Cryptocurrencies

[Vish_ram]

Bitcoin - Store of human economic wealth. For everything else you’ve fiat

[fareastwarriors]

Why is ETH not moving up more?

[thowed]

6 hours ago, fareastwarriors said:

Why is ETH not moving up more?

 

Because BTC is experiencing high speculation?!

 

I think it boils to simply that Bitcoin is THE Brand in Crypto - a lot of people buying in now may have barely heard of ETH.

 

It still seems bizarre to me that the big brand is one where a) the creator is unknown (can you imagine the red flag in any other industry?!?) and b) based on older, slower technology than the competition (though precedent in VHS/Betamax etc.).

[wachtwoord]

On 11/6/2024 at 8:08 PM, TwoCitiesCapital said:

 

All we've done is trade one "danger" for another. And the one danger that we're 'avoiding' was largely already solved via self custody.

 

So we went from remote 'danger' that is already well managed to other dangers that are not. 

 

 

 

We traded away from danger. The extreme war monger are out of office. The ones responsible for the horrible Ukraine conflict escalation amoung other things (what they did to Syriah and Libya is unforgivable).

 

Unfortunately Trump showed last time he can be coerced into signing off on such matters too but at least the president himself isn't directly in favor of it himself this time.

 

Also Trump understands China is the geopolitical enemy, not Russia. Russia should be a western ally but I guessthat's fucking ruined now for the foreseeable future. Pushed into the arms of China.

 

Edit:

 

I'm sorry to say, but your comment on free media is just laughably naive. All main stream media is controlled. Freedom of speech is primarily attacked by the left/democrats with their Orwellian "fact checking" (conforming to the government ordained truth which is nigh never the truth in the true meaning of the word, actually quite often closer to the opposite), prosecuting people expressing opinions, trying to criminalize encryption etc etc. They are simply attempting to move to a world where everyone but them is completely and utterly oppressed and loses as individual right or agency.

 

Don't like the republican party either of course (although marginally less bad than the democrats) so no idea what to do after Trump (as he isn't actually a republican at all).

 

Edited Tuesday at 12:34 PM by wachtwoord

[wachtwoord]

8 hours ago, fareastwarriors said:

Why is ETH not moving up more?

 

Cause it has little real value and is extremely overvalued relatuve to Bitcoin by at least a 100-1000 factor. At some point the market should start reflecting that.

[TwoCitiesCapital]

2 hours ago, wachtwoord said:

 

We traded away from danger. The extreme war monger are out of office. The ones responsible for the horrible Ukraine conflict escalation amoung other things (what they did to Syriah and Libya is unforgivable).

 

And the Republicans did it to Iraq and others before them. Our foreign policy has been atrocious regardless of party. Trump might be a slight improvement here, but I remain to be convinced. 

 

2 hours ago, wachtwoord said:

I'm sorry to say, but your comment on free media is just laughably naive. All main stream media is controlled. Freedom of speech is primarily attacked by the left/democrats with their Orwellian "fact checking" (conforming to the government ordained truth which is nigh never the truth in the true meaning of the word, actually quite often closer to the opposite), prosecuting people expressing opinions, trying to criminalize encryption etc etc.

 

Yes. There are attacks from the left. But the right is no better and arguably more dangerous IMO. The media is far from perfect. But as of right now it is only Fox that has paid the largest settlement  in history to avoid going to trial for knowingly lying for clicks and eyeballs.

 

Additionally, Elon has taken over Twitter and is doing the exact things he complained about the prior board doing, but to elevate his voice, his conspiracy theories, and to quiet the dissenters against himself. 

 

All media is propaganda. But the way the left tends to propagandize is through silence on a topic. The Right does it by outright lying. I view both to be bad, but one is worse than the other. 

 

2 hours ago, wachtwoord said:

They are simply attempting to move to a world where everyone but them is completely and utterly oppressed and loses as individual right or agency.

 

The left could use a dose of respect for self responsibility. So could the right - because they're all about it until they were hamstrung by the political climate, or unfair competition, or immigrants willing to work more cheaply, or the election being stolen, etc etc etc

 

2 hours ago, wachtwoord said:

Don't like the republican party either of course (although marginally less bad than the democrats) so no idea what to do after Trump (as he isn't actually a republican at all).

 

 

Same. I'm fairly center and primarily voted independent or right until Trump came into the picture. Now I support candidates on the left not because the policies are better but because they aren't absolute terrible people help bent on power by any means necessary like most MAGA Republican politicians seem to be. 

Edited Tuesday at 03:03 PM by TwoCitiesCapital

[Paarslaars]

Dems are not different, as hell bent on power ze Trump, just different agenda's. I would have always considered myself a democrat until they started pushing the woke agenda.

[jfan]

I was just looking at the miner innovation over time.

 

The current 2024-25 models have up to 860 Th/s with an energy efficiency of 13 J/Th at a $19/Th pricing. 

 

If look back to 2018 for example, a miner might have 20.5 TH/s with an energy efficiency of 75 J/Th at prices between $50 - 200/Th. 

 

Despite, the total hash rate going up over time, the cost and the energy efficiency to run the network gets lower and better pretty consistently. 

 

[rkbabang]

Good interview with Tad Smith.

https://www.youtube.com/watch?v=1z3bxzu_5E8&ab_channel=TimKotzman

 

 

Here's a good short clip from it:

 

[wachtwoord]

10 hours ago, TwoCitiesCapital said:

 

And the Republicans did it to Iraq and others before them. Our foreign policy has been atrocious regardless of party. Trump might be a slight improvement here, but I remain to be convinced. 

 

Of course. As said, I'm not pro republicans, I'm a libertarian (the real kind, very rare sadly). Trump isnt a republican and will cause far less damage. A good leader is impossible: no good person would want it.

 

10 hours ago, TwoCitiesCapital said:

 

Yes. There are attacks from the left. But the right is no better and arguably more dangerous IMO. The media is far from perfect. But as of right now it is only Fox that has paid the largest settlement  in history to avoid going to trial for knowingly lying for clicks and eyeballs.

 

I'd argue the left is currently much much worse. They control discourse through harsh and extreme censorship combined with the development of Orwellian newspeak designed to make the minds of the populace incapable of any type of resistance. Yes: give me the classical rightwing misbehaviour any day of the week as that is extremely mild and non-dangerous by comparison.

 

10 hours ago, TwoCitiesCapital said:

 

Additionally, Elon has taken over Twitter and is doing the exact things he complained about the prior board doing, but to elevate his voice, his conspiracy theories, and to quiet the dissenters against himself. 

 

I strongly dislike Musk as he's a lying, manipulative, non-loyal, hypocritical (his core businesses survive of subsidies for fuck's sake) individual who switches sides like women change clothes but what you write is completely false. He allows all sides on his platform.

 

On a plus side I dont have to make new accounts after he took over as I don't get banned anymore for daring to utter the truth

 

 

10 hours ago, TwoCitiesCapital said:

 

All media is propaganda. But the way the left tends to propagandize is through silence on a topic. The Right does it by outright lying. I view both to be bad, but one is worse than the other. 

 

I think I responded to this above already but completely false. The left lies, manipulates, twists, censor's and even destroys how we use language. 

 

Again by comparison the right is extremely mild.

 

10 hours ago, TwoCitiesCapital said:

The left could use a dose of respect for self responsibility. So could the right - because they're all about it until they were hamstrung by the political climate, or unfair competition, or immigrants willing to work more cheaply, or the election being stolen, etc etc etc

 

All they want is power. Arguments are only excuses.

 

The only good way to deal with government is to shrink it and take away it's power. The more power it has the more evil it commits.

 

Trump promised this. Will he deliver? Hopefully at least in part (and even if not, at least left wont make things worse for 4 years and hopefully NATO can finally stop its proxy war vs Russia they claim to be a Russian attack)

 

10 hours ago, TwoCitiesCapital said:

Same. I'm fairly center and primarily voted independent or right until Trump came into the picture. Now I support candidates on the left not because the policies are better but because they aren't absolute terrible people help bent on power by any means necessary like most MAGA Republican politicians seem to be. 

 

I'm a libertarian. So not left, right or center. Individuality over collectivism always.

 

Economically that means the left is the mortal enemy (snd economic reality dictates everything else eventually). It doesnt mean the right or center are friends though as most of them are authoritarian too but at least there's a non-authorotarian right. It cant exist for the left by definition due to enforced collectivism at its very core (unless you mean the extreme minority who prefer to live in small voluntary communes. With them I have zero moral issues. I wont elect to join them though, but respect their right to live as they wish as long as they return the favor).

Edited Wednesday at 02:01 AM by wachtwoord

[SharperDingaan]

BTC, concentration and the money press thing ......

 

To get ahead is to not just buy and hold something that will outperform the money press, it is ALSO to trade the price volatility of that thing. Then you need to recognise that the return from trading the volatilty will be multiple times that of holding the asset itself.

 

There is a reason why so many of those who have done well at this, have ALSO seen so many market/business cycles; it's a progression.

 

If you had loaded up when BTC was 57K and sold at 75K (+32%), you have done very well for a few weeks exposure. But for the SAME next few weeks of additional exposure are you likely to do as well by simply continuing to hold BTC, or by swing trading it? Most would say swing trading it.

 

To do well at the swing trade,  one has to 1) recognise when it's currently the better of the two options, and 2) have the expertise and risk tolerance to execute. The more cycles you have experienced, the better you should be at this.

 

SD

 

 

 

 

 

 

Edited Wednesday at 05:00 PM by SharperDingaan

[73 Reds]

1 hour ago, SharperDingaan said:

BTC, concentration and the money press thing ......

 

To get ahead is to not just buy and hold something that will outperform the money press, it is ALSO to trade the price volatility of that thing. Then you need to recognise that the return from trading the volatilty will be multiple times that of holding the asset itself.

 

There is a reason why so many of those who have done well at this, have ALSO seen so many marke/business cycles; it's a progression.

 

If you had loaded up when BTC was 57K and sold at 75K, you have done very well for a few weeks exposure. But for the SAME next few weeks of exposure are you likely to do as well by simply continuing to hold BTC, or by swing trading it!? Most would say swing trading it.

 

To do well at the swing trade,  one has to 1) recognise when it's currently the better of the two options, and 2) have the expertise and risk tolerance to execute. The more cycles you have experienced, the better you should be at this.

 

SD

 

 

 

 

 

 

@ShaperDingaan I asked a straight forward question of proponents on another thread (Trump Trades):  How do you value BTC?  In other words, how do you know the price you are paying is sensible?  No one could provide a cohesive answer.  They all tried hard to justify the future of BTC but responses ranged from "trust", "belief", comparisons to gold, and the efficient market theory (supply and demand).  Personally, I'm neither for or against BTC, though I have trouble ascertaining how or why I would ever need it, and even so how any value - other than relative to other currencies can be derived.  What say you?   

[TwoCitiesCapital]

12 minutes ago, 73 Reds said:

@ShaperDingaan I asked a straight forward question of proponents on another thread (Trump Trades):  How do you value BTC?  In other words, how do you know the price you are paying is sensible?  No one could provide a cohesive answer.  They all tried hard to justify the future of BTC but responses ranged from "trust", "belief", comparisons to gold, and the efficient market theory (supply and demand).  Personally, I'm neither for or against BTC, though I have trouble ascertaining how or why I would ever need it, and even so how any value - other than relative to other currencies can be derived.  What say you?   

 

There are cohesive answers earlier in the thread where this has been discussed. 

 

Stock-to-flow, Power Law, and Metcalf's Law are three such theories. One is a mathematical relationship observed in often in nature,  one is a supply side function, and the other is a demand side function. Neither will give you the exact right answer or the whole picture. But all suggested BTC was cheap this year and is going dramatically higher in the next year due to the continuation of the trend, the continued decline in the stock-to-flow, and the projected demand growth on the network. 

Edited Wednesday at 01:37 PM by TwoCitiesCapital

[Vish_ram]

What I find fascinating is that the BTC skeptics have done minimal reading on the subject of economics, monetary actions, human behavior, role of Fed/Govt etc, perfunctory at best. 

They want answers that they expect will seep thru layers of ignorance and make it click. Life doesn’t work that way. 
 

if someone had read several books on the subject and then asks appropriate Q I can then understand. 

 

subject of BTC isn’t something like doing DCF. Man with a hammer syndrome. This puzzle is like a lock. Some have to try a million keys and others just a key or two.

[73 Reds]

18 minutes ago, TwoCitiesCapital said:

 

There are cohesive answers earlier in the thread where this has been discussed. 

 

Stock-to-flow, Power Law, and Metcalf's Law are three such theories. One is a mathematical relationship observed in often in nature,  one is a supply side function, and the other is a demand side function. Neither will give you the exact right answer or the whole picture. But all suggested BTC was cheap this year and is going dramatically higher in the next year due to the continuation of the trend, the continued decline in the stock-to-flow, and the projected demand growth on the network. 

Do you have links to these theories?  I would be interested in reading them (though am always skeptical of what Dr. Google brings up).  Thanks.

[73 Reds]

6 minutes ago, Vish_ram said:

What I find fascinating is that the BTC skeptics have done minimal reading on the subject of economics, monetary actions, human behavior, role of Fed/Govt etc, perfunctory at best. 

They want answers that they expect will seep thru layers of ignorance and make it click. Life doesn’t work that way. 
 

if someone had read several books on the subject and then asks appropriate Q I can then understand. 

 

subject of BTC isn’t something like doing DCF. Man with a hammer syndrome. This puzzle is like a lock. Some have to try a million keys and others just a key or two.

Who suggested that valuation need be in the form of DCF?  Your answer if I recall correctly was a comparison to gold.  Gold has been a TERRIBLE (emphasis added) investment over time.  

[james22]

13 minutes ago, Vish_ram said:

What I find fascinating is that the BTC skeptics have done minimal reading on the subject of economics, monetary actions, human behavior, role of Fed/Govt etc, perfunctory at best. 

They want answers that they expect will seep thru layers of ignorance and make it click. Life doesn’t work that way. 
 

if someone had read several books on the subject and then asks appropriate Q I can then understand. 

 

subject of BTC isn’t something like doing DCF. Man with a hammer syndrome. This puzzle is like a lock. Some have to try a million keys and others just a key or two.

 

X100

 

It's like reading an x-ray. It doesn't mean anything unless you've done the work 

 

And no one can explain it to you.

 

There is no short-cut.

[TwoCitiesCapital]

3 minutes ago, 73 Reds said:

Do you have links to these theories?  I would be interested in reading them (though am always skeptical of what Dr. Google brings up).  Thanks.

 

Timothy Peterson of Cane Island Digital has pioneered the use of Metcalf's Law for Bitcoin. https://papers.ssrn.com/sol3/cf_dev/AbsByAuth.cfm?per_id=2848613 

This is my preferred valuation tool based on network use and adoption. 

 

Plan B is credited for popularizing stock-to-flow for Bitcoin, but its a theory that was applied to many commodities beforehand. You can find his material on YouTube/Twitter, but probably can just google stock-to-flow. This is a supply-side model only and will eventually break as BTC's stock-to-flow approaches infinity (when the halving cycle ends and the network operates only transaction fees) - but is probably still useful for now while the stock-to-flow is comparable to gold/silver/real estate/etc. 

 

Giovanni Santosasi popularized the use of power-law for Bitcoin. This is very similar to the stock-to-flow model for the first 10-years or so of BTCs history, but is diverging to the more conservative side of valuation. This, again, is probably due to stock-to-flow trending towards infinity and becoming less useful over time. Other than hearing interviews on podcasts, I haven't personally googled/read Giovannai's stuff to link you. But you can google him. 

 

[73 Reds]

1 minute ago, TwoCitiesCapital said:

 

Timothy Peterson of Cane Island Digital has pioneered the use of Metcalf's Law for Bitcoin. https://papers.ssrn.com/sol3/cf_dev/AbsByAuth.cfm?per_id=2848613 

This is my preferred valuation tool based on network use and adoption. 

 

Plan B is credited for popularizing stock-to-flow for Bitcoin, but its a theory that was applied to many commodities beforehand. You can find his material on YouTube/Twitter, but probably can just google stock-to-flow. This is a supply-side model only and will eventually break as BTC's stock-to-flow approaches infinity (when the halving cycle ends and the network operates only transaction fees) - but is probably still useful for now while the stock-to-flow is comparable to gold/silver/real estate/etc. 

 

Giovanni Santosasi popularized the use of power-law for Bitcoin. This is very similar to the stock-to-flow model for the first 10-years or so of BTCs history, but is diverging to the more conservative side of valuation. This, again, is probably due to stock-to-flow trending towards infinity and becoming less useful over time. Other than hearing interviews on podcasts, I haven't personally googled/read Giovannai's stuff to link you. But you can google him. 

 

Thank you @TwoCitiesCapital.  Look forward to learning more.

[jfan]

@73 Reds

There are a number of models out there that different people have proposed in terms of valuation. Every model has some limitations, but even our traditional finance models have limits (ie DCFs, relative valuations, P/E & P/B ratios etc). 

 

In addition to @TwoCitiesCapital's models mentioned, another one that I found useful is on Charles Edward's Medium posts (he runs a digital asset fund) 

Bitcoin’s Production Cost. An Estimate of Bitcoin’s Production and… | by Charles Edwards | Capriole | Medium

 

Bitcoin Energy-Value Equivalence. The Intrinsic Value of Bitcoin as… | by Charles Edwards | Capriole | Medium

 

More simplistic relative models include % market cap relative to gold, relative to dollar-denominated debt, relative to real estate.

 

Others have analysed the blockchain for ratio signals or wallet distribution/activity to look for over and under-valuation moments. Glassnode is a service you can sign-up and learn/use their data. 

 

Greg was quite astute that sometimes it just "feeling" the secular sentiments and behaviour change in the population over time (paraphasing him: digital adoption, level of trust in government, computing power, open-source technologies, etc)

 

@wachtwoord posted a really good document here a while ago. I've attached it below.

 

Even Cathy Wood has some reading material that might shed some light. 

 

I don't think it will get you the precise answer you are looking but might be a starting point. Buried within Edwards blog, is a quote from Satoshi about how he thought initially the production costs will drive BTC's value but as this drops, the transaction fees will play a much larger role in the future. This then requires a functioning market that obeys general supply - demand for block space.

John Pfeffer - An Institutional Investors Take on Cryptoassets - 2017 Dec.pdf

[TwoCitiesCapital]

22 minutes ago, Vish_ram said:

What I find fascinating is that the BTC skeptics have done minimal reading on the subject of economics, monetary actions, human behavior, role of Fed/Govt etc, perfunctory at best. 

They want answers that they expect will seep thru layers of ignorance and make it click. Life doesn’t work that way. 
 

if someone had read several books on the subject and then asks appropriate Q I can then understand. 

 

subject of BTC isn’t something like doing DCF. Man with a hammer syndrome. This puzzle is like a lock. Some have to try a million keys and others just a key or two.

+1

 

It was reading about the history of money, how societies exploited less-hard currencies, and how the world eventually agreed on silver/gold independently through multiple failed alternatives is ultimately what led me to evolve my views of BTC as just a payment network to understanding its use as a store of value/currency. 

 

The history didn't even have a pro-Bitcoin bend. It simply demonstrated that universality of harder currencies absolutely dominating lesser ones regardless of politics/policies/etc and that those who adopted the harder currencies, or 'shorted' the exploitable currencies, massively benefited from the expanding monetary premium. 

 

Once you understand that, and understand that Bitcoin's characteristics are the hardest currency characteristics we've known, the conclusion is natural. 

Edited Wednesday at 02:13 PM by TwoCitiesCapital

[73 Reds]

1 minute ago, jfan said:

@73 Reds

There are a number of models out there that different people have proposed in terms of valuation. Every model has some limitations, but even our traditional finance models have limits (ie DCFs, relative valuations, P/E & P/B ratios etc). 

 

In addition to @TwoCitiesCapital's models mentioned, another one that I found useful is on Charles Edward's Medium posts (he runs a digital asset fund) 

Bitcoin’s Production Cost. An Estimate of Bitcoin’s Production and… | by Charles Edwards | Capriole | Medium

 

Bitcoin Energy-Value Equivalence. The Intrinsic Value of Bitcoin as… | by Charles Edwards | Capriole | Medium

 

More simplistic relative models include % market cap relative to gold, relative to dollar-denominated debt, relative to real estate.

 

Others have analysed the blockchain for ratio signals or wallet distribution/activity to look for over and under-valuation moments. Glassnode is a service you can sign-up and learn/use their data. 

 

Greg was quite astute that sometimes it just "feeling" the secular sentiments and behaviour change in the population over time (paraphasing him: digital adoption, level of trust in government, computing power, open-source technologies, etc)

 

@wachtwoord posted a really good document here a while ago. I've attached it below.

 

Even Cathy Wood has some reading material that might shed some light. 

 

I don't think it will get you the precise answer you are looking but might be a starting point. Buried within Edwards blog, is a quote from Satoshi about how he thought initially the production costs will drive BTC's value but as this drops, the transaction fees will play a much larger role in the future. This then requires a functioning market that obeys general supply - demand for block space.

John Pfeffer - An Institutional Investors Take on Cryptoassets - 2017 Dec.pdf 712.96 kB · 0 downloads

@Jfan much appreciated.  Lots of reading ahead.

[jfan]

1 minute ago, 73 Reds said:

@Jfan much appreciated.  Lots of reading ahead.

You are welcome. The root on X, @therationalroot has some really interesting ideas and put together some visualization with historical BTC data. He has some interviews on YouTube that you might enjoy. Caveat: some of the interviewers are a bit nutty

[73 Reds]

8 minutes ago, TwoCitiesCapital said:

 

Timothy Peterson of Cane Island Digital has pioneered the use of Metcalf's Law for Bitcoin. https://papers.ssrn.com/sol3/cf_dev/AbsByAuth.cfm?per_id=2848613 

This is my preferred valuation tool based on network use and adoption. 

 

Plan B is credited for popularizing stock-to-flow for Bitcoin, but its a theory that was applied to many commodities beforehand. You can find his material on YouTube/Twitter, but probably can just google stock-to-flow. This is a supply-side model only and will eventually break as BTC's stock-to-flow approaches infinity (when the halving cycle ends and the network operates only transaction fees) - but is probably still useful for now while the stock-to-flow is comparable to gold/silver/real estate/etc. 

 

Giovanni Santosasi popularized the use of power-law for Bitcoin. This is very similar to the stock-to-flow model for the first 10-years or so of BTCs history, but is diverging to the more conservative side of valuation. This, again, is probably due to stock-to-flow trending towards infinity and becoming less useful over time. Other than hearing interviews on podcasts, I haven't personally googled/read Giovannai's stuff to link you. But you can google him. 

 

Curious that the opening paragraph in Peterson's "Metcalf's Law for Bitcoin" states that Bitcoin has no intrinsic value.  On the other thread proponents lambasted BTC skeptics for making the same suggestion.

[james22]

43 minutes ago, 73 Reds said:

How do you value BTC?

 

Probably the easiest: If you believe bitcoin is digital gold, divide gold's $18T market cap by 21M.

 

Otherwise, consider adoption curves.

 

 

But really, life changing wealth requires some effort. And the risk of wasted effort.

 

Read this thread and the MSTR one as well.

 

You'll see many of us were skeptics first.

 

(I first thought I'd piggy-back Blackrock believing they'd build a market as they did for ESG.)

 

 

Then look to Twitter/X. That's were the best discussion is now.