Cryptocurrencies

[Dalal.Holdings]

Depends--if the downside comes with decades spent in a prison cell, it's certainly not 100%.

 

If you can be the CEO of a big bank circa 2007, then the downside is much more favorable and you can lever up far beyond 100%.

 

Also, SBF and his crew had pretty much all of their own net worths invested in the scheme, so they were fully exposed as well. Another clear indication that they were not aware of Kelly.

Edited October 31, 2023 by Dalal.Holdings

[Fly]

On 10/30/2023 at 2:25 PM, Dinar said:

I think SBF is a genius with zero common sense.  

 

No, just a narcissistic idiot with no common sense. 

[UK]

6 hours ago, Spekulatius said:

What is the right bet size if you bet with other peoples money per Kelly formula? I think it's 100%.

 

[Spekulatius]

7 hours ago, Dalal.Holdings said:

Depends--if the downside comes with decades spent in a prison cell, it's certainly not 100%.

SFX is fraud regardless if they bet 10% or 100%. Betting it all on black is sort of logical because they would have been Ok if it had worked out regardless of fraud, the way SillyCon valley works.

Edited October 31, 2023 by Spekulatius

[Castanza]

 

[rkbabang]

3 minutes ago, Castanza said:

 

 

If only we could ban Elizabeth Warren.

 

[wachtwoord]

16 hours ago, rkbabang said:

 

If only we could ban Elizabeth Warren.

 

 

She really does seem to hate freedom above all else.

[Castanza]

tbh the point she is trying to make shows how ignorant she is. She already has 99% of the data she is asking to get if she would just contact popular exchanges. You need to submit an ID and other standard legal material for most of the popular exchanges. Then when people withdraw it ties their identity to a wallet which can be traced from there. Plenty of criminals have been caught that way. She's trying to crack down on a very small fraction of people...Even then, it's arguably easier to trace than cash if you get just one piece of information to start on. 

[rkbabang]

5 hours ago, wachtwoord said:

 

She really does seem to hate freedom above all else.

[Dalal.Holdings]

SBF found guilty on all counts after less than 5 hrs of jury deliberations...

 

These Ackman tweets have aged like fine wine

 

 

 

 

[gfp]

Cathie!  She expects deflation and Bitcoin wins no matter what

"Bitcoin is a hedge against both inflation and deflation because there’s no counterparty risk, and institutions are barely involved.” It’s “digital gold,” she said."

 

https://www.bloomberg.com/news/articles/2023-11-03/cathie-wood-says-bitcoin-btc-is-digital-gold-as-deflation-hedge?srnd=premium

[John Hjorth]

13 hours ago, Dalal.Holdings said:

SBF found guilty on all counts after less than 5 hrs of jury deliberations...

 

These Ackman tweets have aged like fine wine

 

 

 

 

 

He  doesn't exactly have the prospects of soft house arrest either. ['Soft house arrest' defined as : 'Your package from FedEx is expected to arrive  8 - 18'.]

 

Using leverage to invest in 'assets' generating no cash flow at all while holding the assets - what could possibly go wrong?

Edited November 3, 2023 by John Hjorth

[TwoCitiesCapital]

https://www.wsj.com/finance/investing/charlie-munger-will-take-your-questions-now-3e842ab7

 

The price of bitcoin has been rocketing higher again. Is that something that concerns you? 

A: Of course it concerns me. I have a lot of very simple fundamental ideas that I think every educated person ought to have. Those ideas include what Adam Smith taught everybody…. You’ve got a huge increase in what I would call civilization per capita. And it happened automatically just because people take better care of their own property than they take care of somebody else’s property…. In order to get the Smithian results, you need a currency to facilitate exchanges. And to make the currency respected widely, the trick we’ve used is the sovereign issues it. 

 

The only way to get from hunter-gathering to civilization that we know of that’s ever worked is to have a strong currency. It can be seashells, it can be corn kernels, it can be a lot of things. It can be gold coins, it can be promises in banking systems like we have in the United States and England and so on.

When you start creating an artificial currency…you’re throwing your stink ball into a recipe that’s been around for a long time, that’s worked very well for a lot of people.

 

---------------

 

He gets SOOOOO close, and then takes the exit right before the crypto conclusion. 

 

A stable currency doesn't lose 80% of its value in 50 years.

 

A stable currency isn't linked to gold redemption one day and then simply the "full faith and credit of the US government" the next.

 

A stable currency isn't one that gets weaponized when you do something daddy-government doesn't like. 

 

I guess he's at an age where it doesn't matter if he veers from the system that's been so good to him or not. He, and his few generations, are gonna be well off no matter what. 

Edited November 3, 2023 by TwoCitiesCapital

[rkbabang]

And human civilization isn't furthered by giving powerful nation-states the ability to print currency to fund wars. Without currency creation out of thin air war would be much harder to fund.  Fiat currency is a destructive force for civilization, not a constructive one.

 

In an age of nuclear weapons human civilization can't afford the dangers of fiat currencies.

 

Edited November 3, 2023 by rkbabang

[Dave86ch]

20 hours ago, TwoCitiesCapital said:

https://www.wsj.com/finance/investing/charlie-munger-will-take-your-questions-now-3e842ab7

 

The price of bitcoin has been rocketing higher again. Is that something that concerns you? 

A: Of course it concerns me. I have a lot of very simple fundamental ideas that I think every educated person ought to have. Those ideas include what Adam Smith taught everybody…. You’ve got a huge increase in what I would call civilization per capita. And it happened automatically just because people take better care of their own property than they take care of somebody else’s property…. In order to get the Smithian results, you need a currency to facilitate exchanges. And to make the currency respected widely, the trick we’ve used is the sovereign issues it. 

 

The only way to get from hunter-gathering to civilization that we know of that’s ever worked is to have a strong currency. It can be seashells, it can be corn kernels, it can be a lot of things. It can be gold coins, it can be promises in banking systems like we have in the United States and England and so on.

When you start creating an artificial currency…you’re throwing your stink ball into a recipe that’s been around for a long time, that’s worked very well for a lot of people.

 

---------------

 

He gets SOOOOO close, and then takes the exit right before the crypto conclusion. 

 

A stable currency doesn't lose 80% of its value in 50 years.

 

A stable currency isn't linked to gold redemption one day and then simply the "full faith and credit of the US government" the next.

 

A stable currency isn't one that gets weaponized when you do something daddy-government doesn't like. 

 

I guess he's at an age where it doesn't matter if he veers from the system that's been so good to him or not. He, and his few generations, are gonna be well off no matter what. 

He doesn't understand the Proof of Work mechanism and its implications.

[ValueArb]

“A stable currency doesn't lose 80% of its value in 50 years.”

How did a “stable currency” lose 80% of its value in one year?

[TwoCitiesCapital]

3 hours ago, ValueArb said:

“A stable currency doesn't lose 80% of its value in 50 years.”

How did a “stable currency” lose 80% of its value in one year?

 

I've never called BTC a stable currency. But I'm not making the mistake calling the US dollar one either. I've explicitly said in the past that I don't think BTC is necessarily here to replace the USD (at least not any time soon), but rather here to replace the payment processors like Visa (which I still believe). 

 

BTC has several hurdles to get through before becoming a useful currency. The first of which is a store of value. We've been proving that out since it's inception . Basically 100% of people with a 3-4 year time horizon have outpaced inflation with BTC. If a store of value is all BTC ever becomes, it'll still be incredibly valuable. 

 

If it masters that and then masters being a transactional currency via layer 2 systems, then we can discuss it being a unit of account and a reserve/stable currency.

 

I have mixed feelings on whether or not increased/transaction throughput will stabilize it's price or if it'll always display the characteristics of something perfectly inelastic (and therefore volatile AF). Time will tell - but it has many characteristics of a stable currency that the USD has lacked since severing ties with gold. 

Edited November 4, 2023 by TwoCitiesCapital

[jfan]

 

The volatility of the price in USD is particularly obviously high but if the value of BTC is ultimately driven by the market price of electricity and equipment to secure the network (using a proof-of-work protocol) the key variable to watch is the hash rate. As depicted above the hash rate is steadily climbing over time. Just like everyone on this board says that the market price does not necessarily reflect the fundamentals of a business and that this year's sales is not always a true reflection of a company's earnings power, we should not be particularly wed to the price volatility of BTC in USD in the short-term.

 

[ValueArb]

6 hours ago, TwoCitiesCapital said:

 

I've never called BTC a stable currency. But I'm not making the mistake calling the US dollar one either. I've explicitly said in the past that I don't think BTC is necessarily here to replace the USD (at least not any time soon), but rather here to replace the payment processors like Visa (which I still believe). 

 

BTC has several hurdles to get through before becoming a useful currency. The first of which is a store of value. We've been proving that out since it's inception . Basically 100% of people with a 3-4 year time horizon have outpaced inflation with BTC. If a store of value is all BTC ever becomes, it'll still be incredibly valuable. 

 

If it masters that and then masters being a transactional currency via layer 2 systems, then we can discuss it being a unit of account and a reserve/stable currency.

 

I have mixed feelings on whether or not increased/transaction throughput will stabilize it's price or if it'll always display the characteristics of something perfectly inelastic (and therefore volatile AF). Time will tell - but it has many characteristics of a stable currency that the USD has lacked since severing ties with gold. 

it has no intrinsic value to make itself a store of value. Its price is simply dictated by inflows/outflows which means that record of beating inflation is unlikely to last.

[Cigarbutt]

22 hours ago, Dave86ch said:

He doesn't understand the Proof of Work mechanism and its implications.

 

14 hours ago, TwoCitiesCapital said:

...rather here to replace the payment processors like Visa (which I still believe). 

If a store of value is all BTC ever becomes, it'll still be incredibly valuable. 

...

If it masters that and then masters being a transactional currency via layer 2 systems, then we can discuss it being a unit of account and a reserve/stable currency.

...

I have mixed feelings on whether or not increased/transaction throughput will stabilize it's price or if it'll always display the characteristics of something perfectly inelastic (and therefore volatile AF). Time will tell - but it has many characteristics of a stable currency that the USD has lacked since severing ties with gold. 

Need some help here.

A few years ago, after reading this:

https://www.bankofengland.co.uk/-/media/boe/files/speech/2018/the-future-of-money-speech-by-mark-carney

i had looked into proof of work moving to proof of stake or else (referred to in page 9 of the link).

The link has common (with Mr. Munger) references to Adam Smith.

Any progress there in throughput?

[TwoCitiesCapital]

10 hours ago, ValueArb said:

it has no intrinsic value to make itself a store of value. Its price is simply dictated by inflows/outflows which means that record of beating inflation is unlikely to last.

 

It is exactly like any other commodity

 

2 hours ago, Cigarbutt said:

 

Need some help here.

A few years ago, after reading this:

https://www.bankofengland.co.uk/-/media/boe/files/speech/2018/the-future-of-money-speech-by-mark-carney

i had looked into proof of work moving to proof of stake or else (referred to in page 9 of the link).

The link has common (with Mr. Munger) references to Adam Smith.

Any progress there in throughput?

 

PoS can lower energy intensity and potentially decrease costs of transactions while increasing throughput. It does so by giving up security and censorship resistance which are probably not worthwhile sacrifices

 

I don't see why this has to be any different then other monetary systems - most transactions will take place on layer 2 type solutions and side-chains. But having the optionality of layer 1 is still valuable 

[Fly]

5 hours ago, TwoCitiesCapital said:

 I don't see why this has to be any different then other monetary systems - most transactions will take place on layer 2 type solutions and side-chains. But having the optionality of layer 1 is still valuable 

 

Agree but that base layer needs to have ultimate security and PoW is the best consensus method when security is the priority. I like to think of the Bitcoin Network layer 1 as the same as Fedwire, slowish but ultimate security particularly for big transactions. The Lightning Network is built on top of Bitcoin as a Layer 2, which would be comparable to something like a Visa/MC credit card network in terms of speed/throughput. Other layer 2s are being developed as well which serve niche purposes (like Liquid) and possibilities are endless. 

[Dave86ch]

11 hours ago, Fly said:

 

Agree but that base layer needs to have ultimate security and PoW is the best consensus method when security is the priority. I like to think of the Bitcoin Network layer 1 as the same as Fedwire, slowish but ultimate security particularly for big transactions. The Lightning Network is built on top of Bitcoin as a Layer 2, which would be comparable to something like a Visa/MC credit card network in terms of speed/throughput. Other layer 2s are being developed as well which serve niche purposes (like Liquid) and possibilities are endless. 

Proof of Work defines physical constraints in the digital realm, enforcing security by incentivizing the use of untapped energy sources, supporting a decentralized platform of shared and certified transactional truth.

 

It transforms labor energy into scarce, secure, and movable wealth.

 

 

 

Edited November 6, 2023 by Dave86ch

[rkbabang]

PoS is a method for the centralization of wealth and keeping the founders/rich elite wealthy.  It's a scam which goes like this:  The founders premine a bunch of coins for themselves and their associates.  PoS makes sure that no one can ever catch up to them and that as a group they can remain in control of that blockchain.

 

PoS blockchains will never be as decentralized or secure as PoW blockchains.  And the most secure PoW blockchain will be what humans will use as the baselayer of money.

 

[ValueArb]

On 11/5/2023 at 8:38 AM, TwoCitiesCapital said:

 

It is exactly like any other commodity

Commodities have consumers, their  demand curve meets the supply curve to dictate price. Even gold has industrial uses.

 

Crypto is just speculation.