Cryptocurrencies

[Longnose]

1 hour ago, TwoCitiesCapital said:

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

 

This is to me where BTC should shine. If i were stuck in one of these countries I would 100% be more happy to hold my money in BTC and over time you'd see the network effect of people just transacting in BTC grow. 

 

While in Thailand I noticed lots of vendors there were trying to move towards a cashless system using QR codes. (I believe this is being pushed by the Thai government) The QR system is still denominated in Baht. I thought to myself if you got a QR code on almost every stand. just have another QR code that goes to a lightning wallet and you'll have a lot lower transaction fees. 

[SharperDingaan]

Argentine 2035 Dollar bonds currently at 34.9c, and going down at least another 2%/month for some time. 

https://financialpost.com/pmn/business-pmn/argentina-bonds-rise-to-two-year-high-after-milei-debuts-shock-plan

 

If ever there was a business case for BTC this is it ...

8 months from now these now 11 year bonds could look even more interesting, should interest non-payment result in a restructuring and reclassification as zero coupons. An eventual 600bp favourable net decline in the YTM, realised in USD, could make you a very rich man. 

 

Everybody still has to eat, Argentina's agricultural exports aren't going to go away, and a very good steak is now half the price it was a week ago.

 

SD

[ValueArb]

14 minutes ago, SharperDingaan said:

Argentine 2035 Dollar bonds currently at 34.9c, and going down at least another 2%/month for some time. 

https://financialpost.com/pmn/business-pmn/argentina-bonds-rise-to-two-year-high-after-milei-debuts-shock-plan

 

If ever there was a business case for BTC this is it ...

8 months from now these now 11 year bonds could look even more interesting, should interest non-payment result in a restructuring and reclassification as zero coupons. An eventual 600bp favourable net decline in the YTM, realised in USD, could make you a very rich man. 

 

Everybody still has to eat, Argentina's agricultural exports aren't going to go away, and a very good steak is now half the price it was a week ago.

 

SD

 

Can you go into more detail into how this is a business case for BTC? I understand that if you are holding Argentine pesos you'd prefer to convert them to bitcoin, but not how bondholders or business owners can benefit. More specifically

 

1) If I own Argentine bonds, how can I use BTC to help me take advantage of that 600bp decline in YTM?

 

2)  if I'm an Argentinian rancher, outside of cash balances how could I use Bitcoin to protect my business from devaluation? Seems like a lot of my assets are going to be in land/feed/livestock/accounts receivable.

[SharperDingaan]

1 hour ago, ValueArb said:

1) If I own Argentine bonds, how can I use BTC to help me take advantage of that 600bp decline in YTM?

 

Wait for the bond to default on non payment of USD interest, a restructuring into a zero coupon USD denominated bond with all deferred interest paid on maturity, and the financial press to bash it as a example of the sorry state of Argentina's finances. Buy it a 50% YTM, while everyone sings 'Don't cry for me, Argentina'.

 

Then simply sit on them. A few years out there's a change in government, an IMF debt forgiveness/refinancing, the YTM drops to 44% or less (600bp +), and there's a refinancing at market; a Latin American version of the Greek Sovereign Debt Crisis resolution. The prospective gain is a simple duration calculation. 

 

SD

 

 

[SharperDingaan]

1 hour ago, ValueArb said:

2)  if I'm an Argentinian rancher, outside of cash balances how could I use Bitcoin to protect my business from devaluation? Seems like a lot of my assets are going to be in land/feed/livestock/accounts receivable.

 

Refinance Argentine assets with Argentine debt to minimise/eliminate FX exposure. Where you can; pay for BTC in Argentine Peso's, and direct ranch exports through an NA/European agent minority owned by you. Worst case you lose the Argentine ranch/mortgages, but most of your wealth is out. Many a Patron knows how to fly; the small planes/airstrips on these ranches are not just for getting around.

 

SD

Edited December 13, 2023 by SharperDingaan

[ValueArb]

1 hour ago, SharperDingaan said:

 

Refinance Argentine assets with Argentine debt to minimise/eliminate FX exposure. Where you can; pay for BTC in Argentine Peso's, and direct ranch exports through an NA/European agent minority owned by you. Worst case you lose the Argentine ranch/mortgages, but most of your wealth is out. Many a Patron knows how to fly; the small planes/airstrips on these ranches are not just for getting around.

 

SD

 

Couldn't I do same just with dollars instead of BTC? Or does Argentina have strict controls on moving assets into other currencies?

[SharperDingaan]

1 hour ago, ValueArb said:

Couldn't I do same just with dollars instead of BTC? Or does Argentina have strict controls on moving assets into other currencies?

 

Dollars will mostly replace the peso for everyday activity, larger dollar amounts will require bribes to both get around the capital controls and periodic shakedowns; however all of it is subject to the usual theft and security costs. BTC/Lightning gives you a capital control workaround, has similar anonymity to cash, and mitigates most of the security and cost issues.

 

One of the bigger niche markets is journalists; if they don't have to carry wads of USD around with them to pay the fixers they are less of a target, and K&R insurance is cheaper. There is a reason why the press uses free lance war correspondents in conflict zones.

 

SD 

 

 

[wachtwoord]

On 12/13/2023 at 9:33 PM, ValueArb said:

 

Couldn't I do same just with dollars instead of BTC? Or does Argentina have strict controls on moving assets into other currencies?

 

Well yes. That 54% "devaluation" the western media reports about is just the "official" exchange rate. The real exchange rate (black market, non-official, free market) is lower still and wasn't (and cant) be overnight devalued like that by a government.

 

The real situation is much more complicated btw with many different official exchange rates between Peso and USD for different purposes (implicit subsidization). All of that the new presidents is going to have to clean up. I wish him all the luck in the world but assign him a negligible chance of success. 

[Dave86ch]

On 8/9/2023 at 5:27 PM, jfan said:

I skipped to section 5 first. His thesis is a bit wordy and quite repetitive in sections but has interesting ideas.

 

These are a few concepts that I thought were useful.

 

1) Power projection theory

    - physical vs abstract power projection techniques

    - benefit to cost ratio as an indicator for outside attacks on owned resources

    - resources divided by the use of physical power trends toward decentralization

 

2) A Planetary computer coupled to proof-of-work protocol to convey a purely digital abstraction of real electrical power spent. This could be used as a non-kinetic technique to project "physical power" in cyberspace. Allowing individuals/communities/nation states to secure a section of the cyberspace/data resources as their own.

 

3) Gabriel's horn - finite volume with infinite surface area as applied to proof-of-work tokens such as bitcoin (fixed supply with infinite electrical power/user representation). 

 

 

 

 

What about the end of mining and its direct connection to energy and digital receipts?

The idea of Gabriel's Horn seems to revolve around the notion of a link between infinite energy and finite cyberspace real estate.

 

At some point, mining will stop, likely because the smallest unit, currently indivisible, is 1 satoshi (2140).

 

How will this theory evolve when this tie breaks?

Edited December 27, 2023 by Dave86ch

[TwoCitiesCapital]

11 hours ago, Dave86ch said:

 

What about the end of mining and its direct connection to energy and digital receipts?

The idea of Gabriel's Horn seems to revolve around the notion of a link between infinite energy and finite cyberspace real estate.

 

At some point, mining will stop, likely because the smallest unit, currently indivisible, is 1 satoshi (2140).

 

How will this theory evolve when this tie breaks?

 

Why do you believe mining stops when the subsidy/BTC issuance ends? There is still the fee component that has every potential to grow and take the subsidy's place

[rkbabang]

5 hours ago, TwoCitiesCapital said:

 

Why do you believe mining stops when the subsidy/BTC issuance ends? There is still the fee component that has every potential to grow and take the subsidy's place

Exactly, I believe this was Satashi’s plan and he wrote about it somewhere. The mining subsidy is just that. A subsidy to kickstart Bitcoin.  At some point long before the subsidy runs out the fees will be more than the subsidy itself. By the time the subsidy runs out completely some time next century Bitcoin will be so valuable that the fees will be more than sufficient a motivator to spend an enormous amount of energy mining Bitcoin. 

[bargainman]

What's the speed and cost of transactions on the major coins these days?  

[Dave86ch]

11 hours ago, TwoCitiesCapital said:

 

Why do you believe mining stops when the subsidy/BTC issuance ends? There is still the fee component that has every potential to grow and take the subsidy's place

 

I never fully grasped the concept of fees, which is due to my lack of understanding.

 

I understand the idea of converting energy into digital property, thereby transforming cyberspace, or at least a portion of it, into a thermodynamically sound environment.

 

However, I'm trying to comprehend how things will change when all the 'bricks' have been mined.

 

Perhaps that's exactly the point of Gabriel's Horn, a realization I've just had.

 

The bricks are limited, but the energy involved remains infinite.

Edited December 28, 2023 by Dave86ch

[Castanza]

10 hours ago, bargainman said:

What's the speed and cost of transactions on the major coins these days?  

Depends how you transact. If you’re doing it right in chain with BTC it’s expensive. If you’re doing it on Lightning network it’s negligible. 

[TwoCitiesCapital]

I listened to an interesting episode of "What Bitcoin Did" podcast recently where they interviewed a miner about this exactly

 

One of the interesting data points he'd dropped was that the "fee" component of each block has roughly averaged .335 BTC, once converted to BTC, through both bull/bear markets all the way back to genesis block. 

 

Because the .335 has largely been relatively constant, the % of revenue that is due to fees is growing because the .335 was true when the subsidy was 50 BTC per block and remains true now that it is 6.25 BTC per block. 

 

If this trend remains, you'd expect the fees to continue to grow into a more and more relevant source of revenue for miners.

 

And I don't know if the .335 will continue - I expect it might actually grow - as energy costs more, as difficulty adjustments go higher, as the industry consolidates a little, and as demand for scarce blockspace grows. 

[bargainman]

On 12/28/2023 at 5:59 AM, Castanza said:

Depends how you transact. If you’re doing it right in chain with BTC it’s expensive. If you’re doing it on Lightning network it’s negligible. 

How does a lightning network work?

[Castanza]

4 hours ago, bargainman said:

How does a lightning network work?

Basically smart contracts to enable off chain transactions between verified peers. It doesn’t have to verify every transaction on chain because it sort of hold open that verification. So it can handle a million times more a transaction volume vs the main BTC chain which verifies every transaction. 
 

layman’s description here. 

https://www.coinbase.com/learn/crypto-basics/what-is-lightning

[Dave86ch]

10 hours ago, bargainman said:

How does a lightning network work?

I personally run a Lightning node on an old ThinkPad. I can go to the McDonald's in my city and pay completely anonymously through my personal node using the Tor network.

[ValueArb]

On 12/30/2023 at 12:51 AM, Dave86ch said:

I personally run a Lightning node on an old ThinkPad. I can go to the McDonald's in my city and pay completely anonymously through my personal node using the Tor network.

 

Only assuming that most of the Tor nodes aren't government run. 

[ValueArb]

[rkbabang]

21 minutes ago, ValueArb said:

 

You have to love it. I just made another unplanned buy.  I couldn't pass up a buying opportunity given to me by government incompetence.

 

[rkbabang]

[brobro777]

9 minutes ago, rkbabang said:

 

You have to love it. I just made another unplanned buy.  I couldn't pass up a buying opportunity given to me by government incompetence.

 

 

Yea I bought some too

 

[Sweet]

51 minutes ago, rkbabang said:

[ValueArb]

3 hours ago, rkbabang said:

 

You have to love it. I just made another unplanned buy.  I couldn't pass up a buying opportunity given to me by government incompetence.

 

 

Why would BTC decline based on that news? I would think it would have gone up if the listing approval was true.