Cryptocurrencies

[TwoCitiesCapital]

45 minutes ago, 73 Reds said:

See, that's where we share a different opinion.  There has been no default (by the US, anyway).  When does $1 not buy an item that costs $1?  My belief is you confuse default with inflation.  I don't know anyone who stores their dollars in a mattress or safety deposit box.  Dollars get used and remaining dollars can be invested.  The issue is, is BTC a better way to avoid inflation than anything else?  I think not.  

 

It defaulted during the Great Depression when FDR made it a requirement to tender all gold, bullion, and gold certificates to the US for a fixed price of $20 an oz and then immediately devalued the dollar to $40 an oz once the gold had been acquired the following year. 

 

It defaulted against its contractual obligation of convertibility into gold in the 70s when it swapped, overnight, from convertibility into a set amount of gold to the "full faith and credit".

 

Since the 70s, it had implicitly defaulted by printing more money each year to pay for its obligations which is why we have generally rising prices each year instead of generally falling prices.

 

Rising productivity is deflationary. Each individual has become insanely more productive than we were 50 years ago. The ONLY reason inflation exists as a default state of affairs is because the US government (and others) can't help themselves when it comes to printing money and defaulting against the value of their liabilities. Each dollar printed is abuse of power and devalues the time/effort/energy you have stored via the currency they force you to use/own/pay taxes in.

 

Inflation is just a form of default - no less sinister than non-payment; just less obvious. 

Edited April 28, 2025 by TwoCitiesCapital

[james22]

On 4/21/2025 at 10:25 AM, james22 said:

Its specific attributes make it a better form of money than gold.

 

 

[73 Reds]

59 minutes ago, TwoCitiesCapital said:

 

It defaulted during the Great Depression when FDR made it a requirement to tender all gold, bullion, and gold certificates to the US for a fixed price of $20 an oz and then immediately devalued the dollar to $40 an oz once the gold had been acquired the following year. 

 

It defaulted against its contractual obligation of convertibility into gold in the 70s when it swapped, overnight, from convertibility into a set amount of gold to the "full faith and credit".

 

Since the 70s, it had implicitly defaulted by printing more money each year to pay for its obligations which is why we have generally rising prices each year instead of generally falling prices.

 

Rising productivity is deflationary. Each individual has become insanely more productive than we were 50 years ago. The ONLY reason inflation exists as a default state of affairs is because the US government (and others) can't help themselves when it comes to printing money and defaulting against the value of their liabilities. Each dollar printed is abuse of power and devalues the time/effort/energy you have stored via the currency they force you to use/own/pay taxes in.

 

Inflation is just a form of default - no less sinister than non-payment; just less obvious. 

I disagree.  Cash is useful, reliable over short enough periods of time to be effective, and transparent in terms of its value relative to other currencies.  It is also relatively stable - again, enough to be useful.  There is no certainty whatsoever about BTC.   For my purposes the backing of the dollar is far more valuable than any backing associated with BTC.  Yet just like I wouldn't hold cash or gold with any expectation of price appreciation or as a store of value, I won't hold BTC.

[73 Reds]

15 minutes ago, james22 said:

 

 

Maybe it is better than gold in the short run - I won't argue the point.  But my view of BTC is like a long term option with mostly time value, i.e. buy the story but likely sell the news.

[TwoCitiesCapital]

23 minutes ago, 73 Reds said:

I disagree.  Cash is useful, reliable over short enough periods of time to be effective, and transparent in terms of its value relative to other currencies.  It is also relatively stable - again, enough to be useful.  There is no certainty whatsoever about BTC.   For my purposes the backing of the dollar is far more valuable than any backing associated with BTC.  Yet just like I wouldn't hold cash or gold with any expectation of price appreciation or as a store of value, I won't hold BTC.

 

You may disagree. But markets are voting with their $. 

 

And for most of the last 15-years, BTC is winning those incremental votes of confidence and USD is losing them. 

 

I have no reason to expect this dynamic will change - and own BTC as a result. It's the best bet for my incremental capital. 

[73 Reds]

2 minutes ago, TwoCitiesCapital said:

 

You may disagree. But markets are voting with their $. 

 

And for most of the last 15-years, BTC is winning those incremental votes of confidence and USD is losing them. 

 

I have no reason to expect this dynamic will change - and own BTC as a result. It's the best bet for my incremental capital. 

You're entirely correct about the last 15 years.  (Wish we could invest retrospectively).

Edited April 28, 2025 by 73 Reds
spelling

[TwoCitiesCapital]

9 minutes ago, 73 Reds said:

Maybe it is better than gold in the short run - I won't argue the point.  But my view of BTC is like a long term option with mostly time value, i.e. buy the story but likely sell the news.

 

Buy the story and add on the news has been what has worked the last 15 years. 

[james22]

[Paarslaars]

This is big, 3B might not seem much at first but if this is one of many to follow...

[TwoCitiesCapital]

27 minutes ago, Paarslaars said:

This is big, 3B might not seem much at first but if this is one of many to follow

 

That's another 31k BTC removed from short term supply at today's prices. You get a few companies doing this, a few states doing this, and few countries doing this, and you end up with hundreds of thousands of BTC being removed. 

Edited April 29, 2025 by TwoCitiesCapital

[Paarslaars]

Still one risk though:

 

According to Governor Hobbs Wikipedia:

"On April 18, 2023, her 100th day in office, Hobbs set a new record for the most vetoes issued by an Arizona governor in a single legislative session, with 63 vetoes of bills passed by the Republican-majority legislature."

 

Seems highly probably this gets vetoed.  

[james22]

11 hours ago, TwoCitiesCapital said:

That's another 31k BTC removed from short term supply at today's prices.

 

The headline is misleading.

 

The bill approves up to 10%, not 10%.

 

2 hours ago, Paarslaars said:

Still one risk though:

 

According to Governor Hobbs Wikipedia:

"On April 18, 2023, her 100th day in office, Hobbs set a new record for the most vetoes issued by an Arizona governor in a single legislative session, with 63 vetoes of bills passed by the Republican-majority legislature."

 

Seems highly probably this gets vetoed.  

 

Yeah, from the headlines I assumed the bill had been signed.

 

Doesn't seem likely:

 

Arizona became the first state in the nation to pass legislation creating a Strategic Bitcoin Reserve after both chambers of the legislature approved the measure in votes that broke largely along party lines on April 28.

 

The legislation, sponsored by Republican Senator Wendy Rogers, authorizes the state treasury to invest a portion of public funds in Bitcoin (BTC).

 

[Democrat] Hobbs has not yet indicated whether she will sign or veto the measure.

 

However, she recently pledged to veto all bills sent to her desk until the state legislature passes a new budget. Hobbs has not commented specifically on SB1025 but has remained firm in her broader veto stance, throwing uncertainty over the bill’s prospects.

 

https://cryptoslate.com/arizona-legislature-passes-bitcoin-reserve-bill-governor-approval-pending/

 

All still very encouraging, but jumped the gun here, sorry.

[jfan]

Will Durant's book - The lessons of history Chapter 9: Economics and history

 

"History is inflationary, and that money is the last thing that a wise man will hoard"

 

"The men who can manage men, manage men who manage things. The men who manage money, manage everything"

 

Paraphrasing the remainder of the chapter:

 

- It is often military strength competing with other communities that allow it to develop economic policies that usually rely on the profit motive to spur productivity. And from this productivity, grows culture and the opportunity for liberty.

 

- However, as with most of history, the most productive abilities are often concentrated in the few people, who if in a democracy (the most liberty), thrive and have the ability to concentrate wealth. This may be slowed by more despotic rule, but the development of wealth inequality is "natural" over time.

 

- when the inequality is too great, and the strength of the poor many, start rivaling the strength in the abilities of the wealth few, and through mechanisms of re-distribution that range from peaceful legal/political maneuvers (redistributing wealth) to violent revolution (redistributing poverty). 

 

- Will Durant then describes the interplay between the family structure and competition for survival within a broader community and between communities. The family structure (if large, and strong) helps protect the individual from the challenges of competition. But it would be detrimental if this were extrapolated to the broader community, as competition is inevitable, and gives individuals and individual communities the opportunities to meet new challenges, adapt, and innovate which is particularly important for survival and for the survival and security as the community competes with other communities. Without security, there can be no liberty.

 

This might not be fully applicable to the discussion of bitcoin and cryptocurrencies, but I thought I would share Durant's perspective here. 

 

[wachtwoord]

On 4/28/2025 at 9:45 PM, 73 Reds said:

See, that's where we share a different opinion.  There has been no default (by the US, anyway).  When does $1 not buy an item that costs $1?  My belief is you confuse default with inflation.  I don't know anyone who stores their dollars in a mattress or safety deposit box.  Dollars get used and remaining dollars can be invested.  The issue is, is BTC a better way to avoid inflation than anything else?  I think not.  

 

They defaulted every time they changed the ratio  of convertability to gold as well as the last time when the convertability was scrapped altogether.

 

Since then they cant really default anymore but the promise also became valueless (it promises to give you an amount of something that's inherently valueless as it can be produced without limit or effort by the party making the promise).

 

The only reason it's still in active use is the threat of violence.

[73 Reds]

2 minutes ago, wachtwoord said:

 

They defaulted every time they changed the ratio  of convertability to gold as well as the last time when the convertability was scrapped altogether.

 

Since then they cant really default anymore but the promise also became valueless (it promises to give you an amount of something that's inherently valueless as it can be produced without limit or effort by the party making the promise).

 

The only reason it's still in active use is the threat of violence.

That's not a default.  When did $1 not buy $1 worth of goods or services?  Few folks, if any were bothered when we went off the gold standard.  Why should the value of our currency be defined in terms of gold anyway?

[Vish_ram]

38 minutes ago, 73 Reds said:

That's not a default.  When did $1 not buy $1 worth of goods or services?  Few folks, if any were bothered when we went off the gold standard.  Why should the value of our currency be defined in terms of gold anyway?

 

$1 of last years money buys less today. That is a default (in purchasing power sense) of few pennies in that single $. 

Many were bothered by removal of Gold standard. People were more powerless then, now we’ve BTC.

 

Like a drunkard who needs a post to stand upright, we need something like Gold to keep the value of currency intact. It could be anything that holds value. 

 

The most sinister thing about inflation is that, not only do we lose the purchasing power, we also lose the productivity gains (unless you own some equity or other assets). With average of say 3% productivity and zero inflation, each $1 bill should help us buy $1.03 worth of goods the next year and $1.34 worth 10 years later. Instead we get to buy $0.95 worth next year and $.60 worth 10 years later (assuming 5% inflation). Monetary inflation runs at 8%. 

 

[TwoCitiesCapital]

1 hour ago, 73 Reds said:

That's not a default.  When did $1 not buy $1 worth of goods or services?  Few folks, if any were bothered when we went off the gold standard.  Why should the value of our currency be defined in terms of gold anyway?

 

You don't have to define it in gold - people just do so because gold tends to be more stable than dollars, rubles, euros, yuan, pesos, etc etc etc

 

The problem with your 'when does $1 not buy $1 dollar" is that it doesn't actually measure anything in terms of value delivered. It's an impossible narrative to prove they did or didn't default because "dollar" is simply a word and using two different "dollars" isn't equivalent even if it's the same word. 

 

Is like asking "when is 1-year not 1-year" and then ignoring that some years have 365 days while others have 366. Or when is 1-month not 1-month even though some have 28 days, 30 days, or 31 days. The word is the same...the values are NOT equivalent. 

 

$1 in 1980 is the same word as $1 today. But they are NOT equivalent. Same with $1 in the 90s, and $1 on 2000s, and $1 as recently as 2020. That is the default.

 

Because the government issues bonds, promising to pay a certain $ representing a certain value, and then intentionally devalues the currency to pay you back less. Is NO different than if they simply kept the value for eh currency stable and gave you fewer $ in return. 

Edited April 30, 2025 by TwoCitiesCapital

[73 Reds]

5 minutes ago, Vish_ram said:

 

$1 of last years money buys less today. That is a default (in purchasing power sense) of few pennies in that single $. 

Many were bothered by removal of Gold standard. People were more powerless then, now we’ve BTC.

 

Like a drunkard who needs a post to stand upright, we need something like Gold to keep the value of currency intact. It could be anything that holds value. 

 

The most sinister thing about inflation is that, not only do we lose the purchasing power, we also lose the productivity gains (unless you own some equity or other assets). With average of say 3% productivity and zero inflation, each $1 bill should help us buy $1.03 worth of goods the next year and $1.34 worth 10 years later. Instead we get to buy $0.95 worth next year and $.60 worth 10 years later (assuming 5% inflation). Monetary inflation runs at 8%. 

 

Again, you are conflating a default with inflation.  No question, dollars buy less almost each and every year.  But the value of the goods and services that $1 buys also grows every year with productivity and technology.   To me the issue isn't about inflation, its about protecting wealth and growing wealth.  I wouldn't use dollars, gold or bitcoin for either.  Currencies are for mere convenience and until such time as it is convenient to use BTC to pay for stuff, dollars work just fine.  And if that time should come, it is highly doubtful I'd store BTC any further than today's dollars.  There are a lot of assumptions built into the BTC thesis which I am not willing to make.

[james22]

39 minutes ago, 73 Reds said:

To me the issue isn't about inflation, its about protecting wealth and growing wealth.  I wouldn't use dollars, gold or bitcoin for either.

 

Dollars do neither and gold only protects wealth.

 

Bitcoin does both.

 

39 minutes ago, 73 Reds said:

Currencies are for mere convenience and until such time as it is convenient to use BTC to pay for stuff, dollars work just fine.  And if that time should come, it is highly doubtful I'd store BTC any further than today's dollars.

 

Bitcoin will only grow wealth until mature (widely adopted), sure.

 

But when it then only protects wealth it'll be better to hold than dollars (you'd store it as you now do gold, if at all). 

 

39 minutes ago, 73 Reds said:

There are a lot of assumptions built into the BTC thesis which I am not willing to make.

 

And that's why you'll miss the growing wealth (adoption) phase.

[73 Reds]

1 hour ago, james22 said:

 

Dollars do neither and gold only protects wealth.

 

Bitcoin does both.

 

 

Bitcoin will only grow wealth until mature (widely adopted), sure.

 

But when it then only protects wealth it'll be better to hold than dollars (you'd store it as you now do gold, if at all). 

 

 

And that's why you'll miss the growing wealth (adoption) phase.

I know, I know.... that's the narrative.  The difference is how hard BTC proponents have to push others and to push for adoption.  I don't care if anyone adopts ownership of my investment holdings - they do well on their own.

[wachtwoord]

4 hours ago, 73 Reds said:

That's not a default.  When did $1 not buy $1 worth of goods or services?  Few folks, if any were bothered when we went off the gold standard.  Why should the value of our currency be defined in terms of gold anyway?

 

You sir are totally delulu. If I were you I would re-analyze the amount of boot licking you are doing you seem to be suffering from Stockholm syndrome.

 

Your questions:

The moment they dropped the gold backing it no longer bought what it promised (the value of that gold backing). Why should it be defined in gold? 1that was the promise they made and defaulted on (or no one would have ever wanted to use it) 2. What else of value is there? A dollar has no value beyond what's enforced with the threat of violence.

 

[73 Reds]

28 minutes ago, wachtwoord said:

 

You sir are totally delulu. If I were you I would re-analyze the amount of boot licking you are doing you seem to be suffering from Stockholm syndrome.

 

Your questions:

The moment they dropped the gold backing it no longer bought what it promised (the value of that gold backing). Why should it be defined in gold? 1that was the promise they made and defaulted on (or no one would have ever wanted to use it) 2. What else of value is there? A dollar has no value beyond what's enforced with the threat of violence.

 

"delulu".  Thanks!  Learned a new word today.  Try paying your bills with BTC and tell us who is delulu.

[wachtwoord]

12 minutes ago, 73 Reds said:

"delulu".  Thanks!  Learned a new word today.  Try paying your bills with BTC and tell us who is delulu.

 

Ok final time: it's not suitable/good as a currency, it's a store of wealth. Terrible stores of wealth are for payments (USD, EUR etc).

 

But at this point I do tap out. I respect your right to stay delulu.

Edited April 30, 2025 by wachtwoord

[73 Reds]

Just now, wachtwoord said:

 

Ok final time: it's not suitable/good as a currency, it's a store of wealth. Terrible stores of wealth are for payments (USD, EUR etc).

 

But at this point I do tab out. I respect your right to stay delulu.

OK, and one final time here:  A store of wealth is entirely meaningless to me when there are plenty of assets with which to grow wealth. 

[james22]

2 hours ago, 73 Reds said:

I know, I know.... that's the narrative.  The difference is how hard BTC proponents have to push others and to push for adoption.  I don't care if anyone adopts ownership of my investment holdings - they do well on their own.

 

You'd be better convinced if we didn't argue for it?

 

Defeats the purpose of this forum, no?

 

Convincing anyone here won't change my returns one whit.