Bitcoin and other crypto-The CR thread

[washparkhorn 9939]

2 minutes ago, longhornmatt said:

I don't think TIPS are an appealing investment option for someone who thinks the Consumer Price Index is a faulty measure that understates true inflation.  

Any alternatives to CPI you would recommend?

[elfenix 34331]

5-8% inflation sustained means there's been no real growth in the economy - and in fact the economy has been in contraction. Does that even pass the smell test?

[GRHorn 105]

12 minutes ago, longhornmatt said:

No.  I'm just saying mentioning a CPI adjusted investment to someone who just told you they don't trust the CPI isn't going to get much traction.

Besides, I just assume that interest rates are going to be held down at low levels for as long as possible because our debt is so large we can't really afford any significant bumps in the debt service obligations.  At this point it goes beyond economic stimulus or wanting to encourage home ownership or whatever other justification is given.  I think before we even get into that stuff, there's a threshold issue that we don't want to start paying 8% on the trillions we have to borrow every year.

Rates are so low dividend stocks might be a better option for income than actual fixed income investments.  

Negative real rates-bullish for assets like Bitcoin. 

Nominally negative interest rates-extremely bullish for assets like Bitcoin. 

[washparkhorn 9939]

21 minutes ago, longhornmatt said:

we don't want to start paying 8% on the trillions we have to borrow every year.

If the market doesn't want it, we shouldn't either - I agree.

And think of what would happen to inflation if we used the alternative measurements (Shadowstats - perhaps?) and had to implement SS COLA adjustments based on those alternative measurements.

(as you know, SS COLA's are based on the so-called blue collar CPI - CPI-W, which shows 3% inflation in it's last report).

CPI-W - https://www.bls.gov/cpi/latest-numbers.htm

Edited May 6, 2021 by washparkhorn

[GRHorn 105]

This is pretty interesting. Druckenmiller thinks it’s likely that some sort of globally distributed ledger will be the next global reserve currency after USD.
 

He thinks it hasn’t been invented yet, but he’s the first major investment “guru” I’ve seen predicting that something in crypto realm will be next. I say if that’s the case it will obviously be BTC. 

[Dahobbs 17649]

China will likely ban all bitcoin mining soon

Quote

 

Bitcoin took investors on another rollercoaster ride over the weekend after a top regulator in China announced a crackdown on mining, a new tack in the country’s ongoing fight against the cryptocurrency.

The government will “crack down on bitcoin mining and trading behavior and resolutely prevent the transfer of individual risks to the society,” said the statement, which was issued by the Financial Stability and Development Committee of the State Council, the country’s cabinet equivalent. The committee is chaired by Vice Premier Liu He, who acts as President Xi Jinping’s top representative on economic and financial matters.

“The wording of the statement did not leave much leeway for cryptocurrency mining,” Li Yi, chief research fellow at the Shanghai Academy of Social Sciences, told the South China Morning Post. “When all mining activities are banned in China, it will be a turning point for the fate of bitcoin, as a large chunk of its processing power is taken out of the picture.”

The Chinese government isn’t just worried about financial stability, either. A commentary piece in Xinhua News, the Communist Party’s official media outlet, elaborated on the government’s stance, voicing concerns about bitcoin’s role in money laundering, drug trafficking, and smuggling. It also mentioned bitcoin’s profligate energy use. Last week, China warned financial institutions not to participate in crypto-transactions or related services.

 

https://arstechnica.com/tech-policy/2021/05/china-advances-its-war-on-bitcoin-cracks-down-on-mining/

I fully expect other governments to start doing the same sooner or later. 

@GRHorn

[GRHorn 105]

23 minutes ago, Dahobbs said:

China will likely ban all bitcoin mining soon

https://arstechnica.com/tech-policy/2021/05/china-advances-its-war-on-bitcoin-cracks-down-on-mining/

I fully expect other governments to start doing the same sooner or later. 

@GRHorn

As I said in the 6thSJ thread, this is great news. The less exposure that Bitcoin ecosystem has to China the better.
 

Although I didn’t buy it you would often hear it framed as China and Bitcoin vs the dollar. That’s clearly no longer a viable assessment. 

Edited May 24, 2021 by GRHorn

[washparkhorn 9939]

8 minutes ago, GRHorn said:

Although I didn’t buy it you would often hear it framed as China and Bitcoin vs the dollar. That’s clearly no longer a viable assessment. 

Wrong. It's the USD v. . . .

[washparkhorn 9939]

A critical look at the state of crypto: 

https://www.nakedcapitalism.com/2021/05/crypto-crackdown-only-the-beginning.html

Roubini assumes that the crackdown will be the civilized sort that one uses on investor types with dough when they use banks and other financial intermediaries: complying with know your customer rules and being subject to reporting of income (as in trading profits). He points out that over 70% of Bitcoin mining takes place in 3 countries outside the US rule of law: Russia, Belarus, and China. By that, I assume he means none have extradition treaties with the US.

Doomsberg has a May 15 post I wish I had written on crypto (except he’s agnostic about the premise of crypto, where as I’ve seen enough financial innovation to regard it with prejudice). The money section:

• My thesis begins with a simple observation. The power to control a society’s currency is the ultimate power over that society. The people who currently have control over the world’s fiat currencies have, by definition, a lot of power. Usually, people with a lot of power don’t like to give it up. When confronted with a risk to their power structure, those in power tend to fight back. They are often late to recognize the threat, especially in the Western democracies, but once they see it for what it is, they crush it.

(read it all at link)

Edited May 24, 2021 by washparkhorn

[GRHorn 105]

14 minutes ago, washparkhorn said:

A critical look at the state of crypto: 

https://www.nakedcapitalism.com/2021/05/crypto-crackdown-only-the-beginning.html

Roubini assumes that the crackdown will be the civilized sort that one uses on investor types with dough when they use banks and other financial intermediaries: complying with know your customer rules and being subject to reporting of income (as in trading profits). He points out that over 70% of Bitcoin mining takes place in 3 countries outside the US rule of law: Russia, Belarus, and China. By that, I assume he means none have extradition treaties with the US.

Doomsberg has a May 15 post I wish I had written on crypto (except he’s agnostic about the premise of crypto, where as I’ve seen enough financial innovation to regard it with prejudice). The money section:

• My thesis begins with a simple observation. The power to control a society’s currency is the ultimate power over that society. The people who currently have control over the world’s fiat currencies have, by definition, a lot of power. Usually, people with a lot of power don’t like to give it up. When confronted with a risk to their power structure, those in power tend to fight back. They are often late to recognize the threat, especially in the Western democracies, but once they see it for what it is, they crush it.

(read it all at link)

Yawn. An article that starts by stating there’s no legitimate use and is sourced extensively by Nouriel Roubini quotes.
 

The attacks will surely intensify, but it will be much harder to kill than these articles dismissively claim. 

[bernorange 8363]

Coinbase just hired a Goldman Sachs tentacle to head up their lobbying.

Quote

Coinbase is adding some firepower to its lobbying team.

The crypto exchange announced Monday the hiring of Faryar Shirzad as its new chief policy officer. Shirzad served 15 years at Goldman Sachs, most recently as co-head of government affairs.
...

https://www.coindesk.com/coinbase-hires-goldman-sachs-exec-to-ramp-up-policy-push-in-washington

[GRHorn 105]

12 minutes ago, bernorange said:

Coinbase just hired a Goldman Sachs tentacle to head up their lobbying.

https://www.coindesk.com/coinbase-hires-goldman-sachs-exec-to-ramp-up-policy-push-in-washington

 

42 minutes ago, washparkhorn said:

A critical look at the state of crypto: 

https://www.nakedcapitalism.com/2021/05/crypto-crackdown-only-the-beginning.html

Roubini assumes that the crackdown will be the civilized sort that one uses on investor types with dough when they use banks and other financial intermediaries: complying with know your customer rules and being subject to reporting of income (as in trading profits). He points out that over 70% of Bitcoin mining takes place in 3 countries outside the US rule of law: Russia, Belarus, and China. By that, I assume he means none have extradition treaties with the US.

Doomsberg has a May 15 post I wish I had written on crypto (except he’s agnostic about the premise of crypto, where as I’ve seen enough financial innovation to regard it with prejudice). The money section:

• My thesis begins with a simple observation. The power to control a society’s currency is the ultimate power over that society. The people who currently have control over the world’s fiat currencies have, by definition, a lot of power. Usually, people with a lot of power don’t like to give it up. When confronted with a risk to their power structure, those in power tend to fight back. They are often late to recognize the threat, especially in the Western democracies, but once they see it for what it is, they crush it.

(read it all at link)

Whose opinion did you weigh more? Naked Capitalism blogger or the Chairman of the Council on Foreign Relations?

I’m not really a fan of this phase of the mass adoption where we have to utilize these powerful people to help further Bitcoin. These people will try to co-opt it. Fortunately it’s a global network controlled by users/nodes. Other cryptos are far more vulnerable to their influence. But the support or even just tacit acceptance of these people is needed to take it to the next level.  

[washparkhorn 9939]

8 minutes ago, GRHorn said:

Chairman of the Council on Foreign Relations

You should lead with Carlisle Group when forming your argument, not the CFR.

Crypto has lousy spokespeople. 

[GRHorn 105]

1 minute ago, washparkhorn said:

You should lead with Carlisle Group when forming your argument, not the CFR.

Crypto has lousy spokespeople. 

Carlyle Group is big Private Equity. He would have more access to intel on long term crypto viability from CFR. 

[washparkhorn 9939]

1 minute ago, GRHorn said:

Carlyle Group is big Private Equity. He would have more access to intel on long term crypto viability from CFR. 

Opposite. 

Know the players. 

 

[wildcat09 29376]

19 minutes ago, GRHorn said:

 

Whose opinion did you weigh more? Naked Capitalism blogger or the Chairman of the Council on Foreign Relations?

This is amazing. Absolutely fucking amazing.

[Nice Guy Eddie 13521]

1 hour ago, washparkhorn said:

A critical look at the state of crypto: 

https://www.nakedcapitalism.com/2021/05/crypto-crackdown-only-the-beginning.html

Roubini assumes that the crackdown will be the civilized sort that one uses on investor types with dough when they use banks and other financial intermediaries: complying with know your customer rules and being subject to reporting of income (as in trading profits). He points out that over 70% of Bitcoin mining takes place in 3 countries outside the US rule of law: Russia, Belarus, and China. By that, I assume he means none have extradition treaties with the US.

Doomsberg has a May 15 post I wish I had written on crypto (except he’s agnostic about the premise of crypto, where as I’ve seen enough financial innovation to regard it with prejudice). The money section:

• My thesis begins with a simple observation. The power to control a society’s currency is the ultimate power over that society. The people who currently have control over the world’s fiat currencies have, by definition, a lot of power. Usually, people with a lot of power don’t like to give it up. When confronted with a risk to their power structure, those in power tend to fight back. They are often late to recognize the threat, especially in the Western democracies, but once they see it for what it is, they crush it.

(read it all at link)

As someone that watches the crypto markets and future path, my biggest worry is not necessary the rise of the non-American involvement in crypto, it's the lack of American support. In some ways, America is burying its head in the sand because it doesn't want crypto to take hold. Obviously this is not the 100% case but why are we happy to let entrepreneurs in other countries take the lead? Why would America not want to be the leader in crypto development?

And crypto development does not mean dominance over fiat. The US dollar can still be the de-facto world currency in a crypto world.

[GRHorn 105]

1 hour ago, washparkhorn said:

Opposite. 

Know the players. 

 

Ok. CFR has multiple former cabinet members, including Geithner, who would have insight into likely attacks against Bitcoin. I think we’re splitting hairs here. 
 

How about we say he has incredibly powerful contacts through multiple positions? And he says it’s here to stay. 
 

1 hour ago, Nice Guy Eddie said:

As someone that watches the crypto markets and future path, my biggest worry is not necessary the rise of the non-American involvement in crypto, it's the lack of American support. In some ways, America is burying its head in the sand because it doesn't want crypto to take hold. Obviously this is not the 100% case but why are we happy to let entrepreneurs in other countries take the lead? Why would America not want to be the leader in crypto development?

And crypto development does not mean dominance over fiat. The US dollar can still be the de-facto world currency in a crypto world.

Which entrepreneurs in other countries? CZ? 
 

Americans hold more Bitcoin and other crypto than any country in the world. We’re in a good spot currently. Hopefully our government is smart enough to capitalize on it. You’re right though it’s not guaranteed. 

[GRHorn 105]

On 5/24/2021 at 4:41 PM, wildcat09 said:

This is amazing. Absolutely fucking amazing.

How so? 
 

Anyway a small group of Senators joining up to influence legislation and regulation in this area. 
 

co chairs Lummis-R and Sinema-D

other members 

D-Hickenlooper

R-Scott, Blackburn, Braun, Cassidy

[GRHorn 105]

Good development here for Texas. Evidently clarifies the legal status of Bitcoin and other virtual currencies.

We’ll be competing with Florida and Wyoming as hotspots in this growing ecosystem. We definitely have a big advantage in the mining industry. 
 

 

[bernorange 8363]

1 hour ago, longhornmatt said:

Oh awesome.  Texas:  open for business for ransomware gangs and Silk Road 2.0!  Don’t take your illegal business to Florida or Wyoming!  We will even throw in tax incentives on the taxes you don’t pay!

I skimmed the text of the legislation:

https://legiscan.com/TX/text/HB4474/id/2401645

I didn't see anything alarming in there.  What specifically is your disagreement with the legislation?

[GRHorn 105]

15 minutes ago, bernorange said:

I skimmed the text of the legislation:

https://legiscan.com/TX/text/HB4474/id/2401645

I didn't see anything alarming in there.  What specifically is your disagreement with the legislation?

He has nothing. He’s either a salty nocoiner or the fact that Republican government in Texas passed legislation activated his lizard brain against it. 

[GRHorn 105]

57 minutes ago, longhornmatt said:

I wasn’t lampooning the bill so much as GRHorn celebrating Texas supposedly becoming a crypto hub.   I will accept the salty no-coiner label gladly.  

As Texas becomes more tech-centric it makes sense to include crypto industry as much as possible. It’s growing quickly. 
 

Then there’s the next level benefits, like having a cohort of successful citizens that prioritize individual rights and it’s a big win. 

[GRHorn 105]

This was announced yesterday at the Bitcoin conference in Miami. Some interesting geopolitical ramifications as well as evidently in US commercial law. Broken down in this thread  

 

[bernorange 8363]

El Salvador President looking for some carrots from the G20/Davos crowd I suspect.  

[GRHorn 105]

2 hours ago, bernorange said:

El Salvador President looking for some carrots from the G20/Davos crowd I suspect.  

That could be it. I know almost zero of El Salvadoran politics. I think they will receive a lot of pressure from outside to not go through with it. 
 

If they do go through with it, I would anticipate some capital moving there. When other countries see that there will likely be followers, especially elsewhere in Latin America. 

[Nice Guy Eddie 13521]

7 minutes ago, GRHorn said:

That could be it. I know almost zero of El Salvadoran politics. I think they will receive a lot of pressure from outside to not go through with it. 
 

If they do go through with it, I would anticipate some capital moving there. When other countries see that there will likely be followers, especially elsewhere in Latin America. 

I haven't really read or thoughts about it but why is making BTC legal tender, along with the US Dollar, encourage capital movement there, unless they start to become a haven for the crypto world? After all, btc capital is everywhere and nowhere at the same time on the blockchain. Also does making BTC legal tender, force citizens/businesses to accept BTC? I would be surprised if they have to accept it. 

If El Salvador started to place their treasury in BTC, I think that is a bigger deal. Was that mentioned by their President? I've long thought that having a few countries publicly state they're storing their federal treasury in btc, even partially, would moon the coin.

[GRHorn 105]

36 minutes ago, Nice Guy Eddie said:

I haven't really read or thoughts about it but why is making BTC legal tender, along with the US Dollar, encourage capital movement there, unless they start to become a haven for the crypto world? After all, btc capital is everywhere and nowhere at the same time on the blockchain. Also does making BTC legal tender, force citizens/businesses to accept BTC? I would be surprised if they have to accept it. 

If El Salvador started to place their treasury in BTC, I think that is a bigger deal. Was that mentioned by their President? I've long thought that having a few countries publicly state they're storing their federal treasury in btc, even partially, would moon the coin.

I’ve seen people online say he committed to reserve allocation but I haven’t seen it anything official. The potential implications of the legal tender are in that thread I linked. 

Citizens of El Salvador would not be taxed on capital gains. It would be treated like a standard currency. 

 

[washparkhorn 9939]

Trump finally understands.

[GRHorn 105]

22 minutes ago, washparkhorn said:

Trump finally understands.

Lol I saw this today. Cmon CR get in here. Orange man bad. 

[wildcat09 29376]

Trump doesn't like that Bitcoin is fucking with the value of high end real estate as a vehicle for money laundering. 

[RDCanecutter 26462]

6 hours ago, GRHorn said:

I’ve seen people online say he committed to reserve allocation but I haven’t seen it anything official. The potential implications of the legal tender are in that thread I linked. 

Citizens of El Salvador would not be taxed on capital gains. It would be treated like a standard currency. 

 

Translation: The President of El Salvador is getting ready to sell some Bitcoin.

[GRHorn 105]

They’re not officially holding reserves yet, but they will hold $150M worth in a fund initially to help offset exchange risk for those that want it.

He also said that US state dept and IMF have reached out. Meeting with IMF Thursday, but it’s already law.

What dominos could be next? I think other Latin American countries are most obvious. Ecuador specifically is dollarized like El Salvador. 

[bernorange 8363]

El Salvador dropped the bomb.  They passed legislation making Bitcoin legal tender.  It goes into effect in 90 days.  Holy moly.

Quote

...
El Salvador has used the U.S. Dollar as official currency since 2001, which Bitcoin will join, not replace. The vote marks a major milestone in monetary history and could be a gamechanger for business worldwide as Bitcoin becomes a more practical asset and the Central American state a cryptocurrency hub. The support of a nation state also could go a long way to dispel widespread skepticism of Bitcoin's long term utility and acceptance, though fears will remain over the token’s volatility. El Salvador’s plans may interfere with ambitions the nation has with the International Monetary Fund, where it is seeking a $1 billion program.
...

https://www.forbes.com/sites/roberthart/2021/06/09/el-salvador-makes-history-as-worlds-first-country-to-make-bitcoin-legal-tender/?sh=32af8870eaa3

Bold emphasis above is mine.  Goes back to my comment about them seeking a carrot from the G20/Davos crowd (the IMF is their bank).  I'm guessing the IMF already told them no and this legislation is their fuck you response.

[Nice Guy Eddie 13521]

37 minutes ago, GRHorn said:

They’re not officially holding reserves yet, but they will hold $150M worth in a fund initially to help offset exchange risk for those that want it.

He also said that US state dept and IMF have reached out. Meeting with IMF Thursday, but it’s already law.

What dominos could be next? I think other Latin American countries are most obvious. Ecuador specifically is dollarized like El Salvador. 

If the US and IMF are opposed to bitcoin enough, this guy might have bluffed his way into free money for El Salvador. 

Good call about Ecuador. It's a different beast that Bitcoin, but a decentralized stablecoin/token like Dai would be the best long term currency for a country especially once (if) Ethereum lowers transactions fees and can handle a higher volume.

 

Edited June 9, 2021 by Nice Guy Eddie

[bernorange 8363]

I posted it in the wrong thread, but I suspect the fast track push by El Salvador to pass this legislation was likely a fuck you response to the IMF already denying (or making the conditions too odious) for the $1B load/aid they were seeking from the IMF. 

[GRHorn 105]

6 minutes ago, bernorange said:

I posted it in the wrong thread, but I suspect the fast track push by El Salvador to pass this legislation was likely a fuck you response to the IMF already denying (or making the conditions too odious) for the $1B load/aid they were seeking from the IMF. 

Looks like simple math here. Not sure he’ll get to 1% but that’s a reason to go first. 

 

11 minutes ago, Nice Guy Eddie said:

If the US and IMF are opposed to bitcoin enough, this guy might have bluffed his way into free money for El Salvador. 

Good call about Ecuador. It's a different beast that Bitcoin, but a decentralized stablecoin/token like Dai would be the best long term currency for a country especially once (if) Ethereum lowers transactions fees and can handle a higher volume.

 

It looks like Lightning network, specifically utilized by Strike and Jack Mallers, is the facilitator. Maybe it is a game changer as has been advertised. 

[GRHorn 105]

The first country I’ve seen outside our hemisphere signaling a move. Looks like they could commit some reserves soon. 

 

[GRHorn 105]

Oh sweet Jesus. I share this knowing you will all hate it here, but this is the CR thread for this stuff. Michael Saylor is going on his show tonight. 
 

I suspect he’s coming to it as he’s suddenly become concerned with government spending. The good news is Bitcoin is apolitical. Anyone can use the network, anyone can trash it. But they can’t affect how it keeps cranking along day by day. 

[Fudge Nuggets 19211]

When you hitch your horse to the El Salvador / Tonga wagon you need to reconsider your investment choices. 

[Bullneck 19198]

On 5/5/2021 at 9:27 PM, GRHorn said:

Negative real rates-bullish for assets like Bitcoin. 

Nominally negative interest rates-extremely bullish for assets like Bitcoin. 

Buy bitcoin!  

And stocks in monorail companies.

[Bullneck 19198]

5 hours ago, GRHorn said:

The first country I’ve seen outside our hemisphere signaling a move. Looks like they could commit some reserves soon. 

 

I would totally trust Lord Faustita and you with my money.

Actually, the fact that you think it's a good idea means I would NEVER buy bitcoin.

 

[StruggleBus 3922]

Derp 

Edited June 10, 2021 by StruggleBus
Fucking cr

[Bullneck 19198]

Quote

Miami penthouse sets cryptocurrency sale record: $22.5M

 

Quote

 

sbojaj

What’s the 10,000 gold in my World of Warcraft account worth? 😂

 

[GRHorn 105]

 

[Fudge Nuggets 19211]

More proof to steer clear.  If Abbot thinks it’s a good idea rest assured it sucks armadillo dick.

[Nice Guy Eddie 13521]

I get the idea that following El Salvador or Tonga may not seem like the path to riches. But the developed country govts are not going to be leading the charge to changing how countries manage their finances. That's like asking Buffet to lead the charge in raising death taxes to 90%. It ain't happening. The first people through the wall always get bloody. And some fail. 

El Salvador may fail in this endeavor but are they currently succeeding in the traditional model? Do they really have a chance to succeed in the traditional model? Their chances are greater than 0 but its not a good bet. What's the worst that would happen if the embrace bitcoin? Go bankrupt and default on their loans? Bitcoin also doesn't require an all or nothing bet.

The biggest risk that I see with these countries going with bitcoin, are with their partners. There are shady people out there that will screw over a country for a dime. But obviously this scenario has also occurred when countries partner with major financial players as well.

[Bullneck 19198]

47 minutes ago, Nice Guy Eddie said:

The biggest risk that I see with these countries going with bitcoin, are with their partners. There are shady people out there that will screw over a country for a dime. But obviously this scenario has also occurred when countries partner with major financial players as well.

Nah, I think it's volcanoes:

Quote

EL SALVADOR TO USE ENERGY FROM VOLCANOES FOR BITCOIN MINING - Country’s President tweeted plans to build full bitcoin mining hub powered by geothermal energy from volcano

 

https://www.independent.co.uk/life-style/gadgets-and-tech/el-salvador-bitcoin-mining-volcano-b1863065.html

[Nice Guy Eddie 13521]

7 minutes ago, Bullneck said:

Nah, I think it's volcanoes:

 

https://www.independent.co.uk/life-style/gadgets-and-tech/el-salvador-bitcoin-mining-volcano-b1863065.html

Ok but I wasn't referring to the power source but rather the company that is going to manage their initial $150m fund they're creating.

As for the volcano power, mining is a very small part of this plan.

[Fudge Nuggets 19211]

2 hours ago, Nice Guy Eddie said:

There are shady people out there that will screw over a country for a dime.

A lot of them lead those same countries.