Sign up you mean?starkmonster wrote: ↑Tue Apr 14, 2020 9:57 pmThe beauty of distributed ledger technology is that if you wanted to check that claim for yourself, you can install a Bitcoin node (the ledger) on your computer and see every transaction that ever happened.spitthedog wrote: ↑Tue Apr 14, 2020 9:31 pmThe lack of volume and high spreads in Bitcoin, suggests that there's not much in the way of smart money involved.
CNBC did an article, where it was claimed that most of the volume in Bitcoin is actually fake. "Wash trading", just one trade being made over and over again.
Discussion: The asymetric risk/reward of Bitcoin
- spitthedog
- Is the World Outside still there ?
- Reactions: 123
- Posts: 5716
- Joined: Mon Feb 17, 2014 10:19 pm
"I don't care what the people are thinking, i ain't drunk i'm just drinking"
-
- MerkinMaker
- Reactions: 62
- Posts: 3232
- Joined: Wed Mar 21, 2012 11:04 am
Sign up to who? Sign up where?
It's decentralised, you download a piece of open source software that implements the bitcoin protocol (aka a full node), you sync the Blockchain, then you have access to the entire ledger, every transaction since day zero.
It's decentralised, you download a piece of open source software that implements the bitcoin protocol (aka a full node), you sync the Blockchain, then you have access to the entire ledger, every transaction since day zero.
-
- OneTrickPony
- Reactions: 64
- Posts: 1640
- Joined: Tue Aug 20, 2019 12:48 pm
It strikes me as quite amazing how people still don't understand the basics of Bitcoin.starkmonster wrote: ↑Tue Apr 14, 2020 11:08 pmSign up to who? Sign up where?
It's decentralised, you download a piece of open source software that implements the bitcoin protocol (aka a full node), you sync the Blockchain, then you have access to the entire ledger, every transaction since day zero.
What do think of BTSE.com and the Liquid Network?
Up the workers!
-
- MerkinMaker
- Reactions: 62
- Posts: 3232
- Joined: Wed Mar 21, 2012 11:04 am
That's one of the problems currently, just like the early days of the internet it's very inaccessible to new comers. I think that's one of the big barriers that needs to be overcome at the application level rather than the protocol layer.kungfufighter wrote: ↑Wed Apr 15, 2020 12:15 amIt strikes me as quite amazing how people still don't understand the basics of Bitcoin.
What do think of BTSE.com and the Liquid Network?
Not familiar with BTSE, so can't comment. As for the Lightening network, I think it's cool tech and I think layer 2 solutions are the way forward, but I don't think it will be the gateway to mass adoption for Bitcoin that the Bitcoin maximalists want it to be.
Everyone in this space from the finance side "knows" this will play out like Highlander ("There can be only one"), but everyone from the technology side (I'm in that camp) "knows" this will play out like the open source movement and there will be stacks of technologies and the blocks within those stacks will get swapped out and replaced as trends and tastes evolve ("survival of the fittest").
Lightening network is tightly coupled to Bitcoin, where as I believe the winning layer two tech will implement an adaptor pattern and work with multiple layer one protocols. We know this from experience, just think web stacks, web browser, mobile platforms, it always goes that way.
-
- MerkinMaker
- Reactions: 62
- Posts: 3232
- Joined: Wed Mar 21, 2012 11:04 am
That said, this doesn't mean I'm not bullish on Bitcoin. I think in the future, there will be literally endless numbers (hundreds of thousands) of very focused and very niche blockchain's in every business vertical you can think of.
That kind of complex echo system is going to need a stable and trusted reserve currency akin to gold (think gold standard) and be used as collateral for new networks, network integrations and new actors in those networks. Unless something comes in from stage right and is 10 times better than Bitcoin at that job, it will be Bitcoin.
That kind of complex echo system is going to need a stable and trusted reserve currency akin to gold (think gold standard) and be used as collateral for new networks, network integrations and new actors in those networks. Unless something comes in from stage right and is 10 times better than Bitcoin at that job, it will be Bitcoin.
-
- MerkinMaker
- Reactions: 62
- Posts: 3232
- Joined: Wed Mar 21, 2012 11:04 am
Just reread that and realised that I missed an extremely important point in the scenarios:starkmonster wrote: ↑Tue Apr 14, 2020 8:18 pmNow let me give you two different scenario's and you tell me, from a market forces perspective which one will win out?
So both scenarios start in the same way. Seller enters sale amount on terminal, buyer agrees, taps phone on terminal, phone asks permission to authorise the debit, buyer gives permission. The difference is in what happens next:
Scenario 1: terminal connects to Visa via the internet, Visa connects to buyers bank to request funds, buyers bank releases funds, seller get payment accepted notification, Visa transfers funds to buyers merchant account, merchant account holds funds for specific amount of time, then releases funds to sellers bank account. Visa takes 3% fee, merchant bank charges fixed sum, say 10c.
Scenario 2: funds transfer directly from the buyers phone to the sellers digital wallet on the terminal. No card processor (Visa/Mastercard), no internet, no seller bank, no merchant bank, no buyer bank. NO FEES, NO RENT SEEKERS, NO MIDDLEMEN.
Scenario 1: non-anonymised details of the transaction are available to the government and the financial institutions involved, anonymised details of the transaction are available to very large corporations with the resources required to purchase the data.
Scenario 2: the anonymised data is available to EVERYONE.
That’s why there’s so many transactions. People use tumblers to automate splitting their money over a period of time into bogus transactions to bogus wallets to create plausible deniability and make their money harder to track.
I’d argue that a minority of Bitcoin transactions are done by people. It’s primarily a robot currency traded by robots.
I’d argue that a minority of Bitcoin transactions are done by people. It’s primarily a robot currency traded by robots.
-
- MerkinMaker
- Reactions: 62
- Posts: 3232
- Joined: Wed Mar 21, 2012 11:04 am
There's no doubt about that.
I think the benefit above is more about the level playing field it provides, most current payment data (Visa, Mastercard, store cards, loyalty card) is acquired to analyse consumer behaviours at the macro level to identify trends and patterns that could give a competitive advantage. That data is only available to big hitters with deep pockets.
With blockchain everyone has access to the same base data. Of course the reality is that most small businesses would be incapable of making sense of that volume of data, but in the future when blockchain tech is used for POS then there will players at the application layer that will process that data into a useable form, and as the data is open that service will likely be commoditised and therefore competitively priced.
- spitthedog
- Is the World Outside still there ?
- Reactions: 123
- Posts: 5716
- Joined: Mon Feb 17, 2014 10:19 pm
BTSE & Licensingkungfufighter wrote: ↑Wed Apr 15, 2020 12:15 amIt strikes me as quite amazing how people still don't understand the basics of Bitcoin.starkmonster wrote: ↑Tue Apr 14, 2020 11:08 pmSign up to who? Sign up where?
It's decentralised, you download a piece of open source software that implements the bitcoin protocol (aka a full node), you sync the Blockchain, then you have access to the entire ledger, every transaction since day zero.
What do think of BTSE.com and the Liquid Network?
https://crypto-markets.news/news/ded-co ... ensing/375
BTSE now seem to have left their bases of Dubai and Malta due to "regulatory uncertainty", and are now trying to set up in the Virgin islands.
Quote ;
"But despite the Maltese government’s beckoning stance as a crypto utopia, there have been signs that crypto businesses are facing a different reality down on the ground"
In March last year “dozens” of crypto firms told the Times of Malta that they had been unable to open bank accounts on the Mediterranean island after having shifted operations there, with banks explaining that cryptocurrency was outside their “risk appetite.”
"Malta Financial Services Authority (MFSA) said it would start actively monitoring crypto exchanges for anti-money laundering (AML), and days after Bittrex suspended operations for customers based in 31 countries, many of which are deemed high-risk by the intergovernmental Financial Action Task Force (FATF)"
https://www.google.com/amp/s/cryptoslat ... topia/amp/
Carry on geniuses.
"I don't care what the people are thinking, i ain't drunk i'm just drinking"
-
- MerkinMaker
- Reactions: 62
- Posts: 3232
- Joined: Wed Mar 21, 2012 11:04 am
Is there a point or an argument here somewhere?spitthedog wrote: ↑Wed Apr 15, 2020 4:19 pmBTSE & Licensingkungfufighter wrote: ↑Wed Apr 15, 2020 12:15 amIt strikes me as quite amazing how people still don't understand the basics of Bitcoin.starkmonster wrote: ↑Tue Apr 14, 2020 11:08 pmSign up to who? Sign up where?
It's decentralised, you download a piece of open source software that implements the bitcoin protocol (aka a full node), you sync the Blockchain, then you have access to the entire ledger, every transaction since day zero.
What do think of BTSE.com and the Liquid Network?
https://crypto-markets.news/news/ded-co ... ensing/375
BTSE now seem to have left their bases of Dubai and Malta due to "regulatory uncertainty", and are now trying to set up in the Virgin islands.
Quote ;
"But despite the Maltese government’s beckoning stance as a crypto utopia, there have been signs that crypto businesses are facing a different reality down on the ground"
In March last year “dozens” of crypto firms told the Times of Malta that they had been unable to open bank accounts on the Mediterranean island after having shifted operations there, with banks explaining that cryptocurrency was outside their “risk appetite.”
"Malta Financial Services Authority (MFSA) said it would start actively monitoring crypto exchanges for anti-money laundering (AML), and days after Bittrex suspended operations for customers based in 31 countries, many of which are deemed high-risk by the intergovernmental Financial Action Task Force (FATF)"
https://www.google.com/amp/s/cryptoslat ... topia/amp/
Carry on geniuses.
-
- I live above an internet cafe
- Reactions: 31
- Posts: 192
- Joined: Mon Jun 24, 2019 12:22 am
Several of you seem to be talking about if this will replace credit cards. That statement by itself kind of indicates your out of the loop when it comes to cashless transactions on a more general scale.
Credit cards have already been made a secondary choice in day to day transfers in many countries. Since I haven't been there for quite a while, I don't claim to be up to date on how people handle everyday transactions in the US, but from contemporary movies and TV series, I do get the impression that credit cards and cash are still considered default payment methods, the odd nerdy types sweep their iPhones, but that seems to be about it.
In a lot of countries, they take a backseat role, like something you would bring on a trip to other countries if you are not hooked up to those regions preferred cashless systems. They typically work in ATMs everywhere and so on.
I can only speak of personal experience when it comes to DE, NL and SE, but it seems a lot of other places have similar systems in place, Cant remember which countries exactly, but I believe that in several African countries there are phone-based apps for this that have become a significant part of the local economy.
For example, in NL, generally VISA, Mastercard, etc are not accepted at all in shops, sure you can use them in big hotels and in on-line shopping, but not if you walk into a shop, restaurant or bar. You cant even buy a train ticket with them since the dispensers don't accept Visa etc, you would first have to go to an ATM to withdraw cash and then find a ticketing office. Good luck if it is not Schiphol or one of the major train stations... You have to have one of the local bank cards, then you can swipe to pay almost anything, even if you buy ice cream from a guy on the street. You can also send requests and payments using the Tikkie app.
In Sweden, Swish is the most popular, it's an app which you connect to your bank account and phone nr. The seller/bus driver/ clerk has the receiving phone number on display by the registry for payments, if you split a bill or otherwise want to transfer to another individual, you just send the desired amount or the request to their phone nr, they get instant payment verification, or in case of a request, they can just choose to accept/decline, and the other party gets an instant notification that the transfer has been done. Most buses and regional trains don't even accept cash as a form of payment, in order to minimize risk of robberies.
Currently, it varies from one country or region to the next, so it is a bit of a mess when traveling. It seems paypal.me is pretty popular for easy cashless transfers etc when you don't share a localized app, but mostly person to person, I haven't really seen any commercial entities accepting paypal.me as a cashless option.
So yes right now it is a bit of a mess with a lot of different local and incompatible cashless systems, no doubt it will eventually standardize down to a couple of globally accepted methods, just like Visa/Mastercard/the rest used to be the defaults.
That will probably involve being based on blockchain ledgers, due to their inherent protection from fraudulent changes of records, therefore, ease of trust and less need for a major player to promise financially covering fraudulent transactions. But currently, blockchain processing seems to be pretty resource-demanding, so it seems all current attempts struggle with computing resources were they to scale up. This is a field that is changing quickly I haven't studied it that close, so perhaps there are already solutions to lower transaction processing costs, in which case I guess the next thing is waiting for the killer app. Not necessarily the best solution, but the one that gets global uptake. My guess would be that if this app is using blockchain for logging transactions, and use existing currencies for the transfers, it will have an easier path to acceptance, but only the future will be able to tell us where this goes.
Credit cards have already been made a secondary choice in day to day transfers in many countries. Since I haven't been there for quite a while, I don't claim to be up to date on how people handle everyday transactions in the US, but from contemporary movies and TV series, I do get the impression that credit cards and cash are still considered default payment methods, the odd nerdy types sweep their iPhones, but that seems to be about it.
In a lot of countries, they take a backseat role, like something you would bring on a trip to other countries if you are not hooked up to those regions preferred cashless systems. They typically work in ATMs everywhere and so on.
I can only speak of personal experience when it comes to DE, NL and SE, but it seems a lot of other places have similar systems in place, Cant remember which countries exactly, but I believe that in several African countries there are phone-based apps for this that have become a significant part of the local economy.
For example, in NL, generally VISA, Mastercard, etc are not accepted at all in shops, sure you can use them in big hotels and in on-line shopping, but not if you walk into a shop, restaurant or bar. You cant even buy a train ticket with them since the dispensers don't accept Visa etc, you would first have to go to an ATM to withdraw cash and then find a ticketing office. Good luck if it is not Schiphol or one of the major train stations... You have to have one of the local bank cards, then you can swipe to pay almost anything, even if you buy ice cream from a guy on the street. You can also send requests and payments using the Tikkie app.
In Sweden, Swish is the most popular, it's an app which you connect to your bank account and phone nr. The seller/bus driver/ clerk has the receiving phone number on display by the registry for payments, if you split a bill or otherwise want to transfer to another individual, you just send the desired amount or the request to their phone nr, they get instant payment verification, or in case of a request, they can just choose to accept/decline, and the other party gets an instant notification that the transfer has been done. Most buses and regional trains don't even accept cash as a form of payment, in order to minimize risk of robberies.
Currently, it varies from one country or region to the next, so it is a bit of a mess when traveling. It seems paypal.me is pretty popular for easy cashless transfers etc when you don't share a localized app, but mostly person to person, I haven't really seen any commercial entities accepting paypal.me as a cashless option.
So yes right now it is a bit of a mess with a lot of different local and incompatible cashless systems, no doubt it will eventually standardize down to a couple of globally accepted methods, just like Visa/Mastercard/the rest used to be the defaults.
That will probably involve being based on blockchain ledgers, due to their inherent protection from fraudulent changes of records, therefore, ease of trust and less need for a major player to promise financially covering fraudulent transactions. But currently, blockchain processing seems to be pretty resource-demanding, so it seems all current attempts struggle with computing resources were they to scale up. This is a field that is changing quickly I haven't studied it that close, so perhaps there are already solutions to lower transaction processing costs, in which case I guess the next thing is waiting for the killer app. Not necessarily the best solution, but the one that gets global uptake. My guess would be that if this app is using blockchain for logging transactions, and use existing currencies for the transfers, it will have an easier path to acceptance, but only the future will be able to tell us where this goes.
- DevanTracy
- 5 minutes to kill
- Reactions: 5
- Posts: 48
- Joined: Sat Feb 22, 2020 4:28 pm
Source: https://blog.bitmex.com/choose-your-fiction/Shazaam! You snap your fingers and COVID has disappeared, you can exit lockdown and continue on with your life. How do you feel? Are you as optimistic as you were in January? Do you trust your government to put your health and safety first? Do you trust your government to tell you the truth in a timely manner, or will it juke the stats when it suits them? Do you trust the media to speak truth to power? Will you wash your hands once an hour furiously, or blithely touch your eyes, nose, and mouth with zero fucks given?
If, once we’re out of this, you can honestly say that everything has gone back to how it was in early January of this year, then happy days. It may well be that we are in for a V-shaped economic recovery. But if, as I believe, your world view has fundamentally changed, the fictions that underpinned your life have shifted dramatically. As we consider the most important price, the price of money and its nature, predicting the collective fiction we believe in becomes of utmost importance.
Money, true money, which is divorced from industrial utility, is nothing more than a fiction which allows us to exchange labour and capital efficiently so that real goods and services can be produced. Without this fiction … the conveniences of modern society would cease to exist. There are three prevalent monetary fictions whose interrelationships post-COVID will completely change.
Government Fiat, aka The USD = Fiction + Violence
We know the USD has value because contracts and taxes owed will be collected at the barrel of a gun if necessary. The dollar derives value from a strong belief the United States can raise taxes to pay back its debts.
Gold = Fiction + Physical Scarcity
Gold has no widespread industrial use case. It is just shiny, physically scarce, malleable, and has captivated human attention for millennia. Therefore it has value.
Bitcoin = Fiction + Cryptographic Scarcity
Bitcoin has value because a piece of open source code is collectively run by many guarantees that only 21 million units will ever exist. Therefore it has value.
After the senseless destruction of human lives in WWII, the victors sat down in Bretton Woods and created the modern financial system underpinned by the USD. We still are under the yoke of the USD today.
The USD used to be worth its weight in gold, $35/oz to be exact until 1971. Tricky Dick wanted to fight a war while giving out goodies at home. “Free Shit, Vote for Me!” That’s the best way to win any election. However, he couldn’t stomach a run on the nation’s gold so he severed the relationship. Since then, the value of USD has depended entirely on trust.
Fast forward to January 2020. The US has the most liquid financial market and is completely open to all capital. All major commodities and trade is priced in dollars. Therefore if you are a country or company doing international business you must have access to those dollars.
That’s great for everyone when the beat is going strong. The Federal Reserve has a global obligation to keep dollars in good, cheap supply. That is why they have FX swap lines with the major central banks. The world is short on the dollar and only demure academic-looking Federal Reserve governors can provide them.
Countries and companies can easily earn dollars by selling knick knacks to rich Americans. 70% of American GDP is driven by consumption. It makes the world go round. Hundreds of millions of peasants have been lifted out of abject poverty so that they can produce cheap iPhones, AirJordans, or F150s, all so the parent “American” company can enjoy record profit margins.
Europeans are not far behind in their consumption. Europe and America combined represents the global demand for goods. Absent them, who the fuck is going to buy this dog shit at insane markups?
Deng Xiaoping on his Southern Tour unleashed the Chinese upon the world after a hundred year hiatus. They began powering the luxury goods, travel, and education sectors after gaining serious wealth from the offshoring of manufacturing from West to East.
Sorry for waxing philosophical, I’m no modern day Thoreau and I certainly don’t live on a pond. Keeping it simple: China sells shit in dollars that Americans and Europeans buy.
Uh oh, COVID… China shut down production to fight the virus, meaning no dollar income. Then Americans and Europeans caught it and shut down their economies, meaning no more demand.
Once China “opened” again for business and started making stuff, there were no orders from the West as they were all watching PornHub at home and ordering GrubHub. If they aren’t vegging-out, they’re worried about when their next paycheck will arrive to pay for fuck-off expensive medical care. The moral of this sorry tale is that China ain’t earning dollars.
And they are not alone. No major manufacturing or services hub is earning any dollars. But they need them to pay for raw commodities and to pay back their dollar liabilities. It would be all gravy if their central bank could print dollars, but Mon Dieu! They cannot lah.
A mini EM currency meltdown occurred at the tail end of March. The Fed’s response was to offer swap lines to additional central banks, but not China. That has eased the pressure a bit. But take a look at the CDX EM HY CDS spread. It looks like a West Hollywood blowout hairdo.
The conventional wisdom is that the Fed can print money until the dollar gets cheap enough. But US banks tend to hoard USD and refuse to lend. There are a variety of regulatory reasons why they cannot, and why take the risk during a global depression. Better to be safe and make sure your balance sheet is rock solid.
Simple simple. The Fed can print as much USD as it likes, but the companies and countries that need it the most will not get it. The most important one is China. China’s currency is not convertible and in the eyes of Western Europe and America, it was responsible for this virus. Whether that is true or not is not the point. Do you think for a second any US politician would stand up and ask the Fed to print money so the Chinese economy can survive the COVID pandemic?
The virus supposedly originated in a Wuhan live animal market. The West believes Beijing downplayed or lied about its severity. Then, all of a sudden, it shut the country because it was a serious problem. Too bad a few million infected Chinese travelled the world and started the party. Truth is not the point here; the narrative rules all. This is an election year, and China bashing is in full swing. Cue The Seinfield Soup Nazi, “No dollars for you”.
The USD is STRONK and will destroy the global economy.
The only country which can credibly enact the appropriate amount of fiscal stimulus to weather the storm is the US. No other country has the option to depreciate their currency to the degree necessary to generate economic activity at a level which honours the credit in the system and promises to their plebes. Remember that all raw commodities are priced in dollars, if you print too much money to monetise your government debt, your currency craters and inflation runs rampant. At that point, the Jacobins enter the street and you better not be munching on a cake.
That summarises how I see events playing out over the next decade. I have no idea on timing, but the strong USD will break the back of the global economy and force a reset. The question is what the new system will look like.
Gaze into my portfolio to see my soul:
Long USDCNH 2y 8.00 calls
Long USDKRW 1y 1600 calls
Long CDX EM CDSI Sprd (I don’t have this on yet, but I’m waiting for my levels on the rebound in markets)
Central banks will devalue against a hard digital asset. What that digital asset is, I have no clue. But, it may include a linkage to bitcoin.
The USD fiction is over. It’s time for a new mental crutch.
Do you believe in Physical or Cryptographic scarcity?
After a societal fetish for all things fiat, the pendulum will swing wildly towards what is hard and scarce. Traditionally investors expect a weak gold or bitcoin price when the dollar is strong.
But dollars cannot be had, and trust in government Frankenstein currencies will evaporate. Gold is the historical best choice. It also is widely owned by central banks. The best way to rebase a currency is an extremely high gold price. This happened during the 1970’s oil crisis, and the Fed raised interest rates to a level where it became silly to own gold when you could earn 20% investing in US Government debt.
This time around, the Fed cannot raise rates. That would destroy the finances of the USG who must hand goodies to all. Remember this is now QE 4 Da People / QE 4eva. The US electorate will not tolerate another exclusive financial services bailout. They will get paid to sit at home, watch NetFlix, aka the Tiger King, and refrain from using their assault rifles to initiate a modern day Whiskey Rebellion.
Therefore, there is not an alternative asset which entices people away from gold as the legacy of Bretton Woods system breaks down. The stock market of the Land of the Free will become a political tool. The US Treasury, powered by the Fed, will buy all government and corporate debt. They will buy equities. They will buy consumer loans. You would think that stocks are the place to be if the government is buying the Index. But let’s remember the Nikkei in 1989. The BOJ now owns upwards of 30% of the Japanese equity market, and the Nikkei is still 50% below its ATH. And I’m only speaking in nominal terms. Try deflating that by the BOJ balance sheet … REKT.
The once mighty US stock market will be a corral of zombie big corporates who had the connections to suck from the teat of the US tax payer. That wouldn’t be so bad if inflation can be kept at bay. However, as the world recovers we have an infinite amount of fiat currency chasing a finite supply of real goods. SMEs represent 60 – 80% of most countries’ economies. These companies, due to their small size and limited connections, pay a high price for credit if it can be obtained. Even with all the well meaning government SME lending programs, a large portion of SMEs will no longer be in existence by the time they can actually access the funds. Complex systems do not recover in a linear fashion.
Therefore, an infinite amount of pledged fiscal and monetary assistance will chase non-existent supply. That leads to inflation. Global stock markets will also become political tools, not efficient allocators of capital. The wrong signals will be sent, the wrong goods will be produced. Can the hipsters handle a $40 smashed avo toast?
The best inflation hedge of human civilisation to date, gold, will be repriced higher. It’s the only thing you can own if you believe in Fiction + Physical scarcity. How high can it go? Take the ratio of the total amount of credit to base money. That multiplier serves as guidance to a possible future for gold.
Another possible outcome is the creation of a digital financial non-USD dominated system.
If they dare to come out in the open field and defend the [dollar] standard as a good thing, we shall fight them to the uttermost, having behind us the producing masses of the nation and the world. Having behind us the commercial interests and the laboring interests and all the toiling masses, we shall answer their demands for a [dollar] standard by saying to them, you shall not press down upon the brow of labor this crown of thorns. You shall not crucify mankind upon a cross of [the USD].
Satoshi Nakamoto’s Democratic Convention Speech 2020
Will a cabal of central banks rebase their currency using a digital hard crypto? Maybe. Could there be a basket of digital fiat currencies where the central banks hold a sufficient amount of gold? Maybe.
All I know is the setup for bitcoin, the hardest form of digital money, could not be better. All manners of trust have evaporated. In order to solve for demand and supply destruction, governments will embark on the greatest fiscal stimulus binge the world has ever seen. It will not be paid for by tax receipts, it can’t be because 30% of the population is out of a job, it will be paid for by the printing press. The kicker is that, in order to hand money directly to the people, governments will have to digitise their currencies. That will educate the populace on digital money. Once they understand fiat digital money, they will seek out the hard version to avert the ravages of inflation. If you believed that Libra could educate the masses on the joys of digital currencies, just imagine when everyone on Basic spends their food stamps via a mobile app.
Remember, the supply of goods will be insufficient because of the SME destruction during the global shutdown. Inflation in what you need, deflation in what you want. Digital finance meets wealth preservation equals Bitcoin. ‘Nuff said.
That was a lot of words to get to that conclusion. Now let’s trade it.
Correlation One
In a global margin call, the market will find leverage and punish it.
In a global margin call, all liquid assets will be sold to finance holdings of illiquid ones.
In a global margin call, correlation = 1.
We are in the midst of a global margin call on all risky assets. The reason why every asset class gets the stick is that weak hands used leverage to juice their short volatility strategies.
The BitMEX open interest halved. Leveraged traders got carried out. Platforms who lent dollars to miners against bitcoin (errbody needs dollars), force sold as the market puked.
Leverage was punished, just like in every other asset class. However on a relative basis, Bitcoin in Q1 still outperformed the S&P 500. Its correlation with SPX reached a local high.
Leverage was extinguished on the downside. The BitMEX XBTUSD swap open interest is rebuilding slowly and, as traders get their sea legs and inflation expectations adjust, the search for inflation hedges will begin in earnest.
This is Act One of a global rebalancing. Every pocket of pricing distortion brought about by leverage will be exploited. Buy the dip at your peril.
Bitcoin will be owned unlevered. Could the price retest $3,000? Absolutely. As the SPX rolls over and tests 2,000 expect all asset classes to puke again. As violent as the Q1 collapse in asset values was, we have almost 100 years of imbalances to unwind the ancien régime. My end of 2020 price target remains $20,000.
Everyone knows the shift is upon us, that is why central bankers and politicians will throw all of their tools at this problem. And I will reiterate, that is inflationary because more fiat money will chase a flat to declining supply of real goods and labour. There are only two things to own during the transition to whatever the new system is, and that is gold and bitcoin.
If you think I’m full of shit, or a stark-raving Cassandra, remember what you believed in pre and post-COVID. Can your mental model revert back to January 2020? I will take my inflation adjusted pocket rockets (gold and bitcoin), and call your Bretton Woods seven two off suit. All in, mother fuckers.
- DevanTracy
- 5 minutes to kill
- Reactions: 5
- Posts: 48
- Joined: Sat Feb 22, 2020 4:28 pm
Any of you fellas believe in the narrative that Bitcoin will become the base currency/global settlement layer in the coming decades ahead?
-
- MerkinMaker
- Reactions: 62
- Posts: 3232
- Joined: Wed Mar 21, 2012 11:04 am
[TLTR I know, I know] But it will only take a few minutes of your life, and by the end of it you will understand why the tech propeller heads that have really studied this stuff believe its impact on our lives will be even more far reaching than that of the introduction of the internet.
Still here? Well done, let's go!
I think that to understand this tech everyone needs to stop thinking about the current financial system and trying to map projects in the blockchain space to existing parts of the financial ecosystem.
This technology will supersede that system rather than compete against it, much like the internet did to the media industry. It's like going back to 1995 and asking, who will be the BBC or MTV of the internet? It's not going to work like that, what will emerge will be something that we will all have trouble imagining right now (if we could imagine it, then we will likely be the new Mark Zuckerburg or Larry Page ten years from now).
To understand this future and the coming wave of innovation you have to understand three key concepts, and how they will change in a post blockchain world.
You only need to understand this on a macro level and don't need to understand how this technology works under the hood, in the same way you don't need to understand HTTP/HTML/CSS/JavaScript to use the web, or an internal combustion engine to drive a car.
For the time being, just humour me and pretend that you believe me when I tell you it does work. Okay so here we go:
Pre-Blockchain world
1. Existing electronic payment systems don't scale down (anything below around $1 isn't financially viable at scale).
2. All electronic payments between two non-trusting parties require an intermediate legal entity (middleman) trusted by both parties.
3. On all but the most high value trades (houses, cars, leases etc) the contract between buyer and seller is implicit (verbal/expected) rather than explicit (binding contract).
Post-Blockchain world
1. Electronic payments can be made for any value, however small, even a tiny fraction of a cent e.g. ($0.000001)
2. All electronic payments are direct between two non-trusting parties without the need for a trusted intermediary (middleman)
3. All electronic transactions will be explicit and contain a contract (contracts could be simple A->B or immensely complicated)
For the time being, don't concern yourself with the details of how this technology is made possible. All you need to know is that it is possible and it is secure.
Side note: If you are interested in how this is possible, go on YouTube and look for "the double spend problem" and "byzantine general problem", these are mathematical problems that for a very long time remained unsolved. Bitcoin (borrowing established concepts from cryptography and Game Theory) was the first ever proposed solution to that mathematical problem that was proven to work at scale and with significant incentive for bad actors to locate vulnerabilities.
Okay, so we now have a proposal about some new properties of electronic payments that will emerge in a "post-blockchain" world. So what? What impact will those properties have?
In know, I know, this is a long post, hang in there, it will be worth it!
The main impacts it will have are:
1. Most businesses that take the role of trusted intermediaries will become surplus to requirements
2. Most businesses that hold monopolies will become commoditised
3. Consumers will become accustomed to the idea of "micro payment streams" rather than paying fixed amounts
Okay those are quite abstract concepts, how about a concrete example???
As I'm posting this on the internet, I can assume you are all internet users so let's use this as an example and look at how the delivery of internet data could be revolutionised.
Most of you reading this post will be accessing the internet in one of the following ways:
1. Your fixed line home/office connection
2. Via a mobile data plan
3. Via the Wi-Fi network of a third party to which you have access
Now imagine this scenario in a post-blockchain world:
Your internet enabled device has a settings panel where you can choose what type of internet you want, this could be infinitely configurable, but lets keep it simple, it has these options:
1. Get me the best connection I can get that costs less than $0.02 per minute
2. Get me the fastest connection available with the price capped at $0.10 per MB
3. Get me the cheapest connection available
4. Get me a connection that is above "security level 3"
Then behind the scenes, your internet enabled device will scan all available networks, find the best deal that matches your requirements and connect to that.
Before the connection, both parties, your device and the network will sign an electronic contract that states the terms of the connection (price, speed, latency, security etc).
Your device has an electronic wallet, and while you are using the chosen network it will be making a continuous series of micro payments to the network provider (could be by the minute, MB or second).
If the network doesn't deliver the connection it promised at any point (speed/price/latency), it has broken the contract and the micro-payment for those packets of data won't be released.
If a better deal becomes available from another network your device will silently switch to that network, without you knowing anything, you won't know which network is providing your internet, neither will you care.
All you need to know is that your device is always getting you the best deal based on your requirements at all times.
But it doesn't stop there
With this system, if you wish you can also become a provider as well as a consumer in the same way that in some places homes with solar power can sell surplus supply back to the grid.
You could have extra settings on your internet enabled device (or home/office computer network) that allow you to offer surplus bandwidth for sale on the network, and for credit to flow back into your wallet. E.g.
1. Place bandwidth on the network market place between 7pm and 7am for $0.10 per MB (outside of office hours)
2. Place my phone on the network anytime it's not active
3. Place my home connection on the network anytime it's consuming less than 3Mbps
You see these payment streams in many cases will flow both ways, it will create two way economies with very little waste. ISP's and internet providers become nothing more than commodities bidding for work in an open market place, the brand will no longer mean anything.
That's an interesting example, but it's only ISP's
I was in a brainstorming session at a blockchain conference in London last year, and the challenge was to go through the list of the 10 largest industries in the UK and propose how there would be the potential for massive disruption provided the following were true:
1. Fast, frequent and free micro-payments were possible
2. Payments were direct and didn't require a trusted intermediary
3. All payments contained a contract that was trusted by both parties
Long story short, there wasn't a single industry where this technology wouldn't be hugely disruptive.
Yes but couldn't we do that now without blockchain?
Yes, technically we could. Economically we couldn't, as soon as the payment size increases or trusted intermediaries need to be involved or off network agreements (terms of service, contracts etc) need to be present the level of friction and increase in transaction cost makes unfeasible.
In more complex blockchain "smart contracts" third parties can be used, especially where it needs to be independently verified that a specific event has indeed taken place or specific set of conditions are arisen, we call these "oracles" and in reality they will most often be external API's that are effectively commoditised and get a small commission as part of the contract.
They could answer questions like:
1. Is today's date 16/4/2020
2. Is the current GBP->USD exchange rate above $1.2533
3. Is this vehicle travelling less than 60 mph
In the future the internet as we know it today, won't be known as the internet, it will be known as the internet of information and what we have looked at above will be known as the internet of value. There will also be other internets, but let's save that for another day....
Still here? Well done, let's go!
I think that to understand this tech everyone needs to stop thinking about the current financial system and trying to map projects in the blockchain space to existing parts of the financial ecosystem.
This technology will supersede that system rather than compete against it, much like the internet did to the media industry. It's like going back to 1995 and asking, who will be the BBC or MTV of the internet? It's not going to work like that, what will emerge will be something that we will all have trouble imagining right now (if we could imagine it, then we will likely be the new Mark Zuckerburg or Larry Page ten years from now).
To understand this future and the coming wave of innovation you have to understand three key concepts, and how they will change in a post blockchain world.
You only need to understand this on a macro level and don't need to understand how this technology works under the hood, in the same way you don't need to understand HTTP/HTML/CSS/JavaScript to use the web, or an internal combustion engine to drive a car.
For the time being, just humour me and pretend that you believe me when I tell you it does work. Okay so here we go:
Pre-Blockchain world
1. Existing electronic payment systems don't scale down (anything below around $1 isn't financially viable at scale).
2. All electronic payments between two non-trusting parties require an intermediate legal entity (middleman) trusted by both parties.
3. On all but the most high value trades (houses, cars, leases etc) the contract between buyer and seller is implicit (verbal/expected) rather than explicit (binding contract).
Post-Blockchain world
1. Electronic payments can be made for any value, however small, even a tiny fraction of a cent e.g. ($0.000001)
2. All electronic payments are direct between two non-trusting parties without the need for a trusted intermediary (middleman)
3. All electronic transactions will be explicit and contain a contract (contracts could be simple A->B or immensely complicated)
For the time being, don't concern yourself with the details of how this technology is made possible. All you need to know is that it is possible and it is secure.
Side note: If you are interested in how this is possible, go on YouTube and look for "the double spend problem" and "byzantine general problem", these are mathematical problems that for a very long time remained unsolved. Bitcoin (borrowing established concepts from cryptography and Game Theory) was the first ever proposed solution to that mathematical problem that was proven to work at scale and with significant incentive for bad actors to locate vulnerabilities.
Okay, so we now have a proposal about some new properties of electronic payments that will emerge in a "post-blockchain" world. So what? What impact will those properties have?
In know, I know, this is a long post, hang in there, it will be worth it!
The main impacts it will have are:
1. Most businesses that take the role of trusted intermediaries will become surplus to requirements
2. Most businesses that hold monopolies will become commoditised
3. Consumers will become accustomed to the idea of "micro payment streams" rather than paying fixed amounts
Okay those are quite abstract concepts, how about a concrete example???
As I'm posting this on the internet, I can assume you are all internet users so let's use this as an example and look at how the delivery of internet data could be revolutionised.
Most of you reading this post will be accessing the internet in one of the following ways:
1. Your fixed line home/office connection
2. Via a mobile data plan
3. Via the Wi-Fi network of a third party to which you have access
Now imagine this scenario in a post-blockchain world:
Your internet enabled device has a settings panel where you can choose what type of internet you want, this could be infinitely configurable, but lets keep it simple, it has these options:
1. Get me the best connection I can get that costs less than $0.02 per minute
2. Get me the fastest connection available with the price capped at $0.10 per MB
3. Get me the cheapest connection available
4. Get me a connection that is above "security level 3"
Then behind the scenes, your internet enabled device will scan all available networks, find the best deal that matches your requirements and connect to that.
Before the connection, both parties, your device and the network will sign an electronic contract that states the terms of the connection (price, speed, latency, security etc).
Your device has an electronic wallet, and while you are using the chosen network it will be making a continuous series of micro payments to the network provider (could be by the minute, MB or second).
If the network doesn't deliver the connection it promised at any point (speed/price/latency), it has broken the contract and the micro-payment for those packets of data won't be released.
If a better deal becomes available from another network your device will silently switch to that network, without you knowing anything, you won't know which network is providing your internet, neither will you care.
All you need to know is that your device is always getting you the best deal based on your requirements at all times.
But it doesn't stop there
With this system, if you wish you can also become a provider as well as a consumer in the same way that in some places homes with solar power can sell surplus supply back to the grid.
You could have extra settings on your internet enabled device (or home/office computer network) that allow you to offer surplus bandwidth for sale on the network, and for credit to flow back into your wallet. E.g.
1. Place bandwidth on the network market place between 7pm and 7am for $0.10 per MB (outside of office hours)
2. Place my phone on the network anytime it's not active
3. Place my home connection on the network anytime it's consuming less than 3Mbps
You see these payment streams in many cases will flow both ways, it will create two way economies with very little waste. ISP's and internet providers become nothing more than commodities bidding for work in an open market place, the brand will no longer mean anything.
That's an interesting example, but it's only ISP's
I was in a brainstorming session at a blockchain conference in London last year, and the challenge was to go through the list of the 10 largest industries in the UK and propose how there would be the potential for massive disruption provided the following were true:
1. Fast, frequent and free micro-payments were possible
2. Payments were direct and didn't require a trusted intermediary
3. All payments contained a contract that was trusted by both parties
Long story short, there wasn't a single industry where this technology wouldn't be hugely disruptive.
Yes but couldn't we do that now without blockchain?
Yes, technically we could. Economically we couldn't, as soon as the payment size increases or trusted intermediaries need to be involved or off network agreements (terms of service, contracts etc) need to be present the level of friction and increase in transaction cost makes unfeasible.
In more complex blockchain "smart contracts" third parties can be used, especially where it needs to be independently verified that a specific event has indeed taken place or specific set of conditions are arisen, we call these "oracles" and in reality they will most often be external API's that are effectively commoditised and get a small commission as part of the contract.
They could answer questions like:
1. Is today's date 16/4/2020
2. Is the current GBP->USD exchange rate above $1.2533
3. Is this vehicle travelling less than 60 mph
In the future the internet as we know it today, won't be known as the internet, it will be known as the internet of information and what we have looked at above will be known as the internet of value. There will also be other internets, but let's save that for another day....
1
1
-
- Similar Topics
- Replies
- Views
- Last post
-
-
Discussion: How will you feel Bitcoin hits $288,000
by DevanTracy » Wed May 06, 2020 12:59 am » in Money, Banking and Insurance - 3 Replies
- 1753 Views
-
Last post by Felgerkarb
Thu May 07, 2020 9:47 am
-
-
-
Expat offers $1,000 reward for return of lost pink Samsung Galaxy S9
by Alexandra » Sun May 10, 2020 7:43 pm » in Cambodia Speakeasy - 9 Replies
- 2287 Views
-
Last post by dudelookslikealady
Mon May 11, 2020 10:33 am
-
-
-
Phnom Penh bar offers reward for staff member who absconded with ‘significant funds’
by Londo » Tue May 02, 2023 3:04 pm » in Cambodia News - 2 Replies
- 586 Views
-
Last post by logos
Wed May 03, 2023 2:01 am
-
-
- 35 Replies
- 3175 Views
-
Last post by Alexandra
Sun Apr 17, 2022 6:03 pm
-
- 8 Replies
- 1435 Views
-
Last post by busybee
Wed Oct 13, 2021 3:42 pm