multicellular life, I'm not joking. It's crazy and the trajectory seems unavoidable at least to a degree where humans wont be dominant for long. Even within the next decade seems to have a double-digit chance of that.

Edited November 27, 2023 by wachtwoord

[TwoCitiesCapital]

Argentina devalued the peso by 54% overnight and is targeting a 2% monthly devaluation going forward.

 

Bitcoin welcomes long-term Argentinian savers with open arms