Cryptocurrencies

[Fly]

2 hours ago, UK said:

 

 

Quantum has been getting a lot of press lately even though we're a decade away from anything scalable. Might be worth watching some small players in the space

Edited October 24 by Fly

[james22]

 

[TwoCitiesCapital]

1 hour ago, james22 said:

 

My Vikings didn't win last weekend. Does that mean they didn't want to?

 

Did they actively score against themselves, refuse to play, or give up on every snap while claiming to want to win? That would be a more apt comparison. 

 

Trump could have run a balanced budget or at least moved the budget in that direction. He didn't. He expanded spending and cut taxes to run the largest peace time, non-recession deficits we've ever seen. He is a self described "debt guy" who has presided over many personal/business bankruptcies himself and suddenly I'm supposed to believe this guy has found fiscal religion? 

 

As far as Fannie and Freddie - he did do stuff. He milked them for the 4 years he was in office and then he hamstrung his opponents from being able to do the same. He could have dropped the suits. He could have negotiated their release instead. He could have let them keep their profits during his 4-years. He didn't. He milked them and then continued the status quo all while calling his opponents criminals for doing the same. 

 

Actions speak 1000x louder than words. I find if you ignore what politicians say, and watch what they do, you probably have a better idea of what they're about. 

 

1 hour ago, james22 said:

How can hearing he asked: ‘Hey, can bitcoin do anything about the 35 trillion dollar debt?’  suggest anything other than he (for whatever reason) cares?

 

 

Because most things he says are patently false? Like many other politicians? 

 

He has DONE nothing to support this thesis. I don't care what he says - his ACTIONS have been the polar opposite. Anything he says right now is basically pandering for votes. Once he's in office, there is no reason to expect it will be any different than the last time he was there. 

Edited October 24 by TwoCitiesCapital

[TwoCitiesCapital]

https://www.wsj.com/finance/currencies/federal-investigators-probe-cryptocurrency-firm-tether-a13804e5?mod=hp_lead_pos2

 

Tether back under scrutiny. 

[jfan]

 

People's thoughts on this issue of re-hypothecation of BTC and centralization of BTC holdings within 3rd parties reducing the ability to form a functional transaction fee market in the future to secure BTC mining?

 

https://x.com/DU09BTC/status/1850544299500552195

 

 

[rkbabang]

On 10/24/2024 at 11:30 AM, TwoCitiesCapital said:

Because most things he says are patently false? Like many other politicians? 

 

He has DONE nothing to support this thesis. I don't care what he says - his ACTIONS have been the polar opposite. Anything he says right now is basically pandering for votes. Once he's in office, there is no reason to expect it will be any different than the last time he was there. 

 

 

Bitcoin doesn't need Trump to keep any promises, nor does Bitcoin even need Trump to win the election.  The faster the debt grows and the weaker the dollar becomes, the faster the $BTC price in USD will go up.  It will be driven up not only by the increasing value of Bitcoin, but by the decreasing value of the dollar.

 

It would be nice if we had a Bitcoin friendly president, icing on the cake, but it isn't necessary.

 

[TwoCitiesCapital]

1 hour ago, rkbabang said:

 

 

Bitcoin doesn't need Trump to keep any promises, nor does Bitcoin even need Trump to win the election.  The faster the debt grows and the weaker the dollar becomes, the faster the $BTC price in USD will go up.  It will be driven up not only by the increasing value of Bitcoin, but by the decreasing value of the dollar.

 

It would be nice if we had a Bitcoin friendly president, icing on the cake, but it isn't necessary.

 

 

Agreed! I own it heavily (~20% of my net worth) and will keep DCA'ing regardless of who wins.

 

It'd be nice to have political support, but I don't expect it and am actually skeptical of most politicians who are offering the olive branch as its decentralized nature seems to suggest that opposition is the default for those who seek to consolidate power and influence to themselves (i.e. politicians).  

 

But I just think it's shocking how many people are willing to ignore what Trump actually did his first 4 years to pretend his next 4 will look wildly different - for Bitcoin/the debt, for Fannie Freddie, for merger/arbs, etc. 

Edited Monday at 06:37 PM by TwoCitiesCapital

[TwoCitiesCapital]

4 hours ago, jfan said:

 

People's thoughts on this issue of re-hypothecation of BTC and centralization of BTC holdings within 3rd parties reducing the ability to form a functional transaction fee market in the future to secure BTC mining?

 

https://x.com/DU09BTC/status/1850544299500552195

 

 

 

Despite diminishing BTC per block, the current value of the rewards being given is still quite large given that the price appreciation has more than kept up with the absolute block reduction. 

 

This will not ALWAYS be the case, but it doesn't appear to be stopping before we reach mainstream adoption/use which still seems to be 5-10 years out. As we get closer to that point, and through another halving or two, we can then make more educated guesses about the state of block rewards (are they still sufficient) or will fees have to be raised (also a possibility). 

 

Regardless - I still expect large counterparties to want absolute settlement and will pay fees to get it done - fees that are likely to still be quite a bit less than the current system with all of the intermediaries taking cuts to achieve an acceptable ROE for their owners. Will that be banks settling payments cross borders? Central Banks settling balances with their member banks? Card processors settling large blocks with retailers like Walmart/Target? Someone selling their house for 1 BTC?

 

Any number of scenarios could exist where you would want final settlement on the blockchain AND would still be willing to pay $10 or $100 or $1000 to get it done in a manner that is more permanent and still cheaper than these methods exist today. 

Edited Monday at 06:52 PM by TwoCitiesCapital

[jfan]

42 minutes ago, TwoCitiesCapital said:

 

Despite diminishing BTC per block, the current value of the rewards being given is still quite large given that the price appreciation has more than kept up with the absolute block reduction. 

 

This will not ALWAYS be the case, but it doesn't appear to be stopping before we reach mainstream adoption/use which still seems to be 5-10 years out. As we get closer to that point, and through another halving or two, we can then make more educated guesses about the state of block rewards (are they still sufficient) or will fees have to be raised (also a possibility). 

 

Regardless - I still expect large counterparties to want absolute settlement and will pay fees to get it done - fees that are likely to still be quite a bit less than the current system with all of the intermediaries taking cuts to achieve an acceptable ROE for their owners. Will that be banks settling payments cross borders? Central Banks settling balances with their member banks? Card processors settling large blocks with retailers like Walmart/Target? Someone selling their house for 1 BTC?

 

Any number of scenarios could exist where you would want final settlement on the blockchain AND would still be willing to pay $10 or $100 or $1000 to get it done in a manner that is more permanent and still cheaper than these methods exist today. 

Just glancing at the rate of doubling of transaction volumes on-chain seems to be slowing down (4 years, prior doubling was 3 years, prior doubling was 2 years) and the transaction fees in BTC (excluding the coinbase rewards) has not budged at all (stuck at ~ 10 - 15 BTC). I think this gives some evidence that the transaction fee market isn't necessarily developing in BTC terms as expected. Food for thought.

 

Source: Blockchain.com charts

[rkbabang]

1 hour ago, TwoCitiesCapital said:

 

Agreed! I own it heavily (~20% of my net worth) and will keep DCA'ing regardless of who wins.

 

It'd be nice to have political support, but I don't expect it and am actually skeptical of most politicians who are offering the olive branch as its decentralized nature seems to suggest that opposition is the default for those who seek to consolidate power and influence to themselves (i.e. politicians).  

 

But I just think it's shocking how many people are willing to ignore what Trump actually did his first 4 years to pretend his next 4 will look wildly different - for Bitcoin/the debt, for Fannie Freddie, for merger/arbs, etc. 

 

 

The way I look at it is that maybe he's learned a thing or two from the first term and he's surrounding himself with better people.  But maybe not.  He's a ... well he's who he is.    Even though Bitcoin itself will be ok regardless of who wins - Bitcoin is a world wide thing, it doesn't need or depend on the US and its government - the US government can negatively effect US citizens who hold KYC Bitcoin.  Which is the category I'm in.  He's most likely to do nothing directly hostile Bitcoin HODLers in the US, with an small possibility that he does something positive (so neutral to slightly positive), the other side is likely to not do anything hostile to Bitcoin HODLers in the US with the slight possibility that they start listening to Elisabeth Warren and her ilk (so neutral to extremely negative).   I expect a buying opportunity if Harris wins and I'm trying to save up some cash now in case that happens.

 

[Dave86ch]

19 hours ago, jfan said:

 

People's thoughts on this issue of re-hypothecation of BTC and centralization of BTC holdings within 3rd parties reducing the ability to form a functional transaction fee market in the future to secure BTC mining?

 

https://x.com/DU09BTC/status/1850544299500552195

 

 

 

Hal Finney pointed out that the core business of Bitcoin would be the exchange between banks, with fees covering the block subsidy.

 

Beyond that, Bitcoin can become a historical ledger—a place where I can place a message in a "bottle," ensuring that historians of the future have mathematical certainty that the message is intact and timestamped—something humanity has never had before.

Edited yesterday at 09:26 AM by Dave86ch

[TwoCitiesCapital]

15 hours ago, jfan said:

Just glancing at the rate of doubling of transaction volumes on-chain seems to be slowing down (4 years, prior doubling was 3 years, prior doubling was 2 years) and the transaction fees in BTC (excluding the coinbase rewards) has not budged at all (stuck at ~ 10 - 15 BTC). I think this gives some evidence that the transaction fee market isn't necessarily developing in BTC terms as expected. Food for thought.

 

Source: Blockchain.com charts

 

Agreed - for now. 

 

Gresham's law is people spend bad money before they spend the good money. Most people acquiring BTC have no incentive to spend it when they have plenty of fiat to spend in its stead. 

 

Once BTC becomes the standard, that will no longer be the case

[jfan]

3 hours ago, Dave86ch said:

Hal Finney pointed out that the core business of Bitcoin would be the exchange between banks, with fees covering the block subsidy.

Do you have to source for this quote? I was always under the impression that the core business was to have peer-to-peer money that was censorship resistant. 

 

1 hour ago, TwoCitiesCapital said:

Gresham's law is people spend bad money before they spend the good money. Most people acquiring BTC have no incentive to spend it when they have plenty of fiat to spend in its stead. 

There is a nuance to Gresham's law, in that it only applies to the situation where there is a fixed exchange often under governmental decree. In these cases, the bad money replaces the good money in a country as the transactional medium (the good money gets hoarded or sold internationally in exchange for the bad money). There already exists many wrapped BTC tokens on various blockchains entities (WBTC [eth], cbBTC [coinbase], kBTC [kraken]) exchanged at fixed ratios, one could imagine that these formats will potentially take over transaction volumes or at least act as a competitive limit to BTC transactions (base layer and lightning network). Taking this a bit further, if a country wanted to control its out digital fiat token and limit its citizen's from using BTC, they could wrap their token as well. All these self-motivated entities could limit/hinder the future development of a proper market-based mining transaction fee? (just talking out loud - idk)

 

The inventors of BTC may be hoping for an application of Thier's law (reverse of Gresham's) where in the absence of legal tender laws, people will choose good money over bad in a free market system where the rate of inflation is high enough to reduce the real demand for the bad money. Perhaps, it is still technically too challenging for the general public to use to enable wide spread daily adoption. 

 

 

[TwoCitiesCapital]

22 minutes ago, jfan said:

There is a nuance to Gresham's law, in that it only applies to the situation where there is a fixed exchange often under governmental decree. In these cases, the bad money replaces the good money in a country as the transactional medium (the good money gets hoarded or sold internationally in exchange for the bad money). There already exists many wrapped BTC tokens on various blockchains entities (WBTC [eth], cbBTC [coinbase], kBTC [kraken]) exchanged at fixed ratios, one could imagine that these formats will potentially take over transaction volumes or at least act as a competitive limit to BTC transactions (base layer and lightning network). Taking this a bit further, if a country wanted to control its out digital fiat token and limit its citizen's from using BTC, they could wrap their token as well. All these self-motivated entities could limit/hinder the future development of a proper market-based mining transaction fee? (just talking out loud - idk)

 

Maybe I have misunderstood Gresham's law, but we can see in throughout history that when a society's money is soft and inflated, flows move OUT of the inflated money to a newer harder money. 

 

Lyn Alden covers many examples of historical monies being exploited for their lack of hardness, but ultimately this is how most societies eventually landed on gold through a trial and error process of monies being exploited and new alternatives tried. So how do countries that gravitate towards a gold standard accumulate gold when they have none to start with? Well, by saving any gold they can get their hands on and spending any other type of currency away. This is what I thought the application of Gresham's law was, but perhaps I am mistaken about its application and this is described by something else. 

 

Either way, when something is being adopted as a money, early adopters get rewarded as the monetary premium goes from negligible to enormous. No rational person would spend the money that has the growing monetary premium to hold onto the one with the falling monetary premium. 

 

22 minutes ago, jfan said:

The inventors of BTC may be hoping for an application of Thier's law (reverse of Gresham's) where in the absence of legal tender laws, people will choose good money over bad in a free market system where the rate of inflation is high enough to reduce the real demand for the bad money. Perhaps, it is still technically too challenging for the general public to use to enable wide spread daily adoption. 

 

I agree that at the moment - Bitcoin on-chain/self custody is probably beyond most people. I don't think that will matter much. Just as transportation of gold, and securing gold, were beyond most people which is why we started custodial banking relationships. Services will pop up to assist individuals in safely and securely managing their Bitcoin wallets and transactions. 

 

I expect that retail interaction with the base-chain to be limited in 5-10 years. Perhaps in buying a house or a car you'll touch it. Beyond that, I think it will largely be reserved for large settlements between banks, nations, and corporations and retail will largely exist on level 2 and level 3 arrangements above that much like we all use digital checking products and credit cards without ever having touched or seen the physical cash 

 

Edited yesterday at 01:29 PM by TwoCitiesCapital

[TwoCitiesCapital]

Also - I don't know exactly where my shift occurred - 

 

I used to view BTC as a p2p payments network and believed that for probably the first ~2-3 years I was buying it. My attempt at valuing it? Take the EV of Visa/MasterCard/AmEx/Paypal/Discover and dividend by 21 million coins (a figure in excess of $70k per coin today btw). 

 

Some where along the way, I think it clicked for me that it IS a payment network, but the real value is in its monetization as provably the hardest asset in existence by enforced scarcity. Then it started to make sense to me as a store of value as well. 

 

I still think its value is based on its p2p network size and capabilities - but there WILL be a monetary premium attached and the price of 1 BTC is probably going to a level that would be "silly" by any other means/method of valuation simply due to how arbitrary the price is when you can subdivide it into 100 million and it becomes the global money of choice after decades of politicians wrecking money globally. 

[Fly]

2 hours ago, jfan said:

Do you have to source for this quote? I was always under the impression that the core business was to have peer-to-peer money that was censorship resistant. 

 

 

 

https://stacker.news/items/303469

 

Additionally, what was the core business of the automobile vs all the other things we do with it now. Yes it still gets us from A to B, but we eat in it, consume media in it, sleep in it, etc etc. Original design vs actual use can be very different 

Edited yesterday at 03:51 PM by Fly

[SharperDingaan]

2 hours ago, jfan said:

The inventors of BTC may be hoping for an application of Thier's law (reverse of Gresham's) where in the absence of legal tender laws, people will choose good money over bad in a free market system where the rate of inflation is high enough to reduce the real demand for the bad money. 

 

Hate to tell you this but the inventors were bang on; this is the BTC-ETF (dividend paying) in today's market.

 

Retail: Same as the T-Bill, and held alongside the T-Bill as an interest bearing store of value; cash it in for whichever fiat you want, whenever you wish to buy something. The T-Bill giving liquidity at the expense of inflation exposure, the BTC-ETF giving inflation protection at the expense of diminished liquidity. Institutional: Hold the BTC directly, and trade the derivatives on the CME.

 

6 weeks ago you could buy BTC in volume at around USD 57.5K, today it's around USD 72.5K (+26%) with a week to go until the US election. If you believe the warnings on out of control US spending, the USD devalues and the BTC USD price rises even further.

 

SD

 

 

 

[Dave86ch]

19 hours ago, jfan said:

Do you have to source for this quote? I was always under the impression that the core business was to have peer-to-peer money that was censorship resistant. 

 

https://bitcointalk.org/index.php?topic=2500.0#msg34211

 

It will still be censorship-resistant;

the world was never engineered to give freedom to everyone.

 

By the way, there are many opportunities to use the protocol to achieve sovereignty—things like the Lightning Network, eCash (Cashu), and mint independence.

Calle, a developer with a PhD in Physics, is working on projects like this.

https://github.com/cashubtc

 

Edited 8 hours ago by Dave86ch

[wachtwoord]

On 10/24/2024 at 4:48 PM, Fly said:

 

Quantum has been getting a lot of press lately even though we're a decade away from anything scalable. Might be worth watching some small players in the space

 

A decade? There's at least a 50-50 chance the effect's too instable to scale (in popular lingo: "the universe is conspiring against us").

[SharperDingaan]

A Bitcoin Bank would exist 'cause the founders need to money launder; and they cannot put up the CME margin to hold BTC options or futures directly. Deposit your BTC with us for interest! (chequing account), so that we can margin against it and use the bank to either buy more BTC, &/or drive up the price ( another Tether) !!! Thing is ... a tamer operating version of Bitcoin Bank already exists; and it's called MSTR ... damn!

 

The 2nd/3rd level BTC payment markets need to focus on the 2nd/3rd world, vs the tech community. In these worlds, USD is used for payment 'cause it retains its value against local inflation, and USD cash is accepted by all (black markets), as cash is untraceable. The thing is that at scale, one needs bales of USD bills .. along with the associated organisation and security. 2nd/3rd level BTC payment markets become useful when they can displace USD bill use in these markets... and in part, is why there are all kinds of dire CB warnings around the pending collapse of USD.

 

SD

Edited 4 hours ago by SharperDingaan

[SharperDingaan]

7 minutes ago, wachtwoord said:

 

A decade? There's at least a 50-50 chance the effect's too instable to scale (in popular lingo: "the universe is conspiring against us").

 

Very good! 

 

SD